Wednesday, March 16, 2011

Leveraging your Organizational Capabilities through CRM for Increased Sales

Often discussed amongst organizational leaders and sales managers are some of the issues, impacts, and activities of sales forces, which are responsible for a company’s overall bottom line results. In fact, activities such as sales calls, sale's success stories, and long-term relationship building are continuing to change the way these issues, impacts, and activities are used to manage customer information, which in turn are helping to increase sales volume, identify additional customer buying habits and requirements, thus increasing customer satisfaction, organizational profitability, and competitive actions. (Raman, Wittmann, & Rauseo, 2006) identified CRM as a technological tool that can help an organizations sales force minimize some of these challenges while helping to increase returns on a sales person’s time invested in exchange for higher sales, revenues, profitability.

However, in spite of the tremendous amount of growth in CRM implementations, many people are quick to point out the high failure rates that these systems have also experienced. (Raman, et al., 2006) reported that in a survey conducted by CSO Insights consisting of 1,337 international companies who have implemented some form of a CRM system, that only 25% actually reported a significant benefit in a sales team’s performance. The most common citing found in the survey was that most of the time organizations lacked proper strategic planning that is required prior to any major system implementation such as that of CRM. Therefore, if an organization carefully plans for a CRM implementation (operational^1 or analytical^2 ) then they will be more likely to segment customers, and market more efficiently while identifying those customers that are more and/or less profitable.

Using some of the strengths and weaknesses found within the literature on a CRM implementation (Raman, et al., 2006) conducted their own qualitative study and developed a grounded theoretical model in order show organizational leaders why they should continue to focus on the CRM technology implementations. Four capabilities are discussed (1) organizational learning, (2) business process orientation, (3) customer centric orientation, and (4) Task-Technology Fit (TTF).

(1) Organizational learning- “organizational characteristics such as size, formalization, centralization, complexity, and interconnectedness on adoption and implementation of innovations” (p. 42)
(2) Business process orientation- an attempt to clarify technological innovations that an organization is considering adapting to match their existing processes (i.e. CRM, ERP, etc)
(3) Customer-centric orientation- an organization’s ability to focus on its customers wants and needs versus that of its internal structure or processes
(4) Task-Technology Fit (TTF)- the degree that technology (i.e. CRM) helps individuals position his/her tasks with that of the organizations desires in order to meet/exceed company needs

The results of (Raman, et al., 2006) study showed that most successful CRM technological implementations occurred when an organization incorporated both operational and analytical characteristics combined with the four main capabilities previous mentioned in order to help guide additional strategic long-term decision making (i.e. sales, marketing, customer service, segmentation, properly identifying profitable, non-profitable, and cross-selling customers, etc). Furthermore, the results of the study opened new doors for research opportunities for those curious to draw on the discussed model or those who want to see if different variations of these characteristics and capabilities would help or slow a CRM implementation.

Although CRM is viewed by many as a technological solution to sales and customer service (Raman, et al., 2006) also identified some of the drawbacks of a CRM implementation. One thing is certain from this review and my analysis of CRM over the last few weeks is that CRM can provide many strategic benefits to those people and organizations that understand and utilize all the tools by properly leveraging this resource to produce higher sales, returns, satisfaction, and profitability. Everyone else who does not fully understand how to build CRM into the strategic long-term plans of the organization should be cautious with an implementation of this type.

Like many of the other articles on CRM that I have analyzed over the last few weeks, (Raman, et al., 2006) proposed yet another model, along with some very interesting follow-up (qualitative and quantitative research) for others to consider who are interested in CRM. Therefore, those people like me who are interested in researching this type system additionally could use this study and model to draw their own conclusions of these type systems. It is one thing to say something about CRM or anything for that matter but actually backing up your statements with actual data is a more effective way to get people to listen. Hence, why I will continue to research and report my findings for those who are interested in this niche technological innovation and all others looking for answers that are credible.

Of course and like usual, I am always open to other opinions of the research that I report, so if you got a thought or want to chime in with some additional insight(s) please drop me a line; otherwise and until next time… Keep Smiling

1 Operational CRM involves functions such as sales, service, support, and marketing.
2 Analytical CRM technologies involve customer information that is used by all organizational departments to analyze data in order to improve business decisions and/or future actions.

Raman, P., Wittmann, C. M., & Rauseo, N. A. (2006). Leveraging CRM for sales: The role of organizational capabilities in successful CRM implementation. Journal of Personal Selling & Sales Management, 26(1), 39-53.

No comments:

Post a Comment