Relationship Management in the real world:
it's about people and processes, not just technology
In the age of commoditisation, service has become the sole differentiator. With the increasing globalisation of business, companies need to accept that relationship management is the one factor that sets successful companies apart from their competitors. [ spokesperson ], [ position ] of [ company ], looks at some of the requirements and benefits of real CRM.
Increasing commoditisation dictates that service sets a company apart from its competitors - as opposed to price or quality. So organisations using strong and lasting customer relationships as their competitive advantage are most likely to succeed in the new economy. Customers are the lifeblood of any business. According to the Pareto's Law, or "The Vital Few and Trivial Many" rule, 20% of your customers account for 80% of your revenue. That's not a newsflash, but the point is that in a sluggish economy, maximising the wallet share of your most loyal and profitable customers is what will drive business growth.
Operational expertise, product knowledge and customer intimacy are the basis on which to build a business. Most successful companies get the first two right. But customer intimacy depends on a level of service and customer interaction that remains beyond the reach of many companies simply because they fail to understand that people and processes, not technology, are the basis of true relationship management.
So before you rush out to buy the latest customer relationship management technology, you should bear in mind that many companies across the world- are failing to see a return on their CRM investment. Worse still, even fewer of their clients are experiencing improved customer service.
Defining CRM remains a challenge, but a look at some of the myths of CRM may take us somewhat closer to understanding what CRM is not:
- It can be bought. CRM technology is not a magic bullet that will instantly meet all you customer management needs. If your people and processes are not customer-focused, automation will do nothing to improve your bottom line;
- Customers can be managed. Customer needs and objectives are in continuous flux, so customer knowledge must become part of your overall business strategy;
- You can have a 360-degree customer view. This is akin to saying that world peace can be achieved by helping the poor. It's an admirable pursuit, but doomed from the outset, as it will never fulfil expectations. Integration across all customer touchpoints remains an as yet intangible dream;
- Integration is a product. Siloed business units, independent company structures and disparate technology are very real challenges that cannot be solved by quick-fix IT integration;
- One-size CRM fits all - there is no single solution or product that will meet all CRM requirements; and
- Implementing CRM will cure all your business ills. The Web is littered with the debris of the dot-bomb fallout - under-utilised e-commerce sites with customers who just never show up.
An enterprise-wide approach to relationship management can optimise profitability and drive revenues, as long as it is tied back to overall business strategy. This requires organisations to focus on customer retention and to develop their employees' abilities to provide customer satisfaction and recognise customers as assets to be nurtured and maintained. Increasing wallet share requires employees to maximise the value of the customer to the organisation, precisely because the customer is an asset. It is therefore each employees responsibility to accelerate and improve the value of each customer to your business. Developing competitive advantage based on a true CRM drive requires companies to encourage employees to provide excellent customer service by training and incentivise them, and ensure they understand the value the new processes, procedures and technology will have on their daily working lives.
Ask yourself, for example, is every employee aware of your business strategy and organisational goals? Do they know what your business actually offers? Can they communicate effectively with your customers, suppliers and partners in such a way as to ensure total satisfaction? Have they been provided with sufficient training to meet the lofty ideals of CRM? Have you recruited the most appropriate staff in these frontline positions. Bear in mind that the best technology in the world will do nothing to improve customer relations if your call centre staff are unaware of the value of loyal and profitable customers to your business. The key is to train your staff and align your strategy to focus on the delivery of exceptional customer care. Once the people and processes are in place, you can begin to look at the technology solutions to assist you in gaining the competitive advantage that arises from having a loyal and profitable customer base.