IS YOUR CUSTOMER RELATIONSHIPS MANANAGEMENT (CRM) SYSTEM WORKING?

I guess the first question to ask is do you have a CRM system? If so this edition of the SalesPulse should help you do a sanity check on your implementation. If you don’t have one and you are planning to this should help with your thought processes. If you don’t have one and are not planning to have one you can see if that is the right decision. The next question is what do we mean by “is your CRM system working”? Well they all work in their unadulterated form but many organisations believe that they need enhancements to meet their specific needs. Customisation of software generally increases costs and risks, extends timescales and reduces the return on investment. For the purpose of this newsletter the word working means is it delivering tangible business benefits?
Here are some simple measures for you to consider:

•  Have you achieved, or are you on track to achieve the return on investment you planned?
•  Have you redesigned your sales processes and practices to optimise performance?
•  Have your best practices been automated?
•  Have these practices been adopted by all those who use them?
•  Has your system helped reduce training time and cost?
•  Has the system helped to improve internal and external communications?
•  Have the timescales from prospect to payment been reduced?
•  Have other sales costs been reduced?
•  Has the implementation helped improve the customer experience, retention and loyalty?
•  Have your customers seen an improvement in sales and service performance?
•  Is revenue and margin growing?
•  Is life time customer value increasing?
•  Are your customer based company decisions better informed because of the system?
•  Will your primary users, your salespeople and customer facing staff rate the system in terms of its usefulness to them at eight out of ten or better?

I am sure that you will have noticed that some of these measures are in fact customer and/or business measures and not solely CRM. That is to be understood as in business objectives are intertwined. For example providing excellent customer service can cover practically every department and individual. You could also say that you do not need a CRM system to help manage customer relationships, or to improve processes or automate sales tasks, and I would support that. After all we achieved great numbers, had great relationships and delivered great service before any of us had a PC on our desk. Perhaps the current question to ask is:

“Is my customer relationship management system helping me achieve my customer objectives”?
 
You can add a few words such as cost effectively or comprehensively but the basic question is a good start point. If you can answer the question positively your CRM system is working, only you can say how well and that depends on the objectives you set at the outset.

Companies that succeed with CRM all have one thing in common: a customer-centric focus which permeates their culture, their processes, their reward systems and their information systems. Customer focus is part of their DNA and this focus becomes their competitive advantage and differentiator. Our sales conference, themed “The Best of the Best in Customer Engagement” will discuss customer centricity through highly experienced board level speakers.

Companies that fail with CRM do so for many reasons, but in our experience the primary one is that it is there to support operational measures such as prospect volume, call rates, account activity etc. CRM systems, for whatever reason they were developed and whatever other value has been extracted from them, have been used extensively as a means for management to ‘oversee’ their sales forces in more detail – not better, just more command and control – ‘best paid progress chasers in the business’? In these circumstances the information provided makes a rod for the information provider’s own back and the outcome is that he or she provides as little information as possible, rendering the system useless. In these cases CRM stands for colossal resource mutilation.

Good sales managers and directors get out there and talk to their people and customers regularly and often, they don’t need CRM systems for micro management – they use their system to achieve their customer objectives.