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5 Worst Reasons for Pouring Resources Into CRM

5 Worst Reasons for Pouring Resources Into CRM

CRM data can indeed alter your relationship with the customer -- but not unless that data is converted into actions. The fact that you're organizing and tracking data for sales and marketing use doesn't help the customer -- it helps you. If you want to alter how customers see you, you'll have to turn that data around and use it to understand what customers want from their relationships with you.

By Christopher J. Bucholtz CRM Buyer ECT News Network
10/14/10 5:00 AM PT

CRM had a reputation as an often-unsuccessful technology, but it's not the technology that causes failure -- in most cases, failure is the result errors in expectations and execution on the part of users and implementers.

Those errors often appear very early, with the motivations that drive companies toward CRM. There are many great reasons for implementing CRM -- including a desire to retain customers by building better relationships, a need to share customer data with various parts of your business, and a drive to improve the sales process by giving sales pros the ability to better understand potential and existing customers.

There are many more great reasons for investing in a CRM solution, and most of them are valid for most businesses. Yet in all too many cases, companies are driven by impulses that are not aligned to what CRM does, or by motivations that stray far from the companies' real goals.

Here are my five worst reasons to implement CRM, in no particular order:

1. To Provide a Fast Fix for Flagging Sales

The sales force automation (SFA) features in CRM are great. They can help improve the efficiency of individual sales representatives, and they can certainly help sales managers gain needed visibility into the sales pipeline. However, none of this will happen without a strategy for implementation, adoption and utilization of the data CRM generates -- and a strategy takes time.

If you're looking at CRM for the first time at the end of a bad quarter and in response to panicked exhortations from C -level executives, you don't have time to develop that coherent strategy, and you're likely to force a half-baked CRM approach on your sales team, which will cause a long-term adoption crisis.

2. To Keep Up With the Competition

It may be true that your competitors are whittling away at your market share because of their clever use of CRM. However, unless you have solid knowledge that this is the case, leaping into a CRM implementation may draw away resources and attention from other issues that are harming your business.

CRM can't make up for a somnambulant sales team, a lackluster product lineup or a service organization that frustrates customers seeking service.

If you think competitors are killing you with CRM, try to figure out how they're doing it. That will not only will it reveal whether you need to invest in CRM, but also hint at how you can use CRM in a unique way to gain a competitive advantage.

3. To Make Your Employees More Customer-Oriented

CRM will enable your staff, especially in sales and marketing, to understand your customers better by allowing you to collate and organize data about them. However, having that data is not going to change your employees' attitudes about customers. If their focus isn't on the customer now, CRM is unlikely to help -- in fact, the process of learning the ins and outs of CRM is likely to further dilute their focus.

At its heart, this is a hiring problem; the right employees will be customer-focused regardless of what technology you put in front of them. Conversely, the wrong employees will never focus properly on customers, regardless of what tools or data you give them. Fixing this issue is something for your HR department, not your IT department.

4. To Untangle Your Internal Customer Processes

CRM can certainly help make the exchange of data between different parts of the business more efficient -- but it doesn't do it by itself. The rationalization of processes is something that must take place before CRM is implemented. It often takes place in the pre-implementation or pre-decision phase, when conscientious businesses sit down and take an unvarnished view of the way they work.

Once broken processes are fixed, then it's an easy task to map CRM functionality to the way the business works. However, applying CRM over a disorganized set of processes and expecting them to magically correct themselves is the epitome of wishful thinking.

Instead of fixing those processes, you'll only be automating broken processes. Instead of a solution, you'll only get a more expeditious route to the same failure you're already suffering from.

5. To Change Customer Perceptions of Your Company

The useful application of the CRM data can indeed alter your relationship with the customer -- but not unless that data is converted into actions. The fact that you're organizing and tracking data for sales and marketing use doesn't help the customer -- it helps you.

If you want to alter how customers see you, you'll have to turn that data around and use it to understand what customers want from their relationships with you. That might mean discounts, different payment options, special product offers, giveaways or preferential treatment to reward loyalty -- but none of these things automatically generate themselves through CRM.

You need processes to take what CRM gives you and turn it into customer-reaching actions -- and that can only be accomplished by your management, not by your technology.


CRM Buyer columnist Chris Bucholtz blogs about CRM at Forecasting Clouds. He has been a technology journalist for 15 years and has immersed himself in the world of CRM since 2006. When he's not wearing his business and technology geek hat, he's wearing his airplane geek hat; he's written two books on World War II aviation, and his next two are slated for publication in 2010.


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