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CRM and the e-customer: Getting the right mix

CHICAGO -- Getting the right mix of people, process and technology is critical in your CRM program if you want it to succeed, according to Barton Goldenberg, president of CRM consultant ISM, Inc. Goldenberg spoke at a DCI CRM Conference and Expo chair address, kicking off the "Building a CRM Master Plan" track.

"Managing relationships with customers has nothing to do with technology," Goldenberg said. Rather, it has to do with business processes and the people that handle customer queries, he said.

"CRM integrates people, processes and technology to maximize relationships with all customers," Goldenberg said. "CRM is a comprehensive approach that provides seamless coordination between all customer-facing functions. CRM increasingly leverages the Internet."

E-CRM is part of CRM as a whole, he said. Often, companies place too much emphasis on technology and not enough on people and processes, and 50% of CRM projects fail because of people resisting the change, according to Goldenberg. Meanwhile, 20% of projects fail because of the technology and 30% crash because the customer-facing processes aren't adequate, he said.

A lot of companies assume that technology solves all their CRM problems, and this is not the case, Goldenberg said. "Technology doesn't make CRM successful," he said.

The people component is most difficult, given the sensitivity of users to change, Goldenberg said. This is especially true internally, where a representative's first reaction to a new process or software is "leave me alone," he said.

He gave an example of a large telecommunications company that kept their CRM initiatives under wraps for too long. A letter went out to representatives, mandating that they attend training on a certain date, he said, and the company received a 50% response expressing disinterest. It was a prime example of the people not being involved and not caring, he added.

A success story involves publishing company McGraw-Hill, which had a communication program in place before the CRM program actually launched, he said. Employees received a hard-copy newsletter each week describing how the program was going, and when the employees were assigned to training sessions, some refused to attend the second session -- they wanted to participate in the first session, according to Goldenberg. McGraw-Hill's employees felt that the CRM program was "so cool" that they had to get in immediately, he said.

To bring about change effectively, first the employees must be made aware of the project, Goldenberg said. They need to understand the costs, time and commitment involved, and if they understand why the project is underway, employees are more likely to accept it, he said. Additionally, employees want to know what kind of rewards they will receive, such as financial incentives, and also want to see top management involved and committed, he said. The top management executive leading the effort shouldn't be below the vice president of sales and marketing.

"The process is the most delicate, because if you speed up broken processes, it makes things worse much faster," Goldenberg said. Another telecommunications company, for example, was trying to put in place a global account management process. Rather than define what the process should be and what the needs of the company were, this telco instead selected technology vendors as its first step. Goldenberg likened that, bringing processes into a company that isn't ready, to bringing in a foreign animal.

In a success story of getting the process right, a biotechnology company had been using Microsoft Excel spreadsheets as its lead management process. Sales representatives were overwhelmed by the data, but by implementing a rating -- A, B, C or D -- to those leads, the sales close ratio rose dramatically, Goldenberg said.

The last part of the mix is the technology component. "The technology component is the most overwhelming, given the ever-expanding CRM offerings" on the market today, Goldenberg said. He compared them to little boys fighting in the sandbox for their share of the market.

Out of the new technologies, one out of 50 is valuable, Goldenberg said. "There is value in technology, but it's difficult (to determine) because of all the components," he said. Goldenberg advises to keep all the technology in perspective when deciding.

The "jewels of a company" are the databases, which Goldenberg said must come together and be in place in order for CRM to work.

After the software is bought, companies need a project management team to ensure that, during the integration of the software, every one of the stages of implementation goes smoothly, he said.

"A CRM implementation that works integrates" people, processes and technology, Goldenberg concluded.


ISM, Inc.

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