Although most people agree that CRM is an important enhancement to their current strategy, many executives are experiencing sticker shock as they look at CRM projects that costs millions of dollars, especially during such an austere time of belt tightening. But don’t get discouraged. Even if the funds are not available right now, it is possible to start the CRM process by performing critical primary steps without a heavy initial investment. Indeed, companies that jump-start their CRM enablement today can help to ensure that they are not left behind tomorrow.
A CRM project includes much more than just technology. In fact, arguably the most difficult aspects of CRM are the organizational and process components. Since these elements typically use internal resources, the cost is primarily the opportunity cost of applying them to CRM related rather than other internal projects. Internal resources can thus be applied before the cash for CRM software, hardware, and consulting is gathered.
The following is a step-by-step process for getting a CRM initiative started without up-front dollars:
1. Create the CRM Vision The first step is to formulate a vision for the CRM within the company. This vision will determine the focus of the initiative and help to guide all subsequent activities. Although each vision will be different, they all share similar elements such as the degree of customer focus within the business model and the channels for achieving that focus (such as sales force, call center, and so on).
2. Diagnose current capabilities The next step is to take an honest look at the company’s current situation to better understand what needs to happen. In particular, it is important to examine the customer experience. This is not just a list of all the ways that customers interface with the company, it is an assessment of the quality of those interactions. Ask yourself: What type of customer data is captured and how it is used? Do we know who are our most and least profitable customers are? How differently should we treat them? How consistent is customer contact across channels? What is the response time to customer inquiries? Is the firm listening to its customers? What are they saying? What follow-up / improvement activities are happening? What speed / cost/ quality tradeoffs are customers willing to accept in order to conduct more business? Why are we winning or losing with customers? The more tough questions answered at this stage, the more value CRM can provide. Now compare the current situation assessment to the CRM vision. The gaps that emerge become the business needs that drive the CRM strategy and technology choices.
3. Define the CRM Strategy Armed with a clear vision and the gap analysis, it is now possible to craft the CRM strategy. The strategy should include specific objectives and the activities that will achieve them. It will act as a road map for the project and help to keep things relevant. It is important to realize that implementing a CRM strategy will involve parallel tracks of people, process technology and knowledge management activities that require coordination and adjustment over time-especially as lessons learned are fed back during the project.
4. Examine and prepare the processes Automating processes that are inefficient or unproductive is a waste of time and money. Quite a number of companies suffer sub-optimal results from their CRM investment because they never spent the time to examine how they do business and improve their processes from the onset. Processes to pay close attention to include: sales & order taking, customer service, accounts receivable, and logistics. Strive to minimize unnecessary activities and shorten the cycle time for these processes.
5. Prepare your data Much of CRM and the decisions it enables is based on good data. It is therefore important to understand the current data situation and make preparations to maximize the benefits from customer identification and segmentation. Historical data may be in different formats (especially if the company was formed through mergers and acquisitions), or incomplete. Depending on how important the historical data is to achieving the CRM strategy, this may be a major problem to the implementation and should be known up front. It is also important to determine additional data needs so that this can be planned for and included in the technology and processes.
6. Create the Business Case Now prepare the business case for a CRM project. The case should include the vision and strategy with a preliminary description of the expected benefits. The case should also include the current state assessment and gap analysis that will drive the cost estimate. Some research into the CRM technology and consulting services marketplace should be compiled to ensure relative accuracy of the cost estimate. In addition, the business case should identify quick hits in terms of how much revenue will this generate, how soon, and how sure it is. You may be surprised to find the initial savings from the process improvements and new revenue will help to offset the necessary investments in technology and consulting.
7. Prepare the organization The last step is to obtain buy in & support from senior management to approve the business case and drive the initiative through the organization. Once approved, all that remains is to identify the CRM project team and communicate the goals of the initiative to the rest of the company. All of these participants (from executive sponsors to team members) must walk the walk and talk the talk’ of CRM as evangelists in order to initiate the desired behavioral change.
Rather than wait until the market improves to make strategic investment in CRM, proactive companies can start the process now with minimal capital outlays. The seven steps outlined above provide an excellent internal foundation upon which to base a CRM implementation initiative. They help to ensure that the company is ready and willing to implement CRM as soon as the necessary capital is available.
Derek F. Martin is a strategy consultant with Pacesetter Management Consulting, Derek has more than 5 years experience working with Fortune 100 companies. Derek specializes in helping companies achieve sustainable results by developing solutions that include people, process, and technology elements. Derek can be reached at: dmartin@pacesettergroup.com http://www.pacesettergroup.com/
