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The CRM industry used to be fun. High-tech as hell. Marrying new technology to white collar, fun functions—especially sales and marketing. No need to muck around with messy, tedious, back-office operations stuff. But then, reality struck. Turns out we couldn't change much about our relationships with customers without changing front office and back office alike. A fact that clients started waking up to, long before the CRM industry did.
To cite an excellent example, a multi-divisional global client approached High-Yield Methods recently about a CRM implementation to be focused not on sales, marketing or even on customer service—but on "order-to-cash." It seems that the biggest "hurt" for their customers is receiving non-conforming invoices, statements, payment terms and related services from each business unit, each of which uses a separate accounting system—and not receiving the leverage they deserve for being large customers.
In response, this client's CRM strategy is based on making any internal operational and technology differences opaque to their customers—so customers feel they're dealing with one company—and rolling up billing so that customers do get the consideration that their aggregate business with this company should earn them. While some of us may delight in such a challenge, unfortunately, the CRM "industry" as a whole still wants to keeps its hands clean of such messy, blue-collar stuff.
What a turn of events. From the nascent days of CRM, the business has been all about making money from CRM—selling it to clients—rather than making money for the clients by dealing with the likes of "order to cash." Vendors galore swooped down on unsuspecting companies and dove right for their wallets: "Who cares how well it really works?" was the attitude. "Let's sell the sizzle, get paid and go onto the next deal." A horrific amount of money changed hands, much of it benefiting CRM vendors only.
Of course, that wasn't the whole story. There were responsible vendors out there. And there were many rational companies that approached CRM as a business strategy for adding value to the company by adding value to customers. And most importantly, there were many very successful CRM implementations that created tremendous amounts of new value for implementing companies and their end customers.
But these happy stories tended to occur off in the wings, not on the main stage. The industry focus was on the big players—the vendors, ironically—not on the customers. And when a business sector is all about sellers, not buyers, bad things inevitably happen.
But now good things are bound to happen. Why? Because it's no fun looking at dead or dying former heroes. The companies that made up the short-lived CRM super-industry are now mostly writhing in economic pain—or just plain dead—like the bad guys in a shoot-em-up John Wayne movie. And now that the huge distraction they caused is declining, we can get about doing things right—companies making money with CRM rather than vendors making money from CRM—in other words, refocusing on doing CRM right rather than on selling it.
And this new focus will undoubtedly bring some interesting truths to light, such as:
- Implementing CRM is hard work, damn hard work.
- Implementing CRM correctly requires a refocusing of the whole company on customers, not just making the front-office more customer-friendly.
- Good CRM implementations start with development of customer-centric business strategies, not just sales and marketing strategies.
- Changing business process, not just sales and marketing process, is how we bring new business strategies to life.
- Technology changes required to support new customer-centric business strategies occur in the back office as well as the front office—and are hardly limited to adopting CRM software.
The sum of these truths is that implementing CRM is a "whole company" initiative, not something limited to sales, marketing and service.
Now, in years past, if I had included in one of my CRM conference presentations a discussion of order-to-cash as a CRM focal point, my audience would have been somewhat mystified. But my peers (who hung around my sessions waiting to see what "outrageous" thing I was going to say next), would have been foaming at the mouth. All I'd hear afterward would be wounded cries of, "Why are you making CRM more complex than it has to be?" "Our software buyers don't want to hear that" and "You're stretching out the sales cycle so it takes years to close a deal."
The good news is that most of the complainers are now in other lines of work; CRMGuru's CustomerThink Summit, where such discussion has always been welcome, is about the last CRM conference left standing; and CRM implementers are more and more prepared to challenge the "front-office boundary" that vendors built around CRM to help them sell their wares.
And these recent events—particularly the willingness of an increasing percentage of CRM implementers to regard as CRM-related anything that impacts customers—make me very optimistic that we're finally ready to put away our white collar approach to CRM and become working stiffs, to get elbow-deep in often unpleasant implementation requirements and to fight our way through the inherent difficulties of implementing CRM in order to achieve the much greater inherent benefits. CRM is very much a case of "No pain, no gain." And it feels as though we're finally getting ready to accept the pain.
By Dick Lee, High-Yield Methods
The CRM industry used to be fun. High-tech as hell. Marrying new technology to white collar, fun functions—especially sales and marketing. No need to muck around with messy, tedious, back-office operations stuff. But then, reality struck. Turns out we couldn't change much about our relationships with customers without changing front office and back office alike. A fact that clients started waking up to, long before the CRM industry did.
To cite an excellent example, a multi-divisional global client approached High-Yield Methods recently about a CRM implementation to be focused not on sales, marketing or even on customer service—but on "order-to-cash." It seems that the biggest "hurt" for their customers is receiving non-conforming invoices, statements, payment terms and related services from each business unit, each of which uses a separate accounting system—and not receiving the leverage they deserve for being large customers.
In response, this client's CRM strategy is based on making any internal operational and technology differences opaque to their customers—so customers feel they're dealing with one company—and rolling up billing so that customers do get the consideration that their aggregate business with this company should earn them. While some of us may delight in such a challenge, unfortunately, the CRM "industry" as a whole still wants to keeps its hands clean of such messy, blue-collar stuff.
What a turn of events. From the nascent days of CRM, the business has been all about making money from CRM—selling it to clients—rather than making money for the clients by dealing with the likes of "order to cash." Vendors galore swooped down on unsuspecting companies and dove right for their wallets: "Who cares how well it really works?" was the attitude. "Let's sell the sizzle, get paid and go onto the next deal." A horrific amount of money changed hands, much of it benefiting CRM vendors only.
Of course, that wasn't the whole story. There were responsible vendors out there. And there were many rational companies that approached CRM as a business strategy for adding value to the company by adding value to customers. And most importantly, there were many very successful CRM implementations that created tremendous amounts of new value for implementing companies and their end customers.
But these happy stories tended to occur off in the wings, not on the main stage. The industry focus was on the big players—the vendors, ironically—not on the customers. And when a business sector is all about sellers, not buyers, bad things inevitably happen.
But now good things are bound to happen. Why? Because it's no fun looking at dead or dying former heroes. The companies that made up the short-lived CRM super-industry are now mostly writhing in economic pain—or just plain dead—like the bad guys in a shoot-em-up John Wayne movie. And now that the huge distraction they caused is declining, we can get about doing things right—companies making money with CRM rather than vendors making money from CRM—in other words, refocusing on doing CRM right rather than on selling it.
And this new focus will undoubtedly bring some interesting truths to light, such as:
- Implementing CRM is hard work, damn hard work.
- Implementing CRM correctly requires a refocusing of the whole company on customers, not just making the front-office more customer-friendly.
- Good CRM implementations start with development of customer-centric business strategies, not just sales and marketing strategies.
- Changing business process, not just sales and marketing process, is how we bring new business strategies to life.
- Technology changes required to support new customer-centric business strategies occur in the back office as well as the front office—and are hardly limited to adopting CRM software.
The sum of these truths is that implementing CRM is a "whole company" initiative, not something limited to sales, marketing and service.
Now, in years past, if I had included in one of my CRM conference presentations a discussion of order-to-cash as a CRM focal point, my audience would have been somewhat mystified. But my peers (who hung around my sessions waiting to see what "outrageous" thing I was going to say next), would have been foaming at the mouth. All I'd hear afterward would be wounded cries of, "Why are you making CRM more complex than it has to be?" "Our software buyers don't want to hear that" and "You're stretching out the sales cycle so it takes years to close a deal."
The good news is that most of the complainers are now in other lines of work; CRMGuru's CustomerThink Summit, where such discussion has always been welcome, is about the last CRM conference left standing; and CRM implementers are more and more prepared to challenge the "front-office boundary" that vendors built around CRM to help them sell their wares.
And these recent events—particularly the willingness of an increasing percentage of CRM implementers to regard as CRM-related anything that impacts customers—make me very optimistic that we're finally ready to put away our white collar approach to CRM and become working stiffs, to get elbow-deep in often unpleasant implementation requirements and to fight our way through the inherent difficulties of implementing CRM in order to achieve the much greater inherent benefits. CRM is very much a case of "No pain, no gain." And it feels as though we're finally getting ready to accept the pain.
Consultant, author and educator Dick Lee is founder and principal of High-Yield Methods , a Twin Cities-based consulting firm that helps clients globally manage CRM implementation. HYM views CRM "holistically," taking it beyond technology to also include developing customer-centric strategies, redesigning business process and aligning strategy, process and technology. Lee co-authored the research report, Customers Say What Companies Don't Want To Hear . You may reach him at dlee@h-ym.com .
