The typical underlying objective of CRM practices, whether they be programs, creative, systems or processes, is to improve marketing performance and strengthen customer relationships, making them more profitable. It follows, then, that senior executives do not look kindly on marketing when CRM programs fail. The calamity and opportunity here is that 90% of CRM failures are completely avoidable with effective management and ongoing oversight.
Consider that the typical CRM architecture consists of eight layers:
The CRM framework: The intersection of internal and external systems, vendors, agencies and channels that drive CRM programs. Vendor/partner quality: The degree vendors/partners are delivering on what is needed for CRM excellence. Data collection: How information is obtained directly from customers through surveys, online forms and other vehicles across channels. Interface management: The design, creation and management of inbound and outbound customer data feeds between channels and databases. Database management: How customer data is housed and managed to support CRM requirements. Campaign management: The design, creation and management of direct marketing activities to achieve business and marketing goals. Reporting and business intelligence: Tools and deliverables that increase the transparency of operations, illustrate performance and provide customer insights. Analytics: Tools that deliver quantitative, predictive and illuminating customer insights.
Given this complex structure, typical points of failure often include inconsistent data collection causing data integrity issues, inconsistent measurement methods and lack of support on the backend, and customer data and operational processes scattered across the enterprise that limit data access and reduce the timeliness and accuracy of operations. Additionally, ad-hoc oversight and manual validation that permits routine errors and inconsistent business rules, resulting in reporting and fulfillment errors can be problematic.
The annual cost of these failures for a typical brand looks something like this:
Production and fulfillment of replacement mailings ($125K)
Development costs for correction ($135K)
Labor costs for partners to troubleshoot and correct issues ($110K)
Routine development costs due to inefficient design ($130K)
That is roughly $500K a year of unnecessary cost, not including any quantifiable negative impact on customer behavior or dips in customer satisfaction. These are recurring hard costs that cumulate year over year.
Consequently, identification and correction of CRM architecture anomalies can save businesses millions on an ongoing basis. A top-to-bottom audit performed at regular intervals reveals errors, anomalies and design flaws that are draining budget and harming customer relationships. And these errors are unavoidable. There are just too many moving parts involved to keep the players and systems from slipping out of alignment. The only question is will you catch slip-ups early with an audit or late when the CRM architecture starts to crumble and you experience systemic failure? Reported numbers will have to be recalled, the brands cannot get their campaigns out, costs soar and everyone is calling for operational change.
By proactively identifying issues, audits give vendors the opportunity to make corrections and improve their services to their clients, reducing their costs and improving CRM performance.