CRM Strategy Best Practices

The Inseparable Link Between CRM Strategy and CRM Success

Customer Relationship Management isn't a software application. It's a business strategy aimed at growing mutually beneficial customer relationships. And interestingly, it's incurring a lot of transformation. In fact, CRM strategies have evolved from an inside-out, technology focused design intended to manage both customer data and customer facing staff, to an outside-in orientation designed to satisfy and delight customers for mutual objectives. But with that said, it remains elusive for many.

As we all know, CRM efforts continue to incur unimpressive results, poor ROI and deplorably high failure rates. From my experience, the top contributing factor to application deployments that fail to realize their slated objectives or deliver payback is a lacking strategy, or many times no strategy at all.

Customer relationship management software enables CRM strategy, and good strategies are both SMART (Specific, Measurable, Actionable, Realistic and Time-bound) and directly linked to the company's most pressing business strategies. When the technology helps the company advance its business growth goals or top objectives, it gains active and visible executive sponsorship from the top of the organization, becomes integral to the company's continued evolution and becomes sustainable.

But if there is no accompanying strategy, CRM software has nothing to enable and instead diverts in an attempt to find other value for any user or stakeholder willing to apply the application for their individual or departmental goals. In this all too common scenario, the application then inadvertently defines the strategic use based on what it can do, not what the company most needs done.

And the differences between individual goals and the company's strategic goals are substantial. From an individual perspective, CRM software may be reviewed and positioned in a way that helps sales people easily enter sales activities or opportunities. However, from a strategic perspective, these same tasks may be reviewed and planned in the larger context of how to increase a salesperson's total selling time or improve sales win rates.

When reviewing CRM software solely from the end users tactical and operational perspectives, the software evaluators compare features and functions in a vacuum, and without clear understanding of how the application can directly contribute to much more empowering goals.

Best Practices

CRM Strategy Best Practices

Creating CRM strategy isn't easy, but here are some key points to guide your efforts.

  1. First, there must first be a compelling business need for change that is recognized throughout the organization. More often than not, the business need is either expressed in pain or opportunity.
  2. Second, there should be a clear CRM vision which directly addresses the need for change and articulates a destination. Recognize though that the destination is not a fixed endpoint, but instead an intersection of organizational priorities, guiding principles and measurable objectives which collectively achieve mutually beneficial customer relationships. It is essential that staff understand and buy in to the vision and this framework in order to make the vision a reality.
  3. Third, the organization must assess and design its culture and capabilities to deliver upon the vision. This is where the strategy takes shape. It must be designed with an outside-in customer focus and include an integrated mix of culture, people, business processes and enabling technology. Developing a business case is helpful in prioritizing the activities from a benefits and ROI perspective. This means that benefits must be expressed in measurable value and tied with costs. The business case should also identify the WIIFM (What's In It For Me) for all stakeholders.
  4. Finally, the company should develop a prioritized delivery plan in order to achieve its SMART objectives pursuant to forecasted results. I recommend the plan start small, iterate and be agile in order to support the inevitable learning and adjustments. Also, the strategy and supporting plan must be led by business leaders and supported by IT staff. When these projects are instead led by IT staff, it suggests a lack of strategic intent and that the primary constituents (the users) are not the champions in achieving the vision.

As the great Yogi Berra once said, "if you don't know where you're going, you will end up someplace else". And from a technology perspective, I'd advise that starting a CRM software implementation without a clear strategy is a lot like boarding the wrong train. You can try running down the corridor in the other direction, but it's really a futile effort.