TORONTO — Long-term CRM strategies without short-term goals are headed for disaster.
That was the conclusion of a panel of experts at the eighth annual CRM conference held Wednesday by the Canadian Marketing Association.
The panel was chaired by David Williams, managing director
of international business for British consulting firm QCi Ltd. A recent report from the firm indicates 60 per cent of all customer relationship management (CRM) initiatives will fail. The greater the scope of the initiative, the more likely the failure, said Williams.
The panel, which was composed of analysts, marketers and bankers, couldn’t agree on the best way to implement CRM — or even on the definition of CRM — but did agree with Williams on one thing.
“”If you’re involved in the 10-year project — run,”” said David Moxley, a private consultant who has worked with the Bank of Montreal and IBM. “”It is doomed.””
The problem, said Williams, is poor preparation and impatience. Companies expect immediate results from CRM implementations without laying down the groundwork. He described “”board-level confusion”” about CRM where senior staff approve a project without understanding what’s involved. “”Even if you’ve got a clear vision . . . you won’t arrive at your destination if you don’t know where you started from,”” said Williams.
He estimated that for every dollar invested in CRM over three years will yield a four-dollar return. But “”most CRM programs get canned after the first year, when you haven’t earned a payback.””
Data accrued over the short term should be put to use, he argued, rather than waiting for long term results.
Bob Carroll, vice-president of customer insights and relationship marketing for the Canadian Imperial Bank of Commerce, claimed return on investment can be achieved in nine months. They key is breaking a CRM strategy into small, workable projects.
It’s also about realizing the value of your employees, said David Neilly, HR consultant with Towers Perrin. “”In order for CRM to be successful, you’ve got to be really clear about behaviours,”” he said. “”You’ve got to chose people for roles that are compatible with your CRM strategy, then you’ve got to train them.””
The only way a CRM project ever gets approved in the first place is because someone within the organization champions it, added Williams. That makes it a fragile proposition to begin with and champions are frequently blamed for failure. But high turnover is bad for business, since it just involves training new employees. “”You’re better to pay people more and retain them for longer,”” said Williams.
The issue that divided Wednesday’s panel was the word “”relationship”” and whether it still belongs in the acronym CRM. Sometimes customers don’t want a relationship with a company, they just want fast results, said Don Barnes, managing director of OgilvyInteractive. “”Sometimes it’s an emotional bond, sometimes it’s just value,”” he said. “”The movement from customer relationship management to customer management is almost customer-driven.””
Mark Tonnesen, vice-chairman and chief financial officer of RBC Insurance, said that the company consistently ranks the best call centre agents as those who take the shortest time on the phone with clients. “”I have a problem with people who think that productivity is the enemy of service,”” he said.
The R isn’t right for everybody, agreed Moxley. He said the president of online bank ING once told him, “”If you want a relationship, get a dog.”” ING, said Moxley, focuses on process and efficiency rather than building a relationship with a customer.
QCi research indicates that European CRM implementations are more successful than those in North America and Asia-Pacific, but Canada is fairing better than the U.S. Bankers and retailers are better at CRM than technology firms and travel companies, but there is no clear leader yet. CRM deployment hasn’t radically improved over the last few years, said Williams, but companies are beginning to learn how to do it better. “”We’ve got this gun,”” said Williams. “”We’re beginning to know where to aim it and what to load it with.””
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