It’s time to move past the hype of customer relationship management. Organizations are realizing that implementing a CRM solution is tough going -— requiring serious commitment and major organizational change. However, for the companies willing to make that investment, the results are paying off.

At Canada Post, a major thrust of its CRM initiative has been about making it easier for customers to do business. Since 1999, Canada Post has reportedly spent $280 million on “”business transformation”” addressing people, processes and technology.

“”It wasn’t a systems implementation, it was a business transformation,”” says Cal Hart, vice-president of product management and business transformation for Canada Post, based in Toronto. “”We have a better view of the relationship between the customer and Canada Post.””

That includes offering differentiated service to different customers.

“”I always want my mom treated well when she calls Canada Post, but I don’t think she needs to be treated as well as a customer who spends $100,000 per year.””

Before the project began, Canada Post spent a lot of time studying CRM at other organizations, says Hart. But even then, the organization wasn’t fully prepared.

“”We spent a ton of time studying other companies. But we never learn,”” he says. Specifically, “”We needed to be more sensitive to the amount of change we’re bringing to customers and staff.””

There were challenges involved in getting customers to adopt new processes, especially if new benefits weren’t immediately obvious to them. A change “”needs to add value for customers. Saying ‘make all these changes and we’ll give you a correct bill’ isn’t enough,”” says Hart. “”Why is this of benefit to them?””

Canada Post rolled out employee training centres across the country.

“”Training is critical,”” Hart affirms. Still, staff wanted to “”cling”” to the old ways, but overall, “”the frontline employees embraced this better than we expected. We were giving them an integrated tool to do their job.””

Executive support is mandatory, and it has to be ongoing, says Hart. That’s why executives at Canada Post meet each Monday afternoon to review the business transformation.

Hart’s advice to other companies looking at CRM is to keep the technology “”as standard as possible.”” Canada Post’s implementation is based on SAP technology.

“”It’s all from SAP or SAP-certified partners, except one piece,”” says Hart, “”and that one piece has caused me more grief than the whole of the implementation. The value will show itself when it comes time for upgrades.””

Jerry Garcia, global partner for customer interaction at consulting firm Accenture in Toronto, agrees standardization is critical. A heavily customized implementation will be difficult to upgrade, he says.

“”Later on, you’ll pay for it in maintenance and upgrades,”” says Garcia.

When it comes to CRM, “”don’t rush into it,”” advises Gerry Wong, CIO at Foster Parents Plan in Toronto. His organization uses Cognos technology to manage its donor data.

“”It helps us define our customers, and how loyal they are,””says Wong. CRM should “”facilitate and create relationships,”” he says.

Canadians currently sponsor 115,000 children through Foster Parents Plan in countries from Tanzania to Bangladesh to Brazil with monthly donations, as well as gifts and letters. The operational complexity of the task is significant.

Wong says it’s important to profile customers and to understand their various points of interaction, whether that’s via mail, phone, fax, e-mail or the Web. Foster Parents Plan is working on integrating all those systems, as well as finance and payment systems. That will be particularly important as the organization plans to roll out a “”self-service”” area on its Web site in the new year, he says.

Ernex Marketing Technologies Inc. in Burnaby, B.C., provides real-time marketing solutions for clients including Eddie Bauer, Nike and Radio Shack.

“”Ernex helps identify who customers are, and communicates back in meaningful targeted ways,”” says Malcolm Fowler, executive vice-president of product marketing.

The challenge is particularly difficult for retailers, he says, compared to other organizations (such as banks, for instance) that begin their relationships knowing critical information about their clients. However, for retailers, the first interaction is generally at the cash register.

“”Retailers at the outset don’t know who their customer is,”” says Fowler.

In many cases, loyalty programs can become a CRM tool, he says. Over time, retailers can capture and understand buying history and patterns to better market to specific customers. Ernex uses Cognos tools to analyze data.

“”We enable programs in real-time at the point of sale,”” says Fowler, explaining that retailers can immediately offer service or promotions when ringing through a purchase, based on an understanding of a specific client’s history.

And while every customer should be treated well, he says it doesn’t make sense to suggest that “”the effort an organization should take with best customer or worst customer should be the same.””

“”That’s the promise of CRM, to be able to react differently depending on what a customer is spending with company,”” he says. “”All customers are not equal to the organization.””

His recommendations are:

• Establish the program around the core of the business, core values and beliefs.

• Rally management and organizational support in the store and behind the scenes.

• Keep it fresh. Tailor the message to individual customers. Test and conduct research to better understand your customers.

• Keep it simple. “”Complexity is not an asset to loyalty programs. If you can’t explain how the program works in 30 seconds to your staff so they get it, your customers don’t have a hope,”” says Fowler.

• Implement a strong point of sale strategy. The greatest interaction with retail clients is when they’re making purchases, so create a strategy around point-of-sale.

• Be upfront with a corporate privacy policy, so customers understand how you will use the information they provide.

According to Accenture’s Garcia, there’s often a “”big gap”” between corporations’ expectations for return on investment (ROI) and what actually occurs. Executives must look beyond CRM as a technology investment, “”as a way to completely transform business processes. CRM may not reap the financial rewards at the pace you expect, but if implemented correctly it will provide business stability and a customer-centric perspective.””

Of note, a recent Accenture survey reports that 91 per cent of executives said “”a greater focus on customer service and building customer loyalty is critically important, not only in weathering the economic downturn, but also in strategically positioning their business for its eventual upswing.””

Garcia outlines some recommendations for a successful implementation:

• Define the business problem first, then look for the solution. Don’t put the proverbial cart before the horse. CRM doesn’t solve everything.

• Understand that CRM is not a tool; it is a new way of doing business. Expect an overall corporate change, including training and culture. Many companies implement technology, “”but don’t change the company to align to the new CRM thinking,”” he says. “”There’s a lack of real focus on alignment.””

• Start from the top down. Your CRM project needs to be driven by corporate executives. Don’t leave it up to IT alone. Offer incentives to all staff to get involved.

“”Companies often expect people to change their behaviour, but they fail to change the compensation or rewards,”” says Garcia. “”The result is the same behaviour as before.””

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