Realism

Despite the good position in CIO’s priorities, huge number of running projects and significant investments - CRM systems does not rich full potential in terms of giving benefits for the organizations. There is a lot of CRM projects clamed as “success” upon implementation.  However, a revisit after a few months with the business sponsors of the projects shows the utter failure. To be clear: yes, there is many successful implementations of CRM solutions, but just a few of them could be called as “perfect” - in terms of implementing all three major pillars of CRM area (operational, analytical, collaborative). There is a number or reason for that: poor planning, poor integration, user adoption problems as well as silo approach which promote CRM solutions as a tool in a hands of few instead of an all-encompassing corporate asset.  

CRM pillars: Operational, Analytical, Collaborative

Operational CRM provides support to "front office" business processes, e.g. to sales, marketing and service staff. Interactions with customers are generally stored in customers' contact histories, and staff can retrieve customer information as necessary.

The contact history provides staff members with immediate access to important information on the customer (products owned, prior support calls etc.), eliminating the need to individually obtain this information directly from the customer. Reaching to the customer at right time at right place is preferable.

Operational CRM processes customer data for a variety of purposes:

• Managing campaigns
• Enterprise Marketing Automation
• Sales Force Automation
• Sales Management System

Analytical CRM analyzes customer data for a variety of purposes:

• Designing and executing targeted marketing campaigns
• Designing and executing campaigns, e.g. customer acquisition, cross-selling, up-selling, addon-selling
• Analyzing customer behavior in order to make decisions relating to products and services (e.g. pricing, product development)
• Management information system (e.g. financial forecasting and customer profitability analysis)

Analytical CRM generally makes heavy use of data mining and other techniques to produce useful results for decision-making. It is at the analytical stage that the importance of fully integrated CRM software becomes most apparent. Logically speaking, the more information that the analytical software has available for analysis, the better its predictions and recommendations will be.

Collaborative CRM covers aspects of a company's dealings with customers that are handled by various departments within a company, such as sales, technical support and marketing. Staff members from different departments can share information collected when interacting with customers. For example, feedback received by customer support agents can provide other staff members with information on the services and features requested by customers. Collaborative CRM's ultimate goal is to use information collected by all departments to improve the quality of services provided by the company. CRM also plays a role of data distributor within customers, producers and partners. Producers can use CRM information to develop products or find new market. CRM facilitates communication between customers, suppliers and partner by using new information system such email, link and data bank.

Time of change

A new era brings change in technologies, solutions, approaches and finally (perhaps) most important – change in customer behavior. Organizations are forced to use maximum of their information potential in order to align with those changes.  That doesn’t mean usage of all data potential from enterprise applications, corporate databases and so on, but also usage of unstructured data. More than 85% of organization’s data potential is residing in form of unstructured data. Here are some examples of unstructured data residing across organization’s departments:

• Marketing: Ads, spreadsheets, targets, accounts, forecasts, webinars, seminars, conferences, booth notes, feedback, customer contact notes
• Operations: Manufacturing runs, defective products, reservations, claims processing, precious goods store, delivery notes, scheduling notes
• Sales: Sales leads, sales calls, sales meetings, sales forecasts, spreadsheets, performance evaluations, customer meetings
• Shipping: Delivery directions, fragile specifications, cooling temperature specifications, time of delivery specifications, speed of delivery specifications, tracking
• Accounting: Spreadsheets, notes, Word documents, audit trails, account descriptions
• Call center: Conversations, notes, replies
• Engineering: Bill of material, engineering changes, production archives, design specs
• Finance: notes, annual reports
• Human Resources: Emails, letters, hiring offers, termination documentation, evaluations, job, specifications, employee manuals, holidays, policies
• Legal: Agreements, amendments, proposals, contracts, meeting notes, telephone transcripts, patents, trademarks, nondisclosure

Furthermore, there is one phenomenon of our era that shouldn’t be overlooked – the social networking. By definition, social network is virtual community of people connected through real life relationships, employment, profession, interests, or other personal attributes. Social networks sites, such as Facebook, Twitter, LinkedIn, explodes in popularity (Facebook alone topped 200 million users in 2009). While social networks began as the area of individuals, companies are now trying to capitalize on this trend as they search for specific strategies and tactics to derive value from it. The center of any business is customers and social networking represents an opportunity to build even more effective relationships with those customers. This is precisely where CRM intersects with social networking. When social networks and CRM work together well, businesses gain the ability to better listen to customer conversations and engage social customers on their own terms while managing and measuring their efforts to do so. Social networks, by bringing in otherwise untapped and unmanaged online conversations, also help organizations get closer to a true 360-degree view of the customer so they can further optimize their marketing, sales, and customer service efforts. The combination of social networking and CRM provides a great opportunity to improve customer interactions and give businesses a way to manage and measure how they use social networking while successfully acquiring social customers.

There are, however, some basic strategies that can help organizations better leverage social networking as part of their overall customer management strategy:

• Social networking should be treated as a new channel within CRM
• CRM should be enchained through social networking. Social networking activities enhance the capabilities of CRM with new ways of engaging customers and managing conversations.
• CRM and social networks together. Use CRM and social networking sites together to better listen to customers, analyze information, and respond to customers in a way that’s meaningful to them

CRM as all-encompassing corporate asset

People from marketing and sales department are most common users of CRM applications. However, a large number of employees from other departments possess potentially valuable information about customers, market and so on, don’t have access to CRM application and data. Consequently, they contribution to CRM will be inadequate.

The solution is moving CRM applications from database-led applications in the hands of a few, to an all-encompassing corporate asset.

That would be possible by establishing CRM foundation across the enterprise consisting of following elements:

• Processes -  CRM have to be involved in all business processes that use customers data on a formal way using policies, procedures, solutions
• Organization – includes employees for the whole organization. Active participation of  employees/users during implementation process  should be provided.
• Data integration – single repository of CRM data should be established -  that would provide data integration and accuracy, including “single truth for all”

Conclusion

Finally the conclusion is:

• CRM applications are essential need of organizations. Despite od certain  problems in giving real potential to the organizations, they will remain “member of the club” of most important enterprise applications. However they need to align with the changes.
• CRM approach should move from database-led applications in the hands of few, to an all-encompassing corporate asset.
• CRM should be aligned with the trends of our era (in terms of functionalities and coverage), such as social networks, in order to leverage on maximum potential of information.

References:

“CRM and Social Networking: Engaging the Social Customer”, Microsoft Dynamics CRM white Paper