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The importance of customer relationships is continuing to drive today�s business and is influencing the shape of the global market place of the future. Customer Relationship Management started as a strategy to manage customer contacts and keep track of customer communications during sales cycles. Many Sales Force Automation companies emerged as a result of this trend in mid-nineties. These companies have experienced some difficulties in recent years due to the ongoing shift in CRM strategy. According to CRMGuru�s Dick Lee: �The global marketplace has experienced a shift in the balance of power from sellers to buyers. In almost all highly developed countries (and surprisingly, in many less developed countries as well), a cross-over in the supply demand curve is affecting most business sectors. Simply put, we can produce more goods and deliver more services than markets can absorb, which is diametrically opposite to the environment of the past 4 to 5 decades. That gives customers choice -- and choice equals power. If we don't take excellent care of customers, they have lots of other options. And in this game, whoever keeps the most customers wins.�
In the last century CRM vendors and consultants offered products and services that helped companies identify and win new customers. The challenge in recent years has been not only obtaining new customers, but keeping your existing ones, by constantly providing them with exceptional customer care. This is the only way to assure the ongoing business relationships with your customers and keeping the revenue stream constant.
Unfortunately, many companies, CRM software vendors and CRM consultants have failed to adapt to this new trend. Many companies view customer care as a cost factor, not as a business driver. Companies try to cut down customer support costs by hiring low-skilled workers with little skills. Many companies have outsourced customer care to other countries where labor costs are cheap (like India, Pakistan or Philippines). How many times have you called your credit card or your phone company and were placed on hold for 45 minutes? How many times have you entered your account number, pin number and password, just to get to a live person that would ask you this information all over again? How many times have you been passed from agent to agent having to repeat the reason for your call every time? And how many times have you lost time and money, because internal departments within a company could not communicate with each other?
It seems that after spending billions of dollars world-wide, companies should be able to offer customers quick and personalized service, but for some reason it seems that these billions of dollars have created more confusion, communication problems and longer on-hold times.
The answer to these problems have until recently been � new technology. Technological advancements have helped increase the productivity and companies flocked to provide expensive CRM products and services to insure that their customers would be eternally happy. CRM vendors have offered �best of the breed" modules with wide functionality from handling inventory orders for manufacturing companies to defect tracking modules for high-tech companies. These companies tried to pack as much features into their offerings as possible. What they lacked in depth, they tried to make up in breadth. However, many solutions ended up being shallow; with poorly thought-out business rules bundled together behind not user-friendly screens. They offered a little bit of everything for companies in each vertical market, claiming that being �best of the breed� is what insures customer loyalty and satisfaction.
Years later we ended up with up to 70% failures of Customer Relationship Management strategy implementations (according to Ernst and Young research), depleted budgets and a lot of bitter customers with lowered expectations. How did we get from CRM strategy as a magic elixir to the CRM strategy that crippled your ability to support customers and left you feeling bitter and cynical?
The answer is that no one knows how to run your business better than you. All software vendors that came out of Sales Force Automation field tried to force companies to adapt to their views of how their customers should be supported. By offering products that could not be easily configured, integrated or customized, they claimed that the CRM failure was due to the lack of management discipline or lack of political clout in order to force the company to change their internal processes.
While cautious about being labeled a whistle blower or being accused of rocking the boat, I would like to offer an alternative theory to the one offered today by the combination of big CRM vendors/big consulting companies. They try to convince the industry that �CRM technology has made it out of a decade-long infancy, and is finally poised to make substantive impact on customer-facing enterprises� (according to Siebel Systems Executive Vice President David Schmaier). However, customers are still spending long hours on hold. Their requests for service are being lost by the system or ignored by the Customer Services Representatives and their expectations continue to be lowered. Despite this, Schmaier, delivering a keynote address at the DCI CRM Conference & Exposition in New York City recently, says "Put simply - CRM works.�
The attitude of blaming the customer for not being able to implement CRM is still the dominating one today. Many middle managers, after spending large corporate budgets on the systems that barely do half of what they are supposed to do, are trying to keep hush about the situation and respond to surveys with rosy outlook.
Reality is � Customer Service is never perfect. It can�t be by the definition. But in order to keep customers happy - companies need to strive for perfection. They need to find processes that work for their own business, leveraging their strengths and accumulated over the years best practices. If a critical customer calls with the problem and the problem has not been solved in a certain amount of time, there should be a way for a system to escalate it to the appropriate level of management. If many critical customers call with the same problem every day, there should be a way for a system to analyze the information and fix the root cause of it. If a certain type of customer likes to buy a certain add-on to a product, there should be a way for a management to learn this on a timely basis in order to offer it to all customers. These are just examples, but each company has a set of specific requests that they will not find in any �out-of-the-box system� (while customizing an existing �best-of-the breed� CRM package is an undertaking that is bound to failure).
The business place does not stay still. The rules of the game are changing. The way you need to support your customers is changing too from the emergence of the World Wide Web to the mobile technology devices. If your CRM system cannot keep up with your business, then you need to get a new CRM system that will, or your customers will leave you. If a customer care process doesn�t work now, management should look at it, evaluate it and reengineer it. However, the resulting process should not be the process that has been pre-programmed by a CRM vendor. The resulting process should be the process that YOU as a manager consider the best practice for YOUR Company. The technology should not be the business driver but a support tool that enhances efficiency. Therefore your system should be flexible enough to adapt to any business rule that you throw at it at any point at time. It should also be open enough to communicate with any data repository or any other system that is critical in your business of supporting your customers. Otherwise all companies will end up using processes embedded in the CRM software and will lose their competitive advantage. The only way to tell a difference between companies will be based on which CRM vendor this company chose.
Some CRM vendors like Salesforce.com are making progress in that respect. They offer easily configurable, somewhat customizable solutions. However, their systems are also concentrated heavily on initial sales process and do not focus on the Customer Care that is required to maintain happy customer relationships.
Until companies are able to implement a customer care package that is built according to their specific requirements and can grow and adapt to ever-changing business environment while providing a substantial ROI, Customer Relationship Management promise will continue to be unfulfilled.