Blame the Vendors

Blame the Vendors

Carol Smalley
Managing Editor, CRMGuru
Member

Posted 02-Apr-2003 12:24 PM
Tell me what you think of a recent article by our colleagues at Optimize. In the article—"Putting The Customer Back In CRM"—consultant and author (Why CRM Doesn't Work) Frederick Newell points his CRM failure finger (albeit a little one) at the vendors.

http://www.optimizemag.com/issue/018/briefing.htm

Share your thoughts!

Carol Parenzan Smalley
Managing Editor
www.CRMGuru.com
carol@CRMGuru.com

Ash Nallawalla
Member
Picture of Ash Nallawalla

Posted 04-May-2003 06:58 AM
Very interesting article—nothing new, but reinforces what most of us know. In another thread I commented that I am constantly seeing ads for Siebel XYZ or SAP ABC technical specialists, but never for CRM Managers at those locations.

I disagree with Newell where he says, "you can't have CRM without the software." Of course, he is talking about large companies. I have seen good CRM being practised by a chain of car dealerships largely with pen and paper—because the CEO doesn't think much of computers. They do the simple stuff that can differentiate them from their competitors, such as a phone call after you buy a new or used car, after you have your old bomb serviced, and they get your name right. I bought my last two cars from them. Of course, I like the cars I bought there, but all things being equal, I won't rush back to their competitor who could not correct the typo in my name in their database after ten years and several reasonable requests to fix it.

Yes, a software package could help them, but they are doing a good job of managing their customer relationships. We need to look at these personal anecdotes of good CRM principles and then extrapolate to the needs of complex businesses.

- Ash

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Ash Nallawalla
CRM & Lead Management Consultant and Author
http://crm911.com

steve olyha
Member

Posted 12-May-2003 07:31 AM
I think Frederick's article correctly points out a fundamental flaw in what many call CRM, namely, it isn't about the technology. CRM, regardless of the specificity of one's definition, is a business model and set of operating practices, of which technology is but an enabler, not a driver. Yet, while many might voice this POV, our industry is full of example after example where we don't walk this talk. This is partially due to the (unfortunate) marketing success of the vendors, who collectively put tens of millions of advertising dollars and noise in to the market, but, it's mostly about selling licenses to them.
While I also agree that best in class performance on CRM initiatives must start with an external bias and clear understanding of what your EXTERNAL customers really want, it's also true many times they just don't know, or in fact, claim they want something they don't. Anyone who has ever attended a focus group session can attest to this. Best in class also includes the ability to creatively drive new performance and interaction capabilites out to customers, many times those include things customers aren't yet demanding. The key to success is balancing options to insure you don't alienate some segments while helping to drive new behavior patterns that create proftable interactions.

Carol Smalley
Managing Editor, CRMGuru
Member

Posted 13-May-2003 07:36 AM
Posted by Carol Smalley (Editor) on behalf of RuthJan [ruthjan@jflesher.com]

Blaming the vendors is like blaming the sales guy at the Ford dealer because you bought a convertible and actually need a truck.

I do agree with Newell on other issues. If businesses don't know what they are trying to get out of CRM, or rather don't know what direction they want the company to move in and have CRM technology support this direction, then they are wasting their money.

I have been fortunate to work with clients that have their business strategy in mind when we are working toward a technological tool for support.

Jan Flesher
Flesher Marketing Infrastructures
ruthjan@jflesher.com

Carol Parenzan Smalley
Managing Editor
www.CRMGuru.com
carol@CRMGuru.com

Carol Smalley
Managing Editor, CRMGuru
Member

Posted 20-May-2003 07:42 AM
Posted by Carol Smalley (Editor) on behalf of Eric Hien [Eric.Hien@sanchez.com]

I completely agree with Mr. Newell that CRM success does not begin with the technology. It begins with the plan that a company has to achieve success using CRM principles. This must first include a definition of what measure the company will use to gauge success whether it be higher customer satisfaction, higher cross sell ratio, better retention etc. The technology is an important tool to achieve this success used to gain access to customer data to aid in decision making, calculate profitability, aid in process improvement etc.

I think it would be a great differentiator for a technology company to add value to their technology solution by also helping the customer in the planning and implementation phase of a CRM project. But to say that "the real blame goes to the vendors" seems like a an easy excuse to use when your CRM initiatives are not successful when in most cases it caused by lack of a good plan or preparation.

Eric Hien
CRM Product Manager
Sanchez Computer Associates, Inc.

Carol Parenzan Smalley
Managing Editor
www.CRMGuru.com
carol@CRMGuru.com

Carol Smalley
Managing Editor, CRMGuru
Member

Posted 20-May-2003 08:00 AM
Posted by Carol Smalley (Editor) on behalf of Lou Valdini [Lou.Valdini@chordiant.com]

Much as it may come as a surprise to many, there are actually some highly experienced "CRM" sales people who do understand what it really means, and what the customer needs to do to make it successful in particular situations. Unfortunately, their opinions are often at odds with the the need to sell to their employers' agenda rather than the customers', but you cannot blame the salesman for doing what he gets paid to do. If he doesn't sell enough, he gets fired and his family starves! Well, OK, he doesn't buy this year's Porsche.

If we are to assume that the buyers of "CRM" are highly qualified and intelligent business and IT professionals, who understand their business far better than any sales person, then they know they are being sold to, and always have the whip hand because they can always say no! However, all the blame should not be laid at the customers doorstep either. The Industry analysts have much to answer for, as do the consultants and systems integrators; the apparent experts, to whom customers go for advice and assistance.

Vendor success tends to be cyclical. Siebel is the biggest CRM vendor in the world, and has had a great run for the past 5 years. Everyone in the industry got behind that particular arrow head and made a lot of money. Today, you will be hard pressed to find those same experts saying anything enthusiastic about Siebel, yet "CRM" (whatever that may mean to you) hasn't changed. The customers are still there, and companies have products and services to sell to them, typically through the same channels as have existed over the past 5 years; call centres, branches, internet... The emperor needs new clothes.

So, on balance, whilst I would suggest that the vendors don't come out of this totally blameless, customers should take a reasonable share of the blame because they should know better, and the industry experts because they should know best!

Lou Valdini

Carol Parenzan Smalley
Managing Editor
www.CRMGuru.com
carol@CRMGuru.com

Graham Hill
Guru
Member

Posted 21-May-2003 03:51 AM
Reading through the various replies, they all make a similar point.

That although the vendors and their tame systems integrators are much to blame for over-hyping CRM technology, the blame also lies with gullible executives who were too willing to believe the hype and their own super-human business sense, and with the broader business press for just copying everybody else's PR releases without doing their homework.

Don't forget, when CRM started to take-off, the economy was growing at a break-neck speed, everyone had internet-fever and the stockmarket was promising everybody ultimate riches when they retired early. It was very easy to believe the hype in these rosy times. And to forget the message from failed ERP, BPR and TQM projects in the past. "This time it will be different!".

Ultimately, playing the CRM blame game is utterly pointless. The past cannot be changed and the CRM costs are already sunk. What matters is looking at what new capabilities your CRM technology has given you, how they can be leveraged to create value, and what you need to do to optimise short-term value from your CRM capabilities whilst developing opportunities to generate longer-term value.

But value is a double-edged sword. Although it obviously means the value of the customer to the company, it also means value returned to the customer. That is part of the implicit exchange that underpins all transactions in free markets. You can only extract value from the customer without returning a 'fair' amount of value to them for so long before you crash. Now that doesn't mean that you need to give the customer the whole shop for free, but it does mean that you need to understand roughly where the optiumum position is between value generated by customers and value provided to customers. This difficult value balancing act lies at the heart of Customer Value Management.

It is clear that in these cost-cutting times, many companies have pushed this difficult balance too far towards the company, at the cost of their longer-term opportunities to create future value.

It should come as no suprise that one of the critical failure factors in CRM to-date has been the failure to think about CRM from the customer's perspective and about the difficult value balancing act!

In a nutshell. Stop play the CRM blame game, it won't help you one bit. Instead, switch to playing the much more satisfying Customer Value Management game.

Graham Hill
Independent CRM Consultant

Carol Smalley
Managing Editor, CRMGuru
Member

Posted 27-May-2003 08:40 AM
Posted by Carol Smalley (Editor) on behalf of Raoul Raijmakers [raoul_raijmakers@yahoo.com]

I agree with Lou. A salesguy needs to sell. You can hardly blame him for that.

Now if an organization—after having talked to the likes of IBM, Accenture and all the other consultants—cannot get its internal act together, it shouldn't put the blame on the guys they bought their software from.

I think that the opinion of industry analysts is highly overrated. When Gartner, Forrester etc. claim that 80% (or any other number) of the CRM projects is a failure, the word is being spread and CRM becomes a three-letter word synonymous for waste of money.

In an ideal world the vendor paints a realistic picture of a success rate for the CRM Project based upon the indepth knowledge of the organization that his consulting partner/SI has gained while working on other assignments at that customers premises and in similar environments. Because that is what the added value of a consultant/SI should be, implementing best practices at new customers.

Best regards
Raoul Raijmakers
Ordina Finance Consulting

Carol Parenzan Smalley
Managing Editor
www.CRMGuru.com
carol@CRMGuru.com