The document discusses common obstacles to customer relationship management (CRM) implementation. It identifies intellectual, cultural, and organizational barriers including unrealistic expectations, wishful thinking, product-centric vs. customer-centric cultures, and fragmented organizational silos. Successfully implementing CRM requires overcoming these barriers by focusing on consistently positive customer experiences over the long-term to build loyalty, rather than expecting immediate results.
2. Common CRM obstacles
• Customers have more information and more control
• To decide what to buy and from whom
• Customer expectation significantly raised due to internet
• Internet itself obstacle to meeting the expectations
• Information due to online system difficult to integrate with old
fragmented system infrastructure
• Eliminated “human glue”
3. Common CRM obstacles
• Major Internal Obstacles (gaps - difficult managing
relationships consistently)
• Intellectual Barriers (Unrealistic Expectations)
• Wave Magic wand-Customer will be loyal
• Software and consulting magic
• Actual work for creation of loyalty abandoned
• Cultural Barriers Product focused-no plans
• Same form filled by patients in every dept.
• Internally Focused (Organizational Silos- organized on
independent functional areas)
• No sharing of common goals, strategies, plans, information and
practices
4. Common CRM obstacles
• Unrealistic Expectations
• Wishful thinking
• Buy software- achieve loyalty
• Loyalty is achieved by providing consistent positive experience over a
long term, takes focus, effort and patience. Potential payback is huge
• Impatience- measuring results on the first month or quarter and not
years
• Loyalty- who is loyal and why? Most organization do not know
• No experience on developing relationships
• Belief in magic wand or one who can do it
• Less than satisfactory results-give up
5. Common CRM obstacles
• Product versus Customer centered Cultures
• Product-Centered Cultures
• A company that makes plans and decisions based on an internal
perspective (impact inside the company)
• Customer-Centered Cultures
• The company has an external point of view, making plans and
decisions based on anticipated impact on customer
6.
7. Common CRM obstacles
Product-Centered Cultures
Customer
Wants
Technology
and
Performance
Solution and Convenience
Company
Focus
Product
(Inside out)
Customer
(Outside in) (Geoffrey Moore 1991)
8. Common CRM obstacles
• Wishful thinking, product centricity, and organizational
silos results in fragmented (split) interactions-
unsatisfactory experiences for customers
9. Common CRM obstacles
• Infrastructure
• Fragmented infrastructure due to:
• Traditional automation of vertical processes
• Data files defined to support specific use of data
• Implemented system becomes part of
infrastructure:
• Dependencies built
• Difficult to make changes
• Integration of old and new systems difficult, often
impossible
• New technologies adopted by system
• Older technologies are stuck
• Information quality in older system
• Risky to show the customers in original form
10. Common CRM obstacles
• Organization
• Functional Siloes companies act as a loose confederation
• Different set of objectives, measures of success
• Managers do not perceive a relationship with other functions
• Do not coordinate their plans
• Functional depts. deliver different messages
• Sales wants numbers/revenue,
• Marketing believes in long term beneficial relationship
• Production wants more units to produce
• R & D and Mktg, want consistent quality
• Channel members may be giving same message to two different
segments
19. Ensuring Customers Loyalty
• Why work on building loyalty?
• Economics
• 5% increase in loyalty (customer retention) increase profits by 35 to
100%
• 1-Company customer inventory
• Increase retention by 5% to double the customer inventory in 14 years
• 2- loyal customers
• Buy more
• Cost less to serve
• Less sensitive to price
• Refer friends to your product/company/store
• Wait and travel a distance to buy on your products
• Prepared to buy a little inferior or equal quality product against
competitor
20.
21. Ensuring Customers Loyalty
• Internet
• Loyalty is more important in absence of information
• Some customers still prefer human communication against online
buying
• Internet used for easy information
• Loyalty plays its part, when customer ignores low price and little better
quality of competitor
22. Ensuring Customers Loyalty
Building Loyalty
• Just Satisfying Customers?
• Satisfaction and Loyalty are independent factors
• Satisfied Customers
• May not be loyal always
• May shift to competitor’s products
• Dissatisfied Customers
• Are never loyal
• Tell others of negative experience
• Terrorists will hurt your reputation (disagreement from US point is
terrorism)
• For Loyalty you must work to delight (pleasant surprise) the
customer
23. Ensuring Customers Loyalty
Building Loyalty
• Just Under standing Customer?
• Understanding customer, the demography, psychography etc. does
not create loyalty
• Customer knowledge must help us to devise products and
strategies to make customer loyal
• Just Automating Processes and customer
interactions?
• Time and cost saver
• Helps in devising strategies and implementation faster
24. Defining Customer Relationship Management
• Customer Relationship Management (CRM) is a discipline
that covers all the elements needed to build successful
relationships with customers.
• CRM includes the following elements:
• The information needed to understand customer better
• The process management needed to deliver efficient and appropriate
experiences to customers
• The software tools that allow us to use that knowledge
• The training and change management elements so our people and
organizations understand and are capable o delivering experiences that
build stronger relationships and increase loyalty