IDG News Service,
Buenos Aires Bureau
BUENOS AIRES –
Most
companies, big and small, have heard about CRM (Customer Relationship
Management), many of them are deploying it; and many others are studying the
matter, but deploying CRM is a move that has as many pitfalls as it can be
rewarding. This is global image depicted by the speakers at the first CRM
Conference South America 2001, held here last week.
Several
speakers reminded the audience of a Gartner Group study that reports failure
rates of 50 per cent or more for CRM projects. This percentage climbs to 70 per
cent for sales force automation applications, a highly touted subset of CRM
applications. According to the speakers, this happens because most companies
think of CRM as yet another information technology, that can be implemented by the
IT department, often with disastrous results.
The
implementation of CRM should go from "point-based solutions" that
serve some departments of the enterprise only (such as marketing or accounting)
to full blown "behavioral systems" that go beyond Enterprise
Relationship Management (ERM) to a stage where it is the customer who controls
the relationship, said Charles Grover, Director of CRM Business for People
Soft. The perspective of the entire enterprise regarding the customer should
change at each of these steps, Grover added.
The benefits
of implementing CRM systems are manifold, as they increase customer loyalty,
help to increase revenues and reduce costs, Grover said.
What should be
avoided is to rely on the IT department only for implementing CRM solutions.
CRM is not just software, said Ronald S. Swift, Vice-president of Strategic
Customer Relations, NCR Corporation, Teradata Division. "CRM is a
philosophy that should encompass the whole of the enterprise".
Swift showed a
list of eleven items, including sales force automation, campaign management,
tailoring offers, loyalty retention and profitability programs, and high return
on investment (ROI) from focused interactions. That long list, he said, is what
CRM is really about... all of those things working together. However, he added,
no CRM software vendor can provide them all. All the vendors, his own company
included, offer partial solutions, he said. It is each company management who
should determine which solutions are preferable in their own particular
situation.
CRM is a
commercial strategy based on demand, explained Luis Cudmani, partner of the
Argentine consulting firm Ordoñez, Bianco Consultores. This sort of strategy --
opposed to conventional "offer" strategies -- requires adding the management
of relationships to the traditional management of products and inventories.
Cudmani offered a complete planning roadmap for a company that wants to deploy
a CRM system.
On the same
line, Néstor Márquez, CEO and President of ResponseLogic Inc., said that CRM is
a competitive strategy that puts the customer at the center of the company
operations. It serves several purposes, including brand building and loyalty
management; but the most important one is creating long term relationships with
the customers, and being able to respond to their needs in real time. Marketing
people have been traditionally too focused in customer acquisition... CRM is
about customer retention, that is much more effective in the long run, he said.
Márquez also
warned against having the information systems people managing CRM. They should
offer support, but CRM is rather a company-wide commercial strategy. The best
people to handle it are the front office people, the sales people. If they are
not involved from the very beginning, the whole project is bound to fail.
"Remember: the software offers support, but it is not CRM by itself,"
he said.
Furthering
this concept, one of the panelists said that a successful CRM project requires
the full commitment of senior management, starting with the CEO. The CEO needs
to drive the change in attitude and the philosophy of the organization,
ensuring that all people are aware of what it means working in a customer
focused organization.
Well managed
CRM helps the organization to retain the customer, and avoids irritating her
with duplicate, irrelevant or even offensive offers, such as promotions for
married couples sent to recently divorced people, for instance. It provides
finely focused marketing campaigns, often aimed to a few hundred people at a
time. Having a very good knowledge of the customer allows for what is called
"event driven marketing", and reduces churn, said NCR's Ron Swift.
Reflecting on
the conference itself, Víctor Iglesias, general manager of the organizing
company Brainstorming SRL, said that he was pleased to see the number of small
and medium size businesses at the show, both as attendees and at the exhibition
booths. This demonstrates that CRM is not just a matter for big business, he
said, but for companies of all sizes, big and small. Even in difficult times
for the economy, such as these, they come looking new approaches and solutions.
There is more
information on the CRM South America at http://www.canaltecnologia.com/informacion/crmsouthamerica2001
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