Everything is normal: there are known and current topics, “so famous and current” that the article is in issue number 45 of the magazine … December 1989 … twenty-seven years ago!

At that time I was European Head of Product Marketing of Personal Computers at Hewlett-Packard and I kept that number of “Harvard Magazine” until today because it was one of the elements that led me to release from Hewlett-Packard to return to Italy and starting to deal with CRM, indeed: “Database Marketing”, since the term “CRM” would have been coined by Tom Siebel only a few years later.

The fact that after so long that old article is still so present, makes ask ourselves spontaneous questions:

• What have we done in all this time?
• What went wrong?
• Why are marketing and sales productivity improvements still considered “promises of the future” and not a reality already achieved by most companies?

I started to deal with CRM for real at the end of 1990, since then I’ve never stopped doing it, though initially as owner of a Software House and then as a Consultant; I have participated in many CRM projects for Small and Large Companies in almost all market segments and I have distilled the reasons for this “so slow success” (I call it a failure!), I called it:

The seven deadly sins of CRM.

1. The first “sin” was made by Tom Siebel who baptized the software produced by his company “Siebel” just as “CRM”. The fact that then “Siebel CRM” has conquered the market of companies “Fortune 1.000” has brought too many people to identify the very concept of CRM with that of an application program, a bit like for “Ferodo” and “Frigidaire” that, born as brands, have become synonymous with “brake linings” and refrigerators. Actually, if we think well, CRM means “Customer Reletionship Management”: a thing made by everybody, in all companies, with or without automation software. The damage has been done and many people think that it’s enough to install software to make sure that all information about Customers is known and available to everyone. Experience has shown that this is not the case, and also the unsatisfactory satisfaction of Siebel CRM users should lead us to meditate on the subject.
2. The second “sin” is that very often the responsibility of CRM projects has been delegated to IT specialists, bit and byte experts, but rarely able to understand the complex marketing and sales issues. How many times have I heard from the project manager, Customer side: “I understand that this solution will not appeal to users, but all changes to the organization are OUT of SCOPE in this project …”. In other words, the biggest mistake is not to understand that the definition of a “Software to Manage Customers” is not a simple business activity, but requires strategic choices that can only be achieved with the involvement of corporate management.
3. In the third place I would put a cultural problem: even in the optimistic situation where the project team includes at least one person with a strategic vision and its powers, it is rare that this has sufficient IT skills to give realistic expectations of what Is feasible in a certain situation. If we consider that this manager will have to discuss with a technician, very good in computer science, but with little sensitivity to strategic and organizational issues, it is clear how the result is at least uncertain.
4. The fourth “sin” is accomplished by marketing and sales: often they are too busy with campaigns and negotiations to have time to stop thinking about the benefits that automation could surely bring to them; in addition, you can continue to spend money in marketing campaigns and bring orders home, even by working exclusively with paper and pencil. This is a critical point, but I wonder what has been done on the supply side to explain the benefits of commercial technology.
5. Sometimes we find real Project Managers on CRM projects, both expert and organizational, as well as computing, however it’s almost always people who are “recycled” by management projects. In this case, the mistake is not to realize that an ERP is typically “addressed to the past” in the sense that it must manage and bring back actions that have been generated in the past: an issue of an invoice, for example, is a consequence of An order that has already been taken and payment management will take place in the future, but with times and ways already defined in the past. Conversely, a CRM is aimed at the future with the aim of increasing sales and profits that will depend on actions, largely still to be decided. If you do not realize this fundamental difference, you are likely to produce “sales managers” that take time to sellers to record what they have already done, with the result of being told: “at the end of the day I’m tired to death and I do not have time or desire to get my CRM done!!!”.
6. Sin number six can be linked to the previous one: For those who have spent a lifetime trying to convince Clients to sign contracts, it may not be easy to understand that automation can also benefit them, provided they are put in Able to do so. This means explaining that the availability of a new work tool results in benefits only if our way of working will benefit from these benefits. In other words, product training and change management must put users in the position to exploit the tool in their work environment. Too often, training is limited to a simple list of functions in alphabetical order.
7. The seventh and last shame is to put CRM into operation with the precise purpose of controlling people. True, the CRM “captures the information”, so it can also be used as a mere control tool, but:
   • People do not like being controlled and boycotting CRM. What to do to a successful seller, one who sells so much, but does not want to use CRM? Would we ever want to dismiss him for this?
   • Control goes hand in hand with “punishment”: would not be better thinking “to help” those who, for some reason, have lower performance than expectations?
   • Also: it is true that CRM is a great source of statistical data, but the statistic is based on already successful event data and therefore no longer editable. The purpose of CRM should be to get better data in the future.

So CRM has failed and can we put it aside, such as daisy printers and bubble memories that have failed to pass the infant mortality phase? Surely not, fortunately, I have seen many cases where “The seven deadly sins of CRM” did not cause the bankruptcy of the project and I want to conclude with optimism: if we know the dangers that await us along the way, our chances of getting to the destination in good conditions can only increase, when it works, the CRM has economic returns that can even exceed the brightest expectations.

Carlo Scampicchio
iWIZ Srl