CRM Demystified - Customer Relationship Managment Isn't Magic

By admin, on June 25th, 2009

Customer Relationship Management Isn't Magic

Paula Williams

The Opportunity

Technology vendors would often have you believe that CRM, Customer Relationship Management, is a tool you can buy in a box off a shelf and instantly have fabulous results.

They have a lot of ammunition. First, the fact it costs between five and ten times as much to find a new customer than to do business with an established customer. Second, the fact that customer loyalty isn’t what it used to be. Even if you’re the only one that sells vacuum belts in your town, you’re now competing with people across the country and across the world who your customer can access by pressing a few keys and having the product show up in his mailbox, sometimes virtually overnight.

Managing your relationships with customers sounds like a wonderful idea, and it certainly is. But it’s not a magical item you can purchase and plug in. There are a lot of articles about the technology and tools used for CRM, this article will be unapologetically low-tech, and will focus on WHAT CRM is and how it works. Additional articles about this topic and other related issues can be found in the article section of Motley Fool, a website that provides financial solutions for investors. HOW to do it depends a great deal on the nature of your company, product, customers, employees, current technology, and a number of other factors.

The Solution

CRM projects are being undertaken by large numbers of companies that serve consumers directly, or that serve other businesses, and their needs will vary greatly. CRM projects happen in:

Financial Services/Banking
Telecommunications
Insurance
Media
Health Care
Electronics
Pharmaceuticals
Information Technology
Utilities

CRM boils down to two basic tenets that seem very simple on the surface- knowing your customer, and being one entity.

1) Know Your Customer

When a customer comes to you for a transaction or for service, you should be able to identify that customer, know what transactions or problems that customer has had in the past, and, ideally, make some suggestions of what you could do for that customer that may be of help.

One company sees customer service using the “man in the desert” paradigm to offer customer service that far exceeds the customer’s expectations. A man is stranded in a desert with no water and no supplies. He comes to a house. The man knocks on the door and asks for water. The family not only gives him cold water (with ice), they also ask him to stay for dinner, offer him use of the phone to make a call to his family, and offer to drive him to the nearest town and arrange for a plane ticket home.

By knowing who your customer is, and knowing the nature of his or her situation, you’re in a better position to anticipate what he or she may need or want, and to be perfectly positioned to provide it for him. You can do this by having all of your channels have access to what that person has bought in the past, what problems he may have had with it, and what your products are interacting with.

For example, if I walk by an ATM at lunchtime and make a withdrawal, and then walk into a bank branch office and make a deposit, both of those transactions should be reflected when I log onto my account through my bank’s web site that evening.

All three channels know who I am (by my ATM card and PIN number; or by my picture ID at the office, or by my login ID and password on the nternet) and have access to the same information about me. The bank may also make some assumptions about my transaction habits. Because of my frequent transactions, they may guess that I may be interested in direct deposit for my paychecks or wireless banking. The bank might suggest those options to me on my computer screen, via a bank teller, or on an ATM screen while I’m waiting for my transaction to be processed.

2) Be One Entity

A customer shouldn’t have to understand your organizational chart, your recent mergers, and the intricacies of your computer systems to get help with a problem. A customer also should not have to give his life-story more than once, no matter what channel he or she uses to get to your company.

Whether I conduct business in person, using an automated phone system, using the Internet, or with a service representative on the phone, the records of my identity and my transactions should be available and reflected.

This may seem obvious, but in a company that has traditionally had strong department management or has invested heavily in systems that work in single silos but don’t cross departmental boundaries, this can be extremely difficult.

I’ll use a personal anecdote of a poor customer interaction to illustrate (and I’ll try to keep the irritation to a minimum.)

I had my name, customer number, and problem summary memorized by the third time I’d recited it to the third customer service rep on the hone. And I was getting irritated. I’d been transferred from the general help-line to the billing line to the technical support line. It was obvious that none of these people had talked to each other before talking to me. It was also explained to me that none of these people had access to my records from other departments.

While on hold, I listened to their customer-service recording indicating that I could also receive customer service online by logging onto the company’s web site. But by that time I was convinced that, after going through the whole story again, my information would be deleted by someone who answered my message with a simple: “Please contact our billing office during business hours, the technical support department is unable to help you at this time.”

It took several days to untangle the whole mess. My account had been classified incorrectly. The billing office reclassified my account, thus authorizing the technical support department to assign a technician, thus allowing the technician (to whom I had to recite my litany again, in more detail this time) to assess my situation and help me.

To add insult to injury, a few days later I was contacted by a telemarketer who wanted me to upgrade my service. (Coincidentally, to the same service I had thought I had before running into this problem in the first place.)

Looking back on the situation, I can see how having separate information pools for the billing office, the technical support area, and the sales
office could lead to this sort of fiasco. Whatever systems you use, you need to make sure that there are connections between them. Whether you
accomplish this by having everyone on a single system, or by having connections between your systems, or whether you have an employee manually key information about customer interactions into three different systems when a transaction takes place is up to you. (The third option, although it may seem like an outrageous duplication and expense, is far less outrageous and expensive than appearing to be a disorganized mess to a customer and damaging relationships.)

Conclusion

No matter what the technology vendors may say, there is no product that will help you do those two things with an off-the-shelf product. The first step in customer relationship management is to determine the strategy for what needs to be done- you need to understand what it means, in your company’s particular circumstances, to know your customer and to be one entity. Once you determine that, technology can be invaluable in helping you get there. There are enterprise databases, database bridges and interfaces, and other products that can help you get from here to
there, and there are lots of articles on how to implement CRM technical solutions once you get to that point. But the first, and most difficult step (and the one that is most frequently overlooked) is strategy and buy-in from each department to understand their part and ensure that the company can meet the primary objectives of CRM.