"CRM Done Right"

Darrell Rigby and Dianne Ledingham

Harvard Business Review

November 2004, pp. 118-129

Over the last 5-10 years, Customer Relationship Management (CRM) systems have been utilized to help bolster customer retention and reduce sales, and marketing costs. The authors of this article state that the early adopters of CRM were often disappointed by high costs and small benefits.

Over the last couple of years, more and more companies are implementing CRM, however. To understand why, a study was conducted of companies that have been successful in implementing CRM systems. Companies discussed in this article include Kimberly-Clark, aircraft parts distributor Aviall, Ingersoll-Rand, electronic connector manufacturer Molex, and Brother International. The authors report that "they've all taken a pragmatic, disciplined approach to CRM, launching highly focused projects that are relatively narrow in their scope and modest in their goals. Rather than use CRM to transform entire businesses, they've directed their investments towards solving clearly defined problems within their customer relationship cycle-the series of activities that runs from the initial segmenting and targeting of customers all the way through to wooing them back for more."

This article distills the experiences of these successful CRM practitioners into four questions that should be asked when an organization launches its CRM initiative:

1. Is it strategic? CRM should only be applied to those processes that are key to the organization's competitiveness. This provides focus and energy that would be lacking if CRM technology were implemented in other areas of organizational functioning.
2. Where does it hurt? Even within the key processes, there are specific areas that are undermining performance. This is where the focus should be.
3. Do we need perfect data? Information serves a purpose, and often the cost of complete information makes it not worth providing in real time.
4. Where do we go from here? Narrowly focused implementation of CRM often unveils additional opportunities. Further steps should be well-planned and strategic.

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