CRM (Customer Relationship Management) defined as customer relationship management, which consists of declaring all business processes and focusing them on customer expectations, in order to provide them with a better service to achieve their loyalty. In Latin America the main factor that has determined the adoption of CRM has been globalization. Some Mexican companies like Bital have achieved successful cases of CRM implementation. But implementing CRM is not only buying software, which is why many companies have failed in their goals.
The term CRM has been quickly adopted by many companies, but few consortia have an adequate program, which is why 70% percent of the programs that are implemented worldwide fail in no more than twelve months.
Before implementing CRM, the following aspects must be taken into account: CRM is not software, CRM is not sales automation, CRM is not new. CRM is not a big investment. CRM is not a department initiative.
As a good initiative, the 4 P's of the success of a CRM should be applied (Planning, People, Processes, Technological Platform). It is also important that the strategy be implemented gradually as it will help increase the success rate of a CRM initiative..
1. Introduction
In today's times, where most companies compete in a global and highly competitive environment, the need has arisen for companies to establish new sales approaches, to attract more customers and not only to sell to them, but to consider them as main partners. of the business, that is, change the business scheme, so that they are the ones in charge of the company.
This is how lately the name of CRM (Customer Relationship Management) has been heard more, which as many know, is the administration of the relationship with the client, which consists of declaring all business processes and focusing them on customer expectations., in order to provide you with a better service and achieve your loyalty.
Throughout history, the relationship with the customer has evolved and currently thanks to advances in technology, this type of strategy can be applied in an organization, CRM techniques were always present, but thanks to specific technology tools. of information it is only now possible to apply these practices to millions of customers at the same time.
In the United States of America, the success stories of companies that have implemented a CRM are well known, but in the Latin American region, the issue is a little more selective in terms of companies that have implemented it, only the truly large companies They have encouraged this philosophy to enter. Because it represents the commitment of many resources and efforts by the company.
For this reason, many companies are not willing to take risks in times of economic recessions and crises such as those that are being experienced in our Latin American countries today.
Therefore, this document will try to list the expectations of implementation and success that Latin American companies have regarding the CRM philosophy, it will also seek to know which companies can access this type of philosophy. And what are the possible critical factors that must be taken into account for a successful implementation of this philosophy, all with the aim of giving an overview of the CRM industry that is growing in our countries.
2.- CRM in Latin America
Over the years, companies have been evolving, trying to differentiate themselves from their competitors in various ways: cost reduction, differentiation, process improvement, with the aim of remaining competitive, whether at the national or global state level. In recent years the term CRM has emerged as a response to a differentiation that is increasingly difficult to achieve, lowering prices is no longer a way to boost sales. As CRM proposes today, the challenge is to understand the customer, to know what is what makes them different as customers. And if we are able to understand who the client is, it will be then that we can better satisfy their needs. Today the problem is that all customers and users want to have the price of a mass production, but be considered and cared for individually.This according to Customer Service magazine (2002)
3.- Importance of CRM
The foregoing indicates that CRM is an approach that is currently in place, as Raciman (1996) referenced by Reyes (2003) comments on the main point in a CRM and says “To understand the importance of a CRM strategy or initiative in an organization, we must first understand what a customer means to the organization ”, Batteman and Snell (2001), define the customer as those who acquire the goods or services that companies offer, without customers a company would not survive. So important is a customer in an organization that their loyalty to it becomes the most important asset of the same and it is obtained when the customer does not need to look for another provider, since he feels satisfied with the current one.
The emergence of this new approach has been due to the fact that companies are looking for a differentiation that helps them compete globally, as Ayala (2003) mentions when he comments: “The CRM phenomenon occurs because brands are within the reach of millions of people at the same time, but one of the biggest satisfiers a consumer has is distinction. Mass communication is positive and spectacular, but cold, while individual contact and long-term plans give it that mixture of warmth and information that most of the public requires to truly love a brand and identify with it ",
The main factor that has determined the adoption of CRM in Latin America has been globalization. Or rather, even before globalization, we should speak of the regionalization of the Spanish-speaking world. The second factor is nothing new: the customer is king. In other words, competition, pressure from other players, differentiation for excellence are key drivers, first at the regional level and then globally. (Customer Service 2003)
4.- Trend in Latin America
As Latin American companies want to remain viable in an increasingly competitive and globalized market, the challenge of understanding and managing the relationship with their customers will increase. These companies will have to focus not only on getting new customers, but also on understanding and managing the customers they already have. Increasing consumer loyalty will be key to the ultimate goal of having greater competitive advantages.
On the other hand, in Latin America, a resurgence is expected in investments of CRM implementation by companies, this is how el Financiero (2003) comments that companies such as Siebel Systems expect Latin American sales to grow between 20% and 30%. % this year, thanks to the resurgence of the market, due to this it already plans to open three new branches. Other companies are also preparing to compete in Latin America, as is the case with PeopleSoft, who optimistically views the southern part of the continent. That despite being a territory three times larger than the United States, but with a much smaller market partly due to the lack of money flow (Mural 2002).
Wilson (2003) comments that a recent survey of more than 400 executives from Latin America reveals that most of the region's medium and small companies are still in the learning stages of CRM solutions.
As Latin American companies want to remain viable in an increasingly competitive and globalized market, the challenge of understanding and managing the relationship with their customers will increase. These companies will have to focus not only on getting new customers, but also on understanding and managing the customers they already have. Increasing consumer loyalty will be key to the ultimate goal of having greater competitive advantages.
5.- Latino Companies that have implemented CRM
In the Latin American region, many companies have implemented or are about to implement CRM strategies, some of them successfully, such as the Grupo Financiero Bital, which remains at the forefront in the implementation of CRM strategies, obtaining, during this year, two important international awards: «Latin American CRM Bank of the Year» and «Gartner CRM Excellence Award 2002«, in the «Large Enterprise« category. According to the Reforma newspaper (2003)
Both awards are also the recognition of the effectiveness of CRM strategies, formally implemented by Bital, which means an achievement that is reflected in its continuous effort to improve the quality of its services.
These achievements, Rafael Arana de la Garza highlights, were achieved thanks to the CRM strategy implemented by the Bital Financial Group, aimed at finding out the specific needs of each of its clients, as well as giving the best level of service and offering products. tailored through a thorough analysis of its database.
Some of the quantifiable results obtained by Grupo Financiero Bital since the implementation of the CRM program are listed in Table1.
Table 1: Results of the Bital CRM Program
Source: Reforma (2003)
| Results |
| Profitability increased 20 percent of campaign customers. |
| 20 percent successful response was achieved in campaign launches |
| Twelve percent of new credit acquisitions come from CRM campaigns. |
This reflects that the implementation of a CRM program together with good leadership can achieve more ambitious goals.
Another company that has also bet on CRM, but with a different approach, is Vitro, as commented in an article in the Mural (2003), Vitro is using CRM to regain national presence through glass packaging in niche markets. which it lost as a result of globalization according to the newspaper El Economista (2003).
But this has not been free, as he had to go from being a producer of glass containers to a consultant who manages from bottle design to marketing and distribution, even starting his strategy for the sale of the finished product. With the aim that its 1,000 clients, including Jugos del Valle, Bacardi, Tequila Herradura, Coca cola, Grupo Modelo and Unilever, become its commercial partners and stop seeing Vitro as the sole supplier. (The Economist 2003)
As well as these two examples, there are many cases of companies that have successfully implemented CRM.
But as he tells us (Ayala2003) that not everything is as easy as it seems when he mentions us "The term CRM has been quickly adopted by many companies, but few are the consortia that to date have an adequate program or are capable of developing full service, which is why 70 percent of the programs that are implemented worldwide fail in no more than twelve months. " Due to a misunderstanding of the CRM concept and how it can be implemented ”.
6.- CRMs that Fail
Currently, the inadequate application of a customer relationship service (CRM) strategy results in companies dissatisfaction with the results of these long-term solutions.
According to a study carried out by the consulting firm AT Kearney, 70% of companies that have adopted a specialized care strategy have done so through an inappropriate approach.
He points out that, unlike certain considerations, service strategies are not short-term initiatives, since their application can take between three and five years, although they are important solutions that, if well executed, represent benefits for companies.
It also explains that there are three different approaches in which CRM strategies have been applied, the first two being the most used and the ones that offer the least results.
7.- How to implement the CRM
There are three different approaches: the so-called Big Bang, which is used by 30 to 40 percent of companies, the multi-initiative approach, used by 44 percent of firms, and the gradual transformation approach, applied only by 12 percent, despite being the most successful, he says.
In the first case, the aim is to apply «everything» at the same time, which leads to a large initial investment, as well as a long implementation time, little flexibility and high management complexity. Likewise, only 30% of the companies that have used it are satisfied with this method, since long periods of time elapse so that results can be observed or they still do not obtain them.
In the case of multiple initiatives, as their name mentions, various areas have their own customer-oriented scheme, which implies duplication of efforts, decentralized information and an inconsistent experience. According to companies that have followed this method, it does meet their expectations, although short-term benefits do not ensure success over longer periods.
The last of the approaches, called gradual transformation, is presented with integrated initiatives and a common customer-oriented vision, highlighting the definition of bases for change, the balance between speed and flexibility, and the integration and consistency of initiatives.
8.- Lessons Learned
Despite the fact that the CRM concept is not something new and has a long time to be applied, today the concept continues to evolve and a certain ambiguity persists. Additionally, the failure rates in the implementation of the CRM indicate that it is not yet fully polished. This is how Marchand (2002) lists in Table 2 some lessons learned about CRM over the years.
Table 2: Lessons learned over the years about CRM
Source: Marchand (2002)
| Learned lessons |
| 1.- CRM is not a software . CRM does not require specialized CRM software. CRM can be done with a simple Excel, Access, or even through agendas and physical files. |
| 2.- CRM is not sales automation. At least it's not just that. Automating the sales force is the most difficult way to implement a CRM. There are other concepts that relate to CRM: customer intelligence, customer service and loyalty, call center , marketing programs, customer development, etc . |
| 3.- CRM is not new. The CRM philosophy is always: be close to customers, identify them, differentiate them, define the points of interaction, personalize the deal, retain them. This has been done for years in corner grocery stores, nowadays thanks to information technologies that this concept helps large corporations in personalized marketing (One to One marketing). |
| 4. CRM is not a big investment . It should be in phases and if you decide to invest in technology, it should be to end a CRM habit in the company. CRM is not going to happen thanks to the millionaire acquisition of software because it is rather a path, not a destination |
| 5. CRM is not a department initiative. It is a global approach of the company. |
What has been proven is that the chances of it working increase when it becomes a corporate goal, and particularly from top management. The challenge, in the latter case, is to first understand the scope and set a business objective, and then align the rest of the organization.
In short, CRM is a movement and a direction that seeks to create, gain, develop and retain clients. The software, with certain conditions, can be an excellent tool. But the CRM approach and consistency in actions come first. Marchand (2003)
9.- The Implementation Process
CRM, as defined by analysts and consultants, is a business strategy, not software. It involves changing internal processes in the company, in order to better manage the relationship with the customer. These process changes, yes, usually go hand in hand with investments in specialized software, hardware, consulting services and training. And that's why it's so related to technology.
Due to the above, Gerson (2001) comments “The most critical aspect of a CRM is the relationship that is established with the consumer. Employees will be the ones to initiate and maintain those relationships. Therefore, it must be ensured that they know how to interact, influence and serve consumers. ”
It is also that Gerson (2001), concerned about the high failure rate of CRM implementations, comments on the critical success factors to increase the expectation of success in a CRM. These are what he has called the 4 P's of CRM success (Planning, People, Processes, Technology Platform)
Planning: Develop an intensive plan for CRM efforts. Design what you want the program to achieve both initially and in the next 3-5 years.
For example, if you intend to capture customer data on the Website, then a three-phase plan is adjusted. The first is to get the customer's email address and name. The second is to get your physical address and phone numbers. And the third party must capture their purchasing preferences.
People: Involve employees and partners in joining forces on CRM. This is a new company culture. The team must be trained with skills in customer service.
There is another reason why people are so important. Employees will be the ones to initiate and maintain those relationships. Therefore, it must be ensured that they both know how to interact, influence and satisfy customers.
Process: You must carefully identify your CRM process. This will be the service map of how to contact the client, how the information will be captured, how the information will be used, the methodology for repeatedly contacting the client and the plans to consolidate the information of all the points of contact with the client. Flow charts, fish charts, service and any other charts need to be created to ensure that everyone understands the process from a customer point of view.
Technology Platform: It is time to select the CRM technology platform. You must find a provider that operates in the same way that the company does and so adaptation will be easier. Since it has been understood which with his expectations, he has involved people and mapped the process. You will need to find the software that will work best for the company and its customers.
When the 4 successful P's of CRM have been developed, the company will have an advantage over its competition. If it's from companies that haven't started their CRM efforts, then this approach will help you leapfrog the competition. By doing it from the beginning, you won't have to do it one more time.
CONCLUSIONS
Currently we live in a clearly global environment and every time we have more information at our disposal, with the help of the Internet and information systems it is almost possible to buy anything, anywhere, that is how companies must find new ways to attract to the clients, pamper them and treat them with such delicacy, that they find out that we are interested in having long-term business relationships, that is, to achieve their loyalty.
With the use of information systems that support the CRM philosophy, many companies will be able to increase their market and will be able to continue growing in this global market. You can no longer think of customers with a single purchase, but rather customers that last for many years.
In other words, how companies must leverage the CRM philosophy so that in addition to growing as companies, they can develop their culture of customer service and feel like part of the company.
Companies in Latin America have a good chance of success when implementing their CRM philosophy as it is something already proven in first-world countries, where the greater risks that organizations face when implementing CRM systems have already been mitigated.
Following a methodology through processes as shown in Fig1 following the steps of Planting CRM activities, Involving and training people, Defining processes and Acquiring the technology that best suits the way the company interacts with its client the company will be able to mitigate the risks in an important way, which will allow a better performance of its system.
CRM Philosophy Development Methodology
What is recommended is that the implementation of CRM be a structured, analytical process and well grounded in the ideology of the company, that is, the software must be adapted to the company and not the company to the software.
The other important point is that a CRM implementation must be done and planned gradually, in this way the risks will be reduced and results will be observed in the course of the implementation. This will help Latin American companies to increase success stories, through a good implementation of their CRM philosophy.
BIBLIOGRAPHY
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THE EXPECTATIONS OF SUCCESS OF CRM IN LATIN AMERICA
Contributed by: Marco Antonio Valdez Aceves - [email protected]
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