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As the firm builds its CRM strategy, there are a few aspects that appear in all successful efforts. They should be considered as the company moves forward on what will be a very extensive enterprise-wide exercise. My favorite ingredients include:

 Focusing on business needs rather than technology implementations

When a firm introduces CRM without a clear connection to the business needs, it generally falls into a trap. The sales people do not populate the databases with the required customer information and other functions struggle to get data in a form useful for their needs. Consider the problem encountered by tobacco company, Liggett Inc., as reported by Ted Kemp for Internet Week.com:

Liggett Group Inc. learned first-hand the problems that arise when a CRM application is designed for only one department’s needs. The tobacco company gathers spending information and other basic data from stores that sell the Liggett Select, Pyramid and Eve brands of cigarettes through its 60 sales representatives who have frequent contact with the stores. When the CRM project launched, the sales reps used hand-held devices sup- ported by sales force automation (SFA) software from AvantGo to send pricing and sales data back to a central Microsoft SQL database server. Merchandising staffers could examine the data and decide where geo- graphically they should spend promotional dollars. But eight months into the project, merchandisers were still seeing only a dribble of information coming in from sales reps. Salespeople resisted using the application because they got nothing in return, says Mike Lehman, IS manager for Liggett’s Western business unit. ‘Though it did help out considerably in the office, it really wasn’t of all that much benefit in the field. It was just something else for them to do,’ Lehman says. To give sales reps incentive to populate the database, Liggett modified the AvantGo application so salespeople could access data that was useful to them, including sales histories and even updates on whether the customer was paying on time. Liggett also added new data fields to the application so employees could enter useful information, such as observations of competing promotions found in stores. Now the application helps the salespeople do their job – selling – rather than merely adding to their responsibilities. Liggett has seen a turnaround in reps’ willingness to use the application to manage their customer relationships. (Kemp, 2, 2001b, p. 1–2)

In plain terms, CRM applications that do not take into account the varied ways different business units, departmental functions, and

Mistake 5: Poor Customer Relationship Management  73

personnel work together will not succeed. Moreover, the firm has to understand that unless you show the salespeople how the use of technology or software will make them more money, it will not be used.

 Designing process steps and enabling systems to help the customer, not

plugging in software that automates the back office procedures

Getting CRM right is all about understanding how every part of a business interacts with its key customers in building a fail-safe system to make it easy for those customers to deal with the firm. This requires new and often unfamiliar approaches, but it certainly means helping the customer so you get more sales in the future. It also means putting a customer-centric strategy ahead of the software purchase. If the objective is to marshal and deploy customer infor- mation to enable more effective service and foster more frequent interactions, where appropriate, then the firm is well advised to start with a strategy built around what the customer wants and needs.

As Elizabeth Herrell, research director at Giga Information Group, puts it, “The key factors for CRM success are designed to reinforce the message that enterprises need to think of customer transactions as episodes in a dynamic, evolving relationship rather than as isolated events” (Herrell, 2001, p. 17). That means linking and reorienting existing processes and channels around the customer. It can require investing in contact centers that provide the kind of after-sale service the customer wants.

 Aligning CRM objectives with the business strategy

Many managers try to ram their CRM efforts through without taking some time up front to win support across the firm, and making sure the objectives mesh with the overall business strategy. In so doing, they fail to evaluate and alter business processes to correspond with the capabilities of the CRM package. CRM is not a product or a single application. It is part of a business strategy.

Online travel service company Expedia Inc., for example, uses CRM to enhance its strategy of meeting customer needs and building new revenues. The firm uses “customer spending and transaction data to forecast how much it should staff its support centers, how many servers it needs and other customer support considerations. Customer data are also pivotal when Expedia is deciding how to market toward individual consumers. The company captures customer information

74  The Supply Chain Manager’s Problem-Solver

through inbound e-mail, the Expedia.com site and phone support” (Kemp, 2, 2001, p. 4).

A customer-centric strategy starts with recognizing the value of each customer and being aware of the costs of acquiring new customers. Next, the firm accepts that CRM encompasses the entire firm, and involves integration across disparate functions, from the front-office- facing functions to the back-office inventory and supply chain activ- ities. The linkage has to be of a high caliber, providing valuable data to improve customer relations, through any channel — at the store, by mail, on the Web site, or over the telephone. Mostly, it means offering an improved service proposition and keeping promises to customers. The rewards include increased business volume.

Within a CRM strategy, there are three issues that must be addressed:

 Organizational issues. These concern the pervasive nature of CRM

and the imperative that every function plays in supporting the cus- tomer interaction. That requires a strong manager and leader for the process.

 Customer awareness issues. Customers need to know what is avail-

able, the value that will derive to them, and how to be comfortable with and make best use of the alternate channels.

 Technology issues. Getting the customer perspective right in the first

place is crucial, but technology is still vital to success. Integration is the key. All applications must run seamlessly across all channels in the enterprise. Different personnel in different parts of the organiza- tion must share a 360° view of the customer being served.