Management (CRM) Implementations
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|By John Schweisberger and Amitava Chatterjee,
Once you’ve decided to invest in a CRM application, the next steps include a well-developed strategy that is effectively communicated, well-defined business objectives, a well-planned approach, identified data sources and verified data quality. This article describes the right order for effective CRM, and points out some classic mistakes that lead to failed CRM implementations.
CRM Is a Way of Running the Business
While the path described below is the perfect theoretical approach (avoiding
the mistakes, of course), and one that we like to see clients follow, real-life
experience tells us the world doesn’t always work that way. The most
typical approach to CRM has companies developing point solutions, something
that solves one particular problem, out of acute necessity. However,
whether you use a consulting firm to help you implement the point solution
or you go it alone, you should be sure that the key questions around direction,
integration, processes and people are being asked. Generally speaking,
the questions are a lot more easily asked than answered, which leads most
companies back to the need for an overarching strategy and the realization
that CRM really is a way of running the business, not just the program
du jour. Additionally, CRM is a way to increase revenues and/or reduce
costs. Not understanding the fact that this is a bottom line strategy could
lead you to make the wrong decisions in establishing your strategy.
Everyone wants to be a CRM Hero — the desired outcome. No one wants to be a CRM Zero — the career-limiting option. Allow us to offer five words of advice: don’t start by picking software. In addition, it would be prudent to watch for these classic mistakes:
Classic Mistake #1: Thinking that CRM is, at its heart, technology-based. The best example of this is the client who told us, “We need to get a CRM.” That makes no sense, for it is not the technology that makes you a hero, it is the recognition and belief by your organization that CRM is a way to operate the company. To accomplish this, the CRM Hero must demonstrate the leadership necessary to develop a CRM strategy and get the rest of the company to come along for the ride. At the risk of stating the obvious, too many companies we’ve seen have adroitly demonstrated that they have no clue where their CRM program is going – but, wow, look at all that data! Never mind that they will soon be another case study in failed expectations. However, with a well-conceived strategy that highlights all aspects of the customer relationship, they would be able to clearly articulate the specific changes, tools and techniques that must be employed over time within their organization to deliver measurable results.
Classic Mistake #2: So I’ve made a strategy, let’s go get the
software. Not so fast. With clear articulation comes the second step:
communicating the strategy to the rest of the company and your guests.
Not much new technology is needed for this step, either. However,
you are guaranteed to fall short of your CRM goals without effective communication
throughout the company. Meanwhile, the CRM Hero grows ever more frustrated
that people don’t “get it.” Yet, people are the most vital, and the
most frequently overlooked, part of the equation. As service providers,
we all know that our frontline people have the power to make or break the
relationships we enjoy with our guests, but it is stunning to note that
occasionally this basic truth gets forgotten. If our people don’t understand
the importance we are suddenly placing on effective relations with our
guests, those relations will be anything but effective.
Classic Mistake #3: OK, we’ve got everybody jazzed about this CRM thing; let’s get some technology in here to help them. Sounds great, but help them do what? The same things they did before you got them the technology? While those things worked really well for you under your old way of managing the business, remember that this is a new way of thinking you’re trying to impart. With new thinking must come new ways of working, which means you will need to lead the way in helping your company look at things the same way your guests look at things. These guest-centric business processes are simple in concept, but much more difficult to get your people to design. Some companies have taken the radical step of inviting customers into their process design meetings to be sure they’re taking a customer-centric approach.
Classic Mistake #4: We know what we’re trying to do, everybody’s on board and our processes are aligned with the desired guest experience – now all I need is a new POS system, a data warehouse, a campaign management tool, new call center software for my reservations agents, a good PMS built on the latest platform and a new yield management tool. It’s finally time for technology, but if you follow this approach your systems integrators will be happy, though your IT shop won’t be when they have to keep all of these balls in the air. Integration is the key – single points of data collection, techniques for data cleansing and easy ways of getting the right information to the right people in a way that allows for seamless, consistent, personalized service.
Keys to Successful Implementations
This is where the true test of CRM solutions takes place. There is nothing worse for your relationships than raising expectations and then failing to meet them.
Continue the Relationship. Interaction with the customer does not begin when they arrive at the front desk and end when they depart for the airport – it begins before their first visit and lasts a lifetime. Remember, a 2 percent increase in customer retention is equivalent to a 10 percent reduction in costs (Caterer & Hotelkeeper, 1994).
It’s All about Technology – Not! Technology certainly plays an important role in the implementation of a successful CRM project. However, it is not a silver bullet that will solve all problems or open all doors. It is important to remember that all technology decisions are only relevant in a business context. All the technology in the world is cool, but if your business processes aren’t set up to effectively utilize these resources, your company will be added to the statistics of failed CRM implementations.
Implementing an effective CRM solution is not complex. Adequate planning, effective communication, stakeholder involvement and mistake avoidance will ensure that your initiative gets off the ground easily, and places you squarely in the exalted ranks of successful CRM implementers.
1 Kinikin, Erin. “Lack of success metrics mean that CRM failure rates will stay high,” Giga Information Group, 2001.
John Schweisberger is a partner with PricewaterhouseCoopers’ Management Consulting Services Hospitality and Leisure practice, based in Los Angeles, Calif. Amitava Chatterjee is a consultant in the practice’s Falls Church, Va. office.
Hospitality Upgrade magazine
and the Hospitality Upgrade.com website
|Also See:||Technology Dilemmas: What have IT investments done for you lately? / Elizabeth Lauer / Hospitality Upgrade Magazine / Summer 2001|
|Full Circle from Centralized to ASP - The Resurrection of Old Themes and a Payment Solution / Gary Eng / Hospitality Upgrade Magazine / Summer 2001|
|A High Roller in the Game of System Integration / Elizabeth Lauer / Hospitality Upgrade Magazine / Spring 2001|
|CAVEAT EMPTOR! Simple Steps to Selecting an E-procurement Solution / Mark Haley / Hospitality Upgrade Magazine / Spring 2001|
|Your Bartender is Jessie James and He Needs to Pay for College / Beverly McCay / Hospitality Upgrade Magazine / Fall 2000|
|Choosing a Reservation Representation Company / John Burns / Hospitality Upgrade Magazine / Spring 2001|
|Understanding and Maximizing a Hotel’s Electronic Distribution Options / by John Burns / Hospitality Upgrade Magazine / Fall 2000|
|The Future of Electronic Payments - From Paper to Plastic and Beyond / J. David Oder / Hospitality Upgrade Magazine / Summer 2000|
|Timeshare Technology Steps Up / by Elizabeth Lauer / Hospitality Upgrade Magazine / July 2000|
|Biometric Payment: The New Age of Currency / by Geneva Rinehart / Hospitality Upgrade Magazine / Mar 2000|