By now, most organizations have used some sort of a SaaS application, so there’s familiarity with the basics of hosted software. But CRM applications are by their nature much more likely to be integrated with other business-critical applications, either behind your firewall or in hosted data centers, so they present some new challenges. Furthermore, applications with really rich web-services APIs (such as Salesforce CRM) can surface operational, policy, and process issues in your IT organization.

Given all this change, where should you as CIO concentrate after rollout? Here’s some practical advice. While much of this article applies to any SaaS CRM system, we’ve focused here on the specifics of Salesforce.com…

1. IT Team’s Level of Engagement - In many early parts of a Salesforce CRM project, there isn’t that much for many parts of the IT team to actually do.  After the first year, however, your team is likely to become more involved, particularly if the system is a big success. There will be demands to extend the application’s footprint (particularly towards your web site) and internal integration (generally in the direction of engineering’s support system and finance’s order management and accounting packages). This is natural as the users start working with the system as a full fledged CRM system, rather than just an SFA tool.

2. Integration and Extension - The biggest effort related to a new SaaS CRM system won’t be implementation or customization: it’ll be data and integration.  Don’t be surprised if cleaning up data and integrating with your existing systems costs more than your first-year license fees.

3. Performance and Business Continuity - In many respects, with a SaaS CRM system, the vendor is ultimately responsible for delivering on the SLA. Salesforce.com has a very good record indeed of operational continuity, and the company provides several weeks’ notice for planned downtime.  In most cases, however, the perceived performance of SFDC in your headquarters buildings will likely be somewhat slower than with an on-premises application; conversely, it will be perceived as much faster in remote offices (particularly those located outside the United States).

4. Access Control and Security - Of course, your team needs to configure the access control and security model, but it’s the vendor that is ultimately responsible for enforcement. Salesforce.com has a pretty thorough role and profile-based security model, and it can be configured for access hours, network address, and other access controls.

5. Data Quality -  As with any large system, data pollution is an inevitability. Business analysts and others will discover corrupted or duplicate data creeping into the system over time. Reports run for executives will start to show contradictory or confusing results. This is poisonous to a CRM system’s credibility.  Whether you use temporary coders, data-entry clerks, or overtime hours of internal people, set aside some budget for a health check and cleanup cycle at least once a year.  You’ll also want to devote quality time (from your team or specialized consultants) to identify the source of the data pollution problems, rectify them, and programmatically clean up the data.

6. IT Team Skills - Some of your staff will take System Administrator or Developer classes to become proficient with the details of the CRM package, of course. However, your team may also need some new lessons at a project management level, especially IT staffers dealing directly with business users who don’t know or care much about technology. As more IT pros play roles akin to business analysts, listening and counseling skills will be important.

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In helping a client understand how to reframe their internal conversations to support delivering customer experiences, we shared with them the following framework that has helped our thinking.

Systems: Companies have core systems that serve as the foundation for their efforts. The most obvious example are IT systems—ERP, accounting, CRM, and the like. Perhaps less obvious, but in certain cases quite crucial, would be facilities—such as real estate, architecture, and infrastructure.

Procedures: The policies, processes, and business rules that provide the “logic” for how the business is run. Some of this is embedded in the systems, some of this is taught to employees.

Touchpoints: The liminal spaces where engagement with customers occurs. Typically considered through channels such as in-store, call center, postal mail, or online.

Interactions: The activities in which customers engage. Any business supports dozens, if not hundreds of interactions. With a bank, you can deposit money, withdraw money, write a check, pay a bill, move money between accounts, open or close accounts, apply for a loan, etc. etc.

Experiences: The sum of what the customer takes away from the interactions they’ve had with you.

Many companies don’t intentionally plan their customer experiences, and as such, design from the inside-out.

This is particularly true when companies consider CRM initiatives. One would hope that something focused on “customer relationships” would take the customer to heart when being developed. Instead, as Edmund Tribue points out…

“Most companies have concentrated on automating processes for their internal users…But what about the customer? This mindset is perfectly illustrated by the most common CRM objectives: increase sales, drive cross-selling, minimize resources, reduce ancillary expenses, and lower the number of costly channel interactions. Those objectives indicate an inside-out view that implicitly treats the processes and internal metrics as more important than the customer.”

Customers have no idea what’s going on in those layers below “interactions”, and just end up feeling insulted and abused by these mercenary mindsets.

Instead, companies need to identify what makes for a delightful customer experience, and coordinate their interactions, touchpoints, procedures, and systems to support that.

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Far too many small and medium-sized businesses (SMBs) that take the leap and invest in CRM software fail to realize the full potential of what today’s CRM products have to offer. Here are three primary steps to maximizing CRM functionality at SMBs:

1. Critique current customer management issues.
2. Configure the CRM product so that it is quick and easy to use.
3. Make sure management views CRM as a process, not a project.

Let’s take a look at each of these three related suggestions in a little more detail and explore how they affect CRM technology usage in many SMBs.  Click here to go to the complete article.

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A Customer Relationship Management (CRM) system can boost sales, strengthen client relationships, and increase customer satisfaction-but only if end-users are on board and using the system properly.

There are two possible scenarios when implementing a CRM system: Users are excited to save time and increase their productivity with the new technology; or users are skeptical and even resistant to change, especially if a previous system was a complete disaster. Fortunately, there are best practices that can help managers win over even the most resistant end-users and help keep them committed to the technology over the long term.

Those best practices are…

1. Do your homework - Sometimes it’s prudent to hire an expert to run the implementation. The right consultant can help build consensus and buy-in from all the parties involved in the implementation, most important, the end-users. They can also send the message to the end-users that management is serious about the success of the project.

2. Set up a pilot project - A pilot project allows end-users to experience firsthand the impact that the CRM solution can have on them and gives them the opportunity to share their experience with others prior to the official implementation.

3. Ensure proper training - Proper training is the best way to reinforce good habits and regular use of the CRM system. It is also one of the most effective means through which end-users willingly adopt a CRM system or any customer-centric technology solution. The right implementation partner will have a methodology for training that matches the skill level of the individual participants within your company.

4. Lead by Example - If the CEO and the management team understand and use the technology on a regular basis, the rest of your employees will follow suit. Supportive, well-trained management and IT teams also show employees that your company cares about their success and the relationships they are building with clients.

From my experience, the best way to get end-user buy-in for a new CRM system is to include them in the CRM system selection process.  Several key end-users from the departments that will be expected to use the new system should be placed on the software selection tiger team.  In that role, they will be involved from beginning to end in the selection process.

When the 2-3 CRM solution finalists have been selected, as many of the expected users as possible should be invited to attend each vendors’ final demonstration of their solution.  It is expected that each of the CRM solution finalists have all the needed functionality, so the focus of the demo should shift to determining which solution the users would most like to use and why?  Accordingly, each end-user attending the demos should be asked to rate and comment on the usability of each solution alternative.  Having the end-users involved in selecting the solution they would like to use will certainly increase the likelihood that they will use it.

Of course if the solution selected is not the one that the users liked the best, then there better be a good reason and the four suggestions outlined earlier in this article should come into play.

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Customer support VPs may have to manage a range of customer-facing functions such as order-taking, shipment expediting, installation and field service appointments, as well as technical or warranty support. Each of these functions should have direct access to the Customer Relationship Management (CRM) system, but the specific information needed (and transactions performed) are quite different across these Customer Service (CS) roles.

If you’re using salesforce.com (SFDC), what decisions will you have to make? How should you measure success? Here are some customer support executive guidelines for the first few months of system usage. While much of this article applies to any modern CRM system, we’ve focused here on the specifics of salesforce.com.

Integration is a key success factor…

Unlike traditional call center packages that “grew out of” advanced telephony gear (PBXs, ACDs, etc.), salesforce.com was not designed to center on telephone conversations. Indeed, many of their customers use web, e-mail, and IM extensively for customer support interactions. So if your CS operation is highly dependent on the phone, job one will be obtaining an AppExchange CTI plug-in for your telephony system. Fortunately, there are several of these available (and some are free).

Evaluate the plug-ins for their depth of integration and the amount of data they automatically insert into SFDC records with each call. The larger and more distributed your call center, the more you’ll appreciate the automation provided by the better CTI plug-ins.

Depending on the function of your customer support reps (CSRs), they’ll need access to information that’s outside the purview of SFDC. You will need to access the Force.com platform APIs to facilitate integration with external systems.

You can probably get away with a periodic batch update in most cases. However, probably 10 percent of the data changes frequently, so some real-time integration will be required. While SFDC’s APIs and 3rd-party integration connectors fully support closed-loop integration, there are implementation and maintenance costs involved. The depth of integration you use is really a business decision, and most of our clients choose their integration approach on a screen-by-screen basis.

Customer Self-Service is King

It’s ironic that in some industries, a well-executed customer self-service portal can achieve higher customer satisfaction scores than “more people on the phone.” While this may not make CS professionals feel all warm and fuzzy, the cost savings and time efficiencies cannot be ignored.

A well-executed customer portal lowers the company’s costs, gives customers 24 × 365 access to the information they need, and reduces the error rate associated with support information.

SFDC’s Customer Self Service portal (part of their Service Cloud offering) is a great foundation for this, but it can’t just be a “click and run” proposition. You need to spend some time to really integrate it into the rest of your website and your business processes. It’s critical that you get customers directly involved to test and refine portal usability. Skimp on this step, and you’ll miss a huge opportunity for improving customer satisfaction at virtually zero incremental cost.

Although high-tech customers become very comfortable interacting with portals, do not implement a self-service portal as a “slash cut” that removes phone support. Introduce the idea gradually, letting customers naturally drift over to the customer self-service portal. As more of the support volume shifts to the portal, you’ll get suggestions for refinements to make it even easier and faster for customers (and in the long run, cheaper for you). Once 80 percent of your “call volume” is handled through the portal, you can provide some incentives (such as lower costs or better service levels) to cement the customer behavior.

Measure the Right Things

Installing a CRM system across all your CS functions provides a range of measurement capabilities that can be overwhelming. Don’t let yourself get caught in information overload, or worse, detail that leads to micromanaging behavior.

With the right AppExchange plug-ins for system integration, reporting, and dashboards, you can focus on the things that measure customer satisfaction and loyalty — the things that really matter to the business.

Focus on measuring the customer experience — and how that effects their satisfaction. Extend salesforce.com to bake in as many measurement points of the customer’s behavior as you can. Click-path analysis in the customer self service portal tells you a lot about things to improve in your operation. Online surveys (keep them short!) at the end of every customer interaction help you develop a wholistic picture of your customer relationships as they evolve.

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Like many users of technology today, I have developed an essentially dysfunctional approach when things don’t work properly: I do whatever it takes to avoid fixing it. I wait to see if it ‘fixes itself’. I make a workaround. I live with it till the next upgrade. Or I just use something else. It’s only when I absolutely can’t function without resolving the problem that I take a deep breath, grit my teeth, and embark on the quest to find a solution.

My worst nightmare is to find myself in the kind of situation frequently described in anguished blog posts by victims of Google, Amazon or eBay glitches and terminations.

As is the norm when these mass-market automated online services fail, the victims discover there’s no information to be found anywhere as to what was the cause, when normal service would be restored, or what actions they can take to resolve the problem.

The common theme with all these stories is a fundamental flaw with the business model of cloud services, which is predicated on fully automated systems — fine when everything works as expected, but not fine when the failure is unexpected, unbudgeted or involves parameters the developer didn’t think of when the system was designed.

At least with cloud services, you can often hope that an operational problem will indeed ‘fix itself’, because the cloud provider may well be working behind the scenes to correct the fault. In that respect, it’s better than when I have a recurring problem on my own PC, where the only resolution to expect is that it will cascade to a worse fault that I can’t put off fixing (in which case I’ll end up stuck in an automated support purgatory at Microsoft or HP’s website). But if the cloud problem is a mission critical fault like a lost RSS feed or a failed payment service, then you can’t afford to wait — and if the root cause is an account problem rather than something in the infrastructure, that’s where the cloud model really falls down.

What these web giants need is an automated customer response system that acknowledges the possibility of exceptions. Instead of setting out to eliminate all human contact, they should explicitly allow for human interaction to investigate and resolve those problems that the system’s designers haven’t allowed for. Each problem resolved should then be analyzed to see how it can be eliminated by enhancing the automation — thus the human intervention becomes part of an iterative self-healing process through which the automation adapts to experience. It’ll cost more in the short-term, but long-term, it’ll enhance customer satisfaction and sales.

Another way to keep costs down is to do a better job of integrating online and community help systems — and being open about their capabilities and limitations. I know from my own experience that I’m often reluctant to investigate a problem online because I’m not familiar with the online process, which breeds mistrust. How long will it take to get a response? Will it answer my question? What do I do if it doesn’t? I was impressed earlier this year with a briefing from community help platform provider Helpstream, which allows vendors to set business rules so that, for example, a question posed to the community can be converted into a case for resolution by an agent if it hasn’t been answered within two hours, or if the originator isn’t satisfied with the response. It is also working on processes that automatically monitor community response and its effectiveness, for example by measuring satisfaction levels for specific pieces of advice.

More than any of these acts, though, the most constructive change would be to get rid of the mindset that leads these Web giants to belittle the circumstances of its ‘consumers’. Is it unreasonable of us to expect to be notified if our account is being cancelled, or to want to know how long you think is acceptable for us to have to wait for a satisfactory answer to a support request? We are individuals — many of us with serious business dependencies relying on our usage of your services — and if you don’t treat us with respect then sooner or later we’ll take our patronage elsewhere.

Anthony Nemelka, of HelpStream chimes in on the subject by noting the following in his blog post, It’s Time to Move From the Email Era to the Facebook Era:

In his book, The Effective Executive lauded by The Wall Street Journal as perhaps the best business book ever written, Peter Drucker explores this concept of “automation” and its counter balance, “exception handling”. As Drucker puts it, “[organizations] solve generic situations through rule and policy …. [but need a] way to test whether the assumptions on which a decision had been made are still valid or whether they are becoming obsolete and need to be thought through again…. Failure to go out and look is the typical reason for persisting in a course of action long after it has ceased to be appropriate or even rational.”

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Last summer, my American Airlines flight from San Francisco to Miami was diverted to Los Angeles for mechanical problems. By the time the plane finally arrived in Miami — five hours late — many passengers, including me, had missed their connections to South America.  American knew, of course, what each person had paid for the ticket and their frequent-flyer customer value status.  But everyone was treated exactly the same as they left the plane in the middle of the night — that is, badly: no hotel vouchers, no help with luggage that had been checked through (and locked up). It didn’t matter if you had paid more than $10,000 for a round-trip ticket to Sao Paulo or a few hundred dollars for a domestic coach ticket.

With the number of airline-issued credit cards, grocery-store club cards, department-store credit cards, and reward accounts with hotels, airlines, and car-rental agencies, companies have tons of information about their customers and their purchase patterns.

But almost no companies use that data strategically.  By “strategically” I mean using information to identify their most profitable customers and figure out, by running experiments, what to do to capture a larger share of the customers’ expenditures on a given category of product or service.

Why so little use of information?…

As Usama Fayyad, former chief data officer at Yahoo! commented, most senior leaders don’t see data as a strategic resource and competitive weapon but just as part of the boring IT infrastructure, something IBM handles. Both Fayyad and Loveman recognize that a company’s ability to use information to gain competitive leverage is not about having data warehouses and data analysis software — that’s necessary but largely insufficient for achieving business results.  Instead, gaining strategic advantage entails:

1. Recognizing the potential to use information to gain business intelligence;
2. Asking intelligent questions of the data;
3. Using the data to segment your customers so you can treat them differently on a moment-to-moment basis; and
4. Running and analyzing experiments to continuously learn how to make your marketing more effective.

This year, my two trips to South America for consulting gigs won’t be on American.  If I’m not going to get much for my platinum status, I might as well try a different carrier. Another customer lost — but I don’t think American Airlines will even notice. This lack of attention to customer data is one of the reasons that U.S. airlines, grocery stores, and other companies have such poor financial results.

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Here are several excerpts from a very informative blog post by Phil Wainewright, How to Fail with Cloud, SaaS and Enterprise 2.0 :

Gartner analyst Michael Maoz blogged yesterday Why your Twitter and Social CRM efforts will fail. It’s an insightful post and one that, by coincidence, shares a theme with something I posted yesterday, Hybrid cloud or half-hearted kludge?

Both these posts are warning of the dangers of adopting the new without fixing the underlying problems in the old — in the processes and technologies we’re already using.

Michael’s post makes the enormously valuable point that, in our embrace of automation over the past two decades in sales and customer service, “We’ve done our best to stop listening to the customer.” No wonder those customers have started talking to each other, seizing the social power of the Web to find the information and resolutions that have become too difficult to obtain direct from their suppliers. Finally, this hubbub of electronic chatter has reached such a volume that businesses have started to sit up and take notice, realizing they should join that conversation. But isn’t that just so ironic? Michael writes…

“… we focused intense effort on lowering costs through extreme self service, draining away our ability to listen, and now that we achieved what we set out to achieve we want to go back to the beginning and learn to listen.”

But instead of just adding this extra listening activity, he argues, shouldn’t we also be re-evaluating all those non-listening processes that we’ve built up over the years? “[Unless you] rethink the effectiveness of your many interaction channels (not their efficiencies), it is unlikely you will find your listening skills, or bottom line, much improved,” he concludes.

That conclusion chimes with the central theme and conclusion of my own post, in which I examined the ways in which enterprises can adopt a ‘hybrid cloud’ model:

“… we all need to be much more aware of how pervasively the old, enterprise-centric way of doing things permeates all of our thinking and habits … A constantly recurring theme in the evolution of SOA, cloud and the Web has been the misplaced imposition of trusted, existing structures onto emergent patterns of interaction. This applies with special emphasis to hybrid clouds — build them to fit with your existing, unchanged infrastructure and you’ll get little-to-no benefit. Change your enterprise to really leverage the cloud and nine times out of ten, you won’t have any further use for a hybrid model.”

You could substitue the term ’social CRM’, ‘Enterprise 2.0′, SaaS, or any other buzzword of the connected Web for the word cloud in the following conclusion, and it would remain as valid a sentiment:

“… I sometimes get impatient with people who look no further than the end of their nose and say they’ve embraced the cloud when they’ve barely begun the journey. The inevitable result of such thinking is they end up with some half-hearted kludge that’s motivated more by a desire to avoid too much change and disruption than really seizing the opportunity presented by cloud services.”

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The highly customer-centric world of social customer relationship management (CRM), which allows businesses to interact and collaborate with customers and respond to their needs in a way that encompasses the growth of social media, is on the rise, Gartner’s expert on CRM, Ed Thompson, has told siliconrepublic.com.

In recent years, CRM has undergone significant change, moving from database-led applications in the hands of a few, to an all-encompassing corporate asset that feeds neatly into accounting and enterprise resource planning (ERP) applications.

“There are three kinds of CRM in the world today,” Thompson a distinguished analyst at Gartner who was in Dublin recently, explained. “There’s operational CRM, analytical CRM, and now there’s collaborative CRM. But what is collaborative CRM?

“Collaborative CRM, or social CRM as it is becoming known, is effectively traditional CRM attuned to a world where customers and businesses live pretty much face to face.”

“In the past 10 years, less than 10% of CRM budgets were invested in the social aspect, but the rise of services such as Twitter and Facebook are hard to ignore, but also hard to define. Traditional CRM budgets are shifting towards social CRM applications, but I would advise CIOs not to take their eye off the traditional analytic aspect of CRM…

“More than ever before firms will have to analyse what their customers are doing, what their customers actually want. More than ever before behavioural patterns will matter, so analytical CRM and social CRM could prove decisive in future sales campaigns.”

Thompson said it is hard to ignore the rise of social-networking sites such as Facebook, which has some 200 million users, but also the Asian social networking site QQ.com, which has even higher subscriber numbers at 300 million people.

The most obvious shift in the software world that is changing the face of CRM and helping CIOs adapt to the world of cloud computing is the move in the direction of software-as-a-service (SaaS), which is dominated by salesforce.com, as well as the software-plus-service (S+S) model espoused by Microsoft.

“Trendy business collaboration services such as LiveMeeting and WebEx, they are all cloud computing. My feeling is that it’s not going to be an either-or scenario; businesses are going to end up with both internally hosted applications and cloud computing applications. SaaS is here to stay, but not everyone will go 100%.

“The real money to be made is in the area of integrating SaaS and non-SaaS applications.”

Returning to social CRM, Thompson said the technologies for using CRM tactically alongside social-media sites and services are still on the fringes, and firms would be best advised to walk before they run.

“While we’re all focused on this Twitter and Facebook stuff, firms are wondering how they’re going to be making money out of this. If you’re a business rather than a consumer, you’ll wonder what your sales and marketing staff will do with this stuff, apart from making idiots of themselves.

“But look at how Twitter is emerging as a search tool. What about tools that identify the key influencers? These technologies sit on the fringe, and because they are evolving so fast, businesses are afraid they’re not keeping up.

“On the one hand, tools are emerging online that allow you to build in Twitter interfaces to deal directly with customers. Another way is to look at tools that allow companies to synchronise with all social networks, such as Ping.fm, which is a micro-blogging interface that can sit on an iGoogle interface and that works with sites such as LinkedIn, Facebook and Twitter.

“Other organisations, like Contact Networks which was acquired by Thompson Financial and Tacit which is owned by Oracle, involve extranet tools that allow businesses to keep track of various email traffic streams and see who was last talking with whom.

“Push technologies are also being studied by airlines such as American Airlines and Virgin to find ways of making better use of their air miles.

“Add-ons, such as a product called Initiate are being used by Mars and Lego to find new revenue streams using social media. Did you know that Mars makes more money out of products like dog food than it does from chocolate? Did you know that Lego recently sold 50,000 units through a word of mouth campaign on social networks?

“At the end of the day, businesses need to realise that marketing will be impossible without social networks in 10 years time.

Clever use of CRM and rising technologies like session initiation protocol (SIP) will enable businesses to facilitate social networking among people on the same flight or attending a networking event, for example,” Thompson concluded.

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It’s a known fact that it costs five times more to gain a new customer than it does to retain an existing one.  So why do companies seem to invest more time, money and effort in the former, when the latter is what will really keep them afloat?

“According to Bill Drury, as reported in Communications Expert Coaches Professionals on Client-Retention,  a 5 percent increase in customer loyalty can improve long-term profitability by 80 percent.’”

So maybe it’s time to focus on customer service, customer service, customer service.

“In a recent presentation by Drury, he reminded people to ‘remember the duck, which seems to glide smoothly on the water but is paddling furiously underneath.’”

In other words, maintain a smooth exterior with customers no matter how hard you have to work behind the scenes to make that happen and to keep them satisfied, and no matter how difficult they may be.

Darrell Griffiths, in Quality Customer Service During a Recession Insures Customer Loyalty makes 10 excellent suggestions to help companies do just that…

1. Always tell your customer what you CAN do for them. Never tell them what you CAN’T do for them.
2. If customers are angry, let them vent at you first.
3. Diffuse anger by saying “I understand that you feel upset or angry.”
4. Remember the customer’s name and use it at various points in the conversation.
5. Make sure you present an acceptable solution to the customer’s problem. Get their consent and agreement.
6. Always end each contact with a “Thank you” or a message of appreciation for their business.
7. When speaking to a customer, make certain that your tone of voice matches your words.
8. Make sure you are actively listening and wear a smile even while on the phone!
9. Follow up on your solution.
10. Ask if there is anything else that you can do for your customer.

Drury sums up the importance of focusing on doing whatever it takes to keep customers happy:

“Ensuring customer satisfaction is the best marketing a company can do… since a satisfied customer will tell approximately three people about their good experience with a business. A customer with an unresolved issue will tell about 11 people and an angry customer will tell as many as 20.”

So be the duck when it comes to customer service.  It may just be the reason you stay afloat.

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