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Planning Your CRM Program

Gauging the Factors of CRM Success.

Factor Ideal Desirable Undesirable
Initial trigger An executive or board member reads about CRM and understands how its benefits can result in competitive advantage. A customer support exec returns from an industry conference where a case study depicted uplift in existing sales via CRM. A product manager sees a vendor demo and returns to the office touting functions and features.
Sponsorship A cross-functional executive team agrees that CRM is a competitive necessity. A business visionary sees quantifiable benefits for her organization in the short term and for the company at-large soon after. The IT organization decides to implement CRM because an existing vendor has just substantially discounted its CRM software.
Objective definition Increased customer loyalty, better customer service, additional sales revenues, and an overall enhancement of external perception. To provide an organization with a greater degree of customer knowledge and improved customer interactions. To automate existing processes – especially if they aren’t costly to begin with. Or to add CRM technology to the IT portfolio.
Solution selection Allowing corporate strategy and business drivers to dictate CRM functionality and letting required functionality dictate tool selection Tool delivers process efficiencies (e.g., marketing list creation) while applying additional customer intelligence via integrated data. Selection of CRM market leader or existing software vendor with minimal research.
Operating environment Integration of CRM product into existing IT infrastructure, including ERP and data warehouse systems. Introduction of dedicated CRM environment linked to corporate network and key data sources. Standalone CRM system.
User community Employees across the corporation at all levels, using CRM for different purposes but basing their decisions on the same customer information. Business people from one or two departments leveraging operational and analytical CRM. Operational CRM available to a select group of users who disperse findings from time to time to selected executives – on paper.
Efficiencies Process efficiencies and integrated data combine to deliver strategic decisions, in turn leading to higher customer profitability, sales uplift, and customer satisfaction. Automation leads to process efficiencies and new information that advance departmental goals and result in improved customer satisfaction. Automation leads to process efficiencies resulting in time savings but failing to cover CRM program expenses.
Measurement Clear sales uplift or decreased complaints and measurable improvement in customer response rates across touch points. Improved perception among existing customer base and suspected improvements in marketing campaigns, closed sales, product quality, and so on. IT has successfully linked the CRM system to operational systems and has deployed CRM to 100 desktops.

From Operational to Enterprise: An Implementation Scenario

The call center adopts CRM

Marketing adopts CRM

Sales adopts CRM


Enterprise CRM

Determining CRM Complexity




















Above figure illustrates a CRM initiative’s complexity relies on two main metrics:

1. Quantity of functions. If your CRM objective is simply to deliver customer profiling, you probably have a single function. If it’s to automate your campaign management, you’ll likely have at least a handful of functions to implement.

2. Range of usage. How many departments are slated to use the CRM system after it’s up and running? Implementing CRM for a single relatively small department is much less complex than deploying it to the entire enterprise.

The contrast among the four quadrants in the figure is stark and has significant impact on the development process, as illustrated here:

• A single-function CRM project to one department is nothing more than a customer-focused application. It is most likely driven by a handful of business people and managers, not corporate executives, and will be used by a single organization. You’ll probably be able to leverage a series of in-house development processes and existing staff to deliver single-function CRM to the department that needs it.

• A multifunction CRM project to a single department is another story. Instituting a customer-focused contact center dictates a range of new customer-oriented business processes, not to mention new policies and end-user training. Defining and documenting business processes, will give you a good idea of the CRM system’s true complexity and the development resources it requires.

• Conversely, a single CRM function to be deployed across the company represents a newly institutionalized business function. If the call center, marketing, risk management, and sales organizations have each requested customer lifetime value information, a simple function takes on additional complexity because it involves multiple departments, and thus varied business requirements. This additional complexity will likely require additional development resources and longer up-front planning.

• The most complex type of CRM is multifunctional and multidepartmental or enterprise-wide. This means deploying a range of new business functions across the company to a variety of business people for a variety of purposes. Requirements will be complex, as will the technology to enable CRM. The complexity suggests a variety of development resources and a range of CRM technologies, from CRM product suites to Internet access to data warehousing.

Preparing the CRM Business Plan

The business plan should generally be made as per the company’s governance process for fund allocation. These can consist of several components to explain the value proposition and the tactical implementation plan.

The business plan may also include the following:
• The requirement of new technologies
• The impact on existing technologies
• Ongoing support and maintenance requirements
• CRM alternatives




Typical CRM Approval Factors

Evaluation Factor Explanation Examples
The Program’s
long-term value Why the proposed CRM initiative will have long-term, sustainable value to the company Marketing’s CRM initiative is estimated to increase target marketing response rates by 50 percent (resulting in a 6 percent average campaign response rate), delivering annual net revenue gains of approximately $14 million.
Its adherence to company objectives How CRM pertains to the company’s stated goals or overarching strategies An enterprise CRM program will allow us to achieve out objective of exceeding 40 percent market share through decreased attrition levels and more successful marketing campaigns.
Its ability to deliver key business objectives How specific business goals will be met with CRM CRM will allow the company to adopt true one-to-one relationships with our customers by delivering both personalization on our Web site and real time customer profiling capabilities for our call center staff.
Its cost An estimate of the cost breakdown During the next fiscal year, the proposed CRM program is estimated to need $1.5 million in technology funding (hardware, software, networking), an additional $1 million for permanent head count, $1.5 million for consulting services, and a half million for external data acquisition.
Its boundaries An explanation of the initial CRM project’s resulting deliverable The initial release of the eCRM program will include deployment of IVR self-service, Web enabled provisioning, and Web FAQ services to alleviate demands on the contact center.
Staffing requirements A list of necessary staff for requirements gathering, technology acquisition, development, and rollout of the CRM solution In addition to the current CRM SWAT team, we estimate the need for
• A CRM development manager (FT)
• Two CRM product specialists (FT)
• A CRM architect (consultant)
• An additional database administrator (FT)
Risk assessment A description of the potential risks involved in launching a CRM program at this time We foresee the e-business organization’s historical reluctance to share its data as a likely impediment to sales-department access to existing customers’ Web purchase and self-service history, rendering customer history profiles incomplete and the resulting decisions potentially faulty.



Cost-Justifying CRM

When launching a visible and wide-ranging program such as CRM, it’s only a matter of time before a high-ranking executive inquiries, “so how much money have we spent on this CRM thing, and what have we gotten in return?” The degree to which your CRM program has been deliberately planned and executed is the degree to which you’ll have a slam-dunk answer to this question.

Any CRM program has three possible financial outcomes:

1. Increased profits
2. Break-even
3. Lost revenue

For some companies, simply knowing that, after deploying CRM, their sales figures exceeded the industry average is enough. For others, the inevitable executive questions loom large – large enough to mandate tangible benefits.

From a hard ROI perspective, CRM can result in revenue or cost savings via the following quantifiable metrics:

1. More efficient customer-focused business processes
2. Decreased customer attrition
3. Increased sales

In fact, every business objective you define as part of your long-term CRM planning should inherently target one of the three metrics.

The following opportunity costs of delaying CRM can also be highlighted –
• The cost of lost marketing opportunities, including
• Cost of lost customers due to competitive marketing events
• Reduced effectiveness of new products due to lack of market understanding
• Continued increase of marketing costs due to poorly focused campaigns and/or oversized target audiences.
• Cost of continuing the support of stovepipe database systems
• Loss of staff skills and experience due to staff redeployment
• Lost IT resource and subject-matter expertise due to normal staff attrition rates
• Reduced customer loyalty and perception due to inability to enhance the customer’s relationship experience.








Following form as a way of measuring company’s CRM opportunity:

The Call Center

Problem Statement: Our call center staff productivity has decreased dramatically as the problems become more complex. We need a means of increasing CSR productivity to improve the cost structure of the call center.
Sample problem quantification: Everyone knows the number of trouble tickets exceeds the existing staff’s ability to process them. We’ve recently determined that the average CSR can handle 10 tickets a day. The average amount of time spent in data-gathering (which includes accessing data from five different systems) is 25 minutes per ticket.
Improvement quote: “A single CSR tool and screen should be able to reduce data-gathering time and allow our CSRs to address more trouble tickets in a given day.” (Vice President of Customer Support).
Operational premise: Number of CSRs = 60
Average time to gather customer information =
25 minutes

Number of tickets generated for each CSR per day = 30-45
Fiscal premise: Average yearly burdened cost of CSR = $60,000
Average tickets per CSR per day = 10
Cost per ticket = $25
CRM improvement assumptions: A CRM system that includes dynamic customer-profile “screen pops” can reduce data-gathering time and present pertinent customer information at the point of interaction.

Reducing data-gathering time will impact the overall ticketing process. (Every 15 minutes saved means a 31% improvement.)

Productivity gains will reduce backlog.
Related applications/systems: Customer profiling
Quantified # of CSRs Staff cost per year Tickets Time gain $ impact
10 100 $600,000 31% $186,000
30 300 $1,800,000 31% $558,000
60 600 $3,600,000 31% $1,116,000
Soft Benefits: Reduced trouble-ticket response times
Improved customer-satisfaction levels
Improved employee-satisfaction levels

The Marketing Department

Problem Statement: The company’s marketing process is too darn long.
Sample problem quantification: It takes up to 6 weeks to identify a campaign target audience – using experienced data analysts. We’d like this to take days, or even hours, using marketing staff with minimal assistance from IT.
Improvement quote: “By reducing the time needed to identify a campaign’s target audience, we could double or even triple the number of campaigns we deploy, while further delimiting our target segments.” (Director of Segment Marketing)
Operational premise: Right now, for every three marketing campaign managers, we need one data analyst and one IT query support staff member to run queries.
Fiscal premise: Each campaign manager requires two support staff members:
Average yearly cost of 1 data analyst = $130,000
Average yearly cost of 1 IT resource = $130,000
Number of campaign managers in marketing = 30
CRM improvement assumptions: • Campaign managers will migrate to using desktop CRM analysis and will need to be educated on its use
• Campaign managers will evolve from project managers to ‘knowledge workers’
• The projected cost savings will occur via the reduction of data analysis and IT support staff
• Productivity gains will increase the number and effectiveness of campaigns by a minimum of 20 percent.
Quantified impact: # of campaign managers # of support staff Projected staff savings (n*$150K)
10 6 $900,000
25 16 $2,400,000
40 26 $3,900,000
Soft Benefits: Through the increased productivity, the company can increase the number of campaigns and thus the effectiveness of each individual campaign, in turn increasing revenues. Alternatively, the company can simply decrease the number of campaign managers but deploy the same number of campaigns.














Understanding Business Processes

Every successful CRM program involves a process improvement of some kind.

1. CRM was initially designed to help solve tactical, customer-facing business problems. (Only after the resulting data promised new strategic improvements did analytical CRM become the darling of analysts and futurists.

2. The common denominator of CRM-related business processes is that they should be designed around the customer’s perspective with the ultimate goal of improving the customer’s experience.

3. Days of business process reengineering (BPR), when companies redesigned their core processes to drive new levels of efficiency, are back with CRM.

4. Improved customer-focused processes that can in turn be automated with technology.

5. The term “workflow” is used in CRM to refer to automated business processes. Many CRM products feature “workflow management” components automating processes such as campaign management or customer troubleshooting.

Analyzing your Business Processes

• More often than not, existing business processes need fine-tuning before they’re implemented as part of a CRM program, putting a new spin on BPR.

• Ask the questions for each customer facing business activity involved in each CRM requirement:

o Is the tangible result of the process (e.g., a purchase order or return authorization number) seen or experienced by the customer?
o Is there an opportunity to gather more customer data at discrete touch-points in the process?
o Does each interaction demonstrate value to the customer?
o Does any interaction waste the customer’s time?
o Does this process improve our ability to see this customer as an individual?
o Is there an opportunity to impress the customer or personalize the interaction at discrete customer touch points?
o Can we include exception-handling to ensure accurate service and personalize interactions?
o Can this process be improved or even eliminated for high value customers? What about for the mid-value tier?

If you don’t know the answer to two or more of these questions, you would do well to take the time to map out the new or existing processes and identify areas that can deliver an improved customer experience and tighter time frames.

In addition, try looking at your business processes from an organizational perspective. Most process planning activities neglect this step, but answers to questions like those in the following list can result in even more highly refined processes and can pinpoint opportunities to improve your overall infrastructure:

• For a given customer-facing business process, how many departments are involved?
• How many actual staff members touch in each process?
• What data is transferred between organizations, and how much?
• Does the information being shared change as it goes through the process? How often?
• Do the organizations involved in each business process agree on business rules and common terminology?