Comment: The human face of CRM

 Rod Newing, IT Week

Technology swallows 82 percent of customer relationship management (CRM) budgets, yet it only contributes 10 percent to the success of CRM projects.

This is the startling finding of research carried out by John McKean, director of the Center for Information Based Competition. He tracked 35 CRM projects worldwide over a seven-year period.

McKean's figures hit a nerve with me, as I made a similar point in this column last November. He agrees with me that many projects classed as CRM failures were never really CRM projects in the first place.

In his book Customers are People - The Human Touch, McKean also points out that the problem with some genuine CRM projects is that they approach customers as consumers, not as people.

He believes that only 30 percent of a customer's buying decisions are based on their concerns as consumers. Of more influence is the fact that customers react as social beings and expect three things when dealing with an organisation. These are acknowledgement, respect, and trust in the organisation, its products and its services.

McKean says that top-performing employees, whether in sales, marketing or services, all have one thing in common - they understand how to interact with customers as people.

Clearly, if you put in a major CRM system it will enable sales and call-centre staff to cross-sell. However, some staff may find it difficult to sell new products if they are not familiar with them, some may find cross-selling difficult, and call-centre employees may not like outbound calling.

Consequently, a significant number of customers may be deterred by the attitudes of the staff they encounter. McKean says that only six percent of customers' reactions depend on the words of the CRM scripts; 80 percent depends of the tone of voice of the operator.

McKean's solution is to find out what customers need as people, then hire individuals with the skills to meet those needs. He says that, for CRM, the next decade will be about identifying how the top performers succeed, and then teaching and spreading these skills consistently across the entire organisation.

Although these are so-called soft skills, technology is the only way to support and enable them.

Staff must have a very sophisticated information system that enables them to properly acknowledge people, show them respect and build their trust.

McKean says that half of what is spent on technology to serve customers actually ends up dehumanising them. Common examples include poor voice-response systems and inflexible mass-marketing technology.

McKean argues that customers don't want relationships. He believes that they just want to buy the best product at the best price and to be treated like human beings in the process. CRM systems should use information to help staff ensure that this is what happens in practice.