Customer Relationship Management (CRM) recognizes that customers are the core of a business and that a company's success depends on effectively managing relationships with them. CRM focuses on building long-term and sustainable customer relationships that add value both for the customer and the company.
A large percentage of failures have been reported in Customer Relationship Management (CRM). For example, according to Zdnetindia.com/news, the founder and CEO of Customer.com estimated that 42 percent of the top 125 CRM sites experienced failures. Numerous failures are also reported by thinkanalytics.com, cio.com, CRM-forum.com, and many more. However, according to itgreycell.com, CRM failures are declining, from a failure rate of up to 80 percent in 1998 to about 50 percent in 2000.
Some of the major issues relating to Customer Relationship Management (CRM) failures are the following:
1. Difficulty measuring and valuing intangible benefits. There are few tangible benefits to CRM
2. Failure to identify and focus on specific business problems.
3. Lack of active senior management (non-IT) sponsorship.
4. Poor user acceptance, which can occur for a variety of reasons such as unclear benefits (ie, CRM is a tool for management, but does not help a rep sell more effectively) and usability issues.
5. Trying to automate a poorly defined process.
Strategies to deal with these and other problem are offered by many. (For example, see CIO.com for CRM implementation. Also see conspectos.com for "10 steps for CRM success")
Customer Relationship Management failures could create substantive problems. Some companies are falling behind in their ability to handle the volume of site visitors and the volume of buyers. We describe the following suggestions for implementing CRM and avoiding CRM failure:
1. Conduct a survey to determine how the organization responds to customers.
2. Carefully consider the four components of CRM: sales, service, marketing and channel / partner management.
3. Survey how CRM accomplishes are measured; use defined metrics. Make sure quality, not just quantity, is addressed.
4. Consider how CRM software can help vis-a-vis the organization's objective.
5. Evaluate all levels in the organization, but particularly frontline agents, field service, and salespeople.
6. Prioritize the organization's requirements as: must, desired, and not important.
7. Select an appropriate CRM software. There are more than 60 vendors. Some (like Siebel) provide comprehensive packages, others provide only certain functions. Decide whether to use the best of breed approach or to go with one vendor. Enterprise Resource Planning (ERP) vendors, such as PeopleSoft and SAP, also offer CRM products.