Customer Relationship Management Strategies Part Two: Creating Your Strategy

Introduction

Customer relationship management is a total business strategy; therefore, proper planning is crucial. After you have communicated and established support for your initiative, outlined the steps your company needs to take for implementation, and marked your parameters for success and failure, you can then create your implementation strategy.

This is Part two of a four-part note.

Part One discussed new approaches to CRM implementation, Part Two will discuss implementation strategies, and Part Three will describe achieving and maintaining the competitive edge.

Part Four will conclude with specific CRM strategies and a hypothetical case study.

Implementation Issues and Strategies

What Robert Burns said about the best-laid plans are true: they do often go awry. However, preparation is everything because it will help you to accommodate change. The road map to a successful CRM implementation is filled with pot holes, but if you know the road signs, you will be able to plan ahead. Large and small organizations alike have stumbled through the same dangers and get caught in the same traps. Recognizing these issues in advance will help guide you through or around these problems.

Overcoming Lack of Requirements

Ask any number of IT professionals what the number one reason software development projects fail and many will say "lack of requirements", more specifically, lack of good requirements. Not understanding user needs can result in inadequate functionality. This is usually a result of insufficient user participation and involvement. Though the system is being developed to serve the user, most business people are too busy with their job demands to spend the time needed to clearly vocalize and document what they want the system to do.

Gathering the Right People

Also falling in this category is inconsistent requirements, which can result when many users are involved in the development of a CRM system. One division's needs may be in direct conflict with the requirements of another division, and diverse needs may compete for priority. One way to solve this problem is to develop some common goals and to focus on the customer. After all, you are implementing a customer management system to take care of the needs of customers. Ironically, often the customer is silent in CRM. A 2003 study by Bob Thompson, published for CRMGru.com, stated that CRM strategies focusing on the customer are more likely to succeed than those that don't.

Getting the right people to participate can be a challenge. The mix should include representatives from the software vendor, key users, and customers.

Software vendor associates: Must be knowledgeable not just in the technical aspect of the product but with best practices and industry standards. Avoid using sales people to help you develop requirements. Instead, ask for someone with functional knowledge to help guide you through the implementation process.

Key business users: Should participate in brainstorming meetings and joint application development sessions (JADS) to create effective use cases, and to write scenario-based test scripts. This type of test script is based on a user's daily workload and not a some vague functional description. Involve your users early on. Start with current business process flows such as an outbound sales call, or a prospect qualification process. Knowledge gaps can be filled with team members who have different knowledge and background.

Users: Look for someone who can see the big picture and has intimate knowledge with the day-to-day workings of the company. Users are required to contribute time and effort to the project beyond attending a few meetings. They must be able to speak for others in the company and understand the needs of the organization. Most important of all, they must share a customer centric vision.

Customer participants: Involve a customer with whom you have a very strong relationship with. This is not necessarily your biggest customer. As a matter of fact, make sure it is not your largest client so that any negative impact will not affect your bottom line materially. Customer participants must not let their special agendas override the overall goals of the organization. When involving your customers, be prudent and realistic. Avoid selecting customers who are negative about the company or have a bias against technology. Just as importantly, do not project pessimism. Be cautious not to present your company in a negative context.

Documenting the Review Processes

To harness the expertise of the team, take a "before" snapshot of your organization. Understand the needs of the organization by looking at the current business environment. How are customers being handling today? What policies are in place? How does information flow? Map out current process flows, documenting procedures, policies, key players, and organizational hierarchy. Gather documents on policies on controls and interview people involved in these processes. If policies are not documented, draw a process diagram or document what users do and have your users check for accuracy. Many users find it insightful to see on paper what they actually do—they might even realize that steps are missing or they are doing redundant work. In one organization, users discovered that they make twelve copies of a form and verify its information eight times—and they still had a 74 percent error rate!

Next, review these flows to see where CRM can help facilitate your processes. Highlight processes that can be replaced with a CRM and note where a CRM system can increase efficiency, improve quality, or automate manual processes. One company enlarged their process diagram, taped it to the wall and stuck sticky notes with the words CRM and a numbering convention. They then organized a use case referencing those CRM sticky notes.

Capturing requirements in an organization that does not have existing, global processes or has departmentally isolated processes is challenging because employees improvise throughout the business cycle. No centralized repository of data exists. No policies are in place and procedures are not documented. Customer relationships are managed via business lunches, golf games, and friendly phone calls. Contacts and phone numbers are typically handwritten in leather-bound notebooks and some sophisticated traders keep their own Rolodex; however, when these employees leave, their fancy notebooks go with them.

Users find it hard to fathom a process they've never had but know they need. Get users to think outside the box, challenge their comfort level, and document anecdotal processes. White papers and cases on similar companies are also a good way to glean information. If you have an implementation partner, whether professional services from your software vendor or a third party consulting firm, inquire about requirements they used in other projects. They will usually remove all the proprietary information first but key implementation information will still be there. Some companies also may have generic requirements that you can tailor to your organization.

Combating Scope Creep

A second reason for CRM implementation failure is scope creep. Changing business conditions can lead to changing requirements. However, undefined requirements and lack of prioritization can cause expanded scope and increased effort. Document your requirements in detail. Write a good-use case to illustrate what the system is expected to accomplish and what the primary actors (direct users) are expected to do.

Be sure to get sign offs on everything! Start with agreements between developers and users, and also involve your sponsors who are the real stakeholders. Business sponsors are typically in management. They are the people who have the vision to support your efforts, acquire funding for your project, and secure resources when you need them.

Break down your deliverables into manageable chunks and prioritize your deliverables. Believe it or not, this does more to prevent scope creep than other techniques. If you deliver the quick wins first, it helps your users to reap some early benefits and consequently you will gain more buy-in.

Perform "sound checks" from time to time to ensure continued agreement and focus. Reinforce the scope of your project and clarify requirements as needed. If the business environment changes, you might have to be flexible and provide solutions to incorporate these changes or alter the requirements to meet these new challenges. When changes occur, document and get sign off on your scope changes.

Compensating for Lack of Skilled Resources

Mid-market companies may not always have the luxury of a full-fledged IT department and are often so overburdened with the cost of new technology and software licenses that they hesitate to invest in technical labor. They might hire a few people to work on the implementation and retain them for support after go-live or consultants are brought in to supplement the team.

However, mid-market companies must take the bold move to increase their technical staff to avoid being at the mercy of their software vendors and third-party consultants. An experienced program manager and senior developer are two key personnel you need to hire.

Your program manager should have strong experience in software development, with least three to five implementations, and ideally has some experience with your industry. To implement a CRM system, a good project manager, should be able to handle all the traditional tasks of project management such as budget control and project plan updates, keep good meeting minutes, and document issues. Risk assessment, project planning, resources management, problem solving and negotiation skills should all be part of the package. Your program manager should also be able to effectively communicate to upper management, users, and of course, to the team,.

Project managers in mid-sized companies cannot afford not to leave technical management to others or trust individuals to manage themselves. Your project manager must have enough technical experience to do their job, but not necessarily write hundreds of lines of code. If your project manager does not have the technical skills to solve technical issues, you should make sure other people in your team can. A strong technical developer would complement a less technical project manager.

Next, acquire a senior developer with over five years experience in development and knowledge of query tools such as Access, SQL or PLSQL, programming best practices, database experience, and be willing to learn new technology from different people. A good candidate should have development skills in the programming language, which your software is built on such as Java, JavaScript, C++, Visual Basic, or PERL. Additionally, experience with application methodology is more important than most people realize. Your developer must understand the software development cycle and practice good, controlled, organized methodology.

In addition to a program manager and a senior developer, a qualified business analyst, database administrator, and technical account manager should also compromise your team. A good business analyst can translate the business needs to software developers. A good applications database administrator (DBA) is a must because CRM applications rely heavily on the underlying database, no matter what database platform you use, Oracle, MS SQL Server, or IBM DB2. A seasoned applications DBA will be able to anticipate problems, resolve difficult issues and optimize performance.

Also invest in a technical expert from your vendor if one is not provided for you. One leading vendor instituted a very effective professional services program where a technical account manager (TAM) is assigned to every implementation. Minimum consulting hours are often negotiated at time of licensing and additional hours can be purchased as needed. These consultants are not sales oriented and are not involved in any licensing negotiations. Instead, they are usually from technical backgrounds, and have a broad knowledge of all CRM modules. For what they don't know, they can usually find someone who does. They also serve as the liaison between the customer and technical support, helping to escalate technical issues and bug reporting.

Because of the limited resources of mid-market companies, one way to avoid increasing head count and overhead is to supplement the technical team with independent contractors. Though consultants are often pricey, their cost can be capitalized and depreciated along with the project costs. Good consultants can offer diverse experience and are usually very well trained. They can bring proven methodology, rigorous training programs, certified technical skills, and multiple implementation experience. An additional advantage is that as a third-party unconnected to the software vendor, they can provide impartial feedback and input. Ensuring that your consultants are not also resellers of any software can help and. importantly, make sure you look for one with experience in your industry and has ample references when seeking consulting services.

Developing Infrastructure

In addition to possibly lacking an in-house technical team, mid-market companies may not possess a robust enough infrastructure to support CRM initiatives. There are two solutions to this dilemma. If an organization does not have an infrastructure to support its other growth initiatives, such as employee count, expanded sales territory, emerging market penetrations, increased technology, cutting edge products, then an injection of cash to overhaul the current infrastructure is called for. This organization needs the infrastructure to support the growing needs of a growing employee base, provide the technology to venture into new markets with new sales channels such as the Internet or telemarketing, and attract skilled IT programmers to develop cutting edge products and services.

A second solution is to use a hosting company. Many hosting companies have sprouted over the past decade, and they provide low cost storage and hosting solutions to companies who do not want to invest in perpetually changing technology. They provide the necessary hardware and network solutions to support CRM initiatives as well as the technical resources to help manage the environment. This solution also works for companies who want to try new technologies, but are not convinced that the ROI would justify the effort and capital investment in such highly depreciating assets. Another advantage of third-party storage and hosting is that a full time monitor does not have to be hired to watch servers or troubleshoot issues.

When selecting third-party storage or hosting solutions, ensure that they have redundancy systems, escalation processes, and disaster recovery plans. Request references and talk to their employees. Your consultants or technical staff often has experience working with these companies. Ask them for a recommendation. The IT world is close-knit. It seems everyone knows everyone. Ask around to see if anyone has heard anything negative about the hosting company you are contemplating engaging. Ask to see their financial statements and do some research on the Internet. In these days of consolidation and mergers, you want to look for a stable company.

Data Quality

According to one Gartner Group report, Successful CRM Hinges on Data Quality (April 2002) the number one killer of CRM initiatives is poor data quality. Many implementations focus so much on the big picture, that they overlook the most important component of their new system. The biggest asset your company is your customer data. It is the heart of every CRM system. Without it, you have no CRM system. So why not take good care of it?

Start from the beginning and evaluate your current data and how you manage and maintain it. How do you collect your data today? Is it a reliable source? Can you depend on this source in the future? What does your company do with the data? Do you mine it to provide different information? Understanding how your data fits in with your overall CRM strategy is key not just to the implementation, but to ongoing CRM initiatives as well. Identify the issues you have with your data today. What data issues plague your staff? Is it sufficient data? Is it timely? Is it accurate? If not, now is the time to cleanse it. Remove redundant data. Standardize your nomenclature. Verify your data. Are your addresses up-to-date? Spend the time to make sure your data does not present roadblocks to growth or sabotage your CRM initiative later down the road.

Converting bad data is never a good practice unless the system you are converting to has the tools to help with the data cleansing process. Some CRM applications allow you to merge customer records to remove duplicate data. Third party data quality tools that integrate with your CRM system can help standardize your data. For example, all instances of "street" is abbreviated to "St." or vice versa. Data validation tools help to verify your data. Is the street address your customer provided you a valid address? Are the zip codes correct? If you do business-to-business commerce (B2B), you might want to verify your data with the Dun and Bradstreet database or other B2B data source. Once your data is sufficiently "clean", develop a process to maintain the quality. Customer data is used throughout the organization so it is important to develop a customer data quality management (DQM) strategy that works for and involves everyone. Many companies acknowledge the value of their data and guard it as a critical assets by appointing a position or a department to monitor to control data quality.

An idea that has gathered popularity in the last few years is the concept of "data stewards." As old-fashion as this term sounds, it implies a position of control, careful attention, and responsibility. Data stewards are charged with not just monitoring customer data, but they are also responsible for establishing standards and procedures for maintaining data quality throughout the organization. These stewards must incorporate all departments and divisions in their total DQM strategy, recognizing that each have special needs, limitations, and challenges. Systems must also be considered. If an application has certain data requirements, such as data length, formats, or fixed elements, policies for collecting, cleansing, or maintaining such data must account for these requirements. For example, if your mass marketing application requires a nine-digit zip code, you might want to validate your addresses with a United State Postal Service database. Stewards should also institute standardization of data. Published data standards help to get everyone in the company on the same page. Data entry uses these standards, and end-users should understand the different abbreviations, formats, and data elements. CRM initiatives must not forget this most crucial asset, and must carefully tend to and cultivate the data.

Change Management

Most organizations resist change. As homeostatic animals, human instinct dictates that we remain the same regardless of our changing environment. However, in today's business environment, change is the only constant. While most employees recognize this, recognizing is not realizing. Changes must be positive, well communicated, gradual, and well planned. Employees like to be part of the solution. If benefits are publicized and presented in a tangible way, employees will recognize the value of a CRM system and will see themselves as enablers, adding to the value. Ultimately, the company's success is tied to individual job security, self-worth, job satisfaction, and resume building. Changes must also be gradual. Sudden changes are stressful and require more energy to adapt to. People must have time to change their habits, learn new technology, and understand the reasons for the change. This is not to say that drag out your implementation until your employees are 100 percent comfortable—you will never go live that way. Decide for your organization what the happy medium is.

Strategy for Change

Communicate your CRM initiative early, at the inception if possible. By the time you are in the testing phase, everyone in your company should be mentally prepared for this new "thing." The transition phase must be well planned. The key elements of a well-executed change management strategy are:

• Motivating promotion
• Thorough testing
• Sustainable training
• Long-term usage campaigns

Motivating Promotion: Your employees cannot touch, see, or feel the change that is about to happen. Immerse them in your CRM initiative. Print posters to publicize the company's goals. Tell them what benefits they will experience personally, less work, better quality, less frustration, smoother processes. Hold town hall meetings to air issues and concerns. Employees want to be heard. They want to be reasoned with. They want to do what is best for the organization. Involve key users in your transition plans, anoint "super users" to spread the message and extend the knowledge. Use role playing to help users understand the system in the context of their everyday work environment.

Thorough Testing: Develop good test scripts that incorporate real life scenarios. System testers cannot replace user acceptance testing (UAT). Utilize users in your testing phase. Your system will only succeed if it could withstand the scrutiny of the users. Don't be afraid that users will discover bugs and faults in the system. Use this as an opportunity to improve it. Develop a realistic timeline for testing. Establish a bug tracking/error reporting tool and follow up with your users. You could not pay someone to do a better job of testing than your users.

Sustainable Training: Provide hands-on training to familiarize users with the system. Lecture-style training classes do not work as well as getting the users in front of the computer. Have users plug-in real data, and experience the results. Show them how their work fits into the whole picture. Supply easy-to-understand training manuals to help maintain knowledge. Train the whole organization. Schedule training classes so you don't interfere with daily work. Start training before go live starting with key users and maintain a training schedule a few days or weeks after go-live. Keep a log of who was trained.

Often, management are left out of the training phase because of their demanding schedule, their ego, or because they may not be direct users of the system. The myth that leaders of the company do not need to know how to use the system should be dispersed. In truth, leaders should attend training to gain knowledge of the technology they advocated. Secondly, they need to feel their employees' gains and pains. Thirdly, CRM initiatives involve everyone in the company, from the lowest to the highest. Executives are the drivers of the process; they must learn to understand and use that the system that enables the company to meet its stated business goals. Finally, employee morale is greatly affected by what leaders do. People will follow if their leaders lead by example.

Long-term Usage Campaigns: CRM is an ongoing process. It does not stop when the software has been implemented and the last person is trained. How do you keep your employees motivated? How do you increase productivity? What metrics will you use for success? How do you increase usage? How do you wean your employees from one system to another? What are the consequences of not using the system? All these questions must be addressed to ensure long-term usage of your CRM system.

Some companies use phased releases to ease the pain and keep the excitement increasing from one phase to another. You can also use promotional products to motivate usage. Customized mouse pads with exciting graphics or motivational phrases help to help to encourage users. Bright, user-friendly overlays prompt users of keyboard shortcuts. Small, laminated quick reference guides help users to remember key procedures. Weekly or monthly themes can highlight certain CRM goals. For example, your company wants to understand why customers call into your technical support line, if you would want to increase usage of the call log feature of your CRM application. Have a contest on which team documented the most calls, not just answer the phone. Make a large chart and post it in your call center. Use system logs to report how many times users log in each day, each week, each month and report by department, by division, or by title. Also get feedback from users to find out why the system is or is not being used.

You don't have to make using the CRM application a condition of employment as some companies do. However, non-compliance could affect performance. It could be a sign of inflexibility, lack of skills or knowledge, or disagreement with the company's goals and mission. Employers often present CRM as just another software to be trained on, another technology to get used to but, it is a shift in how your organization thinks, operates, and performs. Pay attention to the human factor of change. Plan for it, but be flexible enough to modify your plans as needed.

This concludes Part Two of a four-part note.

Part One discussed new approaches to CRM implementation.

Part Three will describe achieving and maintaining the competitive edge.

Part Four will conclude with specific CRM strategies and a hypothetical case study.

About the Authors

Mike Holland is president of Management Advisory Systems Corporation, which he founded in 1993 with a group of former "Big Six" managers and industry experts. He has managed and participated in hundreds of business-based technology projects over the past twenty years including projects for Arthur Andersen and PriceWaterhouse/Coopers. Holland is also the co-author of the Guide to PC-Based Software for the Manufacturing Industry and Requirements Analyst. In addition, he has developed and taught seminars for more than a thousand participants in the methodology for selecting and implementing business and technology infrastructure solutions, e-commerce, and web-based solutions. He can be reached at mikeh@mas-corp.com.

Trinh Abrell is vice president of Management Advisory Systems, Corporation. She has been responsible for strategizing, selecting and implementing a wide range of technology solutions for diverse clients over the past ten years. Abrell has worked for Enron as a CRM senior specialist and for Retriever Payment Systems as the lead project manager on ERP and CRM implementations. She is a Siebel Certified Consultant, as well as a member of the Society for Technical Communicators and the Project Management Institute. She can be reached at tabrell@mas-corp.com.