Why vendors may learn to love independent CRM consultants...

I get the impression that most CRM vendors are at best deeply suspicious of CRM consultants. Not surprisingly, as a CRM consultant myself, I’d argue the negative impression is undeserved, and that we provide considerably more benefit to vendors than they realize. The common complaints are that access to the client is managed and therefore they don’t feel they have control of the sales cycle, and that the purchase process is likely to be more competitive and therefore the odds of winning are longer.

While there’s some truth in this - vendors have much less scope to use spin or charm to secure the sale - I suggest the odds of securing a consultant run sale are higher than the average prospective sale simply because the contract will be awarded to someone, as opposed to most prospective sales which peter out with no decision, generally because the business case hasn’t been made.

It’s in the area of business case generation and general CRM project planning that independent consultants add a lot of value to both client and vendor. Their involvement means that by the time a vendor becomes involved, the foundations of a solid business case and appropriate funding are in place. I’ve worked with clients who’d been talking with vendors for years, but who had never proceeded because they hadn’t satisfactorily determined how the technology would help them.

Establishing business cases is something I think vendors are largely very bad at. To an extent this is because end users are wary of vendors and don’t open up in a way that facilitates the process, but mainly because vendors tend to be technology rather than benefit focused. This blinkered approach is partly about comfort – it’s easier to talk about something you are very familiar with (your software) than something you are not (the potential client’s business) – but also about experience: it’s challenging to apply technology to a potential client’s unique business unless you’ve considerable operational experience and insight.

Aside from helping create the environment in which a CRM project will happen, the consultant also benefits the vendor by smoothing the path of the CRM implementation process itself. Consultants will advise clients on key planning issues such as funding and resourcing, as well as facilitate effective requirements gathering. There are consequently fewer things that go wrong in the implementation process which increases project profitability and customer satisfaction.

It’s in this last respect that vendors particularly benefit. The projects we work on generate significant value to the end user which means they in turn are more likely to invest further in the system. As I’ve argued repeatedly in the past, the average CRM implementation generates little return, and therefore receives little on going investment. The presence of the CRM consultant therefore produces a client that has a considerably higher than average life time value, and can provide considerable reference value.

Ironically, many of the projects we work on become flag-ship case studies for the vendors, though our role in the process isn’t generally acknowledged. I suspect this is because CRM vendors associate us solely with vendor selection activities rather than the business case generation, planning, budgeting, and requirements gathering activities that are vital to ultimate success.

The only vendors that should dislike independent CRM consultants are those with something to hide. Sadly, there a quite a number who rely on deceit rather than candour to win business. They rarely appreciate our work in exposing their fabrications. Even this of course is beneficial to the honest majority in the vendor community because it helps ensure decisions get made on a level planning field, and that dishonesty doesn’t prosper.

Perhaps I’d be naïve to figure on getting many more Christmas cards from vendors next year, but in time perhaps more will appreciate that the end user isn’t the only beneficiary of our involvement.

CRM and social networking...

I was quoted in Computing the other week making somewhat unsupportive remarks about the CRM vendor’s attempts to harness social networking. In essence my feelings are that companies need to understand the impact of social networking rather than concern themselves about taming it.

If we go on a brief historical tour, then once upon a time it was relatively easy to control the image of a brand, and that image could be many steps removed from reality. A company could take a fairly ordinary product and with some clever television advertising enjoy huge success.

Then the technology tide turned. The arrival of the TV remote control meant that people could change channel when the ads came up, or use a video player to fast forward. The arrival of Sky meant that viewers were no longer limited to four channels. And then there were a plethora of new forms of entertainment, such as computer games and the world-wide web, which meant that advertiser’s no longer controlled our attention.

If that wasn’t bad enough, then along came what became known as web 2.0., where people were generating their own content through the likes of blogs and social networking sites. The problem with user generated content was that companies had no control as to what was said, and, perhaps more importantly, people took notice. Decades of exposure to advertising meant consumers were highly resilient to marketing messages, but people were happy to listen to their peers.

So when I do my Christmas shopping and I’m looking for the best indoor aerial booster on Amazon, how do I decide between the hundred options I’m presented with? Simple; I read the customer reviews. What did other people who previously bought the products I’m looking at think of them? Rather than take any notice of the carefully crafted marketing literature the manufacturer has kindly supplied, my purchase decision is made purely on the basis of something the manufacturer can’t directly control - the opinions of their customers.

The reaction to the impact of web 2.0 by many companies though has been ‘how do we tame this to support our own objectives’. Hence we see the sort of initiatives outlined by Salesforce.com and Oracle in Martin Courtney’s article. It strikes me however that it’s rather more useful to know there’s a large shark lurking where you’re about to go swimming, than to try and teach it to become your friend.

As the internet becomes closer and closer to providing people with perfect information about the products and services they are about to buy, then the appropriate response should be to focus on managing the reality rather than the image. If I claim to be the finest widget manufacturer in the world, then I need to ensure that the quality of all my interactions with customers, prospective customers, and all those who may influence customers and prospective customers, is consistent with that claim.

If my widgets are indeed fine, but my customer support department leaves a lot to be desired, then this reality is likely to be recorded in blog posts, forums, and social networking sites, and my ‘finest’ image is shattered no matter how hard I work on the marketing side.

Therefore if CRM has a role to play in the context of social networking, it should be to help organizations manage their reality, and ensure that people experience consistently high standards across all touch points. This is not something I feel companies generally do terribly well, and I suspect many would benefit from switching resources into this area. After all, the problem with negative comment on the internet is that not only can’t you control it, but it doesn’t have an expiry date; it can be losing you business years after the search engines first picked it up.

How to revive a failing CRM system...

The following is a copy of an article I wrote for Winning Edge Magazine published by the Institute of Sales and Marketing Management (ISMM) under the title 'Can we fix it, yes we can' where I attempted in 700 words to explain how to revive a failing CRM system:

Can we fix it, yes we can

There’s been a lot of bad press about customer relationship management (CRM) technology over the years. While a lot has been made about CRM failures, the reality is that only a very small proportion of implementations actually fail in the sense that the system doesn’t go live. Where CRM has commonly failed is in its ability to positively impact the bottom line.

As a thirteen year veteran of the CRM industry I’d estimate that 80% of CRM systems seriously under-perform their potential, with the majority generating very marginal, and in many cases negative value for their owners. Most systems are limited in scope, and usage tends to be occasional and unstructured. So how did we get into this state? Two reasons I suspect:

Firstly, CRM vendors are, in general, first and foremost motivated and equipped to sell software, as opposed to deliver benefits. They may truly believe their software delivers value, but there is a big gap between raw technology and an implemented system that generates operational benefit. In particular vendors have failed to appreciate the importance of analysing and encompassing their clients’ business processes, and have struggled with user adoption.

Secondly, for those systems that do bridge the gap, many have failed to remain relevent over time. This is often because there has been insufficient maintenance of the system, or the business and changed and the system hasn’t adapted.

While businesses may be able to overlook the fact that their CRM technology isn’t delivering on its promise in the good times, the tougher economic environment means that these systems are letting them down just when they need them most. The need to attract and retain customers has never been more pressing. The good news is that it’s often relatively easy to turn a CRM system round, and with the investment already made, this can often be achieved without significant additional expenditure.

Incidentally, if you aren’t sure whether your CRM system is performing or not, one quick check is to review the reports generated by the software. If you can’t find any useful, comprehensive, or accurate data about the running of your business you can safely assume your system isn’t doing a lot for you.

So how do you get your system back on track? The following are the key steps:

· Define what you want your CRM system to do. This might be to improve the management of leads of enquiries, better control the sales process, enhance the customer experience, or reduce the cost of handling sales orders, either way it’s critical to understand what the end objective is.

· Map the business processes required to deliver the defined objectives. This may be a case of re-engineering what you already do or developing new processes from scratch.

· Document how your processes will work within your CRM system. There are a number of ways you can do this, but we tend to create process diagrams in Microsoft Visio, and annotate how the system is being updated at each step in the process. It’s also worth creating mock ups of any screen customisations that might be required.

· Make the changes to the system. Since many CRM technologies are highly user configurable, this may well be something you can do yourself. If you do need the help of your vendor, then the tight specification generated through the previous steps will allow you to minimise costs.

· Clean up your data and ensure the information in your system is complete and up to date.

· Train, train, and train some more. Comprehensive user adoption takes work.

· Ensure that you have reports in place to track the performance of your processes.

· Monitor usage carefully.

· Continue to finesse, improve, and enhance your system over time.

There are massive benefits to using CRM technology to control your key customer facing processes. Not only does it facilitate a host of operational efficiencies, but utilising the notion that you can’t manage what you can’t measure, one of the key benefits is being able to continue to improve over time. Your CRM system may not be doing much to help you today, but getting things back on track might prove the difference between prospering and failing in difficult times.