CRM case studies: how the biggest businesses use CRM
No matter what type of business you have, or the size, it is likely that you have, or are considering adding, a CRM system. And CRMs are certainly a big thing when it comes to businesses in the United States. With spending on CRM currently standing at $40 billion, this is expected to hit $80 billion by 2025.
Whether you have taken the plunge or not, CRM vendors will tell you that CRMs are a must-have piece of software if you are involved in the sales or service industry. And there is no reason to question their statement; research shows that for every dollar you spend on CRM, you receive a return of $8.71. And that’s not all. As CRMs become even better at what they do, the average ROI is set to continue to rise.
The benefits of CRM
Whether you are based in the US or elsewhere, CRMs enable businesses around the world to improve and build on customer relationships, hone internal processes, boost communication and increase lead conversion rates by as much as 300%. This latter figure is one that you cannot afford to ignore. No matter how well your business is doing at the moment, with the right CRM in place, it can do even better.
But before you travel down the road to CRM, investing time and money, take the time to establish exactly what type of CRM will work best for you. Study consumer feedback and get input from employees that will use the system. You can only keep your customers happy, all-singing and dancing by putting your money into an effective CRM that is a perfect match for your needs. If you want to find your business in the ‘successful CRM implementation case studies’ category, creating a detailed CRM implementation strategy is vital. You should also take the time to look at several CRM implementation case studies, successful and unsuccessful.
Successful CRM implementation case studies
For those interested in investing in CRM software, taking a look at CRM case studies and success stories is time well spent. By looking at the way that others have done it right – and wrong – you can fine-tune your own CRM requirements strategy.
By evaluating other companies’ case studies, you can see how CRMs have enabled some of the biggest businesses to use it as they should, resulting in a happy bunch of customers and vastly strengthened customer relationships.
Let’s take a look at a couple of examples:
Here we have a company tasked with keeping track of the property and assets of as many as 70 million people. To them, customer service has to be absolutely spot on. As one of the biggest banks in the US, Wells Fargo knows that in order to maintain their competitive edge, they need to go the extra mile when looking after clients. In order to do this well, they make good use of CRM social media connectivity, enabling them to communicate easily with clients that need to talk. Their CRM is also used to make certain that when problems arise, the issue is dealt with by the correct department within the organization. This eradicates the type of scenarios where clients are sent in circles, from department to department, endlessly trying to get an answer. The result is that they build fantastic relationships with clients, achieving a customer retention rate that is one of the best.
A leading publisher in the US, Activision are heavily into the American video game market and has been so for more than three decades. Back in 2011, ‘Modern Warfare 3’ achieved the title of being the ‘largest and most successful entertainment launch in history’. Unbelievably, it made $400 million in just 24 hours! But Activision knew that money alone could not be their only measure of success. They are very big on customer service, providing an unrivaled communication service to their gamers. Their aim is to keep them happy long after the purchase is made. By using a CRM system, they monitor conversations within social media where they appertain to their products, following up to ensure that any problems are dealt with efficiently and positively. Because social media customer service is so affordable when compared to other methods, the company was able to reduce its customer service operating costs by 25%.
Failed CRM implementation case studies
But it doesn’t always go well. At times, some of the biggest businesses get it wrong when it comes to CRM, as can be seen from other CRM case studies.
Here we have a story of a fairly large consulting firm that needed some process design work carried out on their new CRM implementation. However, when they asked for help, the installation was already ongoing and the system was already being built. So why were they asking for help at this stage?
This particular CRM case study takes place a couple of years in the past. The company had made a decision to put in place the “best of breed” CRM system to automate its sales force. They also pulled in one of the world’s largest CRM consulting firms to customize the software.
But things began to go wrong. The consulting firm quoted a figure of $20 million for them to design and customize the new CRM tool. The CIO felt that this was much too high and threw the price back at them, resulting in the consultants not only reducing the price but lowering the scope of work as well; they would make the same margin but do less work. The price was cut to $12 million by removing all of the business consulting related to the technology. This included the process definition, business logic, and work flow etc. Basically, this was everything that the CRM was supposed to automate.
But the CIO made a massive error, believing that all of these processes already existed or could be developed in-house. The fact was, they did not and the company had nothing to start with. Realizing their mistake, the company began to recruit hordes of additional consultants to take care of the creation and automation of the sales and marketing systems. The systems integrator was asking them to automate content that didn’t exist. Now the budget began to rapidly expand, quickly surpassing the original figure of $20 million.
Added to this, the brief had originally been limited to dealing with the automation of order entry and other basic sales tasks but it didn’t stay this way. Now it has become an ever-growing wish list of must-have CRM features. It was decided that while they were at it, they could automate the pricing process, add a product configuration tool and integrate with the ERP.
The scope of the CRM functionality and the requirement of the business to quantity the underlying processes soon spiraled way out of control. In the end, the company spent $90 million on the CRM tool, paying the vendor $15 million and consultants $75 million!
But worse was to come. No-one in the company ever got to use the CRM as it was never successfully deployed. Years later as the economy slowed down, the company gave up on the system and finally went out of business.
What do these CRM case studies mean for CRM?
As can be seen from these case studies, CRM can either be used incredibly well or exceptionally badly.
This may be due to the fact that instead of seeing a CRM as what it is; an incredibly efficient piece of software that can dramatically increase a company’s ROI, they see it as a magic cure-all that will solve all that is wrong with the business. But a CRM only enables systems to work better. By itself, it cannot resolve things that are going wrong, but it will help a company to do things better and faster. Before any type of CRM system is put in place, businesses of all sizes need to decide how they want the business processes to work before they’re automated, and to be sure that these processes actually exist. Don’t make the mistake that the CIO made in the CRM case study above.
Spending a whole load of money on the most expensive system out there isn’t going to necessarily work unless you do your groundwork. A good idea is to begin with the basics and then add to what you have once it is working well. The most crucial part of using a CRM system is the work you do before it is deployed i.e. putting together a CRM selection team and then creating a detailed CRM requirements document, based upon precisely what your business needs. This should include the organizational and automation of everything related to customer interaction, such as marketing, sales, customer service and customer support. The right CRM for your business will analyze all customer interactions and provide you with a way of improving and building upon the customer relationship.
The CRM requirements stage is so important that it can be responsible for the success or failure of your CRM success. Getting it wrong not only costs time and money but can result in the system never actually being deployed. This in itself can be the death-toll for many businesses, even the largest.
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