Customers Really Matter (CRM)...

Sep 2001

First there was TQM, followed closely by ERP and now hot on their heels is CRM; the business world always seems to be talking about the next "big thing" either hyping it up or knocking it down and CRM, otherwise known as Customer Relationship Management, is no exception. The term CRM is the boardroom mantra of the moment and unfortunately many companies believe that if they demonstrate their commitment to CRM by repeating it often enough and spending thousands of pounds on the latest CRM software package, it will become a reality. Sadly, all too often, the company won't see any improvement in the bottom line and CRM will be perceived to be yet another expensive example of where the latest technology didn't live up to the over hyped promises made.

But here is the crux of the issue - CRM isn't about new technologies and it certainly doesn't begin or even end with the IT Department.

The principles behind CRM have been around for a long time although the definitions of just what CRM means continue to vary. The original concept behind CRM was to identify your most profitable customers and then manage your relationship with this select group to achieve higher profits. By gathering information on these customers companies could then provide products and services they needed or even tailor their offerings, resulting in happy, satisfied customers and equally happy, profitable companies. As any person involved in marketing loves to tell you (I can comment confidently here), it costs a lot more to attract a new customer than it does to keep an existing one - so CRM which is all about customer loyalty makes perfect sense.

In more recent times the term CRM seems to have extended beyond "most profitable customers" to all customers. This isn't necessarily a bad thing, after all whether we are deemed to be profitable or not, we all expect good levels of service and who knows, one day we might turn into very profitable customers. In today's multi channel environment CRM is now also perceived to be all about how a company manages the relationship via all the channels used to interact or communicate with its customers, ranging from the Internet, to the call centre or the shop floor.

Whatever definition you give to CRM, technology undoubtedly has a part to play but CRM isn't about buying software and the success or otherwise of a CRM programme doesn't necessarily depend on the technologies you use. In fact, you can implement CRM without buying any technology at all - take for example your hairdresser or barber. The stylist has a relationship with his/her customers and responds to their needs individually - they will know what type of shampoo to use, how short you are prepared to go and suggest styles to suit the you, the individual.

In complex businesses technology provides the means for gathering and collating information on the customers, data which provides the foundation for CRM. However, getting the information about the customers isn't the difficult part - it's actually making some sense out of the information and transforming it into tangible value for the customer. In the excitement surrounding CRM, the basic rules of understanding customer requirements can easily be forgotten.

To succeed and realise tangible results CRM needs to be about a strategy that focuses on the customer and should ultimately be a way of doing business. Done properly, implementing a CRM strategy is not a trivial task, for most businesses it requires a significant change in culture; reorganising the whole company around the customers and not the functions.

Yes technology is an integral part of a CRM strategy, implemented correctly, it provides the integrated architecture and systems to allow companies to understand customer behaviour and improve customer relationships across all contact channels. But, just as important are the right processes and even more importantly, people. As with most technology, CRM software is only valuable if people understand how to use it, interpret what comes out of it and above all, buy into the broader business objectives of a CRM strategy. At the end of the day, technology supports companies in their efforts to manage and improve customer relationships but what CRM has always, and should always, be about is the customer.