Today, most business leaders recognize that customer relationship management (CRM) is important for the success of their business. Companies continue to invest heavily in technology solutions, including CRM platforms, to better understand and engage more effectively with customers. In fact, the worldwide CRM software market grew to $23.2 billion in 2014, up 13.3 percent from $20.4 billion in 2013, according to Gartner.
However, misconceptions about how to implement and leverage CRM can prevent companies from reaping the full benefits of their investment. Inaccurate data, fragmented technology implementations, data silos, and other challenges can cause a company to stumble. Analysts and industry experts challenge six CRM myths that businesses need to be aware of as well as technology trends that are driving the development of the CRM space.
1. All Data must be 'Cleaned'
Companies understand that accurate data is the foundation of a successful CRM strategy, but setting out to scrub your databases of inaccuracies without clear goals is an inefficient use of time and resources, say analysts. "The problem is that data quality initiatives are difficult to undertake if they are not tied to a real CRM project with quantifiable benefits," notes Kate Leggett, vice president and principal analyst at Forrester Research. "Best practices start with building a business case which focuses on the impact poor quality data has on critical business and customer-facing processes as opposed to just focusing on the data itself."
Marketers, for example, could spend time removing duplicate names from a customer database. However, those efforts will be wasted if the contacts are outdated or are irrelevant to the campaign. Instead, Leggett recommends that CRM and data managementexperts define the following criteria: the business processes, decisions, and customer interactions that are most important to their organization; the data used to support those processes; the systems and processes used to capture and update customer data; and the level of confidence when using this data.
2. The More Data the Better
In their rush to understand customer expectations and preferences, companies have captured and stored huge volumes of data that goes unused. "You can have too much of a good thing," says Robert Wollan, global managing director of sales and customer services at Accenture Strategy. "We recommend a 'data weight loss' program that turns the telescope around - starting with the experiences and operations that will drive the most business value and reverse engineer what data the company needs to drive the results. The rest becomes candidates for complexity reduction."
The same approach applies to technology investments. Instead of buying the latest tool or solution, "only buy what's really needed and be committed to making it a success," advises Sean Alpert, senior director of product marketing at Salesforce Sales Cloud. "Don't bite off more than you can chew." Additionally, invest in training for the team. Give your team the training and support they need to be successful with the new CRM solution, he adds.
3. CRM Data Only Belongs to Certain Departments
Companies that treat CRM data, as something that is only owned and used by specific departments are creating data silos that will make it difficult to gain a full understanding of the customer, notes Rebecca Wettemann, VP of research at Nucleus Research.
"From a data perspective, one of the biggest challenges companies create for themselves is in creating separate data for sales, marketing, and customer service, usually because at least initially different apps and processes are used for each area," Wettemann says."Down the road, this creates integration and data latency problems and makes it more difficult for companies to truly view a complete record of customer interactions and history."
Sean Carithers, vice president of enterprise solutions at TeleTech, agrees that "breaking down barriers between data is a major challenge for most companies." To avoid this problem, companies should have a strategy for integrating their various datasets. Data experts, Carithers continues, should ask themselves "how does our CRM data fit into our overall customer data strategy and where do we want to house that data?" Deciding early on what the organization's customer engagement goals are and developing a strategy for integrating the necessary datasets to accomplish those goals will help to streamline these efforts, Carithers notes.
4. Businesses are Stuck with Legacy Systems
Executives tend to assume that making huge investments in populating data and customizations into a single system means "they should stick with it until it literally falls apart," Wettemann observes. However, advances in usability and analytics capabilities over the past few years have made it possible for business leaders to increase productivity and reduce support costs.
"While some legacy data stores may be too costly or large to make a clean cutover," says Wettemann, "looking at moving some or all CRM areas to modern apps that can integrate with old data sources will likely be worth the effort."
5. CRM is Synonymous with Sales Tools
Although it's true that some salespeople use CRM data in their sales efforts, companies should also consider other uses, maintains Austin Paley, corporate marketing communications manager at Blue Fountain Media. "Many businesses often think of CRM as a sales tool, and consider it solely an information provider for their sales teams, overlooking any additional uses [but] it's capable of much more than just collecting sales data, and can enhance a variety of other marketing channels and initiatives."
For instance, well-segmented CRM data can enrich email marketing campaigns by providing marketers with information about customer that enable them to deliver highly personalized emails that are tailored to each person's needs at scale. CRM data can also be used to improve customer service. For example, Huntsville Utilities worked with SAP to improve its customer service using CRM data.
Huntsville Utilities provides water, gas, and electricity to more than 350,000 people in Madison County, Alabama. However, an aging customer support system and decentralized data led to extended hold times and delayed service. in addition, agents were often forced to toggle between different screenss to access the right customer data, including searching paper reports.
Huntsville Utilities turned to SAP to streamline its customer service. In 2011, Huntsville migrated from its legacy platform to SAP's CRM system, which isintegrated with SAP's Business Communication Management (BCM) solution and the backend SAP ERP Central Component (ECC) system.
Connecting these databases provides Huntsville's agents with a comprehensive view of each customer and allows them to "seamlessly handle customer interactions with a single user interface," explains David Champigny, IT director at Huntsville Utilities. "Instead of searching the system by name, address, (and alternate) identification methods and then looking through multiple credit history records in the legacy system, we have the information for the customer attachedto one record," Champigny says.
Moreover, agents can now access business partner or specific contract account information with a few clicks; view the actual documents for security deposits which were originally stored on paper records, as well as correct issues during the call, such as reversing a bill. Within a few weeks of implementing these changes, Huntsville Utilities saw its abandon rates decline by 34 percent and IVR payments increased 187 percent.
6. A Partial Answer is Better than No Answer
It can be tempting to take channel-specific measurements like app downloads or click-through rates at face value, but without analytics or contextual information, the results can be deceptive. For example, "measuring who, and how many, customers download a company's mobile application without being able to combine that with how they shop in physical locations (stores, bank branches, etc.) will give 'false positives' about digital's importance in the overall growth strategy," Wollan explains.
Indeed, data is "only one piece of what you need to engage a customer," notes Don Schuerman, CTO and vice president of product marketing at Pegasystems. "Data is analogous to memory. It's the memory of a customer's interactions with your brand and you need to turn that into actionable intelligence."
CRM data combined with other data points can help a company deliver more relevant recommendations or offers. Online retailer Wine.com sells thousands of wines and has millions of data points about its customers. But it needed to leverage that data to provide its customers with a more personalized shopping experience, explains Cam Fortin, senior director of product development at Wine.com. The company was able to make recommendations based on top sellers, but personalized recommendations based on a customer's purchase history, for example, were difficult.
To help address this problem, Wine.com implemented personalization software provider RichRelevance's Recommend tool. The software takes into account multiple pieces of data, such as a shopper's browsing behavior, purchase history if the user is a returning customer, and geographical location and compares it with data from similar shoppers to make targeted recommendations.
Creating more tailored recommendations is paying off for the online retailer. Personalized recommendations are now driving a 15 percent increase in average order value, and as much as a 26 percent increase during the holiday season. Wine.com's next step, Fortin says, is to personalize the landing page for customers with different images, and the company is testing each image before it moves forward. Indeed, while it's tempting to mine your customer data for as many engagement tactics as possible, companies should "take it slow and decide what works best for your customers" Fortin advises. "There are a lot of things that we're excited to try but we don't want to rush into it," he says.
In addition to business leaders taking a more informed approach to their CRM strategies, vendors must do their part by providing more powerful and useful solutions. "Vendors will have to do a better job at not only providing table stakes capabilities of data management, data cleansing etc.," Leggett notes, "But also embedded analytics to drive business outcomes." Advanced analytics can add speed, scale, visualization, and predictive capabilities to business applications. Leggett points to Salesforce's Analytics Cloud, SAP S/4Hana, and Oracle Cloud applications as examples of companies that are moving in this direction. Pegasystems has also enhanced its Pega 7 platform with richer analytics capabilities, among other enterprise-focused features.
Wettemann agrees that "effectively managing unstructured data like content and using machine learning and other analytical tools to be more proactive in how I market to, sell, and service customers is still emerging as an area with a lot of opportunity for benefit."Additionally, "the biggest yet most basic innovation is the productivity tools that deliver better, more timely, more complete CRM data without burdening sales and customer service people," Wettemann says.
Ultimately, CRM tools must become more "fluid" to enable businesses to keep pace with "non-stop customers," Wollan observes. "The old customer's journey of marketing?-sales-service used to be linear, but has become much more fluid - a circular journey of discovery-evaluate-purchase-use," Wollan maintains. "This will mean breaking siloes of marketing-sales-service that most companies have used so successfully until now."