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.
5. Re-engineer the processes. For internal CMR, enlist associates at all levels into the re-engineering process, bringing front- and back-office staff in early. This will allow employees to learn about the project from first-hand involvement while, at the same time, giving you a valuable understanding of the things required for your team members to perform their jobs.
For external CMR, ask your customers to take the lead in telling you how you can help them manage the relationship.
6. Get ready for change. Moving from customer relationship management to customer-managed relationships will affect the kind of information previously used to push products or services to the end user.
You will now be using data to learn what products and services the clients want, which will require changes in the management of the customer knowledge base. CMR activities demand the total integration of customer information gathered from all interactions and delivered with speed and precision. That will require more than horsepower. The IT team will have to find new ways to manage the customer data and facilitate the sharing process on an enterprise-wide basis. Everyone who has contact with customers will want their customer information complete and easily accessible—and they'll want it now!
7. Keep technology in its place. Too many guidelines for CRM start with technology. Technology applications are essential enablers for your CRM strategy, but the technology must be secondary. Too many CRM initiatives have failed because of one of two technology issues:
>Automated chaos: leaping into automation of existing business practices; or
>Allowing CMR programs to be seen as an IT project. Instead, enlisting associates into the re-engineering process enables them to view it as a customer service project heralding a fundamental change in the quality of customer interaction. This will lead to deeper relationships designed to make customer interactions more effective, better for the customer, and more profitable for the company.
8. Select the right tools. Understanding, developing and nurturing customer relationships requires a strong flow of information across the enterprise. Having the right information at the right time and enabling effective interaction across all channels is critical for CMR. As such, the selection of the right tools becomes more specialized.
"Why CRM Doesn't Work" by Frederick Newell is available at bookstores or by calling Bloomberg Press, (800) 869-1231.