Consider this: 55% of all CRM projects don't produce results, according to Gartner Group, a research and advisory


according to last year's survey of 451 senior executives, one in every five users reported that their CRM initiatives not only had failed to deliver profitable growth but also had damaged long-standing customer relationships. One manufacturer retailer, for instance, invested $30 million in a CRM siMution in 1999 only to scrap the entire project in early 2001.

Peril One: Implementing CRM Before Creating a Customer Strategy

The reason? Effective customer relationship management is based on good old-fashioned segmentation analysis. Moreover, it is designed to achieve specific marketing goals. To implement CRM without conducting segmentation analyses and determining marketing goals would be like trying to build a house without engineering measures or an architectural plan.

t's mostly technology, isn't it? It partly is-and therein lies the problem. Technology that affects customers must always be aligned with an overarching

Square D and GE Capital realized early that CRM requires companies to adopt customercentric philosophies. almost a decade later. and alter their corporate cultures accordingly. it was simply trying to solve customer-related problems in the most intelligent way it could. change their structures and processes. it needs to first revamp the key business processes that relate to customers. performance measures.strategy if it is to work. is the New York Times starting to install CRM technology-including a national data warehouse that stores information by customer .have been restructured in order to better meet customers' needs. Only now. training programs. Having a strategy is not enough: A CRM rollout will succeed only after the organization and its processes-job descriptions. compensation systems. . The company wasn't considering any CRM software applications when it was trying to break through its circulation plateau. Like all successful users. and so on . from customer service to order fulfillment. Unless .to support its customer strategy Peril 2: Rolling Out CRM Before Changing Your Organization to Match If a company wants to develop better relationships with its more profitable customers.

motivating employees to be more aware of customer needs Peril 4: Stalking. even years. Peril 3: Assuming that More CRM Technology Is Better Many executives automatically assume tbat CRM has to be technology intensive. It doesn't. but they must precede a CRM rollout if it is to succeed. such changes could take months. the Dallas Morning News. one of Texas's leading newspapers. Customers In 1996. . there's hope: Companies do recover from their failures. and the objectives of CRM can be fulfilled without huge investments in technology simply by. Learning from Failure Even if you've been unsuccessful at implementing CRM. to accomplish. woke up to this harsh reality: It discovered that its telemarketing program was annoying customers instead of winning them over. it is unlikely that a CRM technology project will get off the ground. Not Wooing.tbis work is done beforehand. say. Customer relationships can be managed in many ways. Sure.

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