Perfecting Service Management

Issue #6 Tuesday, November 19, 2003

Welcome!

topical index

Welcome to our condensed edition of the Customer Centricity newsletter, where we explore ways for you to improve the performance of your service organization. The purpose of this newsletter is to deliver value to you in the form of information you can apply in your role as a customer-focused business leader and to provide updates from Customer Centricity.

In this issue we provide the first article in our series on avoiding the common pitfalls of CRM.

 

In this issue:

Spotlight: New Customer Centricity Offering

Customer Centricity, Inc. recently announced the availability of a new service called CRM RxSM. The service was developed to assist companies that have already attempted to implement a customer relationship management (CRM) system, but have failed to achieve their return on investment (ROI) objectives. CRM RxSM provides a complete assessment of all areas affected by the CRM program through on-site observations and interviews with key customer service, operations, sales, and marketing staff. It examines the CRM program from three perspectives: people, process, and technology readiness. The result is a report of findings and prioritized recommendations that can be used by the company to realize faster ROI from their existing investments in CRM.

If you would like to learn more about this offering, please visit our web-site or contact Customer Centricity.

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Avoiding CRM's Common Pitfalls

During the hyper-growth economy of the late 90’s, and early 2000’s, many companies invested hand-over-fist in Customer Relationship Management (CRM) technology. With the anticipated benefits that CRM brings, it is no wonder that many companies jumped on the bandwagon. The benefits to be realized by the effective implementation of CRM include:

  • Increased revenue and profitability

  • Improved customer and employee satisfaction and loyalty

  • Increased operational efficiencies

So, what is CRM?

Customer Relationship Management has been defined as a business approach that integrates people, process and technology to maximize relationships with all customers, through the seamless coordination between all customer-facing functions.

Yet, according to estimates provided by leading analysts, over half of all CRM projects fail to meet their initial ROI targets. A recent study published by Nucleus Research, Inc. found that 61% of Siebel Systems’ reference customers reported negative ROIs from their CRM implementations after two years of use. Another report issued by The Gartner Group, Inc. estimated that well over 65% of all CRM projects fail. There are a handful of reasons at the root-cause of CRM failures. We will review each, and identify the strategy that you can use to avoid common these pitfalls.

The Pitfalls of CRM:

  1. Viewed as a technical, not a business, problem

  2. Driven from the top down

  3. Lack of senior management involvement

  4. Not targeting the areas of highest adoption

  5. Driven by the IT organization vs. business leaders accountable for the numbers

  6. Trying to do too much at once

Viewed as a technical not a business problem:

One of the most common reasons why CRM projects fail is that the technology was allowed to dictate how customer relationships would be managed instead of the technology being the enabler.

My first CRM assignment was targeted at improving the performance of a service organization. Upon doing the high-level analysis, all I kept hearing from the organization was “we need a single system”. There were several customer-facing organizations that were each using their own “system” to manage customer interactions. Some were home-grown and others were paper-based. And, on the surface it appeared that a single system was the answer. Per the established protocol I went to my senior manager to provide a project status update. In summary, I reported “we need to get a new system”. My manager thumped me on the head and said “it is a process issue. Fix that, and then we will discuss systems”. Not fully appreciating the magnitude of what he shared, I went back to work. I continued my fact finding, and coming from an IT perspective (at that point in my career) I again went back to my senior manager and said “we can fix this with a system”. Thump. He responded, something to the effect of, “don’t talk to me about the system, fix the process and then we’ll discuss systems”. That was some of the best advice (and lumps) that I have ever received.

At this point, we dove in and developed a customer contact management (a.k.a., problem management, case management) process for handling customer inquiries and problem reports. We then rolled out the process with NO new technology, and spent a few weeks working out the kinks. Once the process had been “burned in” we THEN defined our systems requirements, selected the system and implemented. And, we found that the systems part of the project was EASY. We had already worked out all the issues regarding: roles, responsibilities, process flow, etc.

STRATEGY: Define your customer relationship and interaction processes, and implement them. Once these are "burned in" consider the appropriate systems solution.

The next article in this series will review how to avoid other common pitfalls of CRM.

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More About Customer Centricity, Inc.

Customer Centricity is a business consulting firm that partners with companies to improve the performance of their service organizations. We leverage our real-world experience to help our clients manage their customer relationships in more effective and satisfying ways.

Customer Centricity delivers on this promise by optimizing the interaction between people, process and technology to achieve higher levels of customer satisfaction and increased operational efficiencies. We provide:

  1. Comprehensive assessments to identify the actions that will yield the greatest return;
  2. Skills Training to enable customer-facing personnel to deliver exceptional levels of customer service;
  3. Design and Implementation of business process techniques to serve the customer in efficient, effective and consistent manners; and
  4. Identification of the appropriate business processes to automate, enabling companies to get the most from their investments in technology.

In addition to our core practices, we also maintain a network of strategic partnerships to provide end-to-end consulting across your organization with a commitment to seamless execution.

Click on the following link to see what our customers have to say.

To learn more about Customer Centricity:

call: 603.491.7948

send e-mail to: info@customercentricity.biz 

or visit our web-site: www.customercentricity.biz

In Closing

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Copyright (c) 2002 by Customer Centricity, Inc. All rights reserved.