Gartner guru explains CRM failures

TORONTO — Fifty per cent of customer relationship management projects will fail over the next five years, a Gartner analyst told a crowd of Canadian technology executives at the company’s Symposium/ITxpo.

Walter Janowski said too many corporate enterprises continue to take an ad-hoc approach to CRM that doesn’t involve key departments or take into consideration customer expectations.

“Too many companies fall victim to what I call Airplane Magazine Syndrome,” he said. “The CEO’s on a plane, he picks up the airline magazine and reads in a page-and-a-half everything you have to do to put CRM in your company. Then he goes back to the organization and says ‘We have to get on this’ without really thinking it through.”

At one insurance company client, for example, adjusters were able to process twice as many claims after a sales force automation package had been implemented — but the back-office was still only able to handle one claim at a time. The result was a growing backlog that so concerned senior management that the back-office staff was asked to prepare weekly reports on their progress. This exacerbated the problem even more, Janowski said.

These problems are best solved by a good steering committee that includes participants from other divisions, Janowski said, but only if they are given the authority and budget to make a real difference. But even in organizations where these sorts of groups have been set up, the analyst said many firms leave out a critical element.

“I remember going into a boardroom where there were all these guys in suits and they said they knew all about CRM and had everything in place — it was almost like they were saying ‘What can you tell me about CRM?’ Then I asked them, ‘Who’s the customer advocate on your steering committee?'” he said. “Then the notebooks started to come out and they started writing things down.”

Indeed, even technology solutions that seem to address customer issues take the wrong tack, according to Janowski. He used the example of interactive voice response (IVR) systems in call centres which seem to create efficiencies but annoy many customers. “Automating call centres is something people usually do so that they can get rid of some staff and cut costs without hurting the customer,” he said. “Isn’t that odd, to pursue a strategy just so it doesn’t make the customer relationship worse?”

Like most CRM experts, Janowski urged the audience to make customer interaction consistent across the various “touch points” or channels. If a customer responds to a direct mail campaign by contacting the call centre, for example, the call attendant had better know about the mail campaign. Perhaps more important, however, he said companies need to take a more analytic approach to the data they gather to ensure they deal with each customer properly.

“Sometimes a very intimate relationship with a customer means I know enough about him that he wants to be left alone,” he said. “Sometimes ‘no-touch’ can be an effective form of personalization.”

In a breakdown of CRM adoption by industry, Gartner estimates that about 90 per cent of all technology companies have some sort of strategy in place, while the construction industry, at five per cent, has the least adoption. That’s because Janowski said CRM works best in global industries that involve many different channels and deal in commodity-style products.

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Jim Love, Chief Content Officer, IT World Canada

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