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June 27, 2008

Too big, or not too big?

That is the question. No, not for the King of Denmark. Not for the Jenny Craig spokesperson, either. We are asking about the size of CRM programs.

A circumstance that I have been encountering with more frequency lately is one where things are summed up roughly as, one big program or a bunch of little ones? The typical situation goes something like this. A client organization is comprised of a number of business units and functions, each of which is looking into some form of customer management tool – SFA, campaign automation, managing contacts, managing service requests. Some groups share customers with others, some groups don’t, and some groups work with all the customers.

Likewise, some of the business units share information about customer activity with other business units. Some don’t, but they should. Customers don’t always call into the correct place and sometimes they get lost and sometimes that get taken care of.

This probably sounds like the poster child for a company that can benefit from an enterprise-wide CRM platform and should become a case study for the infamous 360 degree customer view.

Not so fast. This same company has a history of failed company wide initiatives. Different executives are in different places on the need to make a big investment in a large software program. And, one or two of the business units are on the verge of pulling the trigger, including approved budgets and selected software. Meanwhile some of the other groups are months or even quarters away from making any decisions. Going down the path of a single enterprise program would delay the groups with the biggest pain from getting needs met for longer than will be tolerable.

Gnarley Horn

Sound familiar? What is the answer? Too big, or not too big?

Ten years ago the answer would have been automatic. The IT department would select a CRM platform and begin implementing for the groups that ask first, and maybe even for the groups that did not ask. However, by the third or fourth implementation it would be discovered that the data model for the first group does not fit the next group. Of course, today we avoid this by building a single data model first and then force all the groups onto it whether there is a fit or not. This has caused a backlash and in some cases mutinies where business units abandon the company platform and build their own CRM. And we are back where we started.

Can’t we all just get along?

For organizations with multiple business units and multiple customer types, it should not be a given that a single CRM platform and a single source of customer information is the correct answer. If there is a need and a benefit for an integrated approach, it should be considered. But that needs to be addressed first. Just because it is convenient for IT to support a single CRM software package does not mean it makes sense for the business.

For most of the organizations I work with there are three categories of requirements in these situations. First, there are the common requirements such as the need for a single forecasting model or the need to share a single customer identification number. Second there are best practices that are useful to share, but not mandatory, such as following a similar set of sales stages or using the same codes for service issues. Finally, there are requirements that are unique to business units, such as the need for distributor information in a single geography or compliance differences driven by legislation.

To answer whether a company should have a single or multiple CRM programs will be contingent on the ratio of common versus unique needs. I am not sure there is a single threshold that once crossed drives the decision one way or the other, but it is this ratio that needs to be examined and then the decision made whether there is strong enough need to drive conformance to a single platform or whether the agony of that conformance will outweigh the benefits.

Ultimately, the decision needs to be made by the stakeholders who will benefit from the common approach, but also pay the price of the conformance (and the length of time it takes to get everybody up and running with one approach). Enterprise wide CRM is a challenge, and not enough organizations have proved it to be successful. That does not mean it is not right for your organization, but you do need to go into this with eyes open and make the decision with all the stakeholders at the table.

June 13, 2008

Connecting the e with CRM

So, why do I keep running into client organizations that, for some reason, believe that e-business is something separate from their other customer interaction requirements represented within their CRM programs?

Working with customers on the web is just one form of CRM, albeit a relatively new one. You should use the web to attract customers and generate leads. If appropriate, you should look at selling products or services over the web. And, whereever possible, you should be using the web to manage service interactions. These are all normal CRM related activities, but performed with the internet as the channel rather than human contact.

Golden Eye

However, many of the organizations that I meet with feel they need to have a separate strategy for managing these interactions – a strategy built and managed outside of the CRM program.

The problem with keeping it separated is that it can be sub-optimized if left un-integrated. The web is often the first point of contact from a search. It typically serves as a key point for self service. A landing page typically serves as a platform for e-mail marketing. Monitoring web activity is a fundamental mechanism for lead nurturing. E-commerce sites can serve as a primary order entry source. And, increasingly, the web is becoming the preferred partner communication medium. How could these be separate from your other CRM activities and function optimally?

CRM strategy should encompass every channel of customer contact, whether for acquisition or retention, including partner relations. The web is simply one of the channels that should be within that strategic framework. The web channel can serve as an ability to both extend reach out to the long tail, but also to be the virtual receptionist for your best customer. The million miler wants to have self service access when working late at night from a hotel and wanting to print a boarding pass. Likewise, the once a year flyer should be encouraged to your airline through easy reservation booking on your site.

If you don’t have a web strategy, you need one.

If your web strategy is separate from your CRM strategy, they need to be combined

Most importantly they need to be integrated – not just identifying the preferred channel for each customer segment, but specifying the best combination of channels for all acquisition through retention initiatives. In the old days at Sears & Roebuck the stores were for the city folk while the catalog was for the rest of us. Today, the line is blurred and we must assume that any buyer can demand access to multiple channels for even a single transaction, including your web.

Don’t let that e get separated from the C, R and M.

June 06, 2008

Fried Pickles

Last week was another first for me. Yes, I had my inaugural taste of fried pickles. Perhaps some of you out there have no experience with this culinary oddity, while some of you might wonder how it is possible that a person with nearly half a century on this planet could have gone so long without such a staple in their diet.

The concept of a fried pickle had never occurred to me. What is most strange is that it is a food item that has been doubly processed. First, the cucumber goes through the pickling, which is typically the end of the road. But, the fried pickle then goes through the whole batter and fry process, an extra set of steps for something that is already supposed to be ready for consumption.

I have run into other food items like this. The chocolate frosted glazed donut comes to mind. Again, this is an ingestible product that has gone through a preparation twice. I always wonder about these – are the glazed donuts stale, so they add the extra chocolate topping to make them appealing again?

Did these fried pickles follow a similar path? Did the vinegar and garlic wear out causing them to require a cooking process as a form of second sterilization? Is this a lipstick on a pig situation – covering up something that is not quite right with something that is a superficial betterment?

Of course you figured out where this is all leading. How many CRM systems have been deep fried in an attempt to make them more appealing? We get asked all the time to get involved with this. The CRM system does not satisfy anybody, but if we just layered an extra topping of analytics it would be just fine. Or is this is a situation where we are deep frying the CRM system with even more capability such as adding lead scoring to an already good lead management.

So, you might ask, was the deep fried pickle good? Actually, it was really good. Just like enhancing lead management with lead scoring is good. But, that situation starts out with an already good lead management capability. Too many times I see the stale glazed donut with a request for adding chocolate in an attempt to improve it.

Admittedly the metaphor gets a bit weak here, so give me some journalistic license. If your CRM system is like a stale glazed donut, please don’t expect that a chocolate topping of analytics or any other pleasant distraction will make it less stale. You have to fix the donut, not disguise it. In the case of the stale donut you simply start over with a fresh donut and cut your losses. This may not be the case with your CRM system. You might not have to put it in the trash compacter – it is likely improvable. But, the point is, don’t try to cover up the problem with a superficial improvement. Fix the problem, and then add more capability.

Enjoy those pickles.

Manneken Pis Choco