With 2003 just underway, the good news is that we've made it through 2002 - the year in which the light at the end of the tunnel was actually the headlamps of the oncoming train. Even better news is that over the last two years, we've managed to put most of the technology hype behind us and it's the businesses which operate within realistic parameters delivering solutions now, instead of the promise of jam tomorrow, that are flourishing. We're back to REAL business principles where performance is what matters and results are everything.

past mistakes
Over the past few years, customer relationship management (CRM) has developed a bad name because, quite frankly, it didn't do what it was purported to. Or if it could do it, it took so long to set up that many companies were still implementing over a year later. Two of the key reasons are because of the one-size-fits all approach vendors took, and the challenge of integrating the CRM software with back office ERP systems.

In a tough market, effective customer management is imperative to make every transaction count….and, unfortunately, that is exactly where CRM technology has failed to deliver. In fact, CRM has garnered such a bad reputation due to non-performance and a lack of real-time business value that some companies don't consider it a viable option anymore. With the findings of well-respected research firms, such as Gartner Inc. and Meta Group Inc., stating that anywhere from 50 percent to 80 percent of CRM implementations fail, it's easy to understand why.

Intelligent companies have now realised that workable CRM is built around knowledge of a key vertical by companies with experience in that same sector. In this case, that means distribution and using a single system combining both CRM and ERP in one solution.

distribution CRM
The key to CRM in the distribution market is that it cannot be seen as a business project owned solely by marketing and sales, or only as a technology project owned by IT. It must be seen as a way of doing business which is backed by the organization as a whole, owned by the entire company and integrated into all tools that involve customers. It is about every element of the company working together to ensure effective customer management and ensuring customer interaction processes extend seamlessly beyond the front office, to the back office and across the enterprise.

Ultimate success requires a commitment from top management to build CRM into the core strategy of the company. An effective CRM implementation will change the way that the business behaves and therefore transform the way that the people within the business work. The most critical aspect of CRM is the relationship that you establish with the customer for which organisations cannot rely on a robust IT infrastructure alone. As the employees will be the ones to initiate and maintain those crucial customer relationships, it is essential that they know how to interact, influence and service your customers.

In addition to this, your technical infrastructure should support the change of mindset within the business. The system itself should store and manage the knowledge needed by the individuals working with the customer base. This helps good people to perform above their latent ability. The infrastructure around them manages the customer intelligence, delivering it to the relevant employees just when they need it.

Traditionally CRM software has been designed from a B2C angle in sectors such as financial services & utilities. However, as we all know, for distributors the model is B2B. For example, CRM technology for the distribution market needs to view customer contacts in the context of their roles within the business, as opposed to the individuals themselves. In distribution not only must the CRM solution provide instant access to the commercial transactions that sit at the heart of the customer relationship, but also be able to amend and reprocess those transactions in real time to meet customers' changing needs.

Delivering information to people in real time and in the context of their current task is a key part of a distribution CRM solution. In reality, legacy CRM has been about analysis and delivered static data. This is not good enough in the distribution market where information must be up-to-the second to prevent common situations such as a distributor unwittingly providing two quotes for the same item to the same customer and in effect bidding against/undercutting itself.

By linking and integrating its system in real time with those of its customers and suppliers, the distributor is able to better manage the interaction and relationships with these parties, as well as the supply chain as a whole. For example, it would mean that the system would be able to actively track orders 'in peril' along the supply chain enabling the delivery of real time context sensitive alerts about the threatened order to the relevant people in the business so they could take action. This might be an alert displayed on the screen of a customer services individual during an interaction with the customer, plus an email to the account manager advising a call to the customer notifying them of the problem, and an XML message to the customer's ERP system updating the delivery date.

As with any other business strategy, there are best practices for CRM. But don't expect them to function as a gift-wrapped recipe for success. They have to be applied in a way that fits your business model and its strategy. Any function or process that affects how a company interacts with its customers must be considered in a company's overall CRM strategy. If you're buying a CRM package that isn't designed for your market, you could be heading for a fall.