Make More Money Using CRM

By Allan Pulga

Getting a considerable return on investment on CRM technology requires more than simple data mining – clear business planning is the most important part.

Last summer, CRM Guru reporter Ron Condon got to the heart of companies’ misgivings about CRM programs. He spoke with executives and businesses consultants about common concerns and misconceptions about CRM and identified strategies some companies use to get the most out of their CRM efforts.

Back in 2004, many businesses were spooked by an Economist Intelligence Unit survey, which found that of 370 businesses of all sizes, only 15 per cent of them had derived any real value from their CRM implementations.

Condon, quoted the study in saying, “To the chagrin of many companies – from those with double-digit billion dollar annual revenues to small businesses with less than $50 million in annual revenue – CRM has yet to achieve the promised return on investment goals that made it so appealing in the first place. Furthermore, in many cases, customers have yet to notice a decisive difference.”

Times have changed. Rod Street, partner with IBM Consulting Services looks back on that study and speculates that most people’s CRM fears were unfounded. “People were not clear about what they were trying to achieve,” he told Condon. “They didn’t identify the levers of business they wanted to improve and focus on them. The most successful ones were those who managed their budget and tracked the benefits against business goals.”

Street described the success of Dutch beer giant Heineken, which stuck to a specific set of goals, namely prioritize important customers, increase brand penetration, and improve service standards. Because the CRM plan was better focused, it yielded a 14 per cent growth in market share.

“The aim of any CRM project should be to cut the cost of handling customers, while delivering better service,” added Condon. “CRM should allow you to identify your most profitable customers, and should streamline business processes to deliver them a smoother and more efficient service. In short, in should increase profits.”

Stockbroker TD Waterhouse equipped its call centre with a voice recognition system to handle enquiries from clients wanting to check stock prices. If clients then wanted to make a trade, they were put through to a live operator who had their details up on screen and ready. According to Paul Brewer of BT’s CRM practice, which installed the system, first-year savings totalled £200,000 ($394,000).

“The key to any project is to have clear measurement and saving money will always be part of the equation,” said Brewer. “I’ve seen very few business cases signed off in the last 18 months that would mean an increase in costs to a business.”

Jason Nash, CRM manager for Microsoft UK said small companies can benefit from CRM programs just as well as big ones. “In small businesses, CRM can have a big impact. For instance, if you don’t need an office administrator because you’ve got workflow rules set up, that could be a saving of one person, which can be a big difference in a small firm.”

The importance of user adoption

Common rhetoric in the CRM world is that technology is only part of the picture – the entire organization must be committed to customer service and the system for progress (and profits) to be made.

John Appleby, chairman of Enterprise CRM, a consultancy working with Salesforce.com, said user adoption is the key to achieving ROI. Staff need to be trained properly and the systems must be attractive to use.

“A critical success factor is making the system really useful to the individual ‘front-line’ user – not just their management,” he said. “So giving a user individual dashboards showing their won personal key objectives or other success criteria can really help.”

iQmetrix’s RetailiQ software offers cellular retailers the most comprehensive CRM technology in the industry. In a market where customer service may be the last great differentiator, RetailiQ’s real-time CRM module lets you store and retrieve a customer’s complete history at any point in the relationship. As a result, staff can offer the same level of personalized customer service on every visit.