Customer Relationship Management - Are We Losing The Plot?

by Guest Expert

CRM - where is the emphasis? On the C, on the R or on the M? More and more we see the acronym CRM being bandied about in the business press, CRM or Customer Relationship Management is a hot topic.

In the field, consultants have been asked what is the difference between CRM and Customer Service.  From a purely semantic point of view – customer service could be defined as something which you do ‘to’ your customers, whereas Customer Relationship Management is what an organisation must do ‘with’ its customers.

In real life, in companies there is often a feeling that it would be great place to work if the customers would behave themselves and that customer service is the responsibility of one department that is often seen as a cost centre as opposed to adding value!  The ‘them and us’ scenario is alive and well in Irish companies and as things get busier, the gulf between the organisation and customer increases.  The Celtic Tiger may have been partially responsible for the development of this culture as there were plenty of customers, the recent down-turn may well lead to a re-evaluation of the approach taken to customers.

The use of information technology as enablers in the field of customer relationship management has been hailed a major breakthrough in CRM, and has spawned its own sub-acronym --  e-CRM.  The business press abounds with articles and advertisements on the e-solutions available to bring e-CRM to the ‘masses’.  More and more companies are investing in e-solutions to redefine and elevate their customer service activities in the organisation, often without the desired effect.   When we look at the e-CRM solutions, are we actually reducing the relationship aspect and increasing the management aspect? The focus of CRM training is on navigating the software and running the reports. But without the relationship will we have any customers left to manage? This brings in another side to CRM, that could be termed h-CRM , where the h stands for human.

Often, when faced with the question regarding whether or not the organisation is customer focused, management will pull out a mission statement that usually invokes some platitude towards the customer.  However, to have an effective and sustainable h-CRM system, CRM has to be embedded in the culture, and this can only be truly so if the emphasis is on building the relationship with the customer.  The mindset of the organisation from the highest levels down must be focused on the customer, the processes, procedures and policies must be customer centric.   The strategy and function must be aligned so as to deliver maximum value to the customer.
 
So what about h-CRM, with emphases on the h and  R  - how can it actually improve our bottom line ?  The current  version of the  ISO9000 standard, along with the Business Excellence Model from the European Foundation for Quality Management, have a distinct focus on the customer in terms of how do our systems actually deliver benefit to the customer, and how do we measure it.  Having a systematised approach ensures consistency, having the h-factor as a valued aspect of the system ensures the relationship.  But as with every system, to know how we are doing we need to be able to measure what we are doing.

As a business, how do we actually measure our service levels, perhaps we –

-    Undertake customer satisfaction surveys (flawed perhaps by the fact that only those customers who are on good terms with us will respond and paint a rosier picture than is actually the case).
-    Look at the number of complaints that we receive.
-    Look at our turnaround  time for customer issues.
-    Look at how many calls we can answer in a hour.

These metrics are primarily based on things that we ‘do’ to the customer, but what measuring what we do ‘with’ the customer, what about the relationship? Is our customer service ethos based on the alternative-PDCA cycle where the letters don’t stand for Plan, Do, Check and Act, but instead represent Panic then Do lots of Chaotic Activity!  How then, do we measure the relationship aspect?  How do we measure, what we do ‘with’ the customer? How do we train people to work effectively and efficiently with our customers?

By having information on what we do with and for our customer, such as knowing what they expect, what they value and their potential for growth, we can adjust our offering to allow them to deal with us on a continuing basis.  Information technology, even as basic as an Excel spreadsheet with accurate customer information, should be a help to us in the capture and accessibility of information on customers across the organisation.  There is real value in having an e-CRM solution, but it needs to be linked with the people aspect.   The realisation that customer information is not customer knowledge is also worth taking on board – when we look at our customer information databases, how much do we really ‘know’  about our customers?  Technology will take us part of the way, but the real value is in the human aspect that builds relationships through getting to ‘know’ the customer. This generates a  TOTAL relationship with the customer that can be defined as one where there is trust, openness, transparency, appropriateness and longevity.

For a TOTAL relationship that is delivered by the h-factor and enabled by the e-factor, there is a need for integration of the customer into the organisation. The main barrier to this has been found to be fear, a fear of letting the customer see that we are in fact human and operate under fairly much the same constraints as they do!  The barrier is even apparent in how we communicate with our customers – only when it is safe and absolutely necessary!

What about the staff with whom our customers interact?  How customer focused are they? How do they treat our customers?  What is the attitude expressed towards customers by our people?  What type of image of our organisation do they present to our customers?  In HR circles it’s often said that people don’t leave jobs – they leave people.  From a CRM viewpoint could the same thing be said – how often do we lose customers because of the interaction with our people?    How many companies actually use information gathered from the CRM systems to help specify the training requirements of staff?   The basic point is that the best CRM products and customer service processes are of no consequence if the people cannot deliver on the relationship aspect through having and implementing the appropriate skill set.

Looking at how most companies conduct business, relationships are not considered as key entities – its more like warfare where we select our ‘target’ market, gather ‘intelligence’, devise a ‘penetration’ strategy, ‘take out’ our competitors, ‘consolidate’ our position and ‘attack’ through our sales ‘force’  in an aggressive ‘campaign’.  Militarily we are moving towards e-warfare, and the danger is that in our customer interactions we are moving in the same direction with an over-emphasis on e-CRM solutions as the panacea.  The question is, can our customers have a relationship with an e-CRM interface, or more importantly, do they want to?

For the best possible CRM solution for our organisation – we need to make sure we don’t lose the emphasis on the R and this can only be achieved by having people who are ready, willing and able to establish, develop and maintain the relationship. To deliver excellence to our  customers we need to make sure that we have the appropriate skills on board and that they are continuously being updated to meet the ever changing expectations of our customers. Training on areas such as interpersonal skills, customer service and workflow management need to be moved from being classified as ‘soft-skills’ to being classified as essential skills in achieving and maintaining competitive advantage.

So to be able to develop and maintain competitive advantage we must recognise customer relationship building as a key skill, a value adding process for any organisation, because in the final analysis, CRM might more appropriately be the acronym for Customers Really Matter – is this the case for your organisation?


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