The CRM program market (known as MRM, member relationship management, in the credit union world) is huge, estimated at $48.6 billion in 2002 and growing at twice the rate for the overall software market. With so many jumping on the CRM bandwagon, caution and deliberation should be the norm in deciding whether or not to adopt the process.
Even with the most exacting analysis, today's evaluative criteria fail to look at just what it is that is essential for successful deployment of MRM. Most experts put a thorough analysis of MRM needs at the forefront of the evaluation. This is wrong. Even the best analysis of "how," "who" and "what" can do little to prevent MRM failure. According to Forrester Research, CRM has about a 75% chance of failure. It is no wonder that, according to research by the META Group, 90% of companies are re-examining the financial justification of CRM.
Broader Criteria, Better Evaluation
Why so many MRM failures? Looking at the "applicability" of the system (the first "A") in a context isolated from "accountability" (the second "A") and "acculturalization" (the final "A") is a recipe for failure. MRM requires applicability, accountability and acculturalization as absolute necessities for success.
Copious information is available to evaluate the applicability of various MRM programs. Whether modularized or comprehensive, resident software or ASP, "off-the-shelf" or customized, as well as the many other considerations, each is a function of the credit union's needs and the market's products. Applicability leads to customization to the user's needs, with even "off-the-shelf" programs providing the capability to customize the various processes required of the specific implementation. This evaluative component, though the most technical, is in fact the easiest to "get right."
Be forewarned, many different types of vendors attempt to sell MRM to their clients as a means to further lock-in their existing business or get new business, regardless of what that might be. Often, they know little about MRM, other than how to sell it.
The Misunderstood Mandate
"What is the proposed ROI?" is often the first question that financial managers ask of a MRM purchase. The standard accounting formulas don't apply regarding MRM.
Accountability for MRM needs to be evaluated using criteria that measure its potential success. Unlike business process automation ROIs, which are easy to predict, MRM remains a "soft" number. MRM ROI should encompass less tangible benchmarks, including, even, psycho-dynamics like stronger vendor relations and more eager member service sales forces. The inability to establish success criteria that take a credit union's entire operation into consideration can lead to misguided assumptions (or predictions) of failure.
Reasonable expected MRM benefits are predictions in the increase in sales revenues, increases in closure rates, increases in member satisfaction ratings and a decrease in general sales and marketing costs. These metrics apply accountability for both prediction and evaluative purposes.
The Most Difficult Predictor
Bottom-line, MRM is a sales and marketing tool, but it is not a sales and marketing panacea. Far from: MRM applied in the wrong culture is destined for failure.
MRM requires a marketing-oriented culture. If the credit union is attempting to sell the wrong product at the wrong price to the wrong market, no MRM system can fix the problem. Likewise, if the credit union culture is inward- looking, instead of outward-serving, MRM is useless.
If your credit union is considering MRM (or evaluating your current system), a thorough analysis using my "AAA Model" will provide some answers. Is "accountability" in terms of increasing sales success and reducing sales and marketing costs substantial-enough to satisfy the CFO? If you are successful, MRM will be a huge advantage. It can be a boon or a boondoggle. It's your choice.
Ron Gossen, is the principal of the Strategic Communications Group, a branding and marketing consultancy. He can be contacted at stratcomm satx.rr.com.