Is it a Successful Implementation? It Depends . . .

What is "success" when implementing a CRM system? It depends on who you are. Depending on your role in or outside of the company, you may have different ideas as to whether the CRM system is a success. Each group is asking different questions to evaluate success. Some examples are:

• Executives – how does it fit in the business strategy, what is ROI? Are there any secondary or concealed reasons for implementing this particular CRM system at this time? Publicity, internal politics, etc.?
  
• Marketing – how does it help with marketing messages? Or does it confuse people by giving different marketing messages from web, email, printed marketing?
  
• Frontline Managers – Can I administer it / get reports / train users (and how easily?) Can I monitor my call center and sales force activity / application use?
  
• Internal Users (Call Center and Sales Force) – how easy is it to use? Is it fast, laid out logically, and does it have a minimum of required fields? Do passwords sync through the whole enterprise or do you need to remember yet another password? How easy to make/fix data entry mistakes?
  
• Field Sales Force – is remote access easy? Will I gain anything from entering my data? This is a huge subject all by itself, you need incentives or people will ignore the system.
  
• IT – how does the system work? Are we confident that our data will be stored correctly and secured? Does the system meet security requirements and fit in with the overall IT philosophy at the company? (Depending on whether the system is on-site or hosted, the answers may be quite different.)
  
• Customer Users (if web or telephone self service) – user interface design is a whole field of study by itself. Don't be fancy unless you have good reason, use graphics and Flash elements carefully; not everyone has fast broadband. There are some "best practices", conventions that people are accustomed to – use them! (Note that these conventions may be different in different countries; if you are doing business across international borders you will probably need multiple sites.)
  
• Customers (entered by the Call Center or Sales Force) – is data likely to be entered correctly, de-duplicated successfully, and are marketing preferences honored?
  

A failing grade in any one of the groups listed above (and there may be others) will bring much grief or even doom the system. Not everyone has to love the system, but they have to use it, or use the data in it.

So implementing a CRM system is a juggling act (you knew that) and identifying the success drivers for each group, before you get very far, is one key to a successful system implementation.

Social CRM: An Introduction (sort of).

This is an edited & redacted version of email an sent to the divisional president of a huge multinational company. I spent quite a bit of time there implementing various projects, and discovered they were just about ten years behind the times in all things online.  Everything except their call center involves one-way communication. That won't work these days, customers want and expect more.

The scary thing is that they are far from the most backward in their industry, and sales-wise are actually doing reasonably well (for now).  I quite like them personally and as a company but they must change their marketing strategies or get swept away by competitors with inferior products and better sales and marketing - especially social CRM and online marketing.

(See the bottom for their response)

-----------------

Hi (Div. President Name) - I told you that I’d send you email about what the company could do better regarding all online communication.  I've got a bunch of things to say and I tried to just hit the high points, but there are so many problems with your online strategies that I think I failed at brevity.

Online two-way conversation with the customer is the wave of the future, and is quite different than what you have been doing.  [Company] has not participated in these conversations, to its detriment, and it's now hitting the bottom line.

[Company] has a reputation of having great products but being stodgy and old-fashioned.  You do no direct e-marketing (I think the first email campaign went out a few months ago, or maybe it was delayed again and never made it.)  Over the years the trade show staff has collected many user’s business cards with contact info and done nothing with them, sometimes not even passed them on to the territory reps.  You do nothing direct (online) but do a good job of sending paper-based marketing materials, to certain groups at least, but you don't know what percentage go straight into the trash. 

Many times these days people want to chose their own way of getting information; this is what makes web sites powerful.  But that’s only half the equation; the most popular and “sticky” sites that people return to and recommend are always those that build a community, where people know they can talk to like-minded people and get their questions answered.  As a member of one site I visited (for independent advice on use of a product) said, “we are all a bunch of ignorant nobodies, but between us, we know damn near everything!”  [Company] has never even tried to work in this area, neither in (product area 1) nor (product area 2).  It is the wave of the future, and you are standing on the dock watching the ship sail on the tide.

***

What is the most important asset of the company? 

Manufacturing plants?  Product development information?  Employees?  Customers?

No to all the above.  It is the relationship with your customers. 

What do the customers want out of this relationship?  They want good products, and to communicate with the company.

So how do they want the company to communicate to them?  Interactively, quickly, openly, humbly. 

The sales force does some of this, but only on their schedule, and talking about what they want to.  This is talking to the customer, but not really talking with the customer.  It does not meet the customer’s needs or modern expectations.

The Call Center talks with the customer, but the customer needs to call during business hours and wait to talk to someone.  It is necessary, but not sufficient (and very 1980s).  Completely missing is the online two-way communication component.  It’s costing you market share and mind share.  See what your competitors are doing - search for "(brand name) blog" or "(product area) forum" or the like and see what you get.  You won't like what you see; often competitors are kicking your butts with inferior products and better customer service.

It’s easy to ignore online communities.  If you participate fully in any forum (especially one you don’t host or control), people will whine about trivia, lie, insult you, post spam, and all the other bad things that happen online.  You need to be resolute and to accept (and act on) legitimate complaints, and gently correct errors about us or your products, and of course soft sell those products.

At a minimum, you need a position that works with the call center, spending 90% of their time online, preaching the [Company] product gospel (and posting carefully, with the call center’s advice on complaints and products). 

Like your direct-to-consumer marketing it will be hard to measure success, and take a while to show results, so the typical reaction would be to eliminate the job after six months.  This would be the worst possible thing to do, the position needs to be filled with someone the customers can rely on for the long run; it takes time to develop a brand, and in the online arena, [Company] is a new, unproven brand.

***

The days of select customers being “key opinion leaders” are history; anyone with an ax to grind and a blog can write a damaging article, and Google will pick it up.  You wouldn’t know if this happened, and could not respond before any potential damage was done.

There is another related issue; at some point [Company] will become “news”, either by a false rumor or via something the company does, and hit top web sites and become daily conversation of thousands of people.  At that point, damage control and replies at internet speed are needed.  Most major consumer product brands have people dedicated to watching Twitter, Facebook, and news sites for product mention, and responding appropriately. [Company] would be wondering what hit them.

It all boils down to telling all your customer service people this:  “Listen to the customer when they talk to us, listen to the customer as they talk about us, respond appropriately”, especially in all sorts of online forums (those we do and don’t control).  Right now [Company’s] main action in this area seem to be sticking your heads into the sand.

Please let me know if this helps - I want [Company] to prosper.  As I told you, I first came there as a consultant in the 1980s, and have been there many times over the years in various roles.  The company has good products and can do better.

------------
The response I got I'm not at liberty to share with you, but the gist of it was some heartfelt thanks, that my ideas were discussed in the Executive Council meeting the next week, and that changes are forthcoming, soon.  There is hope in the world :-)

Rightsizing your CRM System

CRM systems can cost a lot, in server costs, employee’s time, implementers time, and license fees.  Before you budget millions for your CRM system, make sure it is sized for your business.  You will probably want something more complex than a simple contact management system, but there is no need for a small-to-midsize business to spend millions of dollars on SAP, Siebel or Oracle CRM when they would only use a fraction of the overall features.  (There are many sophisticated oraganizations that can use these features, don’t take this as a blanket condemnation of “Big CRM”.  Just check the ROI, the return on investment - and look at the entire investment.)

I would encourage every company looking at CRM to first go to SugarCRM (http://www.sugarcrm.com) and download the free version of their (mostly) open-source product.  Install it on a simple desktop PC (maybe running Linux) and start to play with it - in the Administration screens it’s easy to change the screens, add fields, etc.  There are also online demos available but they expire very quickly and it’s easy to have your (test) customizations lost.

SugarCRM  is a remarkably complete product, and fairly easy to modify.  Many companies can use it with few changes; they also have a on-demand hosted service if you don’t want to run your own ‘live’ servers.  Since it’s open source, you don’t have the same worries as you might otherwise - if you don’t like their prices, host the server yourself and change the code as you want.  

I called the company "mostly open source" - they also have Professional and Enterprise versions with annual licensing fees that give you many more modules and access to better support.  Prices for these versions seem to be competitive with other vendor's offerings (those from companies that end in ".com")  With open-source (free) software you get less than Enterprise-level support, but then you don’t pay for support you don’t need. 

SugarCRM gets a significant portion of their customers at other CRM software company’s license renewal time - the other CRM company tries to add major annual costs for customizations the client already paid for once, and people get annoyed and start to look for alternatives. 

The moral is: make sure you aren’t paying hundreds of thousands of dollars, Euros, etc. for nothing more than you can get for free.

CRM's gone social - are you talking with your customers?

Customers are talking to each other much more than before.  People are linking themselves into tribes of like-minded individuals.  This has been happening for about ten to fifteen years, and accelerated (or reached critical mass) the past four or five years.

Let’s start with a story from January, 2008.  The Black Mustang Club is a group of people with black Ford Mustang cars - they are passionate about their cars, and wanted to put out a calendar, showing some of these cars.  They went to the cafepress.com online store to get them printed. 

Somehow, Ford’s lawyers got involved with cafepress.com, and cafepress.com declined to print the calendars.  The club members came to believe that Ford was claiming intellectual property rights to privately taken photos of their privately owned cars. 

(http://www.bmcforums.com/showthread.php?t=42402&page=3)

This caused what might be called an “Internet Firestorm” as thousands of other sites linked to the original posting.  Many of these were free speech sites, consumer-rights sites, etc.  Ford began to look stupid and perhaps evil.

Six days after the first post appeared, Whitney Drake from Ford Communications clarified things: “[This] is essentially a misunderstanding... Ford has no problem with Mustang or other car owners taking pictures of their vehicles for use in club materials like calendars…The Black Mustang Club, and any other Ford enthusiast club, are free to take pictures of their own vehicles for use in calendars or other materials as long as they don't use Ford trademarks in products that will be sold.”  (http://www.bmcforums.com/showpost.php?p=1339241&postcount=1)

So the problem went away, mostly.  But there are several good lessons to learn here from a CRM perspective.

1. Misunderstandings don’t save you from bad press.  The fact that it took six days for Whitney to respond gave time for the problem to fester.  (And this was before Twitter made things like this spread even faster.) 
 
2. Anyone can be an influencer - this started as a posting on a fairly obscure enthusiast car forum, but what damage did it do to Ford’s reputation?
 
3. “The evil that men do lives after them; the good is oft interred with their bones.” (from Shakespeare’s "Julius Cesar") This BMC calendar information is widely available years after the fact, and doing a Google search for Black Mustang Club Calendar produces over 80,000 results, mostly as a result of this dust-up. 
 
4. Wow, there is such a thing as a Black Mustang Club.  Is there an enthusiast group for our products that maybe we can encourage?
 

WNTD: Watch your ID values

What Not To Do: Random horror stories from the trenches.

Watch your ID values (this one is more technical, bear with me).  Let’s say you have an old system that uses 8-digit ID numeric values for every table - people, accounts, cases, etc.  A Case ID might match a Account ID, but that’s okay, they are always kept separate in the old system.

Then you migrate your data to a new system, which uses longer GUIDs (Globally Unique IDs) - the new system you can guarantee that no two records (no matter what table they are in) have the same ID.  But the old data was just migrated in as-is, into similar tables.  At the database level, there are no duplicate records in a table, so no problems, right?  What are the chances that it matters that there are duplicate IDs in different tables?

Well, roughly 100%.  Don’t ask me how I know, I’m sworn to secrecy, but associating the wrong customer with the wrong account can be a problem, especially when the customer is real and the account is a test account with a dumb name.  When a mailing goes out to the correct customer address, with the less-than-helpful addition of the dumb account name, it's what we in the CRM business call a "problem".  (Well, the actual name is an "ohshit".)

Getting the Sales Force to use the CRM System: Compliance

It’s one thing to get decision-makers in a company to buy and install a SFA (Sales Force Automation) system.  A good article about the many benefits of installing SFA is here:
http://www.insidecrm.com/features/selling-sfa-092707/

But then you need to get the sales force to actually use the system the way it was designed.  If you have a new sales force automation system, or a major change to an existing one, getting the sales force to enter the data you want, in a timely manner, is always difficult.  Sales reps say things like:

• “Why do you want me to enter all this information into your dumb system?  It takes forever.”
  
• “I’m good at my job, I beat quota every year.  I don’t need this system, go away.”
• “You only want me to enter all this info about my clients so you can replace me!”

There are no easy answers here.  Some companies have tied system use to bonus structure, but this tends to produce volumes of bad data as sales reps do the minimum needed to meet the standard (sometimes with fictional data).  Some simply say “do it, or else!” and some of their top reps leave.

The best approaches I’ve seen have a “carrot and stick” approach, where there are some positive incentives for using the system are added.  A simple “carrot” might be a semi-random prize (a small prize but with great recognition) for particularly well-entered customer data (for entering quality, not quantity). 

The best single method I’ve ever seen (and it probably wouldn’t work everywhere) involved a carefully selected pilot group, and a longer-than-normal time the system was in pilot (over three months).  A few pilot users found that being able to enter customer interactions the same day they occurred helped later sales calls, and that ranking the people they talked to by influence and decision-making power helped their sales closing - and that the mere fact of entering this data made them think more critically about where to spend their efforts. 

These users were persuaded to talk to the rest of the sales force at the national sales meeting - the combination of “stick” (management says: do it!) and “carrot” (my fellow rep made more money this way!) led to about 80% compliance the first two months.  (Typical compliance is under 50% to start.)

Compliance for the rest of the reps was a matter of management attention backed up by custom reporting.  I designed a report that only showed date and time of day of data entry; it was an eye-opener as it showed who was entering a bunch of data late Sunday night, instead of all week as they were supposed to.

WNTD: Keep your staff notes to yourself!

What Not To Do: Random horror stories from the trenches.

Keep your staff notes separate from the customer correspondence:  (My grandfather actually got the bedbug letter in the late 1920s, after being bitten on a Pullman carriage - though not the attached note.)

“The Bedbug Letter”  (from http://www.snopes.com/business/consumer/bedbug.asp). 

A wealthy gentleman was badly bitten by bugs while riding on a certain railway line.  Arriving at his destination, he wrote the company an indignant letter and received a prompt reply.  It was, said the letter, the first complaint the company had ever had of this nature.  Inquiry had failed to reveal any explanation for this unprecedented occurrence.  Nevertheless, a number of new precautions were being taken to make absolutely certain such an unfortunate incident never happened again.  The letter was signed by a high official of the railway.

The gentleman was well satisfied with this reply and was returning it to the envelope when a slip of paper fell out onto the floor.  The hastily scribbled note on it read: "Send this guy the bug letter."

Are you (still) doing the right things?

Are you doing the right things?  Are you still doing the right things?  This is one of the questions that a good CRM system can help you come to grips with.  Customers don’t know what’s “right” or “wrong” in your organization, so they ask, “Why don’t you do this...”.  When they ask questions like that, try to be sure you are giving a correct, current answer.

There's story of a research experiment involving chimpanzees, bananas, and a garden hose.

The chimpanzees are put in a room with a bunch of bananas hanging from the ceiling.  The room also has a stepladder in it; it doesn’t take long for a chimp to move the ladder to under the bananas and start to climb.  But as soon as the monkey gets near the bananas, the researcher sprays him down with cold water from the garden hose, and sprays the rest of the chimps in the room as well.  It doesn’t take very many repetitions for the chimps to all learn not to try to get the bananas.

Now a chimp is removed and a new one replaces him.  The new chimp moves the ladder and tries to get the bananas.  Of course all the other chimps in the room tackle him - they don’t want to get sprayed with cold water.  So the new chimp quickly learns the same lesson, don’t try to get the bananas!

One at a time, all the original chimps are replaced - there are now none there that were ever sprayed with cold water.  Yet when a new chimp comes in and tries for the bananas, the rest still tackle him - but if they could talk, none could tell you why, just that it was bad, not done.

Is that your organization?  Are you still doing (or not doing) things a certain way “because that’s the way we do them here”? 

And what is it costing you?

WNTD: “Who signs your paycheck?”

What Not To Do: Random horror stories from the trenches.

“Who signs your paycheck?”  A consumer products company outsourced part of their call center operations to the wilds of Utah, where labor was much cheaper.  They worked with a company who’s expertise was outbound telemarketing, not that it mattered much.  After weeks of training, they went live, and it worked okay.  There was much monitoring from the parent company at first, then gradually the reins were loosened. 

What was interesting was the metrics the call center reps were judged on - how long was the call (short is good) and how satisfied are your callers (based on surveys).  One rep started getting higher marks, then much higher marks - in fact, he collected all the possible bonuses.  He was demure when he was asked how he achieved his success - “I just listen to them, and try to do what’s right for the customer” was his reply.

The real answer turned out to be he essentially answered the phone with “Hey, it doesn’t matter what your problem is, will $25 in coupons solve the issue?  What about $50?  Great, let me get your name and address.”  He was giving away ten times what some other reps were, over $2000 each day - but the cost of the coupons came from the parent company, not the outsourcing company that signed his paycheck. 

Short call times, happy callers... but somehow, not good overall customer service.  At least, not very cost-effective.

Designing your CRM system (Part 2) - An iterative, user-focused process

Design of your CRM system should evolve during the implementation process.  “Release early, release often” is a mantra of many open-source developers, and it turns out to help in many applications.  (I’ve heard of exactly one system that had no changes between initial design and final acceptance, and they spent four years in the design phase.  It was aerospace-related.)

If you can get a good suggestion from a user, implement it quickly, show them the result during the programming / testing phase, you’ll develop a feeling of “ownership” with that user.  When you have other glitches (and you will!), that goodwill will help you - they won’t be so quick to badmouth “their” system.  Keep the lowest-level users as involved as you can (their managers will resist, wanting them to keep doing their jobs, but it’s important).

And once the system starts coming together, users will be able to try it in increasing completeness.  In various implementations, in the few weeks before final testing I’ve done things like:

• Change field order on all main screens, and reworded all menus.  (This is common.)
• Remove 20% of the app (Adding 6 fields to another area let them drop 8 full screens.)
• Add a complex nested dropdown field that subsequently powered lots of their reporting.  During the design & implementation process, a manager had expressed “decreasingly vague” frustration with the design; after a series of meetings and fact-finding missions, it coalesced into needing this field added.  If she hadn’t seen all the earlier iterations, we never would have gotten to this point.

Users are smart - when you (finally) show them what they want, they’ll know it.

Of course you’ll need some more changes right after go-live, but that’s okay too.  Change is good - you're making the system and process better, removing friction and saving money.

Designing your CRM system (Part 1)

Okay, you need a new CRM system - what do you want in it?  Management has high-level needs that will be part of the design, but the bulk of the system design will be screens, fields, databases, interfaces, etc.  What should they look like?  If you ask this question early in the implementation process, you will (deservedly) probably get blank looks back.

Brian Sooy’s General Theory of Design: "Design consists of creating things for clients who may not know what they want, until they see what you've done, then they know exactly what they want, but it's not what you did."  (from http://bscodesignmatters.blogspot.com/2006/05/skeet-shooting-in-dark.html)

This is a common place to start.  You want to reap the benefits of a good CRM system, but that’s awfully vague.  If you ask people what they need, some will jump into too much detail (I’m sometimes guilty of this) , and some will know only the high level requirements and not be able to drill down to individual requirements.

Brian Sooy goes on to say, “Thankfully in my experience, the antithesis of the Theory has been true in most instances: "Clients who know what they want will provide a design brief, and evaluate all designs based upon that brief."

So how do you get to a decent design brief?  I advocate, “Do one to throw away”, a true pilot system.  Make an incomplete (quick-and-dirty) CRM system as fast as you can, and improve from there.  The “system” may be as simple as some quickie web pages or linked PowerPoint slides with mocked-up screens on them; but preferably, it will be a very simple (almost out-of-box) version of the software, with anything complex put in the “work on this later” pile.

Then take this system to the stakeholders, as many of them as you can get together.  Explain to management where the data they need for reporting will be entered; they will also have technical questions.  Explain to the users what the screens might look like - they will be different than what they are used to, hopefully you can ease a few pain points in the current system.

Make sure you get end-users involved, because the ultimate success of the system depends on them.  Explain what you are doing: “I’ll bet you are tired of getting systems thrust upon you; here’s a chance to tell us what you really need.  Help us make a better system for you.”  Not every user can do this, but every call center or sales force I’ve ever dealt with has a few users who have been extraordinarily useful with system design.  They know their jobs better than anyone else (including their manager) and want to help. 

Get the users off the road or off the phones for an afternoon or two early in the design process, and keep in touch with these users throughout the rest of the design and implementation process.  They will be your biggest advocates in the user community, help you train the users, and help with the general dislike for new systems that is a simple part of human nature.

Luckiest scheduling problem ever

A large Call Center install of a new CRM system had training in 4 groups, two days each.  But the training rooms were booked the week before go-live, so the first training group was held a week early - thus the three weeks before go-live were: training, training, downtime, (then go-live weekend).

As it turned out, this worked out perfectly and I’d recommend this schedule every time.  Some people get sick and miss class, or don’t “get it” the first time they are trained, the extra week gave time for remedial training.  Some bugs are inevitably discovered during training, this gave time for thought-out fixes (not the common “I hope this works” fix thrown in just before live deployment). 

One of the bugs found was subtle and tricky, and took two days to fix.  If we hadn’t had the extra week, we might have had to delay things (thus egg on our faces) or gone live with this bug and stored some bad data.  Instead, with the help of this extra week, we looked like geniuses (we were, but that’s bragging :-) when the biggest post go-live problem was the occasional browser timeout.

So if you can, build in a short delay between training and go-live; you'll be glad you did.

WNTD: Why smart companies do surveys too

What Not To Do: Random horror stories from the trenches.


Company “X” in the late 1970s had a manager who was asked to cut the number of complaints the company received.  His plan was simple and ingenious; he dropped the call center staff from twelve to five.   Since people are more willing to call than write, the number of complaints received went down.   The reports on “abandon rate” (people who called their service line, sat on hold, then finally gave up) for the call center never made it past his own desk, of course.  And the of course their products never got better. 

Eventually a VP’s wife tried to call via normal channels (their advertised toll-free number), and the 90-minute hold time she experienced put an end to the practice (as well as the manager’s employment there).  It took several years to even start to get the company’s reputation back.

CRM IT Systems (Part 2)

I introduced CRM IT systems by explaining they are just like every other computer system - you enter data, transform it somehow, and get data out.  Most companies know what they want to achieve from a CRM system, but not exactly how to do it.  That is why you need a systems integrator with a business view, and it's always a moving target, so plan for change.

One key point on system design is to make sure that every field - every single field in your application - pays for itself.  It needs to improve customer service, increase sales, or be required for technical or compliance reasons - otherwise it has no place in your system.  Be ruthless in removing fields that you "might need someday, maybe".  They will get in your way, slow down data entry and annoy both the system users and the people they are collecting the data from.  [If you load data from an external source (like account numbers or sales figures), feel free to show extra data to your uses, but don't add them as data entry fields.]

So what should your system look like? 


I.) Inputs

1. User-entered data fields.  (This is where most people start, and some get no farther.)
2. System-entered data fields (timestamps, etc)
3. Ongoing data uploads (customers, products, sales data)
4. One-time data uploads (perhaps business card info from a trade show)

II.) Outputs

1. Listing reports
2. Summary reports
3. Letters/emails/campaign mailings
   
4. Samples (for pick-and-pack operation)
5. Ongoing data downloads (customer data updates; and export to enterprise reporting systems, database marketing systems, etc.)

III.) Transformation - turn the inputs into outputs (sounds simple, right?)

1. This is where “running the business” comes in; there are few guidelines and even fewer hard-and-fast rules to help you.
2. A successful CRM manager will need to know their CRM system very well, and know the entire business organization almost as well.
3. CRM Managers need to work closely with the rest of the organization. The CRM system, properly implemented, will capture the true voice of the customer, and every group - manufacturing, sales/marketing, supply chain, compliance, etc. will all be able to use insight gathered there.  (But these groups need to be prepared to not like everything they hear. I could tell you stories...)
   
4. If you know your Inputs and Outputs well, some transformations will be immediately obvious, and others will suggest themselves in time. And talking to other groups in your organization will produce ideas that come only from open collaboration.
5. Be flexible! Change your system as needed; there is no sense in answering questions that no one is asking anymore.

So you go through a design process and now you have a CRM system, and it is perfect the first day... then the second day comes. You need to always keep on top of things, so we need to add to the list:

IV.) Feedback

1. How do you tell if the Inputs made good Outputs? (error and exception reporting)
2. Listen to the customers! This is one of the great values of a CRM system.
3. Listen to the sales reps, and especially the call center reps, regarding the company and the products. 

[Many executives making important decisions at mid-size and large companies have not talked to an actual product user in years. Yes, years, and it’s not from indifference, it’s due to priorities, usually quite valid ones. So they should listen to their best available proxy, the people who currently talk directly to the customers. Don't let the executives rely on their experience as a sales rep ten years ago.]

V.) Process & Process Improvement

1. What do people have to do to use the CRM system? Is it as easy as it could be?
2. Does everyone need the same level of detail, or can some have a “CRM Lite” system to give them just what they need?
3. What workflows are needed in the system? (What data must be entered first, etc.)
4. How do you make the process of using the CRM system better?

Whew, enough for now.  This should give you a roadmap, enough to start thinking about what the design phase of a useful system that produces actionable data should look like.

CRM and IT Systems (Part 1)

CRM IT Systems - what are they, and how do you make a good one?

There are dozens of sites, white papers, etc. that will (try to) help you select a CRM system, usually based on features and technical capability.  But how do you know what features you need?  First you need to go through a fairly high-level business review process, then try to map that to a CRM system.

Like many other IT systems, a CRM system is just inputs, outputs, and transformation. The key to a successful CRM system is to keep things lean and agile, and avoid “dead wood” (data captured for no reason), and “GIGO” (garbage in, garbage out) - data that is factually incorrect. (This is easier said than done, you have to constantly monitor the system and the business for change).  The basics are:

• Decide, define, design, and refine the business view of the application. (What are you trying to accomplish?)
• Cast this business view in terms of the application and technology platform. (How are you going to do it?)
• Prepare for change, both on the business and application side. “I changed my mind, I have a better idea” should be met with a grin, not a scowl. 

So then you work on your Inputs, Outputs, Transformation, along with Feedback and Process Improvement.  The point is that if you can build in the Feedback and Process Improvement from the start, you will have a more valuable system, not another "bit-bucket" that holds data no one uses.

So then you work on your Inputs, Outputs, Transformation, along with Feedback and Process Improvement.  If you can build in the Feedback and Process Improvement from the start, you will have a more valuable system, not another "bit-bucket" that holds data no one uses.

In part 2, I'll continue this with some details on Inputs, Outputs, Transformation, along with Feedback and Process Improvement.

WNTD: Nothing is completely private

What Not To Do: Random horror stories from the trenches.

My "CRM Metrics" post brought up the word "actionable".  It means either something you can use to take positive action on, or something you can be sued for.  Which brought to mind a tip for you...

A wise company will carefully NOT have a place in the application for call center reps to enter private comments about the callers; because no matter how private it is supposed to be, this information is “discoverable” in litigation.  I know some horror stories in this area, but I shall demure listing their details; they are probably no worse than those your fevered imagination can come up with.

Suffice to say there are some words that just never belong anywhere in a CRM system’s data, including “snotty”, “stupid”, and “liar” (as well as most swear words).

CRM Metrics

What the heck are CRM Metrics? Let’s start with some classic ones:

1. Coverage / frequency of sales force visit, by customer, by quarter
2. Complaints by Product, by month
3. Web site visits by referrer, by campaign

Each of these has a time component and an outcome component, and each is incomplete in its own way. Let’s try it again:

1. Coverage / frequency of sales force visit, by customer, by quarter. Put one version in order by customer sales volume, and another in order by customer profitability per unit sold.
2. Complaints by Product, by month. Trend this year over year (seasonal adjustments), and note times of new advertising campaigns and new product launches.
3. Web site visits by referrer, by campaign. See which sources of contact led to new purchases or new inquiries.

This is closer to something “actionable”. (The word in legal circles means something you can be sued for, but in CRM terms it’s data you use to can take useful actions.)

So now we might get answers we can do something with. Each of the insights below is based on actual results I’ve seen over my 20 years in CRM.

1. a) Acme & Sons doesn’t buy that much but they pay full price, a slight volume increase there would help a lot.
1. b) Beta Co. is our fourth-largest customer when you add all our product lines they buy. Each of the three sales reps we have calling on them thought they were a smaller customer, and didn’t know about the other reps.
1. c) Beauty Supply has low volume and low profits; the scantily-clad receptionist is not a valid reason to visit them every week!

2. a) Complaints about leaking bottles doubled in the past quarter. See if there is something wrong with the bottle-making process. Did we outsource something that we need to inspect better?
2. b) We had several dozen new “I love it” calls on the new Autumn Spice fragrance. Should we do a Christmas fragrance? Or continue this all year long?
2. c) All three members of the Flea and Cockroach Anti-defamation League call us each day, complaining about our advertising. Report on this separately so we can ignore it.

3. a) We got 17,000 visits from BigSite.com, average stay at our site, 5 seconds, 22 purchases. We got 150 visits from FocusedSite.com, average stay 7 minutes, 18 purchases. See if we can find more focused sites to advertise on!

Two related points to keep in mind: You can’t report on something if you don’t collect the data. But if you start always collecting extra data “just in case” you will do nothing but annoy your employees and customers. If you need that extra data only sometimes, do surveys. The amount of time you expect to take on a survey is different, and the chance of annoying the customer is less.

So, collect the bare minimum data to start; keep your interactions as smooth and quick as you can. Add questions (also known as ‘data fields in your CRM system’ and ‘friction between you and your customers’) only when you need to; make sure every additional question / time spent pays for itself.

How do you manage relationships with customers?

So how do you manage relations with customers?  (Biff, get your mind out of the gutter! :-)

First, listen. Mostly, people want to talk to you; people love to be heard, and make a difference. The absolute easiest thing to do is to ignore people, especially those you think have nothing to do with your product. You can’t do this in the age of the internet!

Second, be responsive. Even “No, sorry, we can’t do that (but here’s what we can do)” is much better than silence.

Third, be fair. Most people have an innate sense of fairness - they recognize when they have been wronged and deserve compensation, but they also know that business can’t give away the store and expect to survive. On the sales side, people all want the best price but will recognize that long-term contracts and volume buying will change prices.

This is all very high-level and rah-rah. So how do you actually do it?

For the past 25 or 30 years, part of the answer has been a CRM System, a computer application to help capture data and report on that data. For all the advances in technology, the basics haven’t changed. Each time your employees interact with a customer, capture the information. Whether it's an inbound telephone or field salesperson visiting a customer, you go through the same basic process.

• Name / Address / Phone. (See if there are prior contacts with them first.)
• Role - who are they?
• Why are you talking to them, and what are you saying? (Complaints / suggestions? Selling something?  And did they reach out to you, or did you contact them?)
• What product are you talking about?
• What are the next steps you should take?

A good salesman or call center rep will do this sort of thing on their own. And until the advent of cheap computers in the 1980s, that was as far as it went. But computers added data entry efficiency and most importantly, reporting. A recurring complaint can be trended, and corrective action taken. Sales effort can be compared to results. There is a large, fertile field of CRM Metrics (see my next post), and properly done, collecting and acting on the metrics will change your business for the better.

WNTD: “Yes they work here... but...”

What Not To Do: Random horror stories from the trenches.

Sales reps were supposed to document everyone they talked to, and to collect new names too. (“I saw the same people again, and they bought again” was, for a time, not good enough anymore.) Since valid new names were not always easy to get, one enterprising rep got a (paper) employee list and started entering random names into the CRM system.  Management never caught on - they had a perfunctory QA system where someone would occasionally call the company and ask if the contacts entered into the CRM system actually worked there, the answer for this rep was always “Yes he works here” - but they never asked for (or got) the second half - “as a janitor on the weekends”.

The sales rep confessed this to management after he was promoted for excellent sales. And management, to their credit, went to a “Sales Contact Value” method that better helped identify useful people, influencers and buyers.

And the weekend janitor stopped getting weird messages from the replacement sales rep.

Okay, what is this CRM thing?

What is CRM? Of course the three letters mean Customer Relationship Management, but that's hardly enough to help.

If you ask this question to a dozen people in a large company, you’ll probably get a dozen answers.  Maybe more.  You’ll get answers like “We do CRM with our Sales Force Automation system” while someone else would say, “No, it’s our inbound Help Line, or our outbound Call Center” and a third would pipe up with “It’s our Direct Email operation”.  And then what do these groups do to earn the CRM title?  That is where the complexity comes in.

Yet based on the three words - customer, relationship, management - it should be simple.  And it is, if you can think broadly enough.

Who are your customers, and how do you manage the relations with them? 

First, who are your customers?  Do you know?

An old-school (true) story:  An old codger I know has a huge home shop, but hasn’t bought a new shop tool in decades.  Instead, he haunts flea markets and yard sales, and only buys top brands (Snap-on, Rigid, etc) with good service and warranties.  If you sell tools these tools, what do you think of him?  He’s never spent a dime with your company, and probably never will, but he’s a frequent user of your warranty - he actually costs you money.  Is he your valued customer?

The answer is emphatically “yes”!  He is supporting the secondary market; when someone does buy your tools, they know there is a resale market supporting the value of their purchase.  When this person recommends your tools (after all, he’s an expert), he’s adding to your brand value.

Okay, ‘Influencer’ is a well-known role in the sales process.  But who are influencers?  These days, it can be anyone with a computer and internet connection.  There are some well-written diatribes on subjects like “Dell Hell” and “Wal-Mart Sucks”; alternatively, “I love Zappos” is easy to find too.  No one knows (nor much cares) who writes these, but they have the effect of rallying the like-minded and drawing in the curious.

These days, anyone can be a customer or influencer.  So treat everyone as best you can - everyone.  Treat people as they want to be treated, not just as you would want.  You are different from them.  Find out how they want to be treated, then do it.  (Within reason of course.  Don't give away the store.)