The Main Critical Success Factors for a Customer Relationship Management Program

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Nowadays most organizations involve different customer relationship management programs (CRM) for the sake of revenue growth, customer satisfaction, and productivity. According to Destinationcrm.Com: ‘Customer Relationship Management is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty’ (What is CRM?). However, it is not always working: some of them manage to achieve a great success, but a great number of organizations do not receive what they hoped for. Instead, they trap into different sorts of difficulties and failures, ranging from poor customer acceptance to cost overruns. The thing is that it is quite easy to avoid them due to the well-designed CRM program. It helps to increase customer loyalty and sales. Here are three things representing the results of the ideal CRM program: higher profits, lower costs, and, as a result, more revenue. ‘CRM helps you to understand, anticipate and respond to your customers’ needs in a consistent way, right across your organization. Practicing Customer Resource Management requires an efficient and integrated internal business system. Many businesses benefit from the organizational discipline CRM imposes, as well as from the technology itself’ (CRM – Customer Relationship Management n.d.).

Croteau (2003) considers, ‘Critical success factors for CRM are the limited number of areas that must achieve satisfactory results to make CRM implementation a success.’ Thus, there are some steps that can be defined as essential components of the CRM program. Some of such components may seem obvious. Considering the complicacy of the smallest CRM Company, it is recommended to review the next factors.

Factor 1. Gaining the enterprise-wide commitment

Any CRM program requires a broad diapason of talented and energetic experts. As CRM Company includes several areas, it is necessary to gain favor from all departments: distribution, marketing, sales, finance, manufacturing, support, and so on. While involving members of all mentioned departments, the company will gain the precious input. It will promote the cooperation of all sections of the company.

Gaining the enterprise-wide commitment includes:

  • Descending management obligation.
  • Ascending buy-in from the system users.
  • Budget appropriation for the complete solution.

The main step to successful implementation of the CRM system is persuading every victim group of the company in need of the Customer Relationship Management. It will minimize the opposition and increase the company’s chances for success.

Factor 2. The CRM project team formation

Selection of the CRM project team is an essential aspect of any successful CRM program. It will represent the nucleus of all CRM efforts, being responsible for finding effective solutions and making key decisions. Forming an effective project team, one should start from the top managers and technical department. Each team member must represent the desired requirements from the chosen CRM system.

Management has to provide motivation, oversight, and leadership. Managers are always responsible for evaluating offered CRM decisions, which are based on the following:

  • The system must have a significant positive influence on the existing processes.
  • The costs have to be considerably reduced.
  • The current impact of the CRM program has to be prospective enough.

Information Services are closely involved in the work of selecting, customizing, and specifying the CRM system.

Experience shows that the prospects for CRM program are greatly enhanced when marketing users are totally satisfied with the results provided by the CRM system. Here are the criteria which represent the basis of users’ evaluation of potential CRM program:

  • Does it reduce overhead and save time?
  • What are the chances of increasing sale’s productivity?
  • What is the level of difficulty in learning and using it? Does it simplify the process of communication between customer and company?

Factor 3. The analysis of business needs

The quite critical factor in the success of the CRM Company is the analysis of business needs. It is very important to assess the current process of CRM technology. While analyzing the business needs, some actions should be held to agitate marketing, top sales, and customer service. To implement this component for the CRM, it is necessary:

  • To compose a consensus according to the imaginations about the ideal Customer Relationship Management system.
  • To determine the fundamental aims for CRM and identify the goals how CRM should influence the company in general and each work group separately.

The idea of these actions is to interpret the perfect CRM solution for the company. It is also very important to take care to admit and estimate all ideas. Thus, all members of the company will feel that they are part of the process. It will also help to form the game plan for the CRM project. According to Staffware eCRM (2000, p. 6): ‘In formulating the CRM game plan, the gathering of information on specific problem areas, identifying particular goals, and defining objectives must be done uniformly throughout the company.’

The CRM Research is used for gathering the needed information for developing the overall CRM system of the company.

CRM Research:

  • What types of data are used?
  • What are the functions of the CRM Company?
  • How does the company interact with customers?
  • How the company can improve the relationship with management and customers?
  • How the company is involved in propagation activity (direct mail, telemarketing)?
  • What are the requirements of the company?

The research determines business functions that have to be automatized. It also defines what technological peculiarities are needed in gaining the CRM solution.

Factor 4. The CRM “to-do” plan

After organizing the CRM team, next step is to design a “to-do” plan, which is a detailed instruction of the process needed to implement the CRM program. In this plan of action, several determining factors are supposed to be taken into consideration in order to make the CRM program effective. The following information is based on the example of the IT Company.

What to do first when searching for the CRM solution?

The best way to start searching for an effective solution is to take some consultations in CRM industry. There are many experts and analysts whose responsibility are reviews and CRM research. They can offer a detailed analysis and review of any CRM solution. Here are some highly experienced experts: MetaGroup, GiGa Information Group, OVUM.

How to decide which CRM solution best matches my specifications?

This step requires an expert evaluation. For instance, during this process in IT sphere concentration must be directed on three things: technology, software, and vendor. The CRM program will be effective if all these three elements will work in harmony and will complement each other. One should always keep in mind the fact that weakness in one element cannot be covered with strength in another.

What is important to keep in mind before choosing the final CRM solution?

When the CRM solution is finally found, there is a need to take into consideration some aspects which will be helpful when making a final decision. The most important one is the cost. The cost of CRM solution has many factors, which cannot be found in the price list. That is why the following questions can help one to analyze the real situation:

  • Is the system in need of being adapted? How much does it cost?
  • Is there a possibility offered to maintain the system?
  • How much does it cost to train the staff to use the CRM system?
  • What new hardware and software is needed for its accommodation?

Summary

According to Farnaz (2010): ‘CRM project would stand a small chance of success without considering critical success factors’.

Now it is worthwhile to establish what a well-designed CRM program can do. Here are some possible results of its implementation:

  • Consolidation and analysis of information about customer expectations from the product.
  • Concentration on the most profitable customers, as well as development of programs directed towards increasing customers’ loyalty to the company.
  • Providing top managers with an accurate and detailed picture of all marketing activities and sales’ rate.
  • Service personalization, which results in making products according to the customer requirements.
  • Increase in revenue and territory performance and decrease in cost overruns.
  • Elimination of the possibility of customers or prospects to undergo the cracks of the old or overloaded system.
  • Providing with the conditions in which the reaction on market changes can be made instantly.

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