..why, costs go out of control and benefits are seldom as promised
CRM (Customer Relationship Management) is a much-abused and much-maligned term. I am reminded of the elephant in mythology who was being felt up by 5 blind men and who ended up describing the elephant in as varied terms as “a pillar”, “a rope”, “a wall” and so on.
So, for a time about 5 years back, everyone was “doing” CRM. From the call centre agent to the marcom specialist sending out mailers to customers. Then there were CRM tools vendors; all from the contact management softwares which were little better than a rolodex to the sophiticated office telephony vendors.
So, instead of 5 blind men with their unique experiences, we often had ten or more definitions. I will try and break up the CRM universe in digestible nuggets, especially from the point of view of the small business owners. Even though, my post has more relevance to the B2B customers, I hope the B2C people can benefit as well.
CRM is a process of ensuring that the various ways in which the customers interact with us are logged, tracked, measured and hopefully triggers from this are used as feedback so that we make improvements in our customer interactions.
So, over time, CRM systems have come to mean:
1. The software for logging customer profile, activities, customer contact “campaigns”, “leads” etc.
2. The telephony and connected IT systems.
3. The add-ons: like the campaign execution tools like e-mail engines, the webinar platforms and so on. Linkages to “content management systems” whose prime function is organizing content for your own websites.
4. The “overlays”/ management bits: reporting on “sales funnel”, “active” vs “passive” part of the database.
The problem lies in the scope. Since most CRM projects are initiated by marketing, most CRM systems pay a lot of emphasis on “profiling” both the “account” (customer company) and the “contact” (customer company employee). So, we log everything; including SIC codes and industry segments and number of employees and company website address. We record the contact “interests” as explicitly stated and their interaction history, as providing clues to what they “really want”.
Not that it mattered. It is a brave marketer indeed, especially in those big MNC “marcom factories” who will confess to not having enough contacts to target for a marketing campaign. So, targeting filters would be “flexed”; boolean operator “OR” will replace “AND” and sufficient targets will be generated for doing yet another “mass-mailer”. And, this is a self-perpetuating cycle; those that are once targeted in campaign, will find themselves in subsequent mailing lists too.
All CRM software sellers know their audience. They know it is marketing which will be most influential in taking a decision on what software to buy. So, they make sure their software is heavy on profiling, campaign management (linkage to execution is optional) and has a lead transfer path. Since Marketing does not like feedback, seldom will you see a CRM system which provides a “back-flow” path for crappy leads.
Everything has a cost. Profiling every customer to death has a cost; in terms of acquiring the data, keeping it updated and so on. In the B2B scenario at least, the front line salesmen are the ones that gather the data and input into the system. Their motivation for this work is low since to them, this has low linkage to how their pay and commission is determined.
What aggravates the problem for a small business running a team of 20 or less salesmen covering 500 or less accounts who interact, engage and purchase with varying frequency, is that most CRM softwares were written for big businesses and have been scaled down for small businesses. Salesforce.com ends up costing anything between for Rs 5000/- to Rs 15,000/- per month, per user. This does not include initial customization cost and porting of data from legacy system and so on. Nor does it include the cost of training for users. While MNCs would happily shell out this money, I think this is way too much for most Indian small businesses. This is definitely a big reason why most Indian small businesses are still managing their customers contacts in Outlook and prospect summaries in Excel.
In my next post (s), I will talk about “just enough specifications” for a CRM system which should work for most small businesses in India.