The integration of the concept of "customer-centered organization" is essential for the competitiveness of organizations, but this transition is complex both organizationally and technologically speaking and must be supported by a consistent methodology as well as the correct ROI measurement tools.
In many articles it has been widely discussed how to obtain benefits in CRM projects and how expectations are not being met in most cases. This article will develop the concept of return on investment (ROI) in CRM projects as well as some recommendations so that the project "does not get out of hand".
The majority of CRM projects begin with high expectations: revenue growth, cost reduction, increased customer satisfaction, real - time information, etc. getting more loyal internal and external customers. The benefits of a CRM project can basically be integrated into the following three major concepts:
- Change the concept of customer relationships, having an integrated and unique view of customers (potential and current), being able to use analysis tools and thus developing smarter actions Manage customer relationships in a unique way regardless of the channel that contact with them: by phone, website, personal visit, etc. Improvement of the effectiveness and efficiency of the processes involved in customer relations.
Of these three concepts, clearly the most important is to change the concept of customer relations, since it is the only one of the three that becomes a competitive advantage by getting the organization "closer" to its customers, knowing them better and deploying actions more suitable for each case (smarter marketing). Multichannel management and process improvement are truly solutions that lead to excellence in operations but are easily copied.
As for the "causes" that achieve these "effects":
- The first is closely related to strategy and organizational change, although it is also supported by data warehouses and analysis tools. The second is related to data warehouses and technological tools. The third is related to process reengineering together with technological solutions.
As can be seen, the change in the concept of customer relations is the critical element in CRM and the technological solution is necessary, but never sufficient.
After presenting the real protagonist of the project, let's talk about indicators. In an analysis done by AMR Research, the following indicators (from highest to lowest importance) were indicated as a measure of ROI in CRM implementations:
And this is precisely one of the big problems in measuring ROI in CRM. The most important advantages are achieved in the medium-long term due to the change in the concept of the relationship with the client, while in the short term the results related to the reduction of costs of the relationship processes are basically obtained (and are more easily measurable) with clients in the areas of marketing and sales.
For this reason, it is necessary to have a table of indicators composed of both short-term and medium-long-term indicators as well as an approximate timetable for their fulfillment.
Let's now see how to "control" the CRM project. Using a basic methodology that follows the following stages:
- Definition of objectives and vision of the CRM project Definition of the CRM strategy Organizational changes, processes and people Information Technology Monitoring and control
If you analyze the typical parts of a budget for a CRM project, you will find different items:
- ConsultingTrainingSoftwareHardwareOrganization staff cost
Finding how we could divide the budget into two large items: consulting and technology. Analyzing these two large items with their impact on the methodology, it is concluded that the technological part, which is an important part of the budget, focuses on points 4 and 5 of the methodology and that it will never be the only inducer to achieve the change in the concept of customer relations, a critical element for achieving results.
Therefore, a piece of advice in a CRM project is to expand widely in sections 1 and 2, defining the objectives, vision and strategy. After this phase, concepts such as the following should be clear:
- Clear identification of segments based on the key parameters for each case and value proposition for each one of them Definition of strategies by customer segments Clear analysis of the differentiation (from the customer's point of view) of the organization versus competitors. Modeling of customer relationship processes through different departments. Costs per client and profitability per client / segments of the different products / services.Mechanisms for the definition of new products / services adapted to their needs.Analysis of the "points of contact" with the client. Sensitivity of the organization towards the client. the brandLoyalty mechanisms and what are their key drivers Strengths and weaknesses of the organization regarding CRM. Positioning of the organization in the market. Analysis of the marketing plan and its results. Acquisition costs per customer and retention rate. Modeling of the customer life cycle as well as the customer value. Definition of the necessary information as well as the management procedures, etc.
After having defined all these elements, you will have a clear vision of the possibilities of the project as well as the definition of the scoreboard.
After that, the changes defined in section 3 can be modeled, which will give results in the short term due to the savings in the processes, and can also move to the more technological phases (4 and 5) with a higher level of guarantees.
In conclusion, the integration of the concept of «customer-centered organization» is essential for the competitiveness of organizations, but this transition is complex both organizationally and technologically speaking and must be supported by a consistent methodology as well as the correct tools for measuring ROI.
