What are the bases for selecting a CRM? The challenges of implementing a customer management system.

Source: Äri-IT, autumn 2022

Autor: Marek Maido, BCS Itera Marketing Manager

Demand for CRM solutions and the number of solutions has grown all over the world, including Estonia, so it is worth looking at how and where to start. One thing is for sure – introducing a customer management system certainly does not start with the selection of a specific solution.

According to a survey published in CIO magazine (cio.com), roughly a third of CRM implementation projects fail. Moreover, a failure rate of up to 70% is often quoted in international media, based on a Gartner study. The reasons vary: exceeded budget, integrations and data transfers, functionality limitations, change management, etc.

But let’s start with the basics.

THE BEGINNING

The biggest challenge in a CRM project is change management – how and why we do something, how systematic and consistent the activities are. Whereas up to now, information on customer interaction has been scattered – in someone’s head, in an Excel spreadsheet, in emails, etc., from now on, the information will be entered into CRM software. Even more so, customer interactions will also be planned in CRM: meetings, calls, emails, campaigns, offers, etc.

Even if the team understands the need for all this, it takes time for it to become routine. It is the daily task of senior and middle managers to ensure that agreed systems are used.

A CRM project should therefore be started with the team, involving people in making proposals and explaining the objectives and the need for change. According to international practice, the reasons why most CRM implementation projects fail are lack of planning or change management.

For a company, having sales and customer information in its own information system is critical for business, but this is not always necessarily the case for sales people. There are quite a lot of people who consider the sales information that is in their head to be an indispensable asset and want to maintain this status quo.

It is also often thought that implementing the software will make processes easier, but this is not the case. In order to get the information you need for management, you must first enter the relevant data. As this has not been done so far, it usually creates a great deal of opposition. These processes also require consistent management and control, purely due to human convenience and force of habit.

FUNCTIONALITY: THINK IN THE LONG TERM WHEN MAKING CHOICES

The purpose of implementing a CRM solution is not to make things easier, but to:

1. Store information relevant to your business.
2. Manage sales and marketing processes systematically.
3. Start data-driven management.
4. Retain customers.
5. Increase the share of successful sales and your company’s profitability.

But what do many companies do? They look for and select a solution that looks cool and is easy to use! This is not necessarily wrong, but should certainly not be the basis for making the choice. If a company needs a pickup truck, a convertible sports car is not the way forward in business, even though it looks nice and cool. CRM implementation is successful if the business strategy (marketing, sales, service) is well defined: The CRM system follows the business strategy, not the other way around.

Therefore, the first important step is to thoroughly map the technical and business needs and processes and, based on this, find a solution with the functionality that supports these goals and processes. As a rule, a cool and simple user interface can also mean less functionalities, which suits a smaller company but quickly becomes too narrow for a medium to large one.

There should be one truth in the company, not several. An important aspect here is the possibility of integrating CRM with enterprise resource planning software. ERP is not CRM! Customer relationship management is only a small part of the overall supply and action chain, so there should definitely be the possibility to interface it with the enterprise resource planning software.

A PRACTICAL EXAMPLE

The importance of a systematic approach is illustrated by one customer’s answer to the question: Was the CRM implementation a success? ‘Marketing was pleased to now be able to track the lifecycle of every single lead. The CIO was not satisfied with the quality of the data generated by the integration of the databases. The sales director liked the user interface and the data dashboard, which gives a good overview of metrics and forecasts. The sales manager was less satisfied, but admitted that it helped to monitor activity. And the sales team – they mostly hated it. More data were entered, which added little value for them and did not necessarily help them sell more. As the sales team had little motivation to deal with the data entry requirements, the quality of the data in the system became less and less reliable over the following year.’

DON’T FORGET MARKETING AND LINK IT TO SALES

Conventionally, marketing blames sales for not following sales leads and sales blames marketing for not understanding the field and not producing qualified sales leads. However, modern literature on sales and marketing usually emphasises that marketing and sales must work together. It is therefore crucial to integrate marketing activities with sales.

As sales cycles evolve, marketing and sales should have a common understanding of what constitutes a qualified sales lead and an ideal customer profile, both at the company and buyer level. This will help to identify opportunities that are not worth the time.

Later in the sales cycle, marketing works with sales to create materials that can be tailored to the customer’s profile. For the company, it is useful to have at least some joint metrics that can be used to assess both departments.

SUMMARY

• Involve your team right from the start of the project.
• Link the project to the company’s strategy and objectives by answering the question ‘Why?’.
• Base your selection on something other than a simple and cool user interface.
• Map technical requirements and expectations, including integrations.
• Map your business needs and processes, but be prepared to change them.
• Constantly manage change.

WHY DO WE WANT CRM?

The Harvard Business Review has put it well:

Think of your CRM as a tool to increase turnover and profits. Full stop. This is the only reason to invest in this solution. This is the message that the CEO and the sales manager should communicate to the team, loud and clear. The sales team needs to understand that they are implementing the strategy every time they interact with a (potential) customer. Implementing CRM is not about technology or reporting, it is a tool to help you sell more, leverage support resources, and manage sales opportunities. Once the sales team understands the value of this tool, the desired metrics and forecast tables will follow. If they do not understand it, you will receive Excel spreadsheets, if that.