Moonlighting…

April 28, 2006 Richard Boardman

I’ve also been writing a blog for the Customer Management Community in case you wondered why my entries have become slightly more occasional. You’ll need to sign up if you are not already registered. If you are not inclined to do so then Wednesday’s post was as follows:

Systemising the CRM system…

I was having a conversation with a journalist earlier in the week who asked me what I considered to be the biggest issues facing organisations deploying CRM at the moment. The answer, to me at least, seemed a fairly simple one – getting people to use systems in a consistent and systematic way. It’s not a new issue of course; it’s dogged CRM implementations long before the acronym CRM ever existed. However our failure to effectively address it as an issue is one of the reasons so few CRM systems are significantly value enhancing.

To my mind most CRM implementations fall into a category I’ve rather unimaginatively dubbed ‘level 1’ systems (please don’t hesitate to contact me with any more insightful alternative descriptions you may have). ‘Level 1’ systems are characterised by fairly ad hoc and inconsistent usage. It’s not that don’t provide organisations with benefits. They do, but in a fairly limited way. For example the company may better coordinate its interactions with its customers because there’s now a central repository of data about them; or salespeople may manage their long term prospects better because they can set themselves call back reminders.

While ‘level 1’ systems provide benefits, they tend not to be significant because there are few supporting processes, and those that exist are not necessarily consistently followed. As a result, many of the benefits that organisations bought into when they purchased a system are not actually achieved. Management reporting doesn’t get any better because there’s no consistent usage on which to base accurate metrics. Direct marketing doesn’t improve because processes aren’t in place to ensure long term data quality. Sales forecasting doesn’t get more accurate because many staff are still hooked on Excel.

What characterises the high return generating ‘level 2’ systems by contrast, is that they have been set up to achieve a clearly identified set of desirable business results. Secondly there are a comprehensive series of supporting processes designed to achieve those results, and thirdly staff are trained and managed such that the processes are followed in a structured and consistent way.

The process driven ‘level 2’ system massively outperforms the ‘level 1’ system in terms of generating long term return on investment. However there is a price to pay for this. Creating and maintaining process driven systems isn’t easy. Developing and documenting processes, and training staff to follow them, is invariably time consuming, costly and resource intensive.

Too many organisations expect a ‘level 2’ result from a ‘level 1’ approach. They buy the pitch from the salesperson but underestimate what needs to be done to achieve it.

The art of avoiding disappointment is to be clear about what level you are trying to achieve and gear your approach accordingly. Sometimes it’s better to settle for ‘level 1’ through minimal investment, than end up with ‘level 1’ having wasted a shed full of time, energy and resources unsuccessfully shooting for ‘level 2’.