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CRM Means "Customer Relationship Makeup"?

Will CRM transform your organization to be the business equivalent of Angelina Jolie?

This article originally appeared on the BeyeNETWORK

Who has not been looking at implementing acustomer relationship management (CRM) solution? And while doing so, who has not been told that with a CRM solution, one shall automatically sell more and "energize the customer's accomplishments while maximizing their perceived value when interacting with multiple distribution channels," or something to that effect? It all sounds very good indeed.

Furthermore, there is also often some vision that the underlying malfunctioning operational processes that do not satisfactorily treat basic customer activities such as order handling will somehow be automatically solved when implementing customer relationship management. Any and every sales operation will simply work better with customer relationship management. And, of course, the sales that will be generated thanks to the customer relationship management application will even cover the costs of implementing the whole thing. Automatically.

In other words, by putting makeup on what is done today (i.e., on the common and often malfunctioning operational processes), any sales organization shall look like Angelina Jolie – figuratively speaking, that is (there is not enough makeup in the world to make some sales reps look like any Hollywood star). A state-of-the-art CRM application is just going to make things look soooo good.

In this CRM euphoria, who takes the time to really consider what the customers think? One might be disappointed if one did. In any case, instead of speaking with customers, a good CRM system shall, at any rate, allow a company to better pinpoint customers and, therefore, automatically sell more to them. Heck, the system will work by itself, bringing fame, glory and a promotion to the guys positioning and running this solution.

Just to avoid any internal political discussions, it might be a good idea not to create too much of a buzz about the return on this investment. If one sells more, everything should be fine, right? And the CRM system is supposed to take care of that. Automatically.

Regardless, CRM is good for the career, especially if it cannot be proved that it is a failure. It can therefore be convenient to very handily forget that the success rate of a CRM implementation is more or less the same as for data warehouses, which is about 70% failure to live up to expectations. This, in turn, is also a reminder that here is another thing that is best not talked about openly: many data warehouses must be completely modified in order to get the necessary data for the CRM system to work properly. But once this has been done – and having convinced all the sales reps to manually enter all kinds of additional data into the system (such as when their customers have their birthdays, if they play golf or if they have any other hobbies like fishing or riding a Harley-Davidson in the desert) – one shall sell more. Automatically.

With CRM, one will not only know who plays golf, but also who the top 20% of the customers are. This knowledge will, of course, also come automatically once the system is put in place. At least it can be clearly noticed that most of the competitors do not seem to have a clue about who their top 20% are. If they did, they would certainly have been more successful, as 20% of the customers bring in 80% of the revenues. So by being the first to know, one shall therefore automatically be more successful and increase revenues. And revenues equal good times, or at least that is what many would like to believe – even though they may have no real idea which products and which processes are profitable (i.e., give a positive return on costs). Anyway, this too will be solved with CRM. Then, revenues will automatically mean profit.

Myself, I actually saw a beautiful CRM application from one of the most well known CRM vendors at an Irish company. It was colorful, comprehensible and a real support when interacting with the customers. This Irish company explained to me how it had succeeded. Its efforts included hard work in improving the data quality and getting the data consistent, change management, and communication among all involved parties. It was all very impressive and it all seemed like a really big effort – no silver bullet at all – but it was beautiful. And somewhere in this whole thing, the products were not forgotten. This Irish company still focused on product development, as products are what allow customer interaction. No products equal no value-added customer relationship in the first place. Products still matter.

In the end, many never buy a CRM system. Instead they decide that they can do it better themselves, thereby developing their own customer relationship management solution. It should not be too difficult, it will cost less, and the problems of data quality are minor (or so many like to think).

Of course, the biggest problem is convincing the sales reps to take the time to find out when their customers have their birthdays and what hobbies they have. Then the sales reps only have to enter this information into the system. After that, it shall finally be possible to find out who of the customers that are among the 20% best golf players to invite for the next company golf tournament.

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