While the technology decisions are often scrutinized, the most frequent weak link in the chain is not technology. The technology almost always does an acceptable job of collecting, collating and providing reports on the data.

The weak link is too often the employees who must then take that data and translate it into real-world reactions to what it indicates. From there, managers must then direct their employees to take advantage of that data.

That is all far more easily said than done. There are three serious obstacles to overcome in order to translate the insight CRM provides into actions that improve sales, marketing, service — and, ultimately, your customers’ experience with your business. Luckily, once you can spot these obstacles, they become inherently easier to overcome.

1. The Tendency to See CRM as Technology

This myopic view is hazardous for a number of reasons. First, it tends to punt responsibility for CRM into the realm of the IT department, making it once removed from the business problems it needs to address. Second, it also can create a perception issue in which, in managers’ minds, the individual customers become disassociated from the aggregate data about them.

This leads to a number of problems. You can’t treat CRM as another IT project; most IT projects have distinct ending points, but CRM is an eternal work in progress. Since your customers and your business conditions are always changing, CRM needs to change as well.

Classifying CRM as a pure IT issue will result in stale thinking and an obsolete approach to customers in short order. It will also minimize the return you can get for your CRM investment, since a failure to connect business problems with the capabilities of a CRM application often results in ignored features — or, worse, the acquisition and integration of other software to solve problems that the CRM application could have solved if only sufficient attention had been paid to its capabilities.

The perception issue is even thornier. Unless managers are prepared to dig into customer data, they can make false assumptions about customer desires and behavior. The highest level of reporting is great for taking the pulse of your business’ collective efforts, but it’s not good for taking the pulse of individual customers. In order to succeed, managers need to dig deeper and make sure their employees do the same.

2. The Fallacy of Viewing Adoption as Optional

When your business is doing well, it becomes easy to accept employees’ complaints about CRM and to allow adoption and utilization rates to slacken, especially from sales. What this really does is to distort the picture you have of how your sales operation works, since much of the intelligence you can use to segment buyer types and make assumptions about their behavior is now hidden.

Adoption is the classic barrier to CRM success, but it’s becoming a lower barrier to cross. The recession has turned many resistors into users, because the need for performance improvement has come to outweigh the resistance to change. We’re also entering a time of significant change to the user interface; rather than forcing users to alter their work processes to the application, next-generation applications are allowing users to easily adapt the way the application presents data to reflect how they work.

In some cases, it boils down to issuing an ultimatum about CRM. But adoption has to be uniform and universal — exempting some employees from it creates the conditions for confusion, resentment and restricted visibility.

3. The Need to Hire CRM-Minded Employees

This is the most basic obstacle that derails CRM — employees who aren’t really invested in the customer. If your staff has this attitude, it doesn’t matter what kind of data you supply them with — it won’t be translated into actions that maximize sales and stimulate loyalty unless you, as a manager, provide them with exhaustive and meticulous directives — an effort that will ultimately collapse over time.

Technology can’t fix this problem. While many CRM problems develop around the interface between technology and people, this is purely a people problem. Heading this off requires a few critical actions.

First, you must embark on the hiring process with the idea of customer focus as an important criterion. Hiring for attitude is as important as hiring for skills. Second, you have to make sure your management embodies the idea of customer focus and reinforces it on a regular basis.

Third, it’s important for managers to explain what they consider to be critical data culled from CRM to help employees see CRM as the critical tool to help them excel at their jobs. In other words, if you want your employees to partner with your customers, then you as a manager need to partner with your employees.

These ideas seem simple enough, but the deeper you get into CRM technology, the more difficult it can be to remain focused on these non-technological issues. CRM is a discipline that encompasses technology, people and processes; two of these three things involve humans. While managing technology can be tricky, managing people is harder — but it’s a critical part of making CRM work.

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Source: CRM Buyer, February 17, 2011

“It’s a big pain for them. Everybody understands it, but it’s difficult,” said Lori Bocklund, president of Strategic Contact Inc., a contact center consultancy in Beaverton, Ore. “To me there’s two sides. The data side, that’s typically the IT people — how do we store the data?

Then there’s the voice recording part that’s unique to the contact center. That’s one where people looked the other way for a long time.” The rules for PCI compliance in the call center can vary according to the size of the company. The PCI Security Standards Council offers an overview of the standards for call center compliance as well as some self assessment questionnaires.

According to Dennis Thrift, product champion for compliance and risk at Akibia, an IT consultancy based in Westborough, Mass., that helps organizations with PCI compliance, there are a few things call centers should keep in mind.

“What we find a lot of times is whether there are shared accounts or everyone has an individual account, with that many users accessing all the records, sometimes organizations will try to make it easy and have shared accounts and people can come in and access them,” Thrift said. “That’s a problem with some of the audit trails and who had access to records.”

Then there’s the notes.

“Another issue is people are on the phone constantly; they’re talking to people and they have a tendency to have a scratch pad or notebook and take handwritten notes,” Thrift said. “Oftentimes they’re writing down personally identifiable identification.”

Akibia conducts “PCI gap assessments” for companies, determining, for example, whether a company has a policy on taking notes on personal information and whether they’re following it, and offering recommendations. The firm might recommend, for example, that a company segment the customer service systems from the rest of the network.

“There are always areas that people can get better at,” Thrift said. “Some are better than others. In general, when you have a large user base that has access to the data you’ll find more opportunities for remediation. In larger call center environments there are more opportunities for a hole here or there.”

One common hole is voice recordings. Call centers that record customer service interactions for quality assurance are often capturing PCI data. They need to store and destroy those recordings properly.

However, few call centers are revamping their PCI compliance for the sake of compliance alone, according to Bocklund.

“The chance of an audit is pretty slim, so I think that they’re driven to get to compliance but it’s just a question of how fast,” she said. “If they’re doing a [call center] system replacement, that’s for lots of reasons. It might take years to put in a new system. On the voice side, it’s a matter of when they get the budget to do updates.”

And budget is never easy to come by in the call center. Though PCI compliance can, in some cases, increase the speed of call center technology investment.

“We see situations where they’re replacing whole systems and PCI is a part of the requirements,” Bocklund said. “If they’re sticking with the systems they have, it’s a question of how do they make changes, but there’s definitely awareness if they’re pursuing new systems. Then it becomes a burden on the vendors to be good at it and address the questions people have.”

One step call centers need to take, Thrift advises, is to make sure they’re up to speed on the requirements, particularly with the changes in regulation with PCI 2.0 and when outsourcing functions.

“If they’re not doing enough transactions to be a level 1 merchant and are 2 or 3, people get a false sense of security,” Thrift warned. “They are just as responsible for PCI as level 1s. Many times they outsource a lot of the transactions. So the system storing or transmitting the data is in an outsourced data center and think they have no responsibility anymore. They’re ultimately responsible.”

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Source: SearchCRM, January 28, 2011

Where do they go to find out about mortgage rates or apply for a home equity loan?

How important is CRM in general for the financial industry?

Banks, stock brokerages, credit card companies and other financial institutions are moving to automate and “Webify” more of the customer service functions, but unlike retail or trade associations, financial firms have to tread a much finer line, weighing both the risk and cost of online endeavors against the danger of appearing confused or careless.

Facebook is an example of that conundrum, analysts say. Many consumers are financially savvy and want to keep up on the products, services and rates available at their banks.

CRM Analysis and Monitoring Tools Decipher Customer Needs

Along with customer service and CRM comes customer intelligence. Many CRM and social CRM vendors also have monitoring or analysis tools to keep tabs on what customers do on a website or in a CRM environment, and then analyze trends in customer behaviors.

Social CRM packages often include things like sentiment analysis that evaluates a customer’s mood when discussing a specific financial institution. Most CRM experts advise making use of monitoring and analysis tools to better understand what the customer is looking for.

“With consumers, the more customer service tools and analytics you have, the better you can study the consumer’s relationship with you and find out where they’re profitable, where they’re not,” said Marc DeCastro, research manager for consumer banking at IDC’s consumer banking division. “You can use that information to make sure the teller is aware of the customer’s relationship whenever they make contact.”

“When the customer comes up to a teller window, it’s important that the teller know things about the customer like she’s got wealth management services with us, or she’s a heavy online user, so they can get her what she needs quickly, or cross-sell her.”

“We conducted a survey, and one question was if people were following or ‘liking’ their financial institutions on a network — and 25% were actually following their bank,” said Marc DeCastro, research manager for IDC’s consumer banking division.

Consumers increasingly expect some basic level of online access to their financial products. A survey this year by Intuit found that one-third of those who switched banks did so “due to lack of online tools.”

Customer Service S.O.S.

Some of the technology improvements in CRM, such as interactive voice responses (IVRs) and self-service account management over the Web, have had both a good and not-so-good impact on customer service. Automated phone systems and call centers have helped banks and other businesses deal with mounting volumes of customers. But at the same time, the same improvements have frustrated customers whose problems aren’t resoled by the automated answers or by junior customer service reps at call centers. They have also given some customers the impression that the bank can’t or won’t help its customers.

In some cases questions have become more complicated. When a customer needs help with a financial question, it often takes on much greater significance than her simply wanting to return a sweater.

In a poor economy, the need to get financial-services customers help with complex questions is even greater. For instance, more customers are trying to re-negotiate mortgage payments, shift their stock portfolios or deal with account overdrafts.

The backlash on IVRs or long waits in the call center queue has sent more customers to public social channels for help. These well-traveled public channels serve as a sort of S.O.S. service for desperate customers. That, in turn, will lead to greater adoption of social forums as CRM tools by financial firms.

DeCastro offered his own experience with bank customer service as an example.

“I just refinanced with a large institution and I called the local number to ask a question, then another number,” he said. “Finally, I went on Twitter and looked up the bank’s name and I posed my issue on Twitter. Within a couple of minutes I got a reply from a bank employee and within a couple of hours a mortgage specialist called me on the phone.

“In the past, I might have sent a letter to the bank president. Anyone who is educated and somewhat resourceful will eventually find the soft underbelly of the corporation, and often that is a social channel,” DeCastro said.

Kate Leggett, senior analyst at Forrester Research Inc. and a leading expert on CRM, believes that banks and other financial services firms will want to integrate their CRM Web offerings into a corporate Facebook page so that customers don’t have to jump between the two sites but can get the same, consistent online Web services at either place.

“We see some companies — though not yet many banks — offering customer service on Facebook. They can engage with customer service staff directly, through click to chat, or they can browse the knowledge base,” Leggett said. “I believe it is the next wave.” One bank that is using social CRM is ING Direct, an online bank that has no brick-and-mortar branches and caters mainly to younger, middle-income consumers. Leggett sees ING’s efforts in online self-service to be a good example of how financial companies can improve their customer service without outpacing the actual net value of the customer to the company.

“ING customers expect to serve themselves over the Web, with virtual agents,” Leggett said, noting that high-end clients with more complex portfolios should be getting a live person. For more high-touch needs, the service is better handled person-to-person.

Corporate Clients Want Online CRM Services Too

An October 2010 report by Finextra Research and Pegasystems found that the top two reasons corporate customers scale back their business with a bank were a poor access to services and information/insufficient channels (46%) and inconsistent customer service across channels, regions and lines of business (also 46%).

The survey also revealed that business customers were willing to pay more for better online services, such as a web portal with more sophisticated self-service that lets them manage their entire portfolio online. Fifty-three percent of respondents said they’d do more business with their banks if they got quick turnaround times to requests and inquiries.

Corporate clients are likely to do more banking and are worth more in revenue, so keeping them happy is especially important. Quick resolution of complex problems requires increased integration with customized applications that many financial institutions already have in place. CRM vendors are already taking this into account in their product development, said Chris Fletcher, research director for Gartner Inc.

“At the end of the day, it’s tougher to differentiate yourself in customer service based on packaged software applications,” Fletcher said. “You’re going to see more and more integration capabilities between packaged CRM applications, e-commerce environments and social software, with some mobile as well.” In the long run, he expects to see the financial companies offer the same type of social CRM amenities that many retail firms already do today.

“The bar is always rising for financial institutions to have those same experiences on their websites,” Fletcher said. “I think many customers expect more of a Facebook-like experience from their financial services provider, with the ability to make trades, information feeds, video, interaction and other Web 2.0 experiences.”

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Source: SearchCRM.com, January 25, 2011

IIA, founded by analytics researcher Tom Davenport and sponsored by the likes of SAS, Intel, Accenture and Teradata, unveiled the list on a conference call this week.

The group is predicting strong growth for analytics, with a growing competitive edge for companies using analytics.

Business Analytics Predictions

Here’s IIA’s predictions for the year ahead.

1. With even modest economic growth in 2011, the use of analytics as a competitive differentiator in selected industries will explode. IIA says the biggest industries for analytics will be banking, insurance, healthcare, telecom, retail, energy, media and transportation. “IIA expects 2011 to mark the beginning of a multi-year cycle where the sparks of economic growth ignite a tinderbox of technology and business forces that are set to drive mainstream adoption of business analytics across commercial and government sectors,” the group said.

2. The gap between analytical innovators and those who do not invest in analytics will widen in high-profile ways. Pharmaceuticals, entertainment, airlines and baseball will be some of the industries where the difference between innovators and laggards will begin to stand out, the group said.

3. The roles of marketing, sales, human resources, IT management, and finance will continue to be transformed by the use of analytics. HR is “one of the fastest-growing areas for analytics,” the group said, while information technology (IT) will “shift to BI and analytics support, instead of transactions.”

4. 15 Chief Analytics Officers (CAO) will be appointed in 2011. Not everyone will use the CAO title, but there are several already, and “many other firms and organizations are realizing that they need more centralized management of analytical capabilities,” IIA said.

5. The availability of strong business-focused analytical talent will be the greatest constraint on organizations’ analytical capabilities. “New programs from universities and other professional training groups aimed at churning out more analytical professionals will be announced but they will lag behind the demand,” the group predicted.

6. Database capacity, processor speeds and software enhancements will continue to drive even more sophisticated applications of analytics. Analytical and database environments will continue to converge, and the trend will accelerate, IIA said.

7. Newer analytical methods in the areas of text analytics, survival mining, time series mining, net-lift modeling, and data visualization will grow in use. Data management, social media analytics and other areas like the effectiveness and need for sales promotions will be big areas, the group said.

8. Consolidation of analytics software players will continue; entry of specialized analytics software and service providers will accelerate. “The few remaining independent analytical software firms, such as SAS and KXEN, will see increasing interest from large IT firms who don’t have a significant analytical capability,” such as HP and Oracle. IBM will continue to make analytics acquisitions, Davenport said on the conference call, and SAP could also seek to improve its analytics capabilities.

9. Regulatory and privacy constraints will continue to hamper growth of marketing analytics. The Fair Credit Reporting Act and web tracking and analytics will dominate U.S. regulatory and legislative initiatives, while Europe “will continue to lead in the development of relatively restrictive customer data and analytical policies,” IIA said. “Paradoxically, the comfort caused by these policies will likely lead to consumers to part with more information than in the U.S.”

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Source: ECRMGuide.com, December 3, 2010

The reality is that technology is usually not the problem, nor is it integration or integrators. If you push, you’ll find that the most common CRM killer is adoption failure. That is, after the system’s in place and the technology is working, the intended users can’t be persuaded to use it.

Like so much about CRM, it’s a mistake to focus on the technology when it comes to adoption. Sure, the interface needs to be clean and usable — and allowing end-users to modify the interface to reflect the way they work doesn’t hurt, either. However, adoption isn’t really about technology. It’s about selling CRM to your workers — and especially your sales force.

Others along the chain seem much more eager to accept CRM. Marketing loves the ability to harness large volumes of data as it hunts for qualified leads, and service loves the ability to draw a complete picture of a customer’s relationship with the company. Sales is still a sticking point.

What it comes down to is this: If you’re a sales manager, how good are you at selling CRM to your sales team? Like any successful sale, it’s not about a slick pitch or a flashy demo; it’s about identifying the customers’ problems and showing them how your product will solve them.

Two Daunting Problems

Problem one that sales pros face today is an increase in expectations. There are fewer sales assets in many businesses, but the sales reps who are left have even greater revenue expectations placed upon them. Meanwhile, low performers are routinely given the axe.

In order meet quotas and thus hang on to their jobs, sales people have two options: Work harder, or work smarter. Using CRM is the way to work smarter, since it helps to organize data that might otherwise be difficult to access when it’s needed the most.

Problem two is that managers don’t behave like allies to sales reps. That’s been a problem when it comes to CRM — the technology’s seen as something for the manager, not the sales person.

Managers shouldn’t use CRM data as a trigger for heavy-handed discipline or threats; that’s punishing the sales rep for using the CRM system, and it will backfire spectacularly.

However, if managers use it the right way — especially in terms of constantly monitoring the sales pipeline — they can go from being reactionary taskmasters who constantly upbraid sales reps for not achieving goals to becoming mentors who can help steer them along the way. That will make them better sales reps and help them reach their targets.

The Sales/Marketing Clash

Another problem is the antipathy between sales and marketing. Disagreement over the definition of a “qualified lead” causes sales reps to cast a jaundiced eye toward marketing and to spend much of their time prospecting instead of selling.

CRM allows sales and marketing to look back at successful sales and understand in retrospect what defined a truly qualified lead — and to continue doing this over time as the customer changes. This allows marketing to deliver better leads that have higher conversion rates, which allows sales reps to close more sales in the same amount of time (see problem 1).

Finally, CRM helps with follow-on sales to customers that have already been won. CRM allows the business to continue to build its relationship with the customer, so if marketing is on top of things, and is getting data back from sales through the CRM system, then it can act upon it to help improve loyalty. Over time, the customer’s far more likely to say yes to future sales.

Now, making this case to your sales staff will also require you to overcome some common complaints. Chief among them is that sales reps hate entering data into the CRM system. Some organizations take a heavy-handed approach to enforcing this, limiting commission on sales that are not tracked in CRM. Others are more subtle. It’s smart to use the examples of sales reps who have boosted their commissions through the use of CRM as object lessons for others.

Selling CRM to your reps is, at its core, very similar to selling your products and services — what’s important is staying focused on your customers’ needs and desires.

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Source: CRM Buyer, October 28, 2010

In a new report*, the independent technology analyst claims it is these industries that will grow at the fastest rate for CRM outsourcers over the next 12 to 15 months.

Peter Ryan, author of the report and an Ovum lead analyst, said: “Healthcare, government and utilities are the industries most likely to grow their CRM outsourcing footprints in 2011. In fact their growth rate will be well in excess of the overall industry rate for the next few years.”

In the US, Ryan believes that the growth in healthcare will be driven by an increase in calls from members of the public keen to find out how President Obama’s reforms will affect them. He also believes that the burgeoning US Hispanic market, which is currently underserved with healthcare services, represents a significant opportunity for CRM outsourcers.

He said: “CRM outsourcers that can provide bi-lingual agents stand to prosper as they will be an attractive proposition to stretched agencies looking for a CRM partner.”

Ryan believes use of CRM outsourcing services will increase at all levels of government in 2011. He said: “This will be driven by the need to reduce operating costs in the face of an increase in the number of calls from the public seeking advice on schemes such as unemployment benefits. At a time of economic uncertainty, we believe that government decision makers will view outsourcing overhead heavy contact centres as a wise move.”

Meanwhile the utilities market holds significant promise, according to Ryan’s findings, as most companies are using antiquated and costly systems which are no longer viable in the face of budgetary constraints.

Ryan added: “With utility firms offering more products than ever, the only way to keep up is through the use of third parties to provide customer-facing services.”

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Source: Datamonitor, Published by Ovum, October 12, 2010

STAMFORD, Conn., April 14, 2010—  Building a customer relationship management (CRM) strategy is a unique process for each organization that nevertheless should always involve three key steps, according to Gartner, Inc. The three steps needed to create a successful CRM strategy are: setting the destination; auditing the current situation; and mapping the journey to the destination.

“A CRM strategy cannot be developed in isolation. It must be relevant and linked to the overall corporate strategy, and it must build on existing sales or marketing strategies that are already in use,” said Ed Thompson, vice president and distinguished analyst at Gartner. “Following these three steps will provide a solid framework for CRM success.”

Set the destination: The vision of the company and the goals derived from this vision are the intended destination of the CRM strategy. The vision will be heavily dependent on the leadership of the company and on the selected CRM strategy.

“Ensure that the CRM vision is to articulate the future environment for the organization in terms of profitability and customer experience,” said Mr. Thompson. “During the initial stages of the CRM initiative — while the CRM vision and strategy are being developed — the leadership and governance structure must be agreed upon and roles allocated before it is stressed by the impact of change management upon employees.”

Audit the current situation: Skills, resources, competitors, partners and customers all need to be consulted in assessing the starting point. Before beginning the CRM initiative, organizations need to identify how mature their existing approach to CRM is. Most organizations have some existing or past attempt at CRM; even if these were deemed failures, there are usually some foundations that can be leveraged rather than ignored by the new team.

“Use the audit to evaluate the organization against equivalent organizations in the same or a similar industry,” Mr. Thompson said. “A competitive benchmark is an excellent way to gauge how far behind or ahead the organization is in comparison. Along with these two approaches, there are many other types of audit. Ultimately, companies should use as many of these assessment types as possible to prepare for the development of the CRM strategy.”

Map the journey: The journey may take many years, and the map will change en route. It is important to plan for this before starting.

A CRM strategy explains how an organization will achieve the CRM vision. It is the integrated blueprint for how the organization will achieve its sales, marketing and customer service goals. Therefore, it must give quantitative answers to questions such as: What is the ideal customer base? What products or services is it going to sell, to whom, at what price and through which channels? However, it must also be able to give much more subjective answers to more-holistic, organization-wide questions such as: What is the best way to build customer loyalty? How will the organization connect with a customer to create a positive “gut feel”? What will drive customers to recommend the organization, brand and products to others more often to the point that they are willing to pay a premium price?

“Setting the destination, auditing the current situation and mapping the journey is an iterative process that may require several revisions before a final CRM strategy is developed,” Mr. Thompson said. “The challenge is to avoid rushing the development process, as the company may be committed to many years of change.”

Additional information is available in the report “Three Steps to Create a CRM Strategy” which is available on the Gartner website at http://www.gartner.com/resId=1298722.

About the Gartner Customer 360 Summit

Additional information on the future of CRM will be discussed at the Gartner Customer 360 Summit. The Summit focuses on business and IT collaboration and harnessing the potential from the emerging “social” dimension of the customer experience and relationships. The Summit, taking place June 28-30 in Los Angeles, brings Gartner’s CRM research to life, concentrating on strategic advice and best practices for creating a customer-centric enterprise, social CRM, analytics and performance management, customer experience management, marketing, and sales optimization. For complete event details, please visit the Gartner Customer 360 Summit website at www.gartner.com/us/crm. Members of the media can register for the event by contacting Christy Pettey at christy.pettey@gartner.com.

Additional information from the event will be shared on Twitter at http://twitter.com/Gartner_inc and using #GartnerCRM.

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Source: Gartner, April 14, 2010