‘Data? I don’t need help with that. I have 4 CRM’s’
This was feedback from a networking group we recently attended. Whilst its easy to jump to conclusions re the effectiveness of such a strategy, the simple fact is that managing a customer relationship across 4 separate and I suspect, unrelated platforms is littered with issues and I was left wondering how effective this approach was in driving an insight into the customer experience and influencing their loyalty.
Data2action are invariably presented with a variety of CRM solutions engaged by todays businesses. Whether we are being asked to help improve operating efficiency, drive customer loyalty or help understand and mitigate privacy risks, relationship software has found its niche in most modern businesses and the numbers are truly breath taking.
As a concept, Customer Relationship Management has its roots in Marketing back in the 1980’s. With the explosion of the digital economy, Forbes now estimate the CRM market to be worth over $120 billion and with hundreds of different solutions on offer, it has helped transform the relationships between buyer and seller. Improved sales and service processes, increased value and greater insight into customer behaviour are all benefits that CRM solutions can bring. According to Nutshell:
- The average return on investment on CRM software is $8.71 for every dollar spent.
- They can help increase sales by up to 29%, sales productivity by up to 34%, and sales forecast accuracy by 42%.
- 47% of users said that their CRM had a significant impact on customer retention.
It’s a business case that seemingly writes itself but does the implementations actually guarantee success?
All that glitters….
A quick search of the internet highlights the plethora of solutions promising significant return on investment but look more closely, there are also cautionary tales. In a 2017 blog, Intelestream pointed to research that highlighted a failure rate of between 47% and 63% for CRM solutions. They are not alone. Gartner have also previously reported failure rates of 50% which should make Leaders nervous as to the potential returns. Our own experience highlights solutions that have failed to live up to expectations. We commonly see poor adoption, lack of clarity of purpose, and questionable data as areas that are common place and in todays market where data privacy is a key concern for most businesses, a sub optimal solution may actually present unnecessary risks.
Before you ‘plug and play’
Its easy to be seduced by the ease of implementation and attractive business benefits that an effective solution can provide. However before you ‘plug and play’ here are some common themes we often see with our Clients:
Lack of clarity
Ask yourself, what exactly do you want the system to do for you and what are the specific benefits? Are you clear as to the measurable outputs you expect to attain in terms of your own business model and does the solution you are looking to engage deliver that? We often conduct customer experience mapping exercises with Clients and its clear that much of the data that needs to be captured, simply isn’t there. Our experience highlights that a ‘one size fits all’ solution rarely satisfies the unique needs of a business and whilst its easy to be consumed with the ‘glitz and glamour’ of what the system was designed to do, have you a vision and the clarity of the expected outputs?
As with most digital transformation and adoption, engaging the key stakeholders in the business is key. Implementation alone never drives success if the people that are to use it are simply not engaged and it cannot be easily integrated with your existing systems and processes. All too often such systems are driven by IT procurement when deep organisational value is derived when all stakeholders including end users and customers are engaged from the outset in the design and delivery. The value of the system is derived from the activity and data it produces and poor adoption and integration will create reduced buy in and reducing returns as alternative solutions are sought. This can often lead to a cycle of switching CRM products creating more cost and anxiety.
Use and protect the data.
The effective analysis and use of the data that a good CRM solution provides will invariably help enhance your decision making and achieve your expected outputs. However poorly structured, out of date, irrelevant data will reduce engagement and increase privacy risks. Not only will the benefits be hard to come by, in storing unnecessary, poor quality data you may run the risk of breaching the current privacy legislation. Understanding what you have, why you need it and who you share it with are all prerequisites when dealing with data today.
Data centricity – the new advantage.
Having a fully adopted and functional CRM solution can be a powerful weapon to any business. The effective use of data in todays digital economy ca create significant value and competitive advantage and the successful adoption of a carefully considered CRM solution is key to much of that success.
Back to the 4 CRM business. After a coffee and a chat, we set to work and they now have a coherent approach to maximising the customer data in their possession and are seeing real benefits in driving efficiency and effectiveness. Oh and they have saved money with a single solution provided by another provider who received clear instructions as to their needs a built a solution to match.