Introduction

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The term Customer Relationship Management is about as overused as total quality management was in the 1980s. Nevertheless, it holds allure, promise and obligation. If your company is not striving to achieve some degree of CRM capability across your lines of business and throughout your departments, your organization is certainly behind the times, if not critically crippled. Most are making an attempt, but at what cost?

Let's face it there is no such thing as "future-proof." You can plan, you can remain flexible to what's coming, but there is no way to insulate your company from the technology future. A common practice is for vendors to convince companies that it is in their best interest to buy one gigantic installation of software and hardware that serves all lines of business, all departments and divisions all that once and call it a "CRM solution."

The truth is, no matter how complete your "solution" is, eventually it will become obsolete. Changes in organization goals, structure or ownership will affect the usefulness of certain parts of the solution. What constitutes a complete solution today creates roadblocks to dynamic growth as a company later. A modular approach to solving CRM challenges affords the resilience necessary to stay dynamic without breaking the bank.

This report outlines a step-by-step process toward creating a long-term solution that can evolve with changing business objectives and technologies. From the RFP creation process to the build-or-buy decision process, this report will help prepare readers to embark on the painful journey of building CRM processes and infrastructure across a network.

Defining CRM

CRM is an approach to interacting with customers and prospects to provide a seamless flow of information and service to the customer from marketing, through sales and customer service for the entire customer life cycle. CRM initiatives typically are built upon a central customer database that integrates data from every form of interaction with customers to enhance relationships.

Goals of CRM

Why pursue CRM? Most companies expect CRM to add stability through increased customer retention and long-term profitability through increased efficiencies in sales (higher conversion rates of prospects to customers through prospect relationship management), marketing and product development. Industries that can benefit most from investing in CRM technologies are industries in which the customer has two characteristics: high value per client account, and highly available information about the customer's needs, wants and buying history.

Companies expect to achieve high sales-conversion rates, high customer retention and high profitability per customer by providing:

• The right product (or service)
• To the right customer
• At the right price
• At the right time
• Through the right channel
• To satisfy the customer's need or desire

Your ability to achieve these goals depends mostly on the availability and usability of information about your prospects' and customers' buying habits and preferences. To increase your return on investment (ROI), the right information technologies are critical to:

• Know who your customers are and who your best customers are;
• Know what they won't buy and stimulate what they will buy;
• Time when and how they buy;
• Learn customers' preferences and make them loyal customers;
• Define characteristics that make up a great, profitable customer;
• Define the best channels to address a customer's needs;
• Predict what they will buy in the future;
• Keep your best customers for many years;

The secrets of failure

Before we get to the secrets of success, let's look at the secrets of failure. Gartner recently found that as many as half of all CRM implementations fail. Building a customer-centric company takes time and planning, and a dedication to change from the front through the middle and back end of a company.

According to CRM experts Don Peppers and Martha Rogers the most frequent mistake that companies make is to confuse a CRM strategy with a technology implementation. They claim that 50 percent of CRM projects fail. The difficult part of any CRM initiative is making sure that a company's culture is ready for a customer-centric focus and that the executives are onboard. Then technology becomes an enabler of the one-to-one communication Peppers and Rogers have been touting for years: Web sites, call centers, mobile devices, and other media become opportunities to develop profitable customer relationships that will put your company in the successful half.

Ceonex embraces the basic action areas that Peppers and Rogers say will make the difference:

Organizational change:

A single customer relationship typically is handled by several departments (even prospect data is shared among sales and marketing in the least). Data integration, interdepartmental communication, and someone to oversee these processes are critical to success. Smart outsourcing for technical projects achieves specific goals while building internal expertise for tackling future projects.

Metrics to measure success:

The traditional financial measures of success commonly used in a transaction-based environment are often inadequate. A customer-based company must align its branding, research and development, compensation, budgeting, and incentive policies according to a customer-centric model. Human capital becomes a tangible metric.

Culture change:

Long-term relationships outweigh short-term sales. A customer-focused company should be prepared to make recommendations that are in the customer's best interests, even if they conflict with the short-term interests of the company. Ethics must transcend financial goals.

Channel:

For company that are moving their products or services through channel partners, establishing relationships with end users and channel partners is crucial. Partner relationship management introduces a new burden (in terms of data) and opportunity for channel marketers.

Transition planning:

Any company engaged in becoming customer centric must be aware of the transitional process, including a step-by- step awareness, a clear funding strategy and attainable goals. This process supports a modular approach to building network infrastructure for CRM projects rather than introducing sweeping changes all at once. Whether you are reviving a stalled implementation or launching a new one, this is where the fine line between success and failure is often drawn.