Financial Times IT Supplement: CRM Revisited

Promise of new approach puts vendors in a frenzy
Web services by Fiona Harvey
"Even if web services do manage to reduce the complexity and improve the operation of CRM processes, as they promise, that may not be enough to make CRM truly work, according to John McKean, who studied CRM implementations for his books Information Masters - Secrets of the Customer Race and Customers are People: the Human Touch. He warns that an excessive emphasis on technology risks alienating customers: "Companies can spend millions on technology that ends up dehumanising customers, and how human a business treats a customer determines 70 per cent of the customer's decision to buy from one business versus another." Businesses should also consider the need to present a human face, he says."

Customers not impressed by wonderful technology
Management issues by Rod Newing
Kevin Lucas, a senior analyst at AMR Research, reports that in successful implementations about 80 per cent of the project team are users and only 20 per cent are information technologists. This is backed up by research carried out by John McKean, executive director of the Centre for Information Based Competition. Over a seven year period he has tracked 35 CRM initiatives around the world. This research reveals that technology contributes only 10 per cent to the success of the project, yet consumes 82 per cent of the project budget; culture and people contribute most to the success of a project (20 per cent each), yet only account for 1 and 2 per cent respectively of budgets. Mr McKean argues that 70 per cent of a consumer's buying decision is based on human behaviour and only 30 per cent on consumer behaviour. "CRM should not treat customers as consumers, but as people," he says. "The top individual performers in sales, service and marketing all understand customers as people. Customers only want three things - to be acknowledged, shown respect and to build trust in the organisation. Unfortunately, half of what is spent on technology to serve customers ends up dehumanising them." He believes that the next decade will see organisations taking "the art of the human touch" from top performers and making it into a science. Technology can then be used to implement it consistently across the entire organisation through very sophisticated use of information. One of the major thrusts of CRM is to get call centre agents to increase revenue by cross-selling and up-selling. However, Mr McKean points out that only 6 per cent of what a customer reacts to relates to a call centre script, while 80 per cent is reaction to the agent's tone of voice.

New twists for old tricks
Retailing sector by Paul Talacko
Even so, the importance of technology in retailing, compared with human factors such as acknowledgement, respect and trust, can be overstated.