Companies have experienced more pitfalls than expected in creating customer relationship management systems that not only work, but also are successful in creating a direct-marketing connection between customers and brand marketers.
Statistics show that over half of all CRM efforts have failed over the years. Consumer packaged goods companies, in particular, face hurdles due to the lack of face-to-face marketing.
One of the biggest problems is that companies often leap before they look, said Sue Handeman, a CRM specialist at RCG Information Technology, Edison, N.J., a provider of IT services.
"Entering into CRM causes many changes, not just in terms of technology, but also in terms of company culture. It can be very complicated because it's changing the way you think about your customers. The cultural aspects of adopting CRM are rarely thought out sufficiently," Handeman said.
Keeping a CRM initiative on track is also difficult because companies must deal with such a large amount of customer data. To overcome this obstacle, companies should focus CRM efforts on what Handeman calls "low-hanging fruits," or when customer-response data is utilized to execute on levels below the grand scale.
A skillful way to use CRM involves customer self-service, Handeman said. "There is inexpensive technology out there to set up this type of service, and it is more productive for customers to help themselves. And it is much cheaper than hiring an another customer service representative," she said.
Handeman also noted that companies can utilize CRM more effectively by becoming more pro-active in their marketing efforts. Instead of telesales, marketers could use push-e-mail, which could lead customers directly to online promotions and product information, she said.
Finally, one of the most important tips in creating a lasting CRM system is to update customer information constantly, Handeman said.
One company that says it's handling CRM efforts successfully is Kraft Foods, Northfield, Ill., which integrated its sales force in the mid-'90s to interact with customers more efficiently.
Kraft's CRM initiatives are dedicated to "driving profitability not only for ourselves, but also for our customers' businesses," according to Tom Sampson, vice president of category sales and strategy.
Kraft has developed specialized customer business teams to create stronger, more personalized relationships with its individual customers.
"We've created a fully integrated network for servicing customers' needs," Sampson said, adding that Kraft's teams are set up vertically to aid customers at the headquarters level, all the way down to sending sales associates into the stores to aid in promotional planning throughout the year.
For a company that handles thousands of customer calls per day, Sampson noted that Kraft's creation of customer teams has been the cornerstone of its CRM efforts.
Another CRM success story is Heinz Sales Co., Pittsburgh, which handles sales of all Heinz's branded products. In the past four years, sales efforts at Heinz were radically streamlined into one organization dedicated to forging closer relationships with its customers.
Dave Moran, president of Heinz Sales Co., said the company's CRM efforts lie in a four-part plan: structure, people, process and systems. The company structures its sales force around its customers, creating sales teams that focus on single customers, as well as creating common policies throughout the company.
As far as people are concerned, Moran noted that the company looks for associates with good listening skills, as well as those with the ability to plan ahead to incorporate category growth for customers.
Moran noted that the company brings in customers to aid in the planning for product promotions, pricing and sizing, which both solidifies relationships as well as keeps Heinz in touch with what its customers want.
On the systems front, hsc.com, the company's sales Web site, is a fully inclusive, integrated portal that houses all sales and promotional information for the company. According to Moran, the site has helped cut costs and will ultimately be a site where customers can access information and have their questions answered.