Customer Relationship Management:
Technology v Culture

by Cheryl Rickman

CRM: It’s at the forefront of today’s business vocabulary and, according to Meridien Research, $6.7 billion was spent globally on Customer Relationship Management software in 2001. However, businesses are increasingly learning that technology and software alone cannot make a CRM system successful, and that communication, behaviour and culture are equally crucial factors in developing a successful CRM strategy.

Extending Relationships Instead of Closing Sales

Customer-centricity has been the key to many businesses success – whether bricks and mortar or clicks and mortar – it is evident that businesses that fail their customers do not stay in business long. This has always been the case, as repeat business and increased sales result from high customer satisfaction. But today, customer data has become even more crucial to those who want to rise above their global competition and increase customer loyalty.

In our new global economy of competition and frequent change, one key competitive advantage is to know customers and clients individually and better than anyone else does, and to be able to offer them what they want, when they want it, how they want it. This means providing them financial, emotional and other behavioural incentives to stay, and offering personalised, valued services and add-ons, while constantly engaging with them to deepen relationships and discover their behavioural buying patterns.

Much research has shown that B2B companies in particular have fallen short of CRM targets and, as a result, much online scepticism has derived from consumer distrust, slow response times and other customer related faux pas. A recent study by Jupiter Research revealed that B2B customers aren't happy with the expediency of online channels. Solutions offered in the report to improve customer satisfaction, include interactive chat and messaging options and site search engines in place of stagnant FAQ lists – cheap and simple options to improve CRM. However not all CRM solutions are so affordable.

Small businesses in particular have been sceptical about CRM because of the scale and cost of technology involved, systems integration and consultancy. It’s been an ‘is it really worth the bother’ philosophy for many small businesses. However, all that seems to be changing. With the rise in spending on CRM software and the (occasionally reluctant) move towards a more customer-focused business culture, CRM is generally being seen as an imperative part of building and retaining business.

In contrast to Jupiter’s findings, the American Customer Satisfaction Index (ACSI) report found a marked rise in consumer satisfaction online in the fourth quarter of 2001. Revealing that many small businesses and dotcom’s are starting to pull their socks up, having realised the importance of CRM.

And with the increasing importance of customer data with the rise in Internet usage, we are gradually learning to better use the Net as a CRM tool. It’s clearly one of the most powerful and cost-effective relationship builders and customer intelligence gatherers available to companies to exploit.

Now many waning dot-coms are looking to Customer Relationship Management (CRM) software to build customer loyalty. Such software is a good piece of the CRM pie, but the key is to remember that technology alone simply isn't enough. Relationships need to be understood and nurtured in order to retain them. It’s not about talking and selling to customers; it’s about listening to them and serving them well. Customer connections should be thought of as opportunities to extend relationships, not necessarily to close a sale. And technology and software alone cannot do that.

Today’s Technology

New Internet technologies have arisen, such as Computer Internet Integration (CII), Chat, Push, and Callback, which enable one-to-one customer/consultant conversations and let advisors take control of the customer’s browser to help them navigate and buy. However, in the same way that companies have traditionally had problems managing effective in- house call centres, today web companies are finding live customer service to be time consuming and labour-intensive.

Some companies say they have the solution. Microsoft (obviously in there somewhere) will be releasing their new customer relationship management product, MSCRM, due out by the end of the year. This promises increased sales force automation for small businesses and is, apparently, not aiming at the enterprise market. (www.greatplains.com)

A company aiming at the both the SME and enterprise market is SalesForce, www.salesforce.com. They aim to become the world's first "enterprise automation utility" by delivering (CRM), sales force automation (SFA) and financial software over the Web, competing directly with giants such as Siebel, PeopleSoft, SAP and Microsoft Great Plains. And with customers paying as little as $65 per month for their low-end service, it’s a more affordable CRM application, which is apparently quick and easy to implement.

The Professional Edition application (its current offering) does not allow for real-time integration with back-office systems and offers only limited customisation. To address these shortcomings Salesforce.com has announced its Enterprise Edition, which is aimed at larger companies, plus an introductory offline edition, available for use on a laptop, and a wireless version accessible via any PalmOS device.

Another solution comes from Transform People International (TPI). Unlike the aforementioned companies, TPI is not a software company. It’s a management consultancy, specialising in behavioural analysis and transformation, organisational change and training. Naturally they focus less on the technology and more on developing connections and transforming behaviour, attitudes and styles – the grass roots of CRM – know how your customer thinks, what their needs and wants are; how you think and how to best engage effectively with each person to generate optimum results.

It’s the value of knowledge about customer needs and buying habits that is becoming more important along with changing business cultures and deepening connections with customers. TPI understand this and have launched their new Connections Tool as a result: an online diagnostic tool that aims to improve connection and communication with customers in 4 simple steps. Rising above regular sales techniques, the Connection Tool builds on both CRM technology and behavioural understanding. The output provides a written summary of the main characteristics of the person, with an overview of how they act when under pressure. It also provides an overview of what drives that person, with key tactics and strategies for better connection.

The TPI Connections Tool (http://www.transformpeople.com/connections/tpiintroduction.htm) grew out of Transform People International’s experience in delivering organisational change in many global corporations across a wide cross-section of vertical markets ranging from communications and technology to packaging. As well as an acute awareness that, by understanding behaviour, businesses can improve communication and develop relationships more successfully.

Technology V Culture

An Information Masters survey revealed that, “Technology and information are responsible for, at most, 25 per cent of your CRM competence. Other assets that are important include brands, messages (sadly neglected), staff knowledge, policies, processes and rules.”

And, according to Robert Shaw, founding director of the consultancy CRM Best Practice, “The danger is that many organisations are now investing huge sums in the wrong things. The technology is excellent in many cases, ­ the problem lies with how we apply it.” “We invest too much time in selecting one-hit solutions and too little time in creating the business vision,” adds Robert. “Bad CRM is easy. You just read the press, go to a few exhibitions, choose some software, hire some systems implementers, and bingo, you have a Web site, a call centre, or a mailing database. Most important for good CRM is to have an offensive strategy, not a defensive one. Waiting until competitors threaten you, then responding to them or copying them is a recipe for failure. You need to take time out to create the vision.”

And that vision includes developing an analytical attitude towards customers’, staff and client behaviour. A vision mirrored by Transform People.

How you asses the person you’re developing a relationship with, how you assess your own behaviour and your organisational behaviour, and how you engage with people are crucial to making CRM more effective,” Says Ian Mills, Director of Transform People International.

Arthur O’Connor, leading expert on CRM and columnist for www.ecrmguide.com, agrees, “Some businesses spend a fortune striving to engage, attract, and sell prospects -- only to take extreme measures to avoid interacting with these same people after they become customers.”

He adds that the Call Centre hasn’t been the best choice for those striving to improve CRM. “Many companies brought in poorly trained, ill-equipped people to serve as their primary customer interface,” says Athur. “Resulting in Corporate Schizophrenia.”

Evidently then, it is the behaviour of staff, the behaviour and experience of your customers, combined with a winning strategy and good technology that will improve a CRM strategy’s chances of success.

Afterall, a CRM package only has real and tangible value if it is backed by a strategy, agrees Ronni T. Marshak, senior vice president of the Patricia Seybold Group.

“In building a robust customer relationship objectives should include reducing the cost of acquiring new customers, cross-selling and up-selling to existing customers, closing more sales, targeting more lucrative markets, and creating conditions to make those goals more obtainable. "Most of those conditions have nothing to do with CRM technology itself," says Marshak.

"A company that wants to become truly customer-centric rather than just paying lip service to the notion may have to reengineer fundamental business processes and change prevailing attitudes altogether," he concludes.

Evidently then, the success of CRM rests on both technology and organisational change and the willingness of organisations and individuals to assess and analyse behaviour to improve connection and deepen relationships.

The best technology in the world cannot incur the required cultural, organisational and behavioural change that is needed to drive effective CRM strategies. “The difficulty is getting people to change the way they work, to use the technology and to interact with the customer differently.” So says Micheal Juer, Director of Sales Pathways Ltd.

“There is now a shift occurring where businesses are beginning to realise that they have to work with their customers, and technology is becoming a secondary issue to that. But it is that cultural shift that you need to do, in order to actually deliver good customer service and differentiate yourself from your competitors in the market place.”

Customer relationship management should be seen as a strategic response to a set of customer, staff and business needs. And as long as businesses focus on those crucial points and not just technology alone: working with customers and facing organisational and cultural change, their CRM results will improve.

7 Tips for CRM Success

  1. Define your business objectives and goals against which results can be measured.
  2. Give each CRM project three dimensions: people, processes and technology.
  3. Establish a systematic approach to project management including team development, IT, marketing, services, sales and management, as well as software.
  4. Clearly identify corporate and customer needs. Research requirements, behaviour and how to engage and deliver effectively.
  5. Manage organisational change effectively. The human factor is imperative to a project’s success.
  6. Invest in training – more essential than any piece of software.
  7. Focus on proactive selling, management and relationship building to effectively upsell and cross-sell.


Cheryl Rickman is the author of, 111 Winning Ways to Promote Your Website Successfully, and the founder of http://www.webcritique.co.uk where she offers Website appraisals, press releases and personalized Web promotion plans, plus Web content and copy provision.

Many more articles in Customer Relationship Management in The CEO Refresher Archives

   


Copyright 2002 by Cheryl Rickman. All rights reserved.

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