CRM solutions: cash cow or white elephant?
Posted: Monday, September 21, 2009
by Sean Ashcroft
Sticky Clients
IN THE realm of business software, few -- if any -- class of product is as criminally under-utilized as customer service management solutions.
A properly integrated CRM system should be able to:
-- Track and organize existing client and customer contacts, as well as prospective clients and customers;
-- Provide information about customer and client interactions;
-- Improve services provided to clients customers;
-- Track client contacts as they move jobs, with a view to leveraging new business from existing relationships; and
-- Provide information to inform targeted marketing campaigns.
So why is it that following CRM installation and promotion by in house stakeholders, do so many firms employees use it as a glorified Rolodex -- if they use it at all?
The answer could lie in recent Forrester research showing that organizational cooperation and coordination remains a major impediment to the success of CRM initiatives.
In 79 per cent of companies that have reported a negative return on their CRM investments, cultural issues within the enterprise are cited as the cause, the report reveals.
CRM guru is needed to drive customer relations
The study concludes that to execute a CRM strategy effectively, businesses must appoint a senior-level CRM guru who coordinates all CRM activities and reports to the CEO.
But there are further barriers to CRM uptake. In traditional vertical corporate structures - typically where line managers lead teams the guru approach could work well. But in sectors where the senior employees are partners rather than managers, even a dedicated guru is unlikely to shake firms free of CRM inertia.
Partners in CRM crime
The reason is the partner model is a flat corporate structure; partners co-own the firm, and enjoy equal status. In such an environment, a CRM guru would find him or herself answering not to a CEO able to drive CRM measures through the chain of command, but a panel of 50 partners -- all acutely mindful of their time and all ferociously protective of their contacts.
But this partner structure, and the partner mentality, is damaging the profitability of tens of thousands of companies worldwide.
Andy Haven is a US-based legal marketing consultant, and a former chief marketing officer for a major corporate law firm, and has watched CRMs withering on the vine in the legal sector.
"CRM for lawyers and law firms shouldn't be different than for other businesses. In fact, CRM for lawyers should be easier, as I don't know of a single one who doesn't track their time by quarters or tenths of hours in order to be able to bill.
Partner-owned firms missing out on CRM benefits
Although each day a torrent of valuable CRM information flows through partner-owned firms, partners are disinclined to use this to their firms advantage.
They could provide truly rich data about what kinds of work is producing the most profit, the most referrals and the least amount of administrative waste, says Havens.
In so doing, he points out, such firms could identify the most efficient and effective areas for business development.
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Top-level comments on this article: (2 total)Hi Sean.Thank you for writing this informative article. Customer Service Management system or CRM can be an important and effective business tool. I am surprised why companies do not utilize it to maximize profit?Thanks for sharing this information.Nenita
Not at all. The idea for the piece came from a lawyer friend, who's a partner in his firm. His was the Rolladex comment that set this in motion.Sean
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