Choosing and implementing a CRM initiative can be a daunting, complex task. It is an essential business "must have" in the modern economy, but the CRM landscape is littered with well-intentioned, often expensive, initiatives that have failed to deliver.
Andy Hadfield, chief operations officer for community engagement specialist, The Virtual Works, says the best way to avoid many of the potential CRM pitfalls is to begin with a proper understanding of what a "relationship" actually is.
Most businesses, irrespective of size or industry, want to service their customers and partners better by building closer, mutually beneficial relationships with them. The potential benefits of doing so, through effective CRM, are keenly understood and the desire to realise these advantages is reflected in the considerable investments in people and systems that most organisations make.
Equally well documented is the number of these, often expensive, initiatives that fail. Over the years, experts have given numerous reasons why and, while most of these are valid in their own right, our experience suggests that many fail because of a simple oversight of what a "relationship" actually is.
Our work in the field of community building has taught us that relationships of any nature – social or commercial – endure because they are based on a meaningful exchange of mutually beneficial value. What we like to call a "perception of value equity" between the parties in the relationship.
In business terms, it is the idea of suppliers and customers exchanging ideas and information in a meaningful and convenient manner, building mutually beneficial value that grows over time. Central to this is the concept of "exchange" – that the communication is genuinely two-way and that both parties are not talking at, but listening to each other.
Developing and managing these kinds of relationships with customers is the key to a successful CRM initiative, but it requires much more than a database and set of customisable forms. The "value" that customers offer a supplier and what they need in exchange is often difficult to discern, varies from customer to customer and changes over time as situations and circumstances evolve.
Perhaps unsurprisingly, developing and managing these "commercially intimate" "relationships" especially across large customer bases ─ requires a particular combination of disciplines, systems and skills that are simply not available when a typical CRM initiative is being implemented.
An example of a recent CRM initiative that has successfully tackled the challenge of building mutually beneficial value that grows over time is the "Smart Glass Network Programme" developed by The Virtual Works for wholesale glass distributor, Glass South Africa (GSA).
GSA was determined to find a way of delivering real value and building sustained relationships with its 4 000-plus channel partners, from glaziers and installers to joiners and shopfitters, spread out across South Africa.
The first step was to devise an appropriate CVM (Customer Value Management) strategy, based on what the company> '> s channel partners would actually value. Research revealed that channel partners would really value additional "business support". In other words, further assistance marketing and selling themselves professionally to attract more opportunities.
The programme, which has already delivered a Significant payback on investment, uses an innovative blend of strategy and technology to meet this expressed need by providing each of GSA's 4000-plus channel partners with their own, fully-functional, complementary website.
It not only solves the channel partners reported need for effective business support by providing them with a professional website to market their services, but GSA is also receiving a wealth of data back through the system (for example, prospective customer activity on the websites) that it can analyse and convert into marketing insight, and share with channel partners to generate even more mutually beneficial value.
The Smart Glass Network Programme is a great example of a CRM initiative that builds mutually beneficial value that grows over time and has been described as a virtuous circle because both GSA and its channel partners benefit from each other's involvement in numerous ways.
Having a professional website leads to increased business for partners and that means they buy more glass from GSA. Moreover, partners benefiting from using the service are, naturally, going to see GSA as adding real value, which differentiates GSA from other distributors and is likely to foster even greater buying loyalty. Not only that, but every time a channel partner signs up for the service, GSA's customer database is updated and enhanced, providing both GSA, and the channel as a whole, with even more mutually beneficial strategic and marketing insight.
CRM is an acknowledged business "must have" in the modern marketplace, yet choosing and implementing a CRM initiative can be a daunting task. There is often a large number of complex factors to consider and a bewildering wide choice of CRM solutions available.
Yet whatever solution you ultimately choose to adopt, make sure it is based on a meaningful, mutually beneficial exchange of value ─ a proper understanding that puts "relationship" back where it belongs, in the centre of CRM.