INDUSTRY ANALYSIS

Explaining CRM’s Credibility Gap

Let’s face it: CRM continues to be the Rodney Dangerfield of enterprise applications. It doesn’t get nearly the respect it deserves.

Despite many research firms’ take on the aggressive growth of customer-based initiatives inside manufacturing and services companies alike, CRM itself continues to go through a slow and painful metamorphosis today. Let’s take a look at why CRM continues to struggle with its own credibility.

Evangelism is not an action item; it’s a passion.

After getting any type of CRM system installed — and this can include the spectrum from massive call-center deployments to even the smallest partner relationship management portal — unless there is someone, somewhere in the company passionate about making these applications part of everyday life, nothing happens.

Call it ownership. Call it evangelism. I like the word passion because it connotes someone willing to do whatever it takes to make the CRM system achieve its contribution. Without that passion and pride of ownership, the system will have mild use but will never accomplish what it is capable of.

So many agendas, and none include the customer.

For some of the world’s largest software companies, this is certainly the case. These global CRM leaders jump on CRM deals that percolate out of their sales teams with aggressiveness and focus.

Tactically, these companies are brilliant; strategically, they suffer from being too myopic at times. The strategic agendas of these companies are at times clouded, and have the true needs of an evolving customer coming in and out of focus.

Strategically, the world leaders in CRM could definitely use a reality check on how often the customer stays at the forefront of their focus.

Lies, damn lies, and Accidental ROI.

For all those C-level executives who have dropped millions into CRM implementations, they at least deserve a bumper sticker that says CRM ROI Happens…Sometimes.

This is the heart of CRM’s credibility gap: How can you prove that CRM delivers a return on investment in companies where the system gets used sporadically and the quality of the data is at times suspect?

Yes, it is a hard question to answer. Delivering ROI has much more to do with quantifying the before-and-after picture of how sales people get their quotes out, how marketing cross-references leads and existing customer-base data, and how customer knowledge impacts the supply chain.

In short, integration is core to ROI on CRM systems. The higher the integration, the higher the ROI as a rule. Without it, ROI really is lies, damn lies and a fortunate accident.

Anytime vendors guarantee ROI, be sure they back it up with dollars.

Partner Relationship Management: What a short, strange trip it’s been.

This area of CRM is cat-herding in action. Getting distributors, dealers, resellers, agents and service partners to align with your objectives as a manufacturer is time-consuming and tough work.

With a sales channel loyal to margin, there’s ample room to try and create loyalty with all types of applications to serve them. Lead management, escalation, training, order capture, sales configuration, pricing execution, contract compliance, warranty management – the list of applications in this arena of CRM continues.

With such a diverse set of needs to build out on, PRM instead has had a short, strange trip. That’s because only a few select vendors have gotten it. PRM is all about increasing funds into and out of the channel partners — and that includes extending into order capture and even order management. It’s all about funds management and price-exception handling, including special pricing requests and enforcing prices through indirect channels.

It is not enough just to deliver lead management and escalation anymore. Manufacturers have to tackle the chaotic world of pricing in their indirect channels to make PRM pay off today.

The search for meaning requires an honest commitment.

Bridging the CRM credibility gap happens when both vendors and companies decide to be honest with themselves and recognize that these applications are purpose-built for tasks that sometimes can’t be tied back to ROI.

A vendor’s marketing department must start its search for meaning by defining products in conjunction with engineering that doesn’t play specmanship with its rivals. It must make those hard decisions to pare back features for greater usability and value to customers.

For users, the toughest decision of all is buying CRM applications requires an honest commitment to be passionate about change.


Louis Columbus, a CRM Buyer columnist, is a former senior analyst with AMR Research and is founder of LWC Research, a firm specializing in CRM, sell-side e-commerce, sales and product configuration and guided selling.


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