Summary
Within the current information technologies there are a large number of tools that facilitate the control and administration of a company. These tools cover a very wide range of needs, from purely transactional processes (such as Enterprise Resource Planning "ERP") to those that examine this information and present it so that senior managers can rely on it for decision-making (Decision Support Systems "DSS", Expert Systems "ES", etc.) Within this wide range of systems, we find a class of tools that is relatively new, and that allows us to know and examine in detail our clients' information. tool (Customer Relationship Management,"CRM") allows to analyze the purchasing habits of customers in order to offer services that feel personalized, even if the company has thousands of customers.
It also allows analyzing the data sets of all clients in general, obtaining data that allows feeding that information in some other modules (for example, sales projection for production).
They have parts of Call Center, sales, promotions, marketing and a very wide range of services that previously had not been organized and automated.
Introduction
Within the current information technologies there are a large number of tools that facilitate the control and administration of a company. These tools cover a very wide range of needs, from purely transactional processes (such as Enterprise Resource Planning "ERP") to those that examine this information and present it so that senior managers can rely on it for decision-making (Decision Support Systems "DSS", Expert Systems "ES", etc.) Within this wide range of systems, we find a class of tools that is relatively new, and that allows us to know and examine in detail our clients' information. tool (Customer Relationship Management,"CRM") allows to analyze the purchasing habits of customers in order to offer services that feel personalized, even if the company has thousands of customers. It also allows analyzing the data sets of all clients in general, obtaining data that allows feeding that information in some other modules (for example, sales projection for production). They have parts of Call Center, sales, promotions, marketing and a very wide range of services that previously had not been organized and automated.promotions, marketing and a very wide range of services that previously had not been organized and automated.promotions, marketing and a very wide range of services that previously had not been organized and automated.
The reason for this is the exploration of the beginnings of CRM, the types of implementation, problems and frameworks for the correct adoption of the same in companies. Points will be touched showing the different types of implementation of the tool, and what are the areas of opportunity they cover. The central point of the article will highlight the value that a tool of this type can offer to capture more sales, retain customers, increase their level of satisfaction, etc.
At the moment, these types of tools are only being implemented in large companies. The vast majority of organizations have not appreciated the great value of using this type of technology. Some authors claim that it is 6 times more expensive to get a new client than to retain an existing one. For this reason, I think that this tool will no longer be a value-added tool in the future and become a commodity that any company that wants to progress must have. If not, these companies will begin to know the true price of not knowing your client. (Krauss, 2005)
Methodology
The methodology used was a search for information on the Internet, on sites dedicated to CRM, supported and reinforced with first-hand information obtained from searches in the digital library of the Technological Institute and Higher Studies of Monterrey (ITESM). The databases consulted in this library were: ACM Digital Library, IEEE Digital Library, Emerald and Proquest Computing.
Antecedent
The foundations of customer relationship management (or CRM) methodologies have actually been around since the birth of the business. At the heart of any business transaction is the interaction between the customer and the supplier. Properly managing these relationships to keep customers coming back has been the goal of every company ever since. And more so nowadays, with the arenas of global competition growing and demanding more and more from suppliers, this good management of relationships is increasingly important.
The importance of this topic has been so great that during the second half of the 90s, a significant mass of companies have invested millions of dollars in this type of software and solutions. The interesting thing is to see that analysts predict that this behavior will continue to grow in the coming years. (Reed, 2005) Do these investments represent long-term value? Why has there been such an explosion in investments for this type of tool?
According to Reed (2005), "CRM is everything related to attracting, developing and maintaining customer relationships in a way that is beneficial for the company and for the customer itself." Taking this very general definition, the spectrum that CRM methodologies can cover is very broad. Some purists indicate that CRM has "nothing" to do with IT or Software. But in a certain way, the intervention of systems and technologies that make these methodologies more efficient is necessary.
Changes in global markets have made more and more organizations compete for customers that, given the impressive number of companies that exist, seems to be shrinking. It is necessary to find mechanisms to ensure the survival of the company and customers are the right food to keep the organization healthy. In this way, the CRM principles support companies to offer a more effective service to customers, and one way to do this is by strengthening the systems that serve to serve customers and convert sales and marketing operations into operations that are really "customer-centric". A catalyst that could lead to such changes is knowledge. For Drucker (2005) "knowledge is the only economic resource that makes sense". According to Xu (2005),“A futuristic vision of CRM systems is that they be developed in a way that unites with Knowledge Management (KM), so that not only the operational part is maximized, but the strategic efficiency of the company is increased. by gaining and sharing knowledge about customers. "
Based on this statement, a convergence between knowledge, marketing operations and customer relations (relationship marketing) is visualized. Companies that make efficient use of these convergences will have at hand a competitive advantage over the competition.
An overview and from above
One of the main problems with the term CRM is precisely its definition. Light (2003), developed 3 points of view of this term.
a) It is everything that is related to "precision marketing". The exact alignment between what a producer offers with what the customer requires, all with the vision of ensuring sales.
b) It is the simple premise that you have to pay to meet your clients, in order to maintain them.
c) A small portion of the clients in a company generates the majority of the income (Pareto law). Identifying and collecting information about those customers is the true essence of managing customer relationships.
The development and implementation of such a tool involves many activities. In reality, it is not only about the software to be used, but rather how to organize and change the processes in order to retrieve useful information for the software to be used.
Gartner Group (2001), has simplified the understanding of the process of implementing a CRM by generating a chain of 8 building blocks. These blocks are represented in Figure 1.
Figure 1: Implementation blocks of a CRM solution according to GARTNER GROUP (2001)
The first 2 blocks provide the direction that must be taken for the CRM to be successful, while the remaining 6 have to do with implementation aspects of the tool. A very important point is that the technology to be used (in this case the software) is in the seventh of the 8 blocks. It is verified again that the use of this or that software does not ensure or cause the success or failure of an implementation of this type of tool. Furthermore, the fact that only 1 of the blocks has technological implications speaks volumes about the true heart of CRM, and that it is not necessarily software.
The whole process really starts with good vision. What is vision? At the simplest level, vision is the answer to the question "What do we want to create?" Vision is really what translates and changes strategies and tactics to make the organization a “customer-centric” structure. Normally a successful vision is the result of leadership inspired and supported by the proposals that the clients themselves make. These proposals without a doubt are naturally customer-oriented and based solely on the needs of each client.
The next step involves CRM strategies. These are really the actions that must be taken within the company or organization in order to translate customer requirements into a good that effectively gives added value to those propositions. A good strategy must specify objectives, segments and clients, as well as indicate how the organizational resources will be applied to achieve these ends.
Providing a consistent and valued customer experience means offering services or products that provide added value to the requirements that the customer is asking for, but at the same time must allow the company to gain a position in the market.
No CRM strategy can be successful without the collaboration of the highest levels of the organization. An important point to achieve a successful CRM is really to change the culture of the company, its structures and the behaviors of the employees to obtain the result that was promised. It is not superfluous to mention that for all this to take place, the intervention of the high command is necessary to ensure that the changes are carried out in a timely manner.
CRM processes are all those operations that are related to the management of customer life cycles, and the procedures related to internal company analysis, planning and knowledge management. Furthermore, this block serves as a tool to identify how much CRM technology the company can absorb. According to studies by the Insight Technology Group (2002), there is a strong relationship between the company's organizational maturity and the amount of technology it is willing to absorb.
Information is really the heart of CRM. Quality data will deliver quality results. The way in which this information is collected, and how it is used to make decisions are 2 factors that are determining for the success of implementing such a tool. Putting information in the hands of the right people at the right time is vital to CRM success.
Technology makes the CRM process easier. It is the data, information and applications, supported by an IT infrastructure that allows the CRM to work as intended. It is actually important to mention that the selection of the software to be used is clearly a result of the careful analysis of the CRM processes. It has to do again with the amount of information that the company can handle and can absorb depending on its maturity. Kale, (2003) makes an analogy to gradually integrate technology within companies: "crawl, walk, jog and then run." This is really the evolution in terms of systems that all companies must follow in order to properly digest the systems and make the implementation of this tool gradual, but successful.
The measurement allows establishing the necessary corrections and the adjustments that are required so that the operation of the CRM is as contemplated. Kelvin (2002) mentions "When you can measure that about what you are talking about, and you can put it in numbers, then you already know something about it." With this definition it is easy to imagine that the measurement also allows evaluating the degree of success or failure in the implementation of the CRM.
Reasons for implantation… Why do we implant it?
There are many reasons to implement a CRM. Xu & Walton (2005) mention the main motivators for companies to install such technology (Table 1).
Table 1: Reasons to implement CRM (Xu & Walton, 2005)
* 1-Not important, 5-Very important
The keys to success… or failure
In the last decade, the investments for the implantation of this type of tools have grown enormously. And the trend is expected to continue towards growth. But unfortunately there is a problem. According to Gartner (2002) "60% of CRM implantations are a failure". The reasons why these types of tools fail are quite repetitive. The main causes of this problem are the following:
1. Want to implement the CRM before knowing the strategy.- A well-planned strategy is a prerequisite for the CRM to be possible. Walton (2003), proposes to ask a question that will serve as a guide to know if the strategy is correctly placed before going ahead. What can we do next week to build customer relationships without spending a penny on technology? The secret to putting this strategy together is to really understand the traditional way of getting and retaining customers.
2. Implement the CRM before making the necessary organizational transformations.- Let it be clear. Implementing a CRM system will never change the organization. Training and change in organizational culture, as well as changes in structures within companies, must be done before spending a penny on technology. According to Gartner (2002) "87% of failures are due to a marked deficiency in the correct and adequate administration of change".
3. More technology does not mean "better".- CRM does not necessarily have to be a technological monster. Investing in more expensive systems does not ensure that you have a greater chance of success. Let us remember that each company has its absorption limit and decisions must be made about this. You should never despise software for being cheap. Perhaps the cheapest has just what the company needs and saves a few dollars.
4. Guess, not inquire.- In many occasions, organizations feel with the authority to define what the client needs. But right there lies one of the fundamental problems when implementing a CRM. You have to investigate the needs of the clients, never guess. They will never conform to what one thinks, they will always be right.
There are other types of problems, such as lack of communication, integration problems of people, failure to properly manage time, etc.
Gerson (2005) Explains that the most sensitive errors at the time of implantation are the following:
1. There is no value proposition in the CRM.- That is, it is not contemplated to achieve in essence a visible value of differentiation with the competition when implementing the CRM. This proposition value is plain and simple "what it tells the customer why your company is different from your competitors, what makes you special and why they should do business with your company."
2. Failure to match CRM technologies with the way the structure works.- Many of the CRM implementations are technology focused, rather than process or efficiency focused. Companies typically buy what is believed to be the best and newest technology that will make them more "efficient". After that, the organization tries to change and force people to adapt to the new scheme, and that usually breaks the structure and produces disastrous results.
3. Treat Clients in a similar way within CRM.- This point is really divided into 2. The first point is that companies generally think that they already know and know clients totally. This is a fallacy because no matter how much customer information we have, we will never be able to get full customer insight. The second point marks the differentiation that must exist when dealing with customers. To avoid "unnecessary" processes, some companies treat all customers equally. Precisely one of the characteristics of a CRM is to be able to use the information to treat each client differently. For this reason, since there is no correct alignment of being and should be, implementation fails.
Like identifying the problems that cause failures, Kale (2003) proposes the 10 bases that should be covered to ensure success in the implementation of CRM.
1. Engage executives. Make them buy the idea.- A successful implantation without the intervention of high command never happens. You must have a command line to direct organizational changes that starts from the top management.
2. Determine why and where CRM is necessary. - Will the CRM application facilitate the formation and growth of relations between the company and customers? The answer to this question needs a situational analysis of the value proposed by the company at present, which are the customer segments, the objectives of the return on investment (ROI), are only parts that should be benefited with the entry of the CRM. With these points in mind, you can determine whether or not CRM is necessary and, if so, where it should be applied.
3. Define clear and concise objectives.- Like any business project, having clear and concise objectives must be the correct beginning of any CRM implementation. These objectives must always be represented in terms that can be measured and evaluated. If this point is not correctly defined, the implementation process will be shipwrecked like a sailing ship in a storm.
4. Set achievable and short-term goals.- It is much easier to take achievable goals in the short and medium term than one in the long term. The fact of achieving each of these goals helps the implementation team to feel increasingly motivated and to clearly see the direction that the implementation process will be taking. Small, specific goals are easier to confront than large, and not very clear.
5. Take incremental progress. Step by step.- It is impossible and also not desirable to automate all the functions of a CRM at the same time. It makes more sense to take small functional areas (call centers) or business units to start off with the deployment download.
6. Assemble and Train the correct teams.- Training is one of the most neglected concepts at the time of implementation. Companies forget too soon that what really makes implementation work is people's initiative and knowledge. There must be training for people to adopt the system. Team building is quite important at this stage. The right people in the right teams will motivate the rest of the people and an inertia will be achieved that will inevitably lead to implementation successes.
7. Correctly manage internal changes.- Change management, and proactive change are without a doubt the largest component for the success of CRM. Efficient change management means carrying out a well-focused internal marketing initiative: Selling the vision of change to people before it happens.
8. Externally monitor the program.- At the time of implementing the CRM, everyone is so busy with their activities that they cannot really look at areas of opportunity or problems in the operation. The intervention of an external element that visualizes the entire operation from another perspective is necessary. Furthermore, by general law, you cannot be a “judge and party” in the process.
9. Develop effective feedback mechanisms.- The opinions of all affected parties such as product groups, sales, systems, IT, finance, etc. They are essential to the success of CRM. So a mechanism for collecting that feedback must be considered systematically and without objection.
10. Systematic investigation of customer behavior.- The exercise of monitoring customer needs, and how well the company is meeting those needs is an integral part of the CRM initiative. What is acceptable to a customer today may be insufficient tomorrow. The mechanisms that allow having this information updated are important within the implementation plan.
There are simpler models to achieve success in the implementation, such as the one mentioned by Slepian (2005) called IDIC (for its acronym in English Identify, Differentiate, Interact and Customize). This model is strongly focused on the interaction part.
Thompson (2005) mentions another model of how to obtain favorable results in the implementation process: "SMART: Strategy, Metrics, Aligned objectives, Redesing processes and Technology tools".
Whichever model is taken, areas are denoted that cannot be ignored (such as the support of the leadership and administration of change) and once again highlights the importance of the operational and administrative part over the part technological. In this way, the method to be used may depend on the size of the company, but it is recommended to always follow a structured path to achieve success.
Conclusion:
During the information gathering process, the interest and expectation generated by the implementation of these tools in companies has been denoted. There are still many companies that have not decided, or do not know CRM. But it is also true that business conditions have drastically changed and that sooner or later all companies on a larger or smaller scale must have such a tool.
The time technology takes to finally park in companies will be a very important factor that can be decisive for their existence and survival. Although it is true that many companies live today without the use of technology, it is only a matter of time for their clients to seek new horizons, with new suppliers that treat them personally and can thus obtain benefits from a client relationship- long-term provider. At that time those who are not prepared and aware of the use of technology will know the price of letting a client go.
It is necessary to pay attention to the most important points for the success of CRM: strategy, metrics and fundamentally the organization. It is important to clarify that many companies use strategies that they think are of CRM to achieve an advantage against the competitors. One of them and the most popular is the competitive advantage through lower prices. If competitors do the same, which they surely will, the advantage fades. This is then said to be a short-term advantage and effect. A well applied CRM allows to achieve sustainable and long-term competitive advantages. Those that cannot be repeated by the competition and that lie in the good use and analysis of the information to know what changes are necessary to achieve customer satisfaction;Change the organizational structure to achieve these improvements and the use of technology to make this administration more efficient.
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