Whither CRM? (FT.com)

Whither CRM?
By Peter Matthews of Ernst and Young

Published: October 21 2008 09:08 | Last updated: October 21 2008 09:08

Customer Relationship Management. A very well intended concept; but perhaps one that needs a slight rethink in today’s turbulent world

Numerous studies give us empirical proof that broadening relationships with existing customers is both easier and more profitable than trying to add new ones, and CRM as both a concept and a process is a key enabler of that. It remains important that businesses know their customers, their likes, their dislikes, their partners’ names, their football team, their ”hot buttons” (I exaggerate, but you get the point).

It is also key that an organisation can track and record all the interactions they have with a customer, both so that these can be tailored to what the customer wants and expects, and also so that those touch points are ”joined up”. I recently heard of a supplier bidding for a contract whose chief competitor was a different part of their own organisation.

Both of these outputs are enabled by effective CRM and most organisations are trying to develop and build CRM. Yet customers are still dissatisfied with their suppliers. Why is this?

For most of us, a relationship is a living entity, not something that can be created by processes, or by any amount of interaction promising me special offers as a valued client. Intimacy cannot be forged on the basis of one transaction; relationships develop and CRM needs to be reined in while this happens to allow an element of judgment and flexibility.

I am sure many organisations would say they do this, and do it well – although statistics would say otherwise (customer satisfaction rates generally are going down). There must be a reason, and there must be another way.

For me, this is about individual customer service, as opposed to traditional CRM. One could argue this is but a branch of CRM: after all good relationship management is about a focus on a customer as an individual. But I am not so sure.

The word that matters is service, as opposed to relationship management. ”Service” implies a focus on someone else, subsuming your own needs to look after somebody else; the words ”relationship management” are more about a focus on the supplier – making sure that the processes and records are in place to manage a relationship. The very act of ”managing” a relationship is then seen as being as much about the supplier’s needs as the customer’s.

Individual customer service is different. It is a focus on the action not the words. More than that, it is ”individual” – a recognition that we are all different, and that putting people into groups (a key tenet of some aspects of CRM), can have unintended consequences and lead people to feel ”processed”.

The act of individual customer service therefore focuses on delivery and the action, rather than the words, and the individual rather than the group. It is the essence of good ”account management” – a mixture of outstanding delivery or product, and a real tailored service, where each individual feels special.

Where will it work? In business, anywhere there is an exceptional individual leading a client team. That leader will have a working knowledge of ”account management” (which may well involve some CRM tools and techniques), but they will focus on making the customer feel valued as an individual and will ensure that there is a real focus on delivery of what has been promised – both a pre and post sale area of activity.

Good account managers are worth their weight in gold: everybody wants them. They have a wide range of business knowledge and interests that enable them to converse across a customer organisation, coupled with a desire to ”serve” and look after a client that goes beyond a sale.

Some of the big IT and consulting organisations have these people; they have both intellectual and emotional breadth, and are ultimately defined by their values, for it is values that shape behaviours, particularly in tough times. At such a moment, customers will be looking to see who are just fair-weather friends.

A good example: an account manager for a big IT firm personally undertook to fix a problem on a project by acting as the intermediary between his own organisation and his customer. It involved a great deal of personal risk as he had to challenge his own organisation on the way in which the project was being run (profit was all) and by representing his customer in front of his own senior people. He won the changes he needed; the customer saw the behaviours and was able to see that, in a crisis, this account manager’s actions backed up the claims.

In our personal lives we want someone to care and to do what they say they are going to do. We are realistic enough to know that our suppliers need to make a decent return, but are arrogant enough to believe that we are special and should be treated as if we matter. We also want to feel that we are getting what we are paying for. This makes one of the key points of individual customer service the ability of the supplier to follow instinct and relationships, rather than rules.

CRM is still important as a basis on which customer relationships can be evaluated, and processes controlled and ”managed”. It is not a redundant concept, quite the reverse. But it does need to include flair and judgment rather than be just a dry process.
Copyright The Financial Times Limited 2008