Risks of CRM systems implementation
A customer relationship management system may increase your business’s productivity by 500%. This sounds great, but often such initiatives fail with unclear reasons. Here are some of the critical points in CRM design and implementation:
Database structure: as the database will be central to all activity, poor planning can lead to an unusable system. Even though it is impossible to predict the exact number of client records and their relationships, database architecture should be flexible and allow for expansion.
Purpose: Know what to expect from a CRM system. Most importantly, a CRM should:
• Deliver superior customer value by personalizing the interaction between the customer and the company
• Demonstrate the company’s trustworthiness and reliability to the customer.
• Tighten connections with the customer.
• Achieve coordination of complex organizational capabilities around the customer.
It is clear that you know what type of CRM system you need…
• Strategic CRM – focusing on customer value, competitive differentiation, market segmentation and strategic positioning. These systems provide a CEO-level view of customers and typically answers questions about loyalty and profitability per customer.
• Operational CRM – focusing on customer service, data capture, database, relationships. Such a system will provide more accurate mail shots and access to complete customer information to call centres. This enables web sites to remember dispatch and payment information requirements and ease future transactions.
• Analytical CRM – providing infrastructure for customer knowledge. These include transactions, customer contacts, descriptive information and response to marketing stimuli. At his point you could start measuring Customer Lifetime Value (CLV) and see the benefit of a particular customer over time.
Posted: February 25th, 2009 under Uncategorized.
Comments: 1
Comments
Comment from Steve Reeves
Time: April 28, 2009, 8:33 am
Nice to see you differentiating between business models and application requirements.
Unfortunately, the world's been led to believe that CRM is a one size fits all type of software solution, and it isn't of course. This explains the horrific failure rate for CRM implementation which even salesforce suggests is 70% (not for salesforce of course- my guess is it's higher for them).
CRM isn't a software package, it's a philosophy and can only work when it enables the competitive advantage of the company.
Since that's different for every company the very concept of a standard software package is crazy. There are only two ways of offering something to fit a wide range of business needs 1) stuff it full of features most people won't use, and suffer the adoption problems caused by the complexity and 2) net the app down to generic functions so people can use it however they like, and suffer the adoption problems that come from them not knowing how they want to run their business.
Alternatively of course there's the custom solution, which is bound to be expensive, not because of the coding, but because of the consulting on how to add CRM to the business model.
Steve
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