Why there is no such thing as customer relationship management or: How do we actually use each customer contact?
- by Jens Moeller © Copyright Jens Moeller Consulting Ltd 2011
Customer relationship management or CRM is widely used term and was originally created in order to describe a new concept. The aim was to focus the organisation all around the customer in order to deliver an optimum customer experience.
But why did this happen in the first place? Often, there were (and are) issues between various departments all working on the same customers. The marketing department plans campaigns, develops advertising to make prospective customers contact the company and enquire about the company’s services and products. The customer services or customer care department needs to deal with all these enquiries to win and retain the customer. The billing department may deal with customers not paying on time or not paying at all who may have actual complaints and issues with the service.
On top of it all, and ever-increasing technology industry has used the term CRM basically to describe products that were earlier known as sales force automation. Today, this leads to the term CRM being more often understood as a technical rather than a business concept.
If we look at the actual customer experience on the market, it is only fair to raise the question whether customer relationship management has actually found its way.
On the one hand many companies have set up according projects, purchased technologies, and changed organizational structures and processes. In many cases they have started or optimized training and coaching programs to enable staff to better deal with prospective and existing customers. After the CRM technology hype the new buzzword customer experience has been introduced and widely used. At the end of the day it is still all about how to win and how to retain customers more effectively.
On the other hand an ever-increasing need to decrease operational costs, especially customer management costs, has put heads of customer care, customer service, head of marketing, and heads of sales increasingly under pressure. There is an obvious goal conflict and the need to pin down clear priorities. Not least the financial crisis has strengthened the trend of merging organisations with an increasing number of customers and an increasing complexity of winning and servicing them. The trends of automation and off-shoring serve the goal of cost-cutting while keeping up a certain level of service quality.
From a customer’s point of view there is an increasing helplessness towards these growing providers of consumer products & services. If asked directly after their customer experience with a provider, you will often hear from the customer that he or she has given up on receiving the service quality that year she actually would expect. Years of experience dealing with long queues and customer service help lines certainly had an impact on this. However, if organisations carry out customer surveys once a year, customers often have forgotten about their specific experience, and in many cases they would not even bother to tell the truth. Why should they? They know that no one will listen to it anyway. Surveys are standardized, with no feedback to the customer. Time is wasted on both ends.
The reader may actually ask: How can you know this? Well, having delivered customer service training an and coaching, as well as leadership coaching to team leaders and executives in customer facing environments for thousands of people, I gathered loads of feedback from participants regarding their daily experiences with customers and their issues. Many workshops with business leaders, division heads and team leaders gave similar insight into their issues.
What is interesting, it is the obvious differences between service promises that organisations make to their customers via marketing and advertising, and the actual customer experience that customers get when contacting the company reacting to its campaigns. Many call centre managers calculate with each customer turning to the organization about once a year. For this one contact per customer organizational cost performance is constantly under scrutiny. On the other hand marketing campaigns are being carried out - often with significant budgets that nobody can actually estimate the benefit for. If an organization would use a significant chunk of these campaign budgets in order to optimize the actual customer experience instead, my prediction is that they will enjoy a significant business impact, vast word to mouth marketing and according tail effects when it comes to winning customers.
Another question that nobody can seem to answer is this: if we pride ourselves to have introduced customer relationship management, why don’t we use the opportunity when the customer actually turns to us in order to make the best out of it, instead of just delivering an average service at the lowest cost possible? If you put yourself in the customer’s shoes: How often have you seen that your enquiry has not been resolved by the company, and at the same time you receive leaflets with new promotions, TV ads, online advertising, e-mails and so forth all offering you to buy their products and services – often the same one that you have actually just bought? Now, how ridiculous is that? What will you think now about how much this company actually knows about what you told them?
In the first place, the idea of customer relationship management was to use every single customer contact as an opportunity to build an actual relationship with the customer, resulting in more trust, longer life cycle, higher loyalty and more profit.
Sure, this requires sophisticated technology, well-planned business processes, and also training for staff and leaders. But in the first place it requires the management’s commitment, shown by according budget allocation, to use the existing customer relationship in order to achieve the best possible business impact. What we often see instead is that more or other campaigns are being developed while people were dealing with prospective and existing customers every day are not heard sufficiently.
Besides the budget issue, and the priority issue, integration of business planning and business operations between various departments all working on the same customer is vital. If this can be achieved through workshops that are actually integrating each division leaders viewpoints on this topic, integrating these viewpoints and coming up with an integrated solution in order to deliver and often on the customer experience. The latter starts with the campaign to win the customer and continues throughout the whole customer service cycle and may include billing and complaints issues.
If we want carry out successful customer relationship management on a continuous basis in order to win and retain customers effectively, we need to use each single customer contact across all customer touch points to improve the customer experience. This requires listening hard to the customer requirements, involving employees and their leaders dealing with and prospective and existing customers every day. Of course we can try to document such information in all sorts of systems, but in the first step is much easier to simply ask those who deal with customers. What a customer panel is for marketing purposes, an employee panel workshop is for customer relationship management purposes.
The gained customer insight in turn is a valuable basis for all future marketing planning and also for customer service planning. If for example a provider of broadcasting services runs campaigns to win business customers, and such companies later on and accepted because of false or incomplete credit records by a third party, instead of offering billing alternatives–then a large part of the campaign was in vain.
Would you like further information? Do you have questions or suggestions? We look forward to your call, email or letter. You can contact us via the following methods:
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