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Reviewing the state of the CRM marketplace

BOSTON -- Using CRM technology can enhance the revenue of almost any business, even the revenue of golf caddies at a Michigan country club. Jim Dickie, partner, Insight Technology Group, gave his two teenage nephews, both caddies, a review copy of an opportunity optimization software package. That holiday season, the boys discovered the mail merge feature of the software and sent out holiday letters to their customers, Dickie said at the CRM Focus conference here.

"They got $520 in tips," Dickie said, noting that not many caddies in Michigan received tips in December. "They leveraged the technology to make a difference."

Many larger companies could do worse than to follow the example of his teenage nephews, according to Dickie. Insight Technology Group did a study of over 2000 CRM initiatives, and the company found that sales effectiveness is what many enterprises are trying to address with a CRM initiative. On the other hand, e-CRM projects are geared toward improving customer loyalty, he said.

"E-CRM is actually changing the way companies work," Dickie said. "The downside is that we're still seeing companies not leveraging the power of e-CRM." For example, the study found that 60% of these e-CRM projects only had minor returns or no returns at all, he said.

Companies practicing e-CRM fruitfully had four main characteristics in common, according to Dickie: executive sponsorship, a focus on process, intelligent use of the technology, and remembering the human side of CRM all led these companies to success.

Executive sponsorship is very important to CRM initiatives, Dickie said. The executives need to be visionaries, give their employees goals to achieve and motivate employees. And since CRM processes span the entire enterprise, the executive needs to step in and be a "tie-breaker" when two departments are in conflict over the use of the system, he said.

Successful companies focus on the process, versus the technology, Dickie said. These companies examine how they sell and service their customers, understand how their customers buy and use their products, identify flaws in their own processes and select specific problems to solve, he said.

The third piece in the success puzzle is using the technology available intelligently, according to Dickie. "They don't want to be in point solution hell," he said, referring to the multitude of packages available for CRM. "The best projects have been chunkable," meaning that they have been implemented in small pieces.

These successful companies look for technology to support their business processes, have an extensible architecture, and work to minimize the support burden, Dickie said. "Make sure you've got the right (technical support team) to pull it off," he cautioned.

The extensible architecture will have to support customization, Dickie said. "I love vendors that say you can use (the software) out of the box -- yeah, but not for anything productive," he said.

The last piece to CRM initiative success is to remember the human side of CRM, Dickie said. "In a lot of cases, (companies) focus on the technology and forget that they're giving it to people," he said. Not only are there internal issues, such as apprehension and confusion, but also external issues such as getting partners, suppliers and customers to use the system, he said.

"Companies need to make the first sale an internal one," Dickie said. "Someone needs to be Hernando Cortez," the Spanish explorer that, after landing in the New World, burned his ships on the beach and told his men that there was gold in that jungle. It would be dangerous, Cortez said, but there was no turning back.

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