As companies become more sophisticated about customer relationship management, we’re seeing fewer big mistakes being made with CRM deployments. “Fewer” isn’t the same as “none,” however: Mistakes are still made, and while they don’t always spell imminent doom for the project, they do waste money and cause unneeded stress for the project manager. Here a few key ones to put on your watch.
1) Overdoing customization
One of the biggest mistakes companies make in deploying CRM is customizing the application to match their current practices – or what they think are their current practices. This often adds not only significant initial development costs but also ongoing development costs (because customizations have to be undone), adoption challenges, and expensive upgrades.
A better strategy is to keep initial customization to a minimum and then road-test the application with users to see what really needs to be changed – and what would be better left alone. This is best accomplished with a real pilot where users get their hands dirty and provide input that is actually incorporated into any customization plans.
To avoid overdoing customization, ask yourself, “Is our way the best way to do this, or is it just the way we’ve always done it?”
2) Data for the sake of data
Gathering customer data is often a key goal of CRM, but if you don’t have a vision for how you’re going to use those data, you’re wasting users’ time and irritating customers while driving up IT costs. The most-effective CRM managers are continually looking for ways to leverage customer data to improve marketing and customer satisfaction – and are continually keeping on top of new technologies that can deliver greater return on investment.
A key missed opportunity can often be found in the contact center. Using text or speech analytics to leverage the information contained in calls that are monitored or recorded for quality assurance can help uncover opportunities to improve customer retention and profitability.
Keep in mind that using old data is just as bad as having no data. Payroll service ADP, for example, which uses Salesforce.com and SAVO Sales Asset Manager to support its sales efforts, conducts regular reviews of product, customer, and other data in the system to ensure that out-of-date information is scrubbed and only relevant information is accessed.
To avoid wasting money on old or unneeded data, ask yourself, “How will we use this in the next six months? Has anyone used it in the past six months?”
3) Overlooking on-demand applications, particularly in the contact center
Although on-demand sales force automation, service, and marketing applications are broadly adopted, fewer organizations have considered an on-demand solution to support their contact center. Looking to on-demand contact center applications can significant reduce ongoing software and support costs and enable you to take advantage of innovations in contact center technology without the cost of upgrading your existing system.
Going on-demand for the contact center can also deliver the benefits of greater flexibility and growth ability without the big up-front investment. Outrigger Hotels, for example, moved to Echopass to support its contact center, which significantly reduced its ongoing IT costs while enabling it to integrate e-mail, chat, and other customer communication channels and support remote contact center agents.
Before you approve the next invoice for license maintenance for your contact center solution, spend a half-day at least listening to the pitch from some on-demand contact center vendors.
It can be enticing to buy additional software components or applications because they’re offered at a discount. But discounted isn’t free, and there are other ways to get discounts on software. And beware of adding too many CRM tools to users’ portfolios; the more simple and integrated your CRM tools are, the more likely users will use them effectively and the more cost-effective they’ll be to manage.
RightStart, which sells products for infants and young children, uses RightNow to support its marketing and customer service efforts. When the company began looking for a system to track trouble tickets, it first looked for a new application, which would have required additional software, training, and support costs. Ultimately it took a closer look at how it could use RightNow to support the project, and following a little customization, it now has a trouble-ticket system that’s integrated with its existing application and provides all the functionality its users need.
5) Buying CRM to solve a management problem
This is the biggest money waster of all. CRM can support changes in sales, marketing, and service management, but it can’t lead them, and if you’re just paving over cow paths, the cows will still wander in the same direction. Before you spend any money on CRM, make sure you know the business goals you plan to accomplish in clear terms (we will make sales more productive, we will standardize the lead-generation process, we will track the ROI from all our marketing efforts consistently), what changes in operations are needed, and who’s going to make it happen. A good rule of thumb: If you don’t have a clear view of how you’re going to see benefits within 12 months, you need to do more thinking before you waste any money on CRM.
Rebecca Wetteman is vice president of Nucleus Research, a Wellesley, MA-based research and advisory firm.