Gearing up for CRM: Antecedents to successful implementation

Abstract

The thesis of this paper is that customer relationship management (CRM) works best for certain types of businesses, products and organisational structures. Beyond the environmental and organisational factors, success depends on a customer-focused strategy that is implemented by often re-engineering current customer interaction processes and sometimes designing entirely new processes. The keys to profit enhancement however are processes that maximise the opportunity for increasing customer-generated cash flows at every customer contact. This is done by invoking decision rules that recommend specific customer treatments at each contact. Customer segmentation and customer value scorecards (CVS) are discussed as key tools in understanding customers and identifying opportunities for increasing customer-generated cash flows. An example that discusses how the introduction of a CVS in a company resulted in the company embracing CRM is also presented. CRM does require managing customer interactions, but more importantly, to be successful, it requires senior executives to be involved in creating the environment, culture and processes that will help it succeed. Organisational readiness, careful planning, the deployment of the right analytic tools and technology, as well as flawless execution are all needed for CRM to provide significant bottom-line results.