Deciphering customer relationship mismanagement

We've all heard it, "this call may be monitored for training and coaching purposes." If only!


Customer interactions across both public and private sector companies alike bristle with technology from automated Interactive Voice Recognition (IVR) systems, to warehouses of purchase history and sophisticated help desk and community self-help systems storing information of immense value to sales, marketing and strategists alike. Yet if you ask 99 percent of businesses what they use CRM for the answer is almost always the same - pipeline management (what do public sector companies use it for?).


The problem with these sales management driven approaches is that they tend to undervalue the very reason for investing in CRM in the first place - to improve a company's relationship with its current and prospective customers - and worse still, it creates a cynical view of CRM within the sales force and mistrust of the forecast with the leadership which rapidly leads to CRM failure.


Many companies will mistakenly assume their failed CRM implementation (as measured by forecast accuracy) is a result of bad technology, or a lack of "discipline" on behalf of the sales force, their management or both. In many cases the knee-jerk response is to replace the technology, the people or sometimes both only to find the problem hasn't gone away. All the while, the customer relationship continues to suffer.


First, fire the sponsor.

I believe thatone of the fundamental stumbling blocks of a CRM implementation is that they’re usually thought of as a sales management tool. To be specific, the financial aspect of the investment justification is usually expressed in terms of sales productivity improvements and better forecast accuracy - in other words, helping the sales managers do THEIR jobs better. The net result is there's often very little "customer relationship" considered in customer relationship management requirements management process.


The other anti-pattern I’ve frequently observed in business-to-business (B2B) implementations is the near exclusive reliance on sales people (typically the MOST expensive resource in B2B companies) to input and maintain data. In other words, usually the only information in a CRM system is the information that sales put there themselves. They gain nothing from the CRM system they didn’t already know. Certainly nothing that helps them improve the way they serve their customers.


Some sure-fire signs that you're going down the wrong path with the requirements gathering process for a CRM implementation include:

  • Expectations of perfection on "day 1" (80% right and improving is better than perfection)
  • Making “forecast accuracy” the primary requirement (as we’ll see below, it’s a by-product)
  • Senior executives beginning sentences with the words "we need to make sales people do XYZ for us" For example: "We need to make the sales people keep their contacts up to date," "We need to make sales people update the list of competitive products the customer uses," etc
  • The following stakeholders are NOT in the room (or vastly outnumbered): post-sales/support, sales people, sales administration, marketing, product managers/planners and customers


The last one is the most controversial, but I believe that if your relationships are strong enough to have a few customers in the room during requirements gathering, it is a win. After all, nothing shows them you're serious about improving customer relationship than bringing them into the process!


Before I get a missile from the world’s sales managers, don't get we wrong, forecast accuracy and sales productivity are the ultimate benefits of a CRM system, but I believe (from experience) that the only sustainable was to achieve this is AFTER you've satisfied your core objective, which is understanding your relationship with your customer. This requires asking the sales management team to take a back seat during requirements gathering which is controversial, especially as they're often the group paying for it.


Putting the customer first

Living in Silicon Valley I've met many people who knew HP co-founder Dave Packard personally, and all of them share the same story about his business values. Paraphrased his view was "that if you look after the customer, the results take care of themselves." At a fundamental level, that's what great CRM is all about.


That being the case, who is the REAL customer of CRM? Perhaps obviously, it's the customer and anyone who impacts their “relationship” with your product or service, thinking about it from their point of view in the buying cycle, what questions might your team be answering that could provide nuggets of gold that might help you improve customer outcomes and beat your competition? Let’s take a look at some that might matter to you and your customers below.



CRM reqts.jpg




You'll notice that "forecast accuracy" doesn't feature highly on your customer’s list of requirements - BUT, prompt receipt of goods does - which leads to secondary requirements. Forecast accuracy matters a great deal to the logistics team if they are to build and ship on time.  Likewise, the post-sales support experience (either direct or their community peers) will likely impact the probability of closing an opportunity in forecast, as does their investment in training and enablement.


Arming sales people (and their managers) with this information prior to calling on a prospective client will help them take proactive steps to addressing the situation and setting management expectations more accurately. Going one step further and using your CRM system to dynamically measure Net Promoter Score provides a fantastic leading indicator of where your business is headed than subjective forecasting could hope to.


In other words, if a CRM project requirement's are managed smartly, the sales management team will ultimately get a better forecasting system, but only if they begin by putting the requirements of their customers and the people who support them first and enabling the rest of your organisation to help enrich sales prospecting data, rather than the other way around!


If you've been involved in a CRM project - whether a success or disaster - I'd love you to share your experience either here or drop me an email


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About the Author
Paul Muller leads the global IT management evangelist team within the Software business at HP. In this role, Muller heads the team responsib...

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