Deserved or not, CRM has taken a beating in recent months. Arthur O'Connor's article "E-CRM: The Good News and the Bad News" quotes a Web site that boldly claims, "Only 1 percent of CRM implementations succeed." According to Garnter Group, "roughly 50 percent of all CRM projects will fail to meet the customers' expectations. That failure rate is... often the result of politics, bad vendor choices, or poorly managed implentations." CRM seems to have replaced the data warehouse as the IT project most likely to generate snickers in the hallways of corporate America.
Contrary to popular belief, CRM is not dead. A Jupiter Media Metrix study released last month pegs CRM spending in 2001 at $9.7 billion. In addition, CRM spending is expected to increase to over $16.5 billion by 2006. CRM is, in fact, still in its infancy and is evolving fast. So, why the bad rap? The hype about CRM's capabilities has set unrealistic expectations.
A leading CRM software manufacturer defines CRM as "creating a single source of customer information that facilitates selling to, marketing to, and servicing customers across multiple channels." Like deftly worded legislation that says every hungry child in America deserves to be fed, CRM, as defined above, is a good idea -- one no one is likely to disagree with. But legions of Harvard Business School professors have published organizational behavior papers focusing on convincing sales, marketing, and customer service to play together nicely.
Achieving the CRM utopia described above in real-world corporate America is easier said than done. Gigantic CRM implementations that try to be everything for everyone often end up watered down and weak. They do a lot of things adequately but lack the laser-like focus on the specific objectives of each department they intend to serve: sales, marketing, and customer service. The initial solution leaves everybody underwhelmed, and so starts the planning for version 2.0.
As CRM evolves, a second form of CRM implementation is developing. This form is quite different from the major technology initiatives planned at the highest levels of an organization and intended to be everything to everybody. This type of implementation begins as a series of tactical projects that each attack a single business objective, serve a single department of the organization (sales, marketing, or customer service), and grow independently over time into a formal CRM solution.
In his report entitled "Starting the CRM Process: Examples From the Field," Meta Group researcher Ashim Pal says 80 percent of CRM programs are initially run as ad hoc skunkworks operations that, when combined, incrementally accomplish corporate CRM objectives. He coins the phrase "guerilla-CRM" to describe this process. Arthur confirms the redefinition of CRM, stating in "E-CRM," "CRM is seemingly being redefined as smaller, more incremental initiatives -- not the big-scale cultural transformation it was once promoted to be." Neither is saying this new form is a better approach to CRM; they're just observing that it is developing.
The above-mentioned sales database is a good example of a small-scale guerilla-CRM initiative. It was designed to serve a single branch of the CRM triumvirate: sales. Sales representatives identified prospects to populate the sales database. Prospects contained in the sales database were sent an email asking them to participate in the online survey. The online survey collected valuable information that the sales representative required to customize the pitch to the needs of each individual prospect. The database and associated responses from each individual prospect were easily accessible by each of the sales representatives via an Internet interface. Business deals were consummated, and incremental sales revenue was generated. After the tactical project was complete, the data collected from prospects and new customers was integrated into the software company's corporate database using XML.
CRM is evolving to meet the needs of the marketplace. The days of all-encompassing CRM projects that take 12 to 18 months to implement are not completely over, but these are lean times and corporations are measuring the short-term return on investment on every dollar invested in marketing and technology. The sales, marketing, and customer service organizations have short-term goals and objectives that need to be addressed today. Guerilla-CRM projects are developing to meet those goals and objectives.
Mark Sakalosky is vice president of marketing strategy at MarketSmart Technologies, an
agency specializing in technology powered marketing solutions that build
long-term, personalized customer relationships. He also oversees development
of MarketSmart's newsletter, E-mail
Previously, Mark was V.P. of Email product development at eTour.com, a consumer web site acquired by AskJeeves. Mark has held a variety of marketing roles at USA Information & Services; Home Shopping Network and The Golf Channel. Although he earned an MBA in marketing strategy from The
College of William & Mary, he remains a devoted Spider from his undergrad days at the University of Richmond.
Reprinted from ClickZ.
Reprinted from ClickZ.