Deploying CRM in An Organizaton: Learning Objectives

Deploying CRM in an
Organizaton
17
LEARNING OBJECTIVES
After reading this chapter, the readers will be able to understand:
❑ Right strategy to start the CRM implementation process.
❑ The four main areas to support the desired CRM strategy—Data, People, Infrastructure, and
Budget.
❑ Detailed strategic guidelines for the CRM implementation.
❑ Basics of change management in order to deliver a successful CRM programme.
INTRODUCTION
Customer Relationship Management (CRM) is an enterprise wide initiative as it aims at
integrating the front-end customer facing systems with back-end systems that actually
deliver the product and value to the customers. A CRM implementation requires change
management because most of the aspects of business processes like orientation, technology,
and performance are subject to change. CRM implementation is no silver bullet; it is
achieved by completing small, and focused projects that add up to a CRM programme.
A CRM programme is nothing but the sum of all the works a company does to improve
customer experience and increase loyalty. Seeing the importance of CRM in business, it is
a high-stake strategy and is planned carefully and holistically. A CRM strategy involves
not only the top management but also the enterprise as a whole with all functional areas.
CRM STRATEGY IMPLEMENTATION

Given the importance of CRM in business, it is a high-stake strategy and is planned
carefully and holistically. Generally, an organization does not rely on specific methodology
for implementing CRM. It often achieves this by its own experience and creativity
of its technological experts, but they fail to understand that in order to have successful
implementation the business functions and information, technology should understand the
background of each other and work in synchronisation. Thus, methodologies and defined
roles are the bridge between various perspectives.
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Deploying CRM in an Organization 317
For any organization to start the CRM implementation process, it needs to have right
strategy and for this, three basic questions need to be addressed—where does it want to
go? where are they starting? And how are they going to get there? An effective CRM
strategy needs to be customised for a business as a blind imposition will only impede its
profitability. As a rule, the CRM strategy is expected to vary from one business to another
and indeed from one segment to another. For example, the business development force of
a cellular provider with a target to raise revenue from a ‘single’ segment, may want to earn
revenue from its services designed specifically for the single segment, reduce customer
churn by ensuring frequent upgrades and reduce costs by promoting self-care in most
transactions. Such strategy may not be suited to the small traders as a segment.
For CRM strategy to be effective, several sets of data are required. For instance, a
cellular service provider requires such key performance indicators (KPIs) as the number of
profitable customers, the number of unprofitable customers who have churned in the last
quarter and the projected customer life time value (CLV) of the most valuable segments.
These are in the addition to the total number of subscribers usually available with a
firm. A typical data warehouse will yield a repository of customer information, revenue,
behaviour and cost data. It will help the CRM marketer’s access information throughout the
organization. All this is done to ensure that the business is focused on customer segments,
which overtime are likely to turn into ideal segments and support the marketing campaigns
by supplying specific information for specific campaigns.
With the recent downturn of the market, sales and marketing executives are under
increased pressure to ensure a positive return on the company’s CRM investments. As
competition increases and companies fight to retain their best customers, it is critical that
CRM initiatives are implemented on a solid foundation of strategy and planning. CRM
efforts fail for a variety of reasons, but many failures can be attributed to the fact that the
company was not ready to implement the processes and technologies of CRM.
The four main areas that need attention in order to support the desired CRM strategy
include data, people, infrastructure, and budget. This is also shown in Figure 17.1.
People Budget
Data Infrastructure
Strategy
Figure 17.1 Areas that Support CRM Strategy
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318 Customer Relationship Management
Data
Since data is the foundation of every CRM initiative, it is imperative to perform a thorough
assessment of all data sources before the project begins. According to various research
studies, data reliability has been cited as most critical reason for the failure of CRM
implementation, followed by data quality and consistency and reconciliation of customer
records. Companies that maintain a comprehensive view of their customers have greater
success with CRM. Data about customers and their activities must be reliable and available.
As companies continue to enhance their CRM solutions, it is imperative that they keep
data reliability at the forefront of each project. Any CRM initiative that proceeds without
reliable data is ultimately going to incur higher costs to resolve the issues later. These
unforeseen expenses can make the difference between achieving and missing ROI targets.
The basic strategic planning process can be used to collect data for this purpose.
The tools that can be used include internal interviews, customer survey, and competitive
assessments and systems inventory. The kind of information collected from internal
interviews can help the organization in identifying the overall current state and future
plans, exploring the potential risks in the project, knowing the companies’ expectation
of CRM, and making it reasonable. Competitive assessments would be the key input to
priorities. The systems inventory assessment would help the organization in understanding
the state of CRM information and technology, both current and planned.
People
As with any large-scale project, having strong and committed executive sponsorship
is critical to success, so is the case with any CRM initiative which involves changes to
business processes that ripple across the organization and directly impact various business
units, executive sponsorship and broad team participation become even more important.
Research has shown that lack of coordination and organization plays a major role in the
failure of many CRM initiatives. One study noted that of the companies reporting negative
returns on their CRM investment, many cited corporate culture as a root cause. To combat
this problem, companies that are serious about implementing CRM should appoint a senior
level executive to lead all CRM initiatives across the enterprise.
Another critical step is to include all of the right people early in the process. Companies
have spent millions of dollars on software and consulting services before including certain
internal business units into the project. When key business users are not included in the
initial planning of CRM initiatives, there is likely to be resistance. The solution is to
include key members of all affected business units early in the planning process. Their
critical insight can eliminate barriers and unanticipated costs. Besides gaining the expertise
that is vital to the planning effort, these individuals should feel that they are an important
part of the team, giving them incentive to make the project a success. When selecting
the right combination of business and technical members of the team, it is important to
take into account the expertise and perspective of each individual. CRM initiatives will
impact multiple channels throughout the enterprise, so there will be a need for subject
matter experts from each area. From the technical side, representatives from the database,
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data warehousing, Website, and network teams should be included. From the business
side, include experts from strategy, all marketing departments, each sales channel, and
the call centre. The members of the quality assurance team need to be included up front to
support end-user and system integration testing. For the implementation to be successful,
the members of the project team will need to communicate effectively, openly share
information, and work together to achieve the common goal.
Budget
Even with companies under pressure to control expenses and achieve positive ROI, CRM
systems continue to be purchased without real knowledge of the total cost likely to be
incurred. Implementing CRM technology would require a sizeable investment in hardware,
software, consulting, and training. Since most CRM initiatives involve the movement,
processing, and analysing voluminous data, hardware costs can be steep. It is also important
to take into account the cost of internal resources to gather business requirements and
then implement, manage, test, and enhance the CRM system. Training costs must also be
considered.
BIRD VIEW
THE THREE KEY QUESTIONS FOR STRATEGIC PLANNING PROCESS
The three questions in strategic planning process that would help an organization in successfully
building their CRM programme would be as follows:
1. Where do they want to go? The most important deliverable of the strategic planning is
to define what CRM is going to do for the company. It is required to visualize the future
of the organization. In order to visualize future, the primary information would come from
outside the company, that is, the customers. The customers need and expectation would
help set the objective. So a customer survey is a key step. This needs to be balanced with
own competitive advantage and their relative position to their competitors. Thus, they need
to balance the customers’ expectations and reality of company’s business objectives and
goals.
2. Where are they starting from? Once it is figured out where they want to go, it is important to
understand where the company is currently. The data collection tool like customer survey
and internal interaction that was used for goal setting could also be used for analysing the
current situation of the company. Based on long-term direction and current state questions
of all the interviews, the current situation can be analysed. Because of the key role that
technology plays in CRM, it is also required to get the snapshot of the current information
and “systems technology” state of the company.
3. How are they going to go there? The last step would be to understand the best way to move
the organization from where it is currently, to want they want it to be. This requires a set of
plan that would describe the path that they would take and looking out for in two to three
years. Based on the information collected, CRM strategic proposal would be prepared which
would comprise two types of the recommendations that would describe where the company
wants to go and the plan that describes the route.
The case of Raymonds adequately describes as how CRM strategy works to get closer to the
customers.
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Miscalculating the budget often leads to missed ROI objectives. A proper assessment
in the discovery phase of the project should identify potential cost areas. As the strategy
and implementation develops, cost estimates will be revised. Keeping the complete team
appraised of strategy changes will help to identify cost deviations early in the process. The
greatest savings will come from effective up-front planning, since costs escalate as changes
occur in later stages of implementation.
Infrastructure
The final area that needs to be reviewed is the company’s internal systems and infrastructure.
Often, the internal technical team cannot objectively assess the strengths and weaknesses of
these systems. Managers, administrators, and users of internal systems learn to work around
the shortcomings and may not be aware of the demands of a new CRM system. A CRM
initiative could put increased bandwidth demands on the infrastructure to accommodate
high volume email promotions or require additional processing power to handle new peaks
in demand for accessing data. Without a planning process that links the strategy to the wide
variety of implementation barriers, many problems can arise.
CASELET 1: RAYMONDS: GETTING CLOSER TO CUSTOMER

THROUGH CRM IMPLEMENTATION
Background: One of India’s oldest textile manufacturers and retailers, Raymond India operates
across cities and deals with different cultures and people. Raymond India’s retail face is “The
Raymond Shop”, a chain of retail stores offering wardrobe solutions for men. This includes brands
like Raymond, Park Avenue, Parx, Manzoni and now, ColourPlus. Started about five decades
ago, Raymond has been one of the pioneers of Indian retail. The Raymond Shop network started
with a small corner shop in Ballard Estate, Mumbai. It has grown multi-fold with a dedicated team
making it the largest retail store chain in the country with over 300 stores in prime locations in
150 Indian cities. They have also extended their network overseas with around 25 shops in 15
plus cities of the Middle East, Sri Lanka, Bangladesh and Nepal. The Raymond Shop retail chain
occupies a space of 1 million square feet built-up area. The Raymond Shop offers over 3,000
qualities, shades and designs of Raymond fabric.
CRM Objective: Retail is all about knowing your customers thoroughly in order to serve them
better. It is an age old philosophy of Indian businessmen that if you know your customers better,
you can enjoy a better competitive position in the market. Before making extensive use of IT at its
outlets, Raymond’s business used to run on a manual basis. In order to know its customers better,
a team was formed to survey prospective buyers as well as existing customers. After surveying
them, they would know the pattern of their purchases, their likes and dislikes, etc. This process
was cumbersome for the surveying team and at times people were apprehensive about replying
to questions related to their personal choices. With the growing use of IT in the retail segment,
Raymond decided to implement CRM to know its customers better and in a more sophisticated
way. The need was to understand the customers and provide services suitable to them.
CRM Implementation: Customer relationship management was implemented by Raymond to

solve the problems of knowing the customers better. CRM helps the company understand the
colour and design preferred by a particular age group or why a particular group or individual did
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not buy or did buy a particular product. As a result of the implementation, regular customers get a
premium card which has all the details of a particular customer and the purchase patterns of the
person can be studied efficiently.
The CRM implementation is named ‘Premium Circle’. Customers using it are known as premium
users and are given a premium card. This is offered to Raymond customers at 265 out of 365
Raymond Shops in India. With the help of this solution, a central repository of information is
created about premium customers whose details are accessible at any retail outlet where this
system has been implemented.
The Implementation: The technology part of the CRM implementation was outsourced to
proximity which owns the infrastructure that provides touch points to the customer through the
Website.
Raymond’s in-house team was responsible for devising the schemes and plans. Since only the
technology part was given to a third party to manage, cost and quality of service provided by the
vendor were considered while short listing a vendor. The retail head from the business side was
the champion of the project and he was assisted by the IT department to provide the technological
expertise that was required.
Three Principles: The aim of this implementation was to ensure three principles—availability,
reliability and scalability of the solution. Concentrating on availability meant that the solution
had to be available at all times and that downtime had to be negligible. Failsafe software would
ensure the reliability aspect of the solution. Lastly, scalability ensured that the system would
work efficiently, irrespective of the number of locations at which it was rolled out. With organized
retail in the midst of a boom, it is natural that the number of outlets will grow rapidly putting more
pressure on ensuring scalability across the chain.
Phases: The timeline for the entire project was close to three months and it was completed in
three phases. The first phase consisted of the proof of concept. In this phase, the project was
cleared through internal research to prove that the core ideas were workable before going any
further. This use of proof of concept helps establish viability, technical issues are uncovered,
and overall direction is set. It also helps in providing feedback for budgeting and other forms of
commercial discussion and control.
The second phase involved running a pilot model created by the project team. This was to
ensure that the core solution has been developed satisfactorily and was running as per the
requirements.
In the final phase, the entire Web-based project went live across 265 shops. Initially, only 10
shops went live but soon 265 shops were on the network.
Hardware: The entire solution runs on HP servers on Windows Server with the SQL Server
database. The database for the CRM is located on a web database server hosted by the vendor
at an ISP IDC. The servers are in high availability mode with redundancy at the server link level.
In case of a breakdown of the link, the recovery time is approximately an hour.
Benefits: Since this project was Web-based, many customers are using it across India. This
project helped evaluate customer choices to a large extent. With the use of this software, the
product lines kept changing according to the customer needs and patterns, and the end result has
been the satisfied customers.
The repeat visits made by each customer increased with the help of CRM solution. The only
time customers were left a bit dissatisfied was when the database of that customer was not
updated properly during the initial days after going live. The overall happiness of the customer has
boosted business by a substantial margin.
Source: www.networkmagazineindia.com/200703/casestudy01.shtm
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Key Idea: CRM Implementation—Best Practices

● Establish measureable business objectives.
● Align the organization to the CRM strategy.
● Define best practices and map them to application functionality.
● Use a phased-implementation plan.
● Staff trained, experienced consultants to implement the CRM solution.
● Train, reinforce, and reward for 100 per cent user adoption.
● Monitor progress and measure results.
CRM IMPLEMENTATION ROADMAP

It is difficult for any organization to proceed with the CRM implementation process
without having the detailed strategic guideline for the CRM implementation. Now, when
the strategy is in place, it is important to define the steps required for successful CRM
implementation. This helps an organization to develop a positive cultural acceptance of
CRM. This roadmap will help an organization to deal with the organizational changes,
businesses process change, customer needs and CRM technologies.
Various stages of a CRM implementation road map are given in Figure 17.2.
SWOT Analysis
The best way to start the process is to understand the strength and weaknesses of the
organization as well as their competitors by doing the SWOT analysis. Based on this
analysis, the organization will be in a position to improve its performance in the market
and develop relationships with its customers by taking corrective measures.
Planning for
Strategy and
SWOT Analysis Change
Goal Setting
Management
Software Technology Designing

Development Selection system
System
Evaluation and
Implementation
Measurement
Figure 17.2 A CRM Implementation Road Map
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Strategy and Goal Setting

After the analysis of its environment, an organization is required to define its purpose for
going in for a CRM implementation. Identifying which strategic CRM capabilities are
needed to help organizations to more effectively direct their CRM efforts in order to meet
the goal. For example, the purpose of implementing CRM for an organization might be
to improve the customer understanding. For this, the strategic CRM capability or strategy
would be to leverage customer information from the service process, understand customer
profitability and cost to serve a customer.
This might be difficult but is required to build more effective, efficient and long lasting
relationships with their customers. An organization should not embark upon any CRM
programme because of peer pressure or because it is the latest technology buzz in the
industry.
Planning for Change Management

The very important step in the CRM implementation road map is the planning for change
or transformation in an organization. Before going in for any change, any organization has
to define its CRM’s over all objectives at the department as well as enterprise level. This
stage would include documentation of high-level CRM business goals in the form of a
business document, which becomes the focal point for strategy development. This would
require various fundamental changes in an organization because of such exercise. Some
interrelated areas that are subject to change could be as follows:
● Business focus
● Organizational structure
● Business metrics
● Marketing focus
● Technology
Change management is often considered a “soft” activity and thereby, ignored. The
importance of an effective change management component to the CRM implementation
cannot be emphasized enough. The business benefits of the implementation have to be
communicated to all people who will be affected by the project, and also to thus whose
cooperation will be critical in making the project successful. For example, at the onset
of a sales force automation project at a Fortune 500 manufacturing firm, the company’s
sales staff offered resistance when they heard about the business process changes that
would accompany the new software. Hearing this, the company’s executive VP of sales
called each sales manager, and followed up with an email to the sales force assuring
them that the new software would enable them to achieve greater results, and in turn,
higher commissions. Later in the project lifecycle, they had an opportunity to view the
prototype demo and validate the executive’s claims. As a result, buy-in was achieved
and the sales force embraced the new solution. The end user should be involved early in
the implementation to make sure that the CRM solution addresses their needs and makes
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them more productive. Training should be organized for them. Evaluate rewards and team
structures, and modify them to enable a smooth transition to future processes.
Transformation of business culture is a vital step in making sure that a CRM initiative
succeeds. CRM, like any other new initiative, will face resistance. It is a difficult system
and outlook to implement, especially in business cultures that have been successful for
years. At its best, when change is handled well, users enjoy the new business environment
they are working in. It sweeps away the dusty behaviours and stodgy thinking that had
begun to cripple the business. It allows for a foresighted approach to how the business
needs to conduct itself over the ensuring years to the benefit of the customers, employees,
suppliers, and partners.
Designing the System

The objective of CRM is to change the entire focus of an organization to consumer-centric
with all the processes and operations getting designed around the customer. The process
design is an important phase wherein an organization will undergo various process changes
in order to achieve its CRM objective of being more customer focused.
Technology Selection
In this stage, various technologies and vendors are evaluated. The factors, such as alignment
of the technology with the current system, capability of the CRM solutions in terms of their
functionalities and other such factors are considered while evaluating the products from
different vendors.
Software Development
The software development stage consists of various activities such as customization of
features, development of new features that are not present in the product, process integration
and testing by using the prototype and the design of the database.
Implementation
In this penultimate stage, the organization deploys the solution and documents it. The end
users need to be trained and the system needs to be sold internally so that it can be used.
Measurement and Evaluation

The final stage in the CRM implementation road map involves development of metrics
for measuring the performance of the CRM solution, and comparing it with the desired
performance.
Thus, the development of CRM strategy and its implementation as a roadmap consists
of many interrelated stages, and these entire stages takes place one after the other and
require corrective feedback at each stage. The issues which need to be considered while
selecting CRM tools are given as follows:
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Key Idea
Issues for Consideration in CRM Tool Selection
● Functionality ● Scalability
● Legacy systems integration ● Total cost
● Technologies used in the tool ● Usability across geographies and diverse
● Performance under critical cultures
situations ● Past performance of the CRM tool
● Security issues ● Service support
● Report generation ● Upgrade policy
The case on SBI Life describes the initiatives and actions taken to launch CRM project
for better management of the customers. The case also gives details of the software used
for CRM.
CASELET 2: SBI LIFE’S NEW CRM SOLUTION
Background: SBI Life Insurance is a joint venture between State Bank of India and BNP Paribas
Cardif., wherein SBI owns 74 per cent of the total capital and BNP Paribas Cardif the remaining
26 per cent. The company has 600 branches across the country but heavily leverages the SBI
bank branched to cross-sell products and as well as a significant touch point for the customers.
Apart from SBI, the company also has tie ups with AP-Online franchise, MP-Online and Citi Union
bank as well as the ATMS of the banks all of which serve as customer touch points for SBI Life
Insurance customers.
CRM Project Objective: SBI had an in-house CRM system that would serve as a complaint
and lead management system, and would capture customer interaction recorded only at the
branch level. With the rise of the Internet and mobility, they realized that customers need to be
serviced through multiple channels; this could be either through mobile solutions, or may be
through an automated chat on their Website. The goal was to provide customers with a uniform
and consistent service experience across all touch points. To allow this, the service agent must
have the history of customer interactions. The existing CRM at SBI Life had reached an inflection
point. They needed a system that could offer richer turnaround time, be more scalable and that
can create technical readiness for future requirements driven by mobility and social media. During
this time came the IRDA regulation that specifies the timeframe in which insurance companies
must resolve complaints and also its process. To enable this, insurance companies must have a
complaint tracking model that can be integrated with the regulator, such that they can have a clear
and transparent view of the status of customer service in the country.
Thus, the objective for the CRM project was to have an in-house CRM system that would serve
as a complaint and lead management system.
CRM Project: The CRM project implementation. They had to consider whether to build on their
existing solution or buy a new one. They decided to buy a new solution because they wanted to
incorporate some of the best practices that they need to follow. SBI Life chose CDC Software’s
Pivotal CRM as their solution.
One of the biggest challenges was to integrate the data from the existing systems with the new
solution. This was made relatively easy by the solution’s plug and play modules. The same module
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also allows integration with the IRDA portal such that the regulator can query the system to track
complains. With the new solution, SBI Life can efficiently service any query/compliant because
they have a consolidated view of all the past payments and history of customer interaction at
their fingertips allowing for faster resolution and immediate escalation for problem that requires
deeper investigation. For every complaint they receive, they have a corresponding token from the
regulator which tracks the resolution and defines the turnaround time. For example, the regulator
allows for three days from the complaints being generated to the acknowledgement received by
the customer from the bank. This is available for both the regulator and SBI life to see online.
Similarly, IRDA has defined the complaint lifecycle of different types of complaints. “Certain
complaints where there is investigation involved a certain breadth of time of defined.” With the
new system, the company can record not just the queries of existing customer but also the initial
interactions with the potential customers. This helps them understand customer behaviour; what
people are looking for, why they chose the solutions they do.
CRM Benefits: With a central monitoring team, the management can decide which complaints
can be handled by the service agent and which need to be escalated to the next level. It allows
a single view of the customer and follows it within the hierarchy, and offers a summarized view
for the management to see. SBI Life now has a spanking new CRM system that has improved
transparency, brought down complaint resolution time and cuts across all customer touch points.
Moreover, it is one of the first insurers that are compliant with the new IRDA regulation allowing
for seamless transfer of information and transparency. In fact, this solution is being considered
by IRDA to serve as model for other insurers who will soon have to comply with the norms. With
the new solution, SBI Life is ready to take the next step of servicing customers through new and
emerging touch points such as mobile and social media, giving it a definite competitive edge.
Source: http://www.cio.in/case-study/sbi-life-s-new-crm-model-other-insurers
Figure 17.1 The “Your Recommendations” feature on the Amazon.com homepage. Using this
feature, customers can sort recommendations and add their own product ratings.
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Figure 17.2 Amazon.com shopping cart recommendations. The recommendations are

based on the items in the customer’s cart: The Pragmatic Programmer and Physics for Game
Developers.
How It Works: Rather than matching the user to similar customers, item-to-item collaborative
filtering matches each of the user’s purchased and rated items to similar items, then combines
those similar items into a recommendation list. To determine the most similar match for a
given item, the algorithm builds a similar items table by finding items that customers tend to
purchase together. We could build a product-to-product matrix by iterating through all item pairs
and computing a similarity metric for each pair. However, many product pairs have no common
customers, and thus the approach is inefficient in terms of processing time and memory usage.
Recommendation algorithms provide an effective form of targeted marketing by creating
a personalized shopping experience for each customer. For large retailers like Amazon.com,
a good recommendation algorithm is scalable over very large customer bases and product
catalogues, requires only sub second processing time to generate online recommendations, is
able to react immediately to changes in a user’s data, and makes compelling recommendations
for all users regardless of the number of purchases and ratings. Unlike other algorithms, item-to-
item collaborative filtering is able to meet this challenge.
Source: Amazon.com recommendations item to item collaborative filtering, Greg Linden, Brent
Smith, and Jeremy York Amazon.com
CREATING A CRM CULTURE

Many companies have cultures that do not support CRM. Various product-centric
organizations virtually ignore customers and decide based on their internal objectives
rather than expectations of the customers. These cultures create difficulty for building
cross-organizational and customer-centric programmes like CRM. Changing the whole
culture of the organizations is beyond the scope of any CRM initiative. But it can be hoped
that some changes in the behaviour through training and education and creating metrics
and rewards might be brought within the company.
It is well understood that one needs to adapt to change. While examining management
challenges for the new millennium, Peter F. Ducker once said, “We do not hear much
anymore about overcoming resistance to change, which 10 to 15 years ago was one of
the most popular topics of management books and management seminars”. Everybody
has expected that change is avoidable. But that still implies that change is like “death and
taxes”; it should be postponed as long as possible.
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People in an organization are generally quite reluctant to change, and at times even
fearful of the unknown. With the support and encouragement, the cultural and behavioural
changes that are mandatory for the success of CRM initiative can happen. If an organization
does not pay attention to the basics of change management, they would have little chance
to deliver successful CRM programme.
The father of social psychology and change management, Kurt Lewin, identified a
three-stage model for managing change in the 1940’s that stands the test of time for any
type of change:
Stage 1: Unfreezing: This is the most difficult stage. It often needs an organizational shock
to occur. It is initially when at least the top management understands that the traditional
way of doing business is no longer appropriate. It is not necessary that this realization
will come from failures only; there could be other motivating factors as well like need to
improve upon their success. The top management should be able to think strategically and
describe future opportunities, if such strategic changes are made and if consequent changes
are not implemented. If they can effectively get this across to their personnel, unfreezing
could occur. What makes this so difficult is that there is a strong resistance to anything
new and if it does not appeal to touch, taste, sight, or sound, then people have a hard time
grasping it. It is all the more difficult to get the breakthrough understanding that comes
with unfreezing.
Stage 2: Changing People: People, one of the important component in CRM infrastructure
is the most difficult to manage. People do not like change. They should be motivated
and rewarded to look for modern ways of doing business and select an appropriate and
promising approach.
Stage 3: Refreezing: At this stage, the new approach has been implemented and it
becomes established as a supportive environment something which is mandatory for the
organization.
CHANGE MANAGEMENT PLAN

The change management plan would include a section on communication, training, and
rewards. In order to support the transition, it is mandatory to have the plan of each one of them.
1. Communication: The most critical step for the success of any change in an
organization is to let everyone know early and often what is planned and how are they
going to progress. Everyone needs to be informed what is being changed, what has
been changed and what will be changed. But it has been observed that only some part
of the information is shared by the management whereas there might be some critical
information which is not communicated and would be important for employees to
accept a major change. Even if there is nothing new to be communicated during the
process, it is required that everyone is connected and communicated that everything
is going well! The communication plan needs to take care of all the three types of
message that needs to be communicated—why, when, and how change will happen.
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Communication should start early, the sooner the better. If people get more time to
learn about the change sooner, they would be able to accept the change. The message
communicated should be clear and well supported by the top management. Also, we
need to make sure that communication is a two-way process. Getting people involved
in the decision making and planning for the new direction is a powerful way to
encourage adoption of the change.
2. Training and education: Next important tool is training and education, which consists
of the materials needed to help the new users of CRM to understand the philosophy
of CRM as well as technological tool implemented to support the philosophy. A key
factor to take care is that everyone has different style of learning. Some would prefer
learn by reading, some by listening and others by practicing. The plan should take care
of all these aspects.
3. Metrics and rewards: The next important tool that needs to be employed is a set
of measurements and rewards towards customer centricity. For example, if an
organization’s objective is to increase sale of product A, how will they be able to
measure success? If it would be traditional sales volume concept, how would they
know if the change or customer centricity is better than the earlier process? With
this objective, the organization might want telesales people to be more proactive
and spend time with customers explaining about the product. But if their reward is
dependent on number of calls, they will not be able to help the company in achieving
their objective. New metrics and reward systems needs to be designed based on
customer satisfaction measurement, customer loyalty, support received, etc. which
would give an opportunity for really understanding the differences.
Key Idea
Expected Benefits of CRM Implementation:
● Customer return rate/retention of customers
● Spending per customer
● Winning new customers
● Financial results
● Change of attitude towards customers
● Degree of satisfaction
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BIRD VIEW
CRM IMPLEMENTATION GUIDELINES
1. Formulate a solid CRM vision: Organizations should have clear business objectives for
their CRM initiatives and this clarity can only emerge from a well thought-out and well-
documented CRM vision.
2. Let business processes drive the CRM implementation: Risk presented by a technology-
driven implementation, instead of a business-process driven implementation, is that
organizations often blindly buy into the promise of an “enterprise-wide view of the customer”
and is seduced by the boundless potential of more comprehensive customer data profiles.
A detailed gap analysis of current and future processes should be conducted during the
analysis and design phase of the implementation.
3. Choose technology partners wisely: With the help of references within the industry, a fairly
good idea can be gauged at the levels of customisation required by organizations or business
units within that industry. If, after due diligence, it is discovered that massive customisation is
inevitable, focus should be on software products that have robust customization capabilities
but not substantive upgrade path challenges.
4. Assemble a stellar implementation team: A major CRM implementation requires great
deal of manpower to ensure that all of the tasks are accomplished on time and with acute
attention to detail. Critical skills profiles for each role need to be identified and commitment
from all the participants is mandatory. The skills profile can include broad categories such as
,project management skills, process skills, technology skills and change management skills.
5. Move from myths to reality: A large section of the corporate sector appears “cognitively
challenged” when it comes to CRM. Most executives either are unaware or appear
overwhelmed by the surreal powers of the CRM. The truth is that CRM is neither powerful
software nor a panacea for all corporate ailments (Agarwal, 2001; Boar, 1995). The need is
to take a proper perspective and avoid unreasonable expectations. Every CRM practitioner
needs to pay heed to them while launching CRM in the organization.
6. Match need of CRM with the need of organization: CRM is not right for every company.
Thus, it is advisable for the corporate sector to begin by clearly defining the business issues
and needs, and then determine whether CRM can and should be a part of the solution. CRM
strategies that are clearly linked to business objectives have a much greater likelihood of
success. Similarly, CRM applications are just a component of a CRM strategy, but they are
not the whole solution.
7. Involve the right customers in CRM design and implementation: The organizations
should identify the key customers that have a vested interest in developing the relationship
with the organization.
8. Keep introducing CRM enhancements regularly: The CRM technologies introduced
in an organization must remain vibrant and scalable. It should support the firms in better
tracking and managing customer interactions. Rules for prioritization, escalation and routing
of complex issues can be automated within the system to reduce the time of resolution. The
ability to adapt to ever-changing customer needs and deliver value added functionality will
be a key component to a successful CRM strategy.
9. Constantly measure the return on CRM: The old adage “You can’t manage what you can’t
measure” remains true in CRM too. A part of the reason why CRM has failed to prove its
worth to many is its perceived inability to demonstrate measurable benefits.
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10. Make CRM an enterprise mission: CRM efforts within an organization are often championed
by one functional area (probably marketing or information technology department. As a result,
CRM strategies are pursued in a vacuum. Enterprise-wide CRM can be all encompassing,
consisting of people, processes and technology. Successful companies view the path to
CRM as an evolution and are willing to make mistakes, learn from them, and regroup to get
closer to the goal.
11. Validate CRM output with an intellectual asset: It is important to run the CRM output and
directions regularly through a credible intellectual asset (e.g. business school, university,
research lab, and academic).The interaction may be in the form of an independent validation
of the CRM processes, model building or hypothesis development.
Another case on CRM implementation at ICICI further elaborates various

implementation issues and ways to handle them successfully.
CASELET 3: CRM IMPLEMENTATION AT ICICI
Background: Established in 1994, ICICI Bank is today the second largest bank in India and
among the top 150 in the world. In less than a decade, the bank has become a universal bank
offering a well-diversified portfolio of financial services. It currently has assets of over USD 79
billion, and provides services through a network of about 950 branches, 3,300 ATMs and a 3,200-
seat call centre (as of 2007). The hallmark of this exponential growth is ICICI Bank’s unwavering
focus on technology.
CRM Objective: ICICI Bank was set up when the process of deregulation and liberalisation
had just begun in India, and the Reserve Bank of India (India’s central bank) had paved the way
for private players in the banking sector, which at that time was dominated by state-owned and
foreign banks. Foreign banks were deploying high-end technology, and had innovative product
offerings, but had a very small branch network that serviced only corporates and individuals with
high net-worth. Sensing an untapped opportunity, ICICI Bank decided to target India’s burgeoning
middle class and corporate segment by offering a high level of customer service and efficiency
that rivalled the foreign banks, on a much larger scale, at a lower cost. A crucial aspect of this
strategy was the emphasis on technology. ICICI Bank positioned itself as technology-savvy and
customer-friendly bank. To support its technology-focused strategy, ICICI Bank needed a robust
technology platform that would help it achieve its business goals. After an intense evaluation
of several global vendors, ICICI Bank identified Infosys as its technology partner and selected
Finacle, the universal banking solution from Infosys, as its core banking platform.
Business growth by addressing the more lucrative and growing segment of middle-class
consumers and emerging corporate became the objective for the CRM project.
CRM Project: One of the biggest challenges for Finacle was ensuring Straight Through
Processing (STP) of most of the financial transactions. With the ICICI group having several
companies under its umbrella, Finacle needed to seamlessly integrate with multiple applications
such as credit cards, mutual funds, brokerage, call centre and data warehousing systems.
Another key challenge was managing transaction volumes. ICICI Bank underwent a phase of
organic and inorganic growth, first by acquiring Bank of Madura followed by a reverse merger
of the bank with its parent organization, ICICI Limited. The scalable and open systems-based
architecture enabled Finacle to successfully manage the resultant increase in transaction levels
crm.indb 331 7/28/2015 10:36:45 AM

from 400,000 transactions a day, in 2000 to nearly 2.1 million, by 2005. Over the years, the
strategic partnership between ICICI Bank and Infosys that started in 1994 has grown stronger and
the close collaboration has resulted in many innovations.
Benefits: The bank has successfully leveraged the power of Finacle and has deployed the
solution in the areas of core banking, consumer e-banking, corporate e-banking and CRM. With
Finacle, ICICI Bank has also gained the flexibility to easily develop new products targeted at
specific segments such as ICICI Bank Young Stars—a product targeting children, Women’s
Account addressing working women and Bank@campus targeting students. ICICI Bank is today
recognised as a clear leader in the region and has won numerous accolades worldwide for its
technology-driven initiatives. In 2003, the bank received the best multi-channel strategy award
from The Banker magazine. The bank has effectively used technology as a strategic differentiator,
thus not only redefining the rules of banking in India, but also showcasing how technology can
help in transforming a bank’s business.
Source: http://www.infosys.com/finacle/customers/case-studies/pages/investment-in-
technology.aspx
SUMMARY
It can be said that although technology is just an enabler of CRM, there are many issues that need to
be kept in mind by a firm before it ventures into a technology-based solution. Given the importance
of CRM in business, it is a high-stake strategy and is planned carefully and holistically. Generally, an
organization does not rely on specific methodology for implementing CRM. They often achieve this
by their own experience and creativity technological experts of their, but they fail to understand that in
order to have successful implementation, the business functions and information technology should
understand the background of each other and work in synchronization. Thus, methodologies and
defined roles are the bridge between various perspectives. Many organizations have cultures that
do not support CRM. Various product-centric organizations virtually ignore customers and decide on
the basis of their internal objectives rather than expectations of the customers. These cultures create
difficulty for building cross-organizational and customer-centric programmes like CRM. Changing the
whole culture of an organization is beyond the scope of any CRM initiative. But, it can be hoped that
with some change in behaviour through training and education, and creating metrics and rewards
might be brought within the company. CRM implementation in an organization would help them in
increasing customer retention and satisfaction along with financial benefits.
SELF-ASSESSMENT QUESTIONS
1. What are the key factors determining the success of Shell’s CRM approach?
2. How can we formulate Shell’s vision and strategy towards CRM?
3. Discuss the critical steps involved in successful implementation of CRM initiatives in an
organization. Explain with a suitable example.
4. Discuss the importance of change management in successful implementation of CRM in an
organization.
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PROJECT
1. Study the successful CRM implementation process for two or three different companies in
varied sectors and analyse their strategic planning process.
REFERENCES
1. Berry, Leonard L. (1983), ‘Relationship Marketing of Services: Growing interest, Emerging

Perspective’, Journal of the Academy of Marketing Sciences, 23 (4), pp. 236–245.
2. Buttle, F. (2000), ‘The CRM Value Chain”. Manchester Business School: CRM-forum.com,
March.
3. Duggal, Sanjeev, (2000), ‘Face to Face with Your Customers, Economic Times. Kumar
S. Ramesh (1998), Marketing Nuggets, Vikas Publishing House, New Delhi.
4. Zeithaml, V.A., M.J. Bitner, and A. Wilson, (2000), Services Marketing: Integrating Customer
Focus Across the Firm Boston: Richard D. Irwin, McGraw-Hill.
5. Rogers, Martha, (2005), ‘Customer Strategy: Observations from the Trenches’, Journal of
Marketing, 69 (October), pp. 262–63.
6. Parvatiyar, Atul and Jagdish Sheth, (2001), ‘Customer Relationship Management: Emerging
Practice, Process and Discipline,’ Journal of Economic and Social Research, vol. 3 no. 2,
pp. 1–34.
7. Payne, Adrian and Pennie Frow, (2005), “A Strategic Framework for Customer Relationship
Management,” Journal of Marketing, 69 (October), pp. 167–76.
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Guarding Against CRM
Failures 18
LEARNING OBJECTIVES
After reading this chapter, the readers will be able to understand:
❑ Compare and contrast the traditional and changed mindset of CRM.
❑ Identify the critical success factors for successful implementation of CRM.
❑ Identify the key reasons for the failure of CRM in any organization.
❑ Identify general myths associated with CRM.
INTRODUCTION
CRM is now moving to the centre of corporate strategy as a process of learning to
understand the values that are important to individual customers and using the knowledge
to deliver benefits, the customer really wants and making it easier for the customer to do
business with the company. But still CRM practice is at standstill in India and why so
many companies are failing to see a return on their CRM investment is that because of its
celebrity, the label “CRM” has been loosely (and often incorrectly) applied to anything that
suggests customer centricity. It is almost impossible to hear a common definition of CRM
from industry experts, even among the executives within the same company.
Some think CRM is a matter of technology. Some still believe it is just the process of
segmenting customers. Some think it is a matter of selling efficiency. Many marketers still
think CRM is just an advanced stage of database marketing—using the customer database
to find which customers would be the right ones for a specific product offering. They do
not yet understand that the relationship building must start with an understanding of the
customers’ needs. They talk about sharing the customers wallet but fail to realize that one
can not get access to others wallet, unless they get first access to the customers mind and
heart.
CRM: THE CHANGED MINDSET

Customers have shown that they do not want to be hunted like prey. They do not want
to be managed; they just want companies to make their lives easier and less stressful.
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Guarding against CRM Failures 335
They are not removing their names from the mailing lists for defensive reasons. Rather,
it is an offensive lifestyle management tactic aimed at reconfiguring and improving – not
serving- their connection with marketers. Time has passed for traditional marketing which
has been trying to make business better for the company. CRM makes do business better
for the customers. CRM also requires operational and process changes that will allow the
company to respond to individual customer needs. Within an organization, CRM will touch
every business and cultural area, every human relationship, and every technology.
Table 18.1 CRM—Changed Mindset
Traditional Model CRM

The company is in control. The customer is in control.
It makes business better for the company. It makes business better for the customer.
It tracks customers by transaction. It understands customers unique needs.
It treats customers as segments. It treats customers as individuals.
It forces customers to do what you believe they will It let’s customers tell you what they care about.
want.
The customers feel stalked. The customers are empowered.
It Organized around products and services. They organized around customers.
The key reasons for CRM success/failure have not been technical, but organizational.
Software problems always come last in the list of causes for failure of CRM initiatives,
but still organizations of every size want to start with the technology decisions first. They
spend a tremendous amount of time and energy looking for a technological solution
without having first established a clear business case with goals and objectives and metrics
to identify the results they hope to achieve. They do not understand it is not technology that
drives CRM, its intelligence about the customer.
CRM is a combination of processes, people, and technology. Notice that technology
comes last in all these. Certainly identifying, extracting, and transforming customer data
into usable information to achieve critical business objectives requires technology. But the
business objectives must be defined before the search for the technological solution starts.
STRATEGY
Various researches done by the firm Gartner have shown that successful enterprises
have become more aware of focusing on customer satisfaction rather than technological
applications. Gartner identified eight distinct layers or building blocks used by the world’s
leading businesses to reach excellence in CRM which are as follows:
● Vision: Leadership, market position, and value proposition.
● Strategy: Objectives, segments, and effective interaction.
● Valued experience for the customer: Understand requirements, monitor expectations,
satisfaction versus competition, collaboration and feedback, and customer
communication.
● Organizational collaboration: Culture and structure, customer understanding.
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● Processes: Customer Life cycle, and knowledge management.

● Information: Data, analysis, one view across channels
● Technology: Applications, architecture, and infrastructure.
● Metrics: Retention, satisfaction, loyalty, and cost to serve.
They also concluded that too many CRM initiatives suffer from an inward focus on the
enterprise, whereas the point of CRM is to achieve a balance between value to shareholders
or stakeholders and value to customer for a mutually beneficial relationship.
CONNECTING
Marketing to customers based on their purchase history data was what we did in the
traditional marketing, and it worked for what we were trying to “do-sell” more of what we
wanted to sell. But marketing based on the transaction database alone is not enough for
CRM, where we try to serve the consumers or businesses by getting them to show us the
solutions that will serve their needs. Just for an example after 9/11, 2001 attack the United
States was already mired in a recession, unemployment levels had risen, retail sales were
flat, consumer debt remained high, and now the country was at war. In times like these,
it would be presumptuous to believe that a transactional database could still provide the
correct guidance for reaching the confused and frightened customer. Never before this
there had been a need for establishing, nurturing, and creating strong relationships and this
holds true for both business-to-customer and business-to-business relationships.
At the start of a chapter in his excellent book, All-to-One (McGraw-Hill, 2002), Steve
Luengo-Jones quotes John McKean of the Centre for Information Based Competition in
Ohio. The quote says “Some 70 per cent of delivering customer value is about making the
customer feel like a human being. This is the most profoundly simple idea that everyone
in the customer arena seems to miss.” Steve goes on in the chapter to reinforce the point,
“You have to get close to your customers, as close as possible, understand them, direct
at each one of them all the good and appropriate benefits your company has to offer,
communicate with each one of them in all the ways open to you, find out what each one
wants or needs or both, then provide it for them.”
This is what CRM requires—getting as close to the customers as possible and using
customer intelligence, not just collecting customer data, but connecting, and connecting
means more than being available on the web.
PERSONALIZATION
Research shows that the critical element in providing a positive customer experience lies in
personalized and proactive service. Nearly 75 per cent of one study’s participants said that
personalization was a major factor in their “most satisfying” purchase experience, on or off
the web. 73 per cent of the most positive customer experiences were due to personalization
such as self-service, personalized voice or e-mail interactions, the ability to track purchases
and requests, and knowledgeable customer service. 34 per cent of respondents cited a lack
of personalized customer care in their “least satisfying” customer experience.
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Connecting with the customer and finding ways to provide a positive customer
experience go far beyond the initial transaction. The more one can “delight” customers the
more they will come back.
CUSTOMER LOYALTY
Kenneth Kanady, Education Enablement Manager of KANA, a leading provider
of external-facing CRM solutions in Natick, Massachusetts, has written in his paper,
Confessions of a Loyal Customer….When Being Satisfied Is Just No longer Satisfying
about customer loyalty as follows:
1. Customer loyalty is influenced as much by your company’s emotions and learning
capacity as your own company’s products, services, processes, and prices.
2. Customer loyalty is a rare gift given to only a few over a lifetime.
3. Customer loyalty is not normally admitted aloud because its roots are not very well
understood even by the customers themselves.
4. The three elements of customer loyalty include engagement, enablement, and
empowerment. The presence of all three can be significantly differentiating—the lack
of one can be devastating.
5. Whereas customer satisfaction and customer confidence can be well managed and
measured up close, customer loyalty is not really manageable at all and is best assessed
from afar.
Stop offering special deals designed to get loyalty. Such things just do not work.
Empowerment
Empowerment is the feeling that customers develop ‘about themselves’ as a result of
interacting with a company through its people, products, processes or services. Empowerment
is what differentiates a ‘repeat’ customer from a loyal customer. Customer loyalty is the
steadfast emotional allegiance or commitment given to a business, product, brand, or
person. As such, loyalty is an emotional state of empowerment. It is empowerment that
keeps a customer coming back to a particular company or product and keeps the customer
loyal. The advertising agency Brann Worldwide agrees that customers have taken control
and says, “We’re not helping sellers sell anymore. We’re helping buyer’s buy.”
BEATING THE COMPETITION

Connecting to customers, listening to customers, and letting customers connect to each other
have never been so important, and all have been critical to CRM. Except under exceptional
circumstances, customers will accept only the products and services that fit their lifestyle,
have the process of connecting means knowing more about the customers than current
marketing practices make possible. It is just not enough to know what the customers buy,
but also their preferences, aspirations, habits and interests. You are allowing customers
to manage the relationship when you know enough to offer products and services, on an
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individual basis, that you know to be useful to them personally. You will not only have a
reason for your offering; you can also explain the reason to them.
In The Myth of Excellence: Why Great Companies Never Try to Be the Best at Everything
(Crown Business, 2002), Fred Crawford and Ryan Mathews support this argument for
the importance of connecting with the customers. They talk of “Consumer Relevancy,”
suggesting that the new way for businesses to create a bond with their customers is to
reflect fundamental human values such as trust, respect, dignity, and ease in their offerings.
Customers, they say, are looking for human values showcased in every product or service
the company offers. They want to be treated like human beings and not just as a transaction.
They want respect, honesty, trust, and recognition as individual human beings.
Information
Customers are tired of being talked to base information from a company’s transaction
database. Customers are now beginning to say, “Stop relying on information about me and
start listening and paying attention to information from me.”
Lester Wunderman, Chairman Emeritus of Wunderman Worldwide, a member
of Young & Rubicam Global Communications Network in New York, says, “CRM is
a process that builds more information, understanding and dialogue between sellers and
buyers. CRM is not advertising. It’s not one-way anything. It implies dialogue.” When
customers share their interests on returned postcards, on the phone, or via emails, the
company learns a lot about what individual customers want, and they deliver CRM.
One should never underestimate the customer’s desire for information. Information
is more important than product and is an important ingredient of the dialogue required
to help customers manage the relationship. One cannot determine what information to
share with customers, until one understands how they think the company can add value to
their lives. Effective dialogue requires changing the way one does business, moving from
transactions to solutions, from getting the order to helping the customer. It means building
an interdependent relationship between the customer and the company in which each relies
on the other for solutions and successes. The customers value the relationships and believe
in it. The company creates a common bond with the individuals customer based on trust
and shared win-win approach.
CRITICAL KEY SUCCESS FACTORS

A CRM is not a standalone technical solution that could be implemented in isolation
in an organization. It requires a drastic shift in focus from product to customer-centric
philosophy. A prudent CRM strategy is essential for a successful adoption of CRM.
The critical success factors that need to be considered for successful implementation
of CRM are as follows:
1. Identification of functions to be automated or processes to be changed: There
might be many processes which need to be changed in order to attain customer
centricity in an organization. Such processes need to be identified and rectified. CRM
technology helps in automating such processes.
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2. Top management commitment and support: No CRM strategy can succeed,

unless it receives top management support and commitment. The support from the
top management can be secured by demonstrating them the importance of CRM
implementation which results in improved margins, higher sales revenue, and higher
customer satisfaction.
3. Commitment from users: Gaining commitment from users is essential. The sooner
the users are involved, the better is their understanding of the new system. They are
the ones who are aware of the needs best and can help define the new system.
4. Internal communication: The people in an organization should be communicated
about the change in the organizational philosophy from product centricity to customer
centricity.
5. Training and know how: The paramount importance of training cannot be over
emphasized. This is the single most prevalent reason for the failures or incomplete
success. Training includes demonstrating to users how to access and utilize needed
information ensuring that users are provided with understandable user documentation,
offering online tutorials. Thus, the best way to change work habits and to ensure
systems success is via effective training.
6. Database integration and data quality: Technological obsolescence is a real
threat. CRM cannot be a standalone system. The database needs to be integrated with
the existing systems in an organization. Thus, the system selected should be open
architecture, scalable and reliable. The redundant data may not give accurate result for
the analysis, thus quality of data is also of immense importance.
7. Administrate the system: One person from each department should be responsible
for the welfare of the CRM implementation. The person should be responsible for
ensuring the information is timely, relevant, and easy to access and is positively
impacting the user’s decisions making needs.
8. Motivate the employees: Technology generally breeds fear and insecurity. Thus, it is
desirable to motivate the employees to avoid any resistance from the employees.
REASONS FOR CRM FAILURE

Though various organizations have invested huge amounts in implementing strategic CRM
technology and infrastructure in order to win the battle in the increasingly competitive
economy, and customer relationship management (CRM) has been one of the fastest
growing businesses of the new millennium, still critics have pointed high failure rate of the
technical CRM projects as evidenced in various market studies. The scope, size, complexity
and duration of the CRM projects seem to vary quite significantly across organizations.
Although lack of CRM understanding, improper planning and not recognizing the need for
business change are the key reasons for CRM failures.
I have identified seven key reasons that are the “usual suspects” for failure which are
as follows:
1. Data is ignored: At the base level, CRM is all about data—which includes customer
information, product data, inventory details and transaction history. This is a huge
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amount of information that needs to be in the correct place, in the perfect format, and
at the required time. Although many CRM initiatives may have hired multiple vendors
and timelines that take months or years to implement, majority of organizations pay
no attention to the data that will support investments and systems. As such, they must
focus on having a detailed understanding of the quality of their data—how to clean it
up, how to keep it clean, where to source it and what third-party data is required. Only
when a foundation of good data has been laid down by the organization, they would
find that subsequent investments will generate acceptable returns.
2. Politics rule: By politics, I mean the tendency of an organization to worry more about its
individual CRM needs and less about overall organization wide CRM requirements. In
such cases, CRM is, at best, when it is departmentalized and, is worst, when completely
disconnected. In a politics dominated organization, every department is possessive
about the data and they believe that they “own” the customer and, therefore, are not
willing to share data or support any other channels. This approach of departmental
CRM is suboptimal, and can only yield efficiencies and benefits at department-level.
Instead, CRM is all about organization forming enterprise-level relationships with
customers, and allowing individual organizations to maintain control of individual
interactions.
3. The Information System (IS) department and business users can not work
together: CRM is a business strategy, but it is somehow dependent on technology.
Therefore, business users need IT team to select the right technologies, appropriate
systems infrastructure and the overall architecture required to support the strategy.
The IS organization needs business users to establish priorities, requirements and
the overarching vision to make the CRM pieces come together. If they do not or
can not work together, enterprises often find they have nice, shiny technologies that
solve nothing, or large consulting reports that can not be implemented. Neither one is
conducive to CRM effectiveness.
4. There is no plan: No one can build a house or a bridge, or anything that is the least-
bit complex, without a perfect plan. Yet many organizations still undertake CRM with
no idea of what they are hoping to build in the long-term. Various solutions are joined
with each other very haphazardly, initiatives come and go, and soon enthusiasm ***
throughout the organizations. It is recommended that organizations should create a
minimum three-year plan for their CRM initiatives, and then tactically invest towards
the vision.
5. CRM is implemented for the organization, not the customer: CRM is all about
people and, to be precise, the customers. That applies if the customer is a consumer,
an enterprise, or a partner. Therefore, CRM has to make the lives of the customers
better and should not be implemented to solve any internal problem. Solving the
problem may be a fortunate side effect, but it should not be the motive of a CRM
initiative. For example, sales automation tool objective should make the lives of
sales representatives and customers easier. Whereas, the most common reason for
sales automation implementation by organizations is better pipeline reporting, that
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ultimately makes it difficult for the organization to motivate its sales representatives
to use the technology. And thus, the initiative collapses and there is still no pipeline
reporting, and the organization ends up wasting millions of rupees.
6. A flawed process is automated: Most organizations have customer-based processes
that are flawed because of years of minor corrections and failure to keep up with
customers’ demands. Therefore, when automation is added, it is not CRM—it is
an automated flawed process. To make a flawed process run faster means that the
organization can more quickly and efficiently annoy its customers. This is not what
CRM is all about. Instead of assuming that the current process is perfect and should be
automated, one should think back from the technology and ask, “How can the things
be done differently for a customer-centric organization now, and is this a process that
is required anymore?”
7. No attention is paid to skill sets: Any heavy investments in the world can not
save a CRM project if, at the end of the implementation, it is put in the hands of
underskilled and under trained employees. By doing so, organizations reveal that they
believe employees are unimportant. Nothing could be further from the truth. CRM
is an opportunity to put powerful tools into the hands of employees; it should not
weaken the customer experience by short-changing employees with poor training on
those tools. Whether it is a sales associate, a call-centre representative, or another
customer-facing individual, the employee should reinforce CRM and vice-versa.
CRM’s potential should be fulfilled at the point of sale or service.
CRM involves optimizing product, price, place of distribution, promotion, sales and
service, which looks easy to implement but still many companies are struggling. The reason
being CRM is enterprise-wide initiative rather than technology initiative.
CRM is difficult because it is an enterprise-wide initiative; it is not a technology
initiative. Many organizations perceive CRM as a technology initiative, and assign the
CRM implementation project to their IS or IT group. Technology is needed in order to
implement CRM—particularly the customization part—but technology is not the driver of
CRM, or the solution to successful CRM implementation.
1. CRM is not exclusively a marketing initiative: Many organizations have merely
equated CRM with customer-focused marketing, or data-driven/database marketing.
CRM results in more effective, data-driven marketing efforts—CRM requires
marketing expertise. But CRM is not strictly a marketing initiative.
2. CRM is not exclusively a sales initiative: Similar to marketing, CRM is often lodged
within the sales department. The sales—force, after all, is extremely close to their
customers understanding their needs and wants, and trying to fulfil them. However,
sales is just one functional area that can benefit from CRM, and that is necessary for
effective CRM.
3. CRM is not exclusively a service initiative: As with sales and marketing, customer
service is one functional aspect of successful CRM implementation. But customer
service is not the sole driver of the process.
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4. CRM is thus a multi-functional initiative: It involves marketing, sales, service and

technology, as well as the other inner-workings of an organization. Thus, it is properly
described as an enterprise-wide initiative. It involves all areas of the organization
and all functions of the organization, and it requires all areas of the organization
to be working together in harmony. CRM requires all areas of the organization too
not only exist in harmony, but to be working toward the common goal of stronger
customer relationships. Having even one “broken spoke in the wheel”…one area of
the organization that is less than committed to CRM can make the difference between
success and failure. Some of the key benefits expected from CRM are given below:
BIRD VIEW
SUMMARIZING REASONS FOR CRM FAILURE
It is observed that the firms reason lack of CRM understanding as the main hindrance in
implementing CRM. The companies are still considering CRM as a technological initiative rather
than taking it as an “enterprise-wide” initiative. Another major obstacle is improper planning,
where in the firms do not have specific goals and vision set and assigned jobs. Technology itself
also needs to be considered in regard to its product features. Lastly, the financial constraint is
also one of the issues for its failure. Unrealistic expectations, improper planning, organizational
change, lack of CRM understanding, lack of CRM skills, lack of resource/budget, software related
problems are the most critical reasons for CRM failure. Lack of CRM understanding and improper
planning are the most important reasons for CRM failure. Many companies have failed to
implement successful CRM programme in their organization because their organizational needs
did not match with the need of CRM.
Key Idea
Nine CRM Planning Steps
Brendler Associates Inc4., Austin, Texas has described nine steps to help the company build a
customer relationship management strategy:
1. Form cross-functional teams that represent the whole enterprise and are driven by the CEO.
2. Have these teams jointly develop a strategic CRM vision.
3. Make sure this vision is based on customers’ needs.
4. Analyse CRM strategies of current and potential competitors.
5. Identify the capabilities needed to provide superior customer value.
6. Assess the capabilities you already have.
7. Identify business process changes, such as by mapping customer flow.
8. Build a change management plan. Figure out how employees are set up to deal with
customers, what changes are necessary, how much training is required, what capabilities
exist, whether people need to be added to the company or whether teams need to be built.
9. Implement CRM.
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CASELET 1: CIGNA
1. What Went Wrong with CRM at CIGNA Healthcare

In January 2002, Philadelphia-based CIGNA HealthCare migrated 3.5 million of its members to
new claims processing and customer service processes and systems. CIGNA wanted integrated
processes and systems for enrolment, eligibility, and claims processing so that customers would
get one bill, medical claims could be processed faster and more efficiently, and customer service
reps would have a single unified view of members.
This required consolidating complex back-end processes and systems for claims processing
and billing, and integrating them with new CRM applications on the front-end. The project required
complex technical work and business processes to work together between front and back office
as well at customer service staffing levels and skills. In addition, new processes and applications
were designed to allow members to enrol, check the status of their claims and benefits, and
choose from different health-plan offerings—all online.
At first, CIGNA conducted small-scale migrations, moving its members in small groups of
approximately 10,000 people at a time. During this time, problems were limited and manageable.
At the same time, the customer service areas were being revamped in anticipation of the new-
fangled systems. Huge gains in claims processing and customer service efficiency were expected,
and the company started lying off reps as part of a consolidation of service centres. In 2002, the
company terminated 3,100 employees and spent $33 million in severance payments. CIGNA also
invested $32 million in the new regional service centres.
At this point, in January 2002, with members renewing and new members lining up, the company
performed a mass migration to the new infrastructure. Serious problems emerged immediately.
Members had trouble obtaining, confirming, and inquiring about coverage. Employees at one
member company effectively lost coverage due to membership data problems. Member ID cards
were issued with incorrect numbers and prescription icons. Some people could not get their
prescriptions filled at drugstores.
As a result, a flurry of inquiries put CIGNA’s new customer service operation to the test. But
lower staff levels left the centres short-handed. Customers who phoned were put on hold, and
when they did get through, some of the new reps struggled to navigate the new systems. In
addition, data from back-end systems did not show up properly in the customer service systems
making it difficult for reps to fully understand the customer’s situation.
In the rush to go live, the system’s ability to handle claims and service from front to back
and in large volumes was not adequately tested. Problems in one area cascaded into others;
staffing levels were inadequate, and staffs were improperly prepared. Rather than realize that
benefits would come over time as the company became used to new processes and systems,
they expected them the day the switches were flipped.
Given this experience, CIGNA has now slowed down the pace of migration and solidified the
processes, systems, and staffing. It also has improved testing practices. By mid-2002, CIGNA
was moving new members without major problems. In January 2003, it successfully performed a
significant migration of 700,000 members. It also successfully launched www.MyCIGNA.com, a
website for members to look up their benefits, select health plans, check claim status, search for
health information, and communicate with nurses online.
Now, that the problems had been handled, the company is processing medical claims more
efficiently and servicing customers better than in the past. Some of the initiative’s original goals
have now been achieved. The elimination of duplication in claims processing and billing, as well as
other benefits, have allowed the company to streamline its sales force and medical management
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team. However, the price tag for the project has exceeded the $1 billion planned and significant
damage was done to the company’s reputation and its financial performance.
2. Failures of CRM implementation in the hospitality sector: ITC Hotels

Hotels in India have a supply of 1,10,000 rooms and according to the Ministry of Tourism in India
5 million tourists visited India in 2010 and the demand are expected to soar to 10 million by 2012.
In addition to that, there are expected to be approximately 350 million travellers. India is ranked
18th in Business Travel and will be among the top 5 countries in terms of growth in the business
travel segment. There is a huge demand-supply disparity and the room rates are likely to rise
almost 25 per cent annually and occupancy to about 80 per cent in the next two years. MNC
Hotels are flocking to India like never before and are forging joint ventures to earn their share of
pie in the race.
ITC Hotels comprises more than 60 hotels in 45 locations across India with an additional 15
international hotels in Malaysia, United Kingdom, US, Bhutan, Sri Lanka, Africa, the Middle East
and Australia. ITC has grouped itself into three categories which are as follows:
● Luxury
● Leisure
● Business
The core product is space–supplemented with services such as restaurants, health clubs,
banquets, discotheques, bars, and business centres. The supplementary products involve travel
arrangements, ticketing, airport pick-ups, sightseeing, etc.
Problem: The concept of CRM was adopted by ITC quite late compared to its competitors such
as Taj Group and Hilton in the Indian Luxury Hotels space.
Some of the key problems were related to performance of staff below expectations with respect
to competitors. For example, a simple gesture such as an anniversary was not remembered and
this led to loss of repeat customers who eventually went to ITC’s competitors. Training of the
service staff in order to use the CRM was not up to the mark and that eventually led to the decline
of market share of the ITC group, especially in the business hotels category from 54 per cent to
49 per cent.
The same time Marriot, Hyatt and Hilton had made in-roads into the business hotels segment
in addition to the behemoth that Taj Group already was.
The Solution
1. A CRM project was started by ITC Ltd in order to develop a property management solution
for all its hotels under the ITC WelcomGroup brand. The project essentially involved various
functions related to hospitality but also included a CRM suite.
It was used for saving the profile, preferences and special information (anniversary, Birthdays,
etc.) related to the guest on the central server. This information was accessible to all the ITC
properties. Therefore, whenever there was a repeat customer, the hotel staff already had all
the necessary information enabling them to delight the customer by personalized service.
2. A guest preference sheet was always presented to the guest at the time of the reservation
along with the confirmation mail. This is primarily to cater to the preferences of the customer,
for example, the food habits (diabetic, etc.) as well as to gauge if the customer was coming
to the hotel on a special occasion so that appropriate arrangements could be made for the
same. The CRM software gave a regular action report to the manager.
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3. A Card was used as a special instrument by personal butlers for recording guest preferences
and other information that was related to the guest. This small booklet that was carried by
the staff at all times could record the information that can be useful in the future to please the
customer. This information was further recorded on the CRM system making it accessible to
all.
4. Once the guest is in the hotel and stayed for some time (a day or two), a courtesy call was
to be made by the guest relationship executive during the evening hours. This was just to
know about the experience of the guest and how it can be improved in case there is some
difficulty being faced by the guest. In case there is a complaint, it was uploaded on the CRM
software.
5. A Guest satisfaction tracking system was installed. This system, post-departure, sends
an automated mail from the central server to the guest requesting to fill up a feedback
form. There are various stations of experiences which are scored on a Likert Scale. This
information was quantified.
6. Loyalty Programs: An “Inner Circle” programme similar to the one run by Embassy suites
of the US was replicated in India. Guests can avail benefits during stays as well as while
dining in any of the ITC restaurants in India and abroad.
For corporate bookings, value programmes can be started since corporate bookings are some of
the largest revenue pipelines for ITC.
An alliance and partner programme can be started similar to the code-share agreement of
airlines wherein if a guest checks into a partner hotel of the ITC group, he/she can earn points.
This also helps in retaining customers and the industry as a whole stands to benefit.
GENERAL MYTHS ABOUT CRM

Many companies have misconceptions about CRM in regard to assessing customer
satisfaction to enhance business. There are several myths associated with CRM that needs
to be evaluated in order to have successful CRM implementation which are as follows:
1 CRM is a software application: Organizations fail to understand that CRM is a
business strategy, which consists of people and business processes and technology
is just supporting it. Thus, CRM is not IT issue that is to be equated to software. It
is impossible to have successful CRM implementation with only technology centric
approach, but it requires a customer-centric approach.
2. CRM is complicated and difficult to understand: The general perception about
CRM is that because of technological developments the implementation of CRM is
difficult to adapt. But even in the era when there was no technology relationship,
marketing was practiced. Today, only it has been facilitated by technology. The core
concept of CRM remains the same.
3. IT is responsible for CRM implementation: Who is responsible for CRM
implementation is it, marketing, customer care or sales? It is not advisable to lay
the responsibility on all of them individually. But the responsibility is with the top
management who is the leader of the organization. It is he/she who would formulate
and strategies the entire process. Thus, top management support and commitment is
imperative to the success.
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4. CRM is expensive: It is a myth that CRM implementation and maintenance costs are
high. Strategic CRM can be implemented within the organization by just changing the
business process or strategies. In order to have technological support there are various
application service providers with simple and limited functions.
SUMMARY
CRM is a mindset—a business philosophy that reshapes a company’s sales, marketing,

customer service and analytics, and presents a radical cultural shift for many organizations.
CRM fails because organizations fail to understand that it is a change from product centric
to a customer-centric. It is a change from a monologue to a dialogue with the customer
with the advent of the Internet customers want to converse with a company. Mostly the
companies see CRM as a software to solve their problems where as it is just an enabler.
Technology is just the transactional thing; it is people who have to make the change
happen in the organization. Thus, for successful CRM implementation it is important to
get IT professionals to “think customer” and breaking down the barriers between IT and
the employees who interact with customers. It also means structural changes in how the
company operates, like sharing information and resources across departments and job
functions, which translates into giving up control over who “owns” it; retraining employees
in new roles, responsibilities and skills; and measuring their job performance.
SELF-ASSESSMENT QUESTIONS
1 With so many software applications available, why do many organizations fail to find the success
they expect from CRM?
2 What are the most critical success factors for success of CRM in an organization? Discuss in
detail.
PROJECT
1. Study and analyse the failure of different CRM initiatives taken by leading retail/aviation/FMCG
companies.
REFERENCES
1. Steve Luengo-Jones, “All-to-One’’ (McGraw-Hill, 2002).

2. Fred Crawford and Ryan Mathews, “The Myth of Excellence: Why Great Companies Never Try
to Be the Best at Everything (Crown Business, 2002).
3. Virtual Insurance, (2001), Published by “SellingWithTechnology.com Brendler Associates Inc.,
Austin, Texas, 2 November.
4. Wift, R. S., (2001), Accelerating Customer Relationships Using CRM and Relationship
Technologies. London: Prentice Hall.
5. Swift, R.S., (2002), Executive response: CRM is Changing our Eras, the Information We
Require, and Our Processes, MIS Quarterly Executive, 1(2), pp. 95−96.
crm.indb 346 7/28/2015 10:36:46 AM

6. Thibaut, J. W. and Kelley, H. H., (1959).The Social Psychology of Groups. New York: Wiley.
7. Wilson, H., Daniel, E. and McDonald, M., (2002), Factors for Success in Customer Relationship
Management (CRM) Systems. Journal of Marketing Management, 18, pp. 193−219
8. Blattberg, R. C. and Deighton, J., (1996), Manage Marketing by the Customer Equity Test.
Harvard Business Review, 74(4), pp. 136−144.
9. Campbell, A. J., (2003), Creating Customer Knowledge Competence: Managing Customer
Relationship Management Programs Strategically. Industrial Marketing Management, 32(5),
pp. 375−383.
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Deploying CRM in An Organizaton: Learning Objectives

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Deploying CRM in an

CRM STRATEGY IMPLEMENTATION

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Figure 17.1 Areas that Support CRM Strategy

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CASELET 1: RAYMONDS: GETTING CLOSER TO CUSTOMER

CRM Implementation: Customer relationship management was implemented by Raymond to

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Key Idea: CRM Implementation—Best Practices

CRM IMPLEMENTATION ROADMAP

Software Technology Designing

Figure 17.2 A CRM Implementation Road Map

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Strategy and Goal Setting

Planning for Change Management

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Designing the System

Measurement and Evaluation

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CASELET 2: SBI LIFE’S NEW CRM SOLUTION

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Figure 17.2 Amazon.com shopping cart recommendations. The recommendations are

CREATING A CRM CULTURE

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CHANGE MANAGEMENT PLAN

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Another case on CRM implementation at ICICI further elaborates various

CASELET 3: CRM IMPLEMENTATION AT ICICI

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1. Berry, Leonard L. (1983), ‘Relationship Marketing of Services: Growing interest, Emerging

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CRM: THE CHANGED MINDSET

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Traditional Model CRM

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● Processes: Customer Life cycle, and knowledge management.

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BEATING THE COMPETITION

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CRITICAL KEY SUCCESS FACTORS

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2. Top management commitment and support: No CRM strategy can succeed,

REASONS FOR CRM FAILURE

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4. CRM is thus a multi-functional initiative: It involves marketing, sales, service and

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1. What Went Wrong with CRM at CIGNA Healthcare

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2. Failures of CRM implementation in the hospitality sector: ITC Hotels

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GENERAL MYTHS ABOUT CRM

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CRM is a mindset—a business philosophy that reshapes a company’s sales, marketing,