Are you on the CRM bus?

If you thought that the road was open after Y2K, be prepared for a bumpy ride with customer relationship management

If you thought that the road was open after Y2K, be prepared for a bumpy ride with CRM.

Just like number 11 buses for a busy it department there's always another major it project coming along in a moment. With year 2000 done and dusted, and enterprise resource planning up and running, the next biggies are, of course, the Web and customer relationship management (CRM). Or, more usually, both - interdependently - together.

If you want to see where the CRM bus is likely to take you, the best thing is to ask one of the people already on board. Private health company BUPA caught the CRM bus some time ago and, at last month's Computer Weekly 500 Club meeting, BUPA's group IS director Uwe Natho told his fellow it directors and managers what the view was like from the top of the CRM double-decker.

So, are people in for a bumpy ride when it comes to CRM?

Natho has reassuring news. "CRM has been blown up out of proportion," he says. "I don't feel it is that new or that complicated. It is basically one-to-one marketing."

So far so good. Now the less good.

"CRM isn't cheap," Natho highlights bluntly.

If you go down the CRM route, he says, even for something like a sales contact management system, expect to fork out a few million pounds in the end.

But to talk about technology and systems at all is to rush too far ahead, too fast - a fatal mistake when it comes to successful CRM. That's because, urges Natho, the most important element of CRM is not the technology but the underlying business processes. These must be tackled first when the CRM bus arrives at your stop.

Why?Because CRM is all about knowing your customers individually, and responding to them individually, and selling to them individually, it is absolutely essential that you know what you want to do and why and how from a strictly business point of view - before a line of code is loaded anywhere.

Natho's CRM experiences are based on working jointly with the business to develop a plan on becoming customer-centric. His key message is: involve your users and don't start developing or implementing any CRM systems at all until you've got the underlying business processes right, rigorously worked out in co-operation with the business.

For example, at BUPA, working out just how best to segment the company's customer base in readiness for one-to-one marketing was a delicate operation in its own right. Customers veered from the nonchalant couch potatoes who would cheerily bin an invitation to a medical screening to the highly health-conscious segment who would respond with alacrity.

Gaining this kind of indepth, individual knowledge of your customers is all very well, however, but it was clear from the Computer Weekly 500 Club directors that it raises two significant issues: one technical, one ethical.

The technical issue is that it is a safe bet that every organisation starting a CRM initiative will be faced with the problem that data about customers will inevitably be spread across multiple databases - and that existing information may well be inaccurate, unreliable and contradictory. Cleaning and collating customer data will, therefore, be a major first task of any CRM programme.

The second issue that it directors were quick to raise is that of customer privacy and data protection. Quite apart from what is legally permissible is the issue that customers may resent, or even mistrust organisations that have detailed and comprehensive knowledge about themselves. As e-commerce comes on-stream, the amount of customer information will only increase.

Businesses must learn to understand their customers' apprehensions in this respect, for example, by being delicate about the way they take such knowledge of the customer from the Web site and present options and information back to them. What rights does the organisation have to push back over the Web to convert interest into a sale, questions Natho. Judging from the Computer Weekly 500 Club response, many businesses are also pondering how to proceed on this issue.

Working hard to ensure that your customers regard you as a 'trusted agent' who will not abuse the information you gather about them, such as passing it on to third parties, is a key priority in CRM was the general consensus.

One suggested method of approach to this issue is that it is essential to involve customers in the building of the CRM system. Running focus groups with customers is one possibility, so is launching a CRM prototype specifically to get customer feedback to what is being planned or proposed.

A word of warning about prototypes, however. Remember, says Natho, that whereas a prototype can be built for tens of thousands of pounds, scaling that up to a full CRM implementation will easily run into the millions - which perhaps is even more reason for using a prototype to check that you are taking the right approach to CRM.

CRM will not merely impact the customer and the profit and loss statements on the annual accounts. CRM also introduces complexities to the end-user population of customer-facing staff who will need to become virtually a 'one-person voice of the company' - they will be expected to be not only technically literate in the new CRM systems but also to have extensive skills in customer contact and sales.

Inevitably, 500 Club IT directors agreed, that means end-user training will need to increase significantly.

But contact staff training is way down the line. Foremost with CRM is to ensure that business is on board for the right reasons with the right aims and expectations. As with any major project, no it director should take on CRM, felt the meeting, until that business vision is crystal clear. It may take time to polish the crystal, but it will be time well spent.

With CRM the bottom line is: hasten slowly. That way you'll get an easier ride and be happier with the destination when you get there.

Uwe Natho's five CRM fundamentals

  • Get business buy-in and clarity about the CRM processes you need before you start.
  • You can build a prototype for tens of thousands of pounds, but full implementation is likely to run to millions.
  • Be sure you are able to integrate disparate data sources and ensuring data is clean and accurate.
  • Consultants will tell you - and the business - it's easier than it is. If you don't manage the business' expectations of CRM, others will.
  • Allow sufficient time and money for training customer-facing staff to the higher calibre needed for CRM.

Read more on Business applications

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

SearchCIO

SearchSecurity

SearchNetworking

SearchDataCenter

SearchDataManagement

Close