CRM is becoming a dirty acronym. Because CRM represents a fundamentally sound idea, this is unfair. Sales and marketing are information intensive activities. Increased investment in IT links customers to the points in an enterprise that serve it should produce better customer experiences. Especially in a downturn, profits depend on customer satisfaction. Serving prospects and customers better makes them much more likely to buy again and buy more. However, over the last year, we have been hearing more and more stories about failed or troubled CRM deployments. What is going wrong?

As is common in such situations, it is not simply that CRM technology is failing. The problem is to match technology to sales and marketing working practices and then manage change in those practices. Of course, the vendors are not without blame. They have oversold in the way that only the IT industry can. But Mark Twain identified the real problem more than 100 years ago - "I'm all in favour of progress, it's change I hate".

CRM success stories have often come from financial and other service industries. Many of them relate to situations where record keeping is completely computerised. As a result, rather than wait to talk to someone who knows the situation, a customer can be served by the first available assistant who fires all the information up on their screen. Often, these deployments are in call centres.

In practice, call centres only work well in situations where both the customer and the service assistant have pre-existing knowledge of the service or product offer. Assumptions don't need to be stated. The dialogues are predictable and can be written down. The buyer carries the risks of misunderstandings. Call centres are then a lot cheaper than a field sales force. However, in complex situations costs and risks soar. The call centre's lack of flexibility can actually hinder the situation. For example where something has gone wrong and the customer wants redress, the experience of contacting a call centre often exasperates the customer rather than satisfies them.

In the longer term, we expect call centres to decline. In effect, the assistant is looking at a screen and answering your questions. They don't add much value. If and when people can serve themselves by looking at their own screen, they will. Self-service petrol stations are the proof. The government's ideas that call centre jobs can replace lost manufacturing jobs look rather daft.

In industry, as opposed to financial services and the public sector, the main sales and marketing activities are business to business. Typically there are many individuals in a customer organisation who are in contact with many individuals in the supplier company. Almost always there is geographic distance between the parties. Frequently the product or services have to be customised. Establishing a fit between demand and the offer is a major part of the transaction. In the lobbies of manufacturers, it is still common to see buyers and sales representatives sitting around brochures discussing the options.

There are some situations in industry where CRM can have a big impact. You will be impressed when the engineer who comes to fix your washing machine, or a machine tool at a subcontractor, knows exactly what you stated the problem was when you phoned in and brings with him first time the part needed to fix it.

In industry, desktop "contact manager" type products are widely used. However, they mostly don't fit industry's real contact problems with many to many relationships between contact points. Usually, desktop products only model one to many relationships. When the sales representative using the contact manager leaves the company the contact information is lost. Often it is simply too difficult to integrate with company wide information. Where the transactions are bigger we hear of successful Lotus Notes deployments that share information among the many to many relationships. CRM systems should overcome this problem but we hear of too many deployments where the customer information is only visible in the CRM system and not available in calendars, emails, etc.

CRM's marketing automation should provide big benefits by matching marketing activities to sales activities. They can help sales representatives to select useful information and prepare proposals for their prospects or customers. CRM's sales force automation should help sales representatives optimise time so that as much as possible is spent in contact with customers. Few deployments in industry deliver enough to the sales representative and achieve these benefits.

The benefit that is achieved is visibility. Sales management can see and monitor the pipeline of opportunities, prospects and proposals leading to orders. The sales force's actions are recorded and continuously monitored. In normal times, this means that management can set investor expectations. This in turn supports the share price. From the CEO's chair this benefit is massive.

But asking field sales to record all the information as sales are progressed is a heavy overhead. In a call centre, when you are connected it is virtually automatic. In industry, the sales representative user is remote and disconnected. We are asking them to enter information, fill out forms and then synchronise with the central system. This is not painless and it takes time away from selling. There is also a temptation to "sandbag" - keep opportunities in reserve in case the numbers look bad. What is not recorded is not visible.

When a CRM system relies on the sales force putting effort into activities, which they are not measured against, then it will surely fail. Sales representatives are measured on orders, not filling out forms correctly. It will take a lot of courage and may not make much sense, to change reward systems so that sales representatives who update the CRM system but don't sell anything get the bonuses.

My final conclusion is that the IT industry has seen CRM too much as an automation tool and not enough as an empowerment tool. By definition people working in sales and marketing are self-confident types who employ their own judgement. We want them to decide if a prospective sale is real enough for them to invest their time and effort pursuing. It is no surprise that CRM has worked best in situations where sales simply about taking orders from inward calls generated by marketing campaigns.

Mike Evans

Related press articles and reports

Aug 2002 The vendor selection dilemma, by Dan Roberts

Oct 2001 Cambashi's Dan Roberts reports on CRM in the real world

3/10/01 CRM industry’s first independent satisfaction study debunks vendor hype about high customer satisfaction CRMguru report summary

Hewson Group Global and European CRM Market Share Analysis

27/09/01 Choosing the right IT system is vital, as print technology and services firm Printmountain discovered Computer Weekly article

20/09/01 Personalisation technology is a growing sector, but now it must prove its worth Computer Weekly article

19/09/01 The trick to making eCRM work is to tie such packages in with legacy systems and business process re-design Computer Weekly article

18/09/01 Creative business : customer relationship management Financial Times article

10/09/01 Promising ROI keeps CRM expenditures high 1to1 article

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