Are CRM Consultants Leaving Value on the Table?

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Or worse, are they taking value away from an unsuspecting client?

CRM consultants leaving value on the table is one of my
favorite topics to think about because I truly believe, after many years in the
“so-called” CRM consulting world, that sometimes CRM consultants are being
robbed of the value they create for clients; and other times, they are the ones
doing the robbing. Now, I’m not suggesting that CRM consultants are thieves.
But, ignorance is no excuse when the success or failure of your client’s
business is at stake. Conversely, not asking for an appropriate investment for the value
you deliver only robs you and your employees of the respect they deserve.

Am I being too tough? Maybe everyone is satisfied with their level of value
delivery. Maybe you’re happy letting your customers get a 1 million percent return
on their investment with you. Personally, I’m never satisfied and I know that I
can do much better.

Most of us price out or projects using a per-diem rate. I’m not sure who it is
that sets the rate for “CRM” but I’m pretty certain that it’s tied to rates
determined in the IT world. Certainly, they are higher than many IT rates
because the implementation and development knowledge is specialized. The problem
with this theory is that IT generally promotes operational efficiencies that are
fairly straight forward. CRM, if approached properly, provides an opportunity
for businesses to achieve exponential leaps relative to the dollars they are
being asked to spend.

Ha Ha CRM consultants. The joke’s on you…..or is it?

In fact, the joke may be on the CRM customer most of the time. Hey customers,
when you engaged your CRM consultant, did you proceed to run down a list of all
the forms and buttons you needed? Was it one of those never-ending lists of
wishes from every corner of your business? If so, you let yourself get taken for
a ride! Why? Because CRM consulting rates are probably priced too high for basic
task oriented implementation efforts. After all, what real value was delivered?
You’re the one who thought you knew what you wanted!

In a few select cases, the joke is on the CRM consultant. The rates being
charged can’t possibly include the value created when a company is guided
through the process of moving the customer to the center. Look at it this way,
this process first has to begin with a cultural change that starts at the top.
That’s not programming. Once this change is in place, every internal business
process has to be re-worked to support that new vision of the customer. And once
all of that is done, technology has to be developed and implemented to support
it. Not many companies are ready for this, so the consulting and guidance needed is
significant.

But generally, this sort of CRM consultant figures it out eventually. How do
they do that? Well, their customers are constantly praising them and telling
about all of the wonderful things that resulted from the project. And then they
stumble up a book like “Million Dollar Consulting
” or “Value-Based Fees: How to Charge – and Get – What You’re Worth
“, both excellent books by Alan Weiss, which
expose them to the perspectives and techniques used by truly successful
management consultants. If you read either of these books, you will shed a few
tears at the thought of all the money, er value, you let slip through your
hands.

These aren’t the guys that just sell and install software for a living, so don’t
get yourself excited thinking you’re suddenly going to make more money!

If I were to interview you (Mr. CRM Consultant) to find out what kind of
consultant you were , and whether you are leaving value on the table, or
stealing it, here are the things I would want to know.

  • Do you and your clients engage in a meaningful discussion of what their
    clients want and need, how they deliver (or intend to deliver) it, and how they
    expect to see it returned to them?

  • Do the solutions you recommend allow your client to identify their most
    valuable customers?

  • Do the solutions you recommend allow your client to identify changes in
    customer value over time so they know where, when and how to react?

  • Do your solutions help your client identify when a customer is about to
    defect, so something can be done about it?

  • Do your solutions get away from bad behavior generating tools, like enforcing
    sales quotas, in exchange for a customer-centered approach to incentives?

  • Do your solutions support cross-functional workflows designed around the
    customer’s experience?

If these questions seem foreign to you and your business card says CRM
consultant, you should lower your rates. Sorry for being blunt, but you are
product focused and products are commodities. If these questions seem incomplete, then you are probably a
damned good CRM consultant and could teach me a thing or two (let’s talk!).

One of the problems you will face when taking a more “value” oriented approach
to your engagements is demonstrating how you will help your client increase the
value of their business. I’ve written about this a few times. Probably the
simplest way to do this was outlined in my article about
customer accounting.
With simple techniques like this, you should be able to quickly show a client
where they are, and talk to them about what they should be trying to achieve.
Then, a few months, or quarters, down the road they will be able to see the
changes your promised. These are the sorts of things you will not achieve by
simply viewing CRM is a means to make bad operations and process more
“efficient”.

What Do You Think?

Do you agree? Or have I totally mangled this one? Don’t be shy, I’m not!

2 COMMENTS

  1. I will definitely look for you @twitter. I rarely find such a compelling bio. I’ve been preaching that for years, having gone through the software craze myself. How can you implement a super app if no one, top-down, adheres to basic notions such as “client moments of truth”, client lifecycle etc.?

  2. Hi Mike

    If each of the CRM consultants had had ‘risk & reward’ contracts in place for the estimated 50-75% of CRM projects that went wrong and if each of those consultants had had to pay damages for the value destruction the projects had caused to business, we probably wouldn’t have any CRM consultants left around today, certainly none of the big CRM systems integrators. They would all be bankrupt.

    Graham Hill
    Customer-centric Innovator
    Follow me on Twitter

    Interested in Customer Driven Innovation? Join the Customer Driven Innovation groups on LinkedIn or Facebook to learn more.

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