Beyond CRM 8 Steps to Better Customer Relationships
By Lisa Yorgey Lester
Why am I not seeing a return on my CRM investment? Is there a way to predict or modify customer behavior without wasting money? Author of the recently published "Why CRM Doesn't Work: How to Win By Letting Customers Manage the Relationship," marketing consultant Frederick Newell argues the time for customer relationship management (CRM) has passed, and it's time to transition to customer management of relationships (CMR).
According to Newell, CMR allows companies to empower customers so they can tell you what kind of information they want; the service level they expect; and when, where and how they want you to communicate with them.
In his book, Newell explores how household-name companies have shifted from a sales-oriented CRM solution to a CMR strategy, and why: It forces companies to think of customers as individuals. As such, Newell contends CMR helps to build long-term relationships, create customer loyalty and bring in profits over time.
In "Why CRM Doesn't Work," Newell offers the following list of eight steps for a successful transition from CRM to CMR:
1. Think differently. The first, and perhaps most difficult, concept to cast overboard is the idea that the benefits of your CMR effort would accrue to the company, not to the customer.
2. Establish a benchmark. Establish-ing the benchmark for a CMR initiative involves determining the best potential customers for your business and learning what it means to have them manage a relationship that's rewarding for them and profitable for your company.
3. Define measurable goals and objectives. The things you should measure to turn customers into assets are economic, not operational. Ultimately, increased revenue and customer equity are two of the greatest long-term values of CMR, and profit should still be the number one goal.
4. Create the strategy. A CMR strategy must develop a seamless integration of every area of the business that touches the customer by unifying people, processes and technology. Truly empowering the customer is new and unchartered territory for most businesses.