Best Principles to Practice for Effective CRM
What is Customer Relationship Management?

Keeping Customers is Smart and Profitable

CRM Applications Serve Employees, Customers, and Partners

Customer Loyalty--the Holy Grail of CRM

Buy or Rent Your CRM Application?

Partner Relationship Management Brings Indirect Channels into CRM

The Future of CRM

About the Author

Advertisers' Web Sites

CRM Home

Adsections Home


















Beware of articles purporting ìbest practices,î warns Michael Schrage, author of Serious Play. ìJust how sustainable are 'best practices' in a world built on the premise that change is the one constant?î he asks. Fair enough. Letís focus, therefore, on ìbest principles to practiceî in CRM.

Leave it to Steve Diorio, principal of Stamford, Conn.-based IMT Strategies to put his finger on the problem with a lot of CRM practices today: ìI feel like a marriage counselor when I go around to a lot of these companies. Over the past six months Iíve been with 30 companiesí CIO and marketing guys, and the level of cooperation now looks like kids in a street fight.î What are the best principles to get past this stage?

Involve top management on Day One.
Top management always pushes successful CRM. There are never any exceptions, says Brendler and Associatesí Bill Brendler: ìIf they donít lead the charge, it wonít happen. Before CRM will work, the top person needs two things: A vision, clearly enunciated across the organization, and the will to make it work across functional boundaries.î Ian Woodhouse, Dataforce Corporationís CRM practice manager, agrees. ìEach of the constituentsósales, marketing, manufacturing, or whateveróhas an inherent belief that they are the most important department in the enterprise. Without a strong executive sponsor taking responsibility for the final sign-off on the completed system, the inevitable result is that strong-willed committee members will shape the final implementation to reflect their desires for their departments or divisions.î
Restructure employee compensation to reinforce CRM priorities.
Much of the problem, of course, is a company pushing a new set of customer-centric priorities while the old set of compensation practices remains the same. In other words, not ìwalking the talk.î Youíll lose this fight ten times out of ten because, as a wise man once said, ìwhere your treasure is, there will your heart be.î Companies serious about CRM tie employee incentives to customer indicators such as retention and satisfaction. Cisco Systems, for example, rewards employees based on whether the company hits customer satisfaction targets. Over time, CRM-committed firms will change compensation plans. Successful firms will do that as soon as possible.
Manage cultural change and people issues carefully.
ìWhat youíre dealing with is a whole set of new roles and responsibilities,î says Bill Brendler. ìYouíre moving toward a much more customer-focused organization.î To implement CRM, you need people on your side to make change happen. To do this, Brendler says, ìshow them whatís in it for them and listen to their feedback. If feedback is being passed back up through the representatives to the CEO and being acted on, theyíre on your side and change will happen.î For your CRM system to be successful, every single person must support it. Donít settle for anything less.
Concentrate on customer lifecycle value.
Understanding the value of a customer relationship over time is an integral part of CRM. Mei Lin Fung, co-founder of eFrontier Ventures, advises to ask: ìWhich customers repay investment? Which just gobble up resources and should be referred to a competitor? You will only know who you want to find as prospects when you know who you want to keep as lifetime customers.î Archer Consultingís Jim Blaschke agrees. ìThe first CRM application is like a 15-watt light bulb in a dark room. Itís not very bright but can make a huge difference. The wattage can be turned up to 250 when relationships are viewed as a select set of assets to be developed.î
Bulldoze goat paths, donít pave them.
Fixations on CRM technology result in paved ìgoat paths.î Insight Technology Groupís Jim Dickie says, ìTime and again, I have heard executives lament about how they started focusing on technology too soon in the process. If you use 21st century technology to pave a goat path, you will end up with a really smooth goat path. But, it is still a goat path. If your process is fundamentally flawed, technology may give you boost, but more likely it will end up helping you do inefficient or ineffective things faster than ever before.î Message: use CRM technology to do things differently, not just faster or cheaper.
Push the project if youíre serious. And keep pushing.
Donít be too diplomatic. Your firmís long-term future may be at stake. Accepting less than 100 percent user buy-in doesnít work. Make it clear that using the CRM system is not an option, Dickie advises, but rather is a condition of employment. ìAs soon as you let a single person get away with not using the system, the foundation for your project will start to crumble,î he says. Also, donít back off at the first sign of problems. No matter how much thought you put into the system, you can count on running into unanticipated problems when you implement it fully. Backing off at the first sign of problems will cause chaos if it happens too often.

Provide training and support. Prepare for continuous improvement.

Successful CRM is an ongoing process. After youíve developed your strategy, defined a project plan, involved all the right people, chosen appropriate technology and implemented the program across the enterprise, now what?

  • Train new employees. New employees will require the same level of training as your existing personnel.
  • Maintain adequate system support. For example, if you are asking your sales teams or channel partners to manage their business through a CRM system, you must give them a fast, easy way to get support.
  • Plan appropriate enhancements and upgrades. You will continue to improve the way you sell over time, so your system will need to be enhanced accordingly. Budget for that now.