Pick up any business journal or trade publication and you will be hard-pressed not to find an article discussing the importance of customer relationship management. But success in CRM depends not so much on dollars spent or on technology as it does on top management’s willingness to undergo a wholesale shift in thinking about the way business is conducted within the organization.
Many costly decisions have been made by CEOs who have invested millions in CRM technology without first adopting an overall business strategy of building sustainable relationships with key constituents. The rush to find the CRM solution overshadows the bigger picture, which is relationship marketing.
This top-down commitment focuses a company’s collective energies on building solid relationships not only with best customers, but all stakeholders, including channel partners and importantly, employees. And though technology is essential to practicing true relationship marketing, a computer can never create this type of human value connection.
Data collection is not CRM. Business leaders tend to view CRM as a technology-only challenge, assuming that if they just amass enough customer data and massage it thoroughly, the best will naturally appear, ready to be sold more. Toward that end, companies bent on launching CRM initiatives usually begin by acquiring massive computing power and building data warehouses. By one estimate, however, seven of 10 data warehouse projects fail to deliver on expectations.
The field is strewn with underused warehouses whose price tags run into eight figures. GartnerGroup, Stamford, CT, estimates that by 2002, 60 percent of organizations will think “they overspent on marketing technology with no suitable results.” Too often, management’s approach has been backward. It invests heavily in technology, then only later tries to come to grips with who will use the data and for what reasons.
Recapture the business-customer bond.What CRM comes down to is a radical attempt to recapture the simple bond that once existed between a business and its customers. In times past, when you walked into a general store its owner knew you personally. He knew not just your name but your income level, your preferences and your history of past purchases. Armed with that knowledge, he could make an instantaneous mental estimate of your importance to him as both a present and a future customer, then sell to you accordingly.
Today, the challenge CRM addresses is how to translate this same competitive advantage into a modern setting. How can best customers be recognized immediately and their preferences automatically honored, no matter where or how they and a business connect? How can a company that has many customer touch-points gain mastery of CRM? And how can this knowledge be used to enhance employee and channel performance to positively impact the service-profit chain?
The only way is by driving customer knowledge out to every line employee and channel partner with whom best customers come in contact. A daunting proposition? Certainly. But the payoff for multi-touch-point companies is significant. Every point of contact between one of your customers and one of your employees is a moment of truth. Affecting that moment in an individualized manner, enterprisewide, is the crux of the relationship marketing business strategy.
Relationship marketing is a business strategy. Old-fashioned mass-market advertisements are not packing the same punch they used to because fewer and fewer people see themselves as part of a mass market. They want shoes made for their feet, a beer brewed to their tastes. And, while all of this sounds a bit overwhelming, there is some good news. Your own foray into CRM could — and should — start modestly.
Not even the glitziest technology can spare a company the hard imaginative work of putting itself in its customers’, channels’ and employees’ shoes — and that is the first step. What matters to these people? What do they care about? How do you strengthen your relationships with them?
As an example, a company might explore these important questions with its best customers, offering them carefully targeted inducements for their answers. As information is acquired, it could be fed automatically to its sales force which is better able to address each customer’s individual needs and circumstances. The goal, ultimately, is to promote a “conversation” so satisfying to customers that it moves their attention off price and on to added value.
The problem with a narrowly focused CRM effort is that customer information stays trapped within a single “silo” — the customer service center — rather than being allowed to percolate out into the larger organization. The minute a best customer steps out of the service center — the one setting where he is known and valued — he reverts (in the eyes of line employees) to being part of the masses. Best customers must be recognized at every “touch point” where they and employees interact.
Knowledge, authority, motivation. Push customer information out into the hands of line employees. For CRM to work, these employees need three things. First is the knowledge of which customers qualify as “best.” But knowledge alone is not enough. They also must have the authority to offer customized service and the motivation to do so creatively.
That usually means redesigning existing jobs, creating new ones and establishing new hiring profiles. It also means changing the way employees and channel partners are rewarded and their performance judged.
As an example, Bausch & Lomb, an eye care products manufacturer, adopted a relationship marketing strategy using a CRM technology system in which call center staff for the first time had access to customer records and the history of each account. Employees who had been order-takers now found themselves asked to do far more. They fielded customer questions by accessing online manuals. They learned to use incoming calls as an opportunity to sell. If a customer ordered contact lenses, a call center employee could see from a client’s record what else he might need to buy — saline solution, for example. All this required retraining, as well as a revamping of rewards. Call center staff were given monthly sales targets and compensated on how well they met them.
Corporate culture revolution. Launching a CRM initiative presumes a willingness by management to transform corporate culture. What is required is a willingness to spearhead a revolution. And nobody said it would be easy.
But, of the many steps top management can take to ease the transition, two are basic. 1) Skillfully assess not only the relationships a company has with its target clients, employees and channel partners, but also how its corporate systems strengthen or weaken that relationship. And 2) Design and implement a relationship marketing strategy that focuses on developing relationship equilibrium necessary to achieve desired results.
True relationship marketing and effective CRM — the antidote to traditional marketing practices and one-stop technology solutions — will bring customers back repeatedly, positively impact your bottom line and establish a stronger team approach than you have ever known before.
