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CUSTOMERS
A storekeeper of the Victorian era would have
been baffled by that corporate buzzphrase of today, "customer
relationship management". Today "CRM" systems are
being introduced into companies throughout the land in the form of
training schemes, new call centres and sophisticated websites with
online sales and order-tracking facilities. In the 19th century, the
retail trade had none of these tools,
yet knew its customers
infinitely better than big companies do today. The range of goods
and potential outlets may have been miserable compared to what we
now have, but the link between buyer and seller was immutable,
established by habit and availability. If a regular customer
walked into his or her local shop in the 1890s the first question
the person behind the counter asked would be: "The
usual?" There was no lengthy ordering process.
Victorians would probably have fainted at the idea that they
had to browse through a gigantic catalogue themselves, as we do on
so many net shopping sites today. At the heart of the business of
buying and selling was a close, implicit relationship. The
storekeeper understood what you liked to buy; you knew you could
rely on him to get it for you.
For all the hype about CRM, this simple rapport is at the heart
of the subject. John McKean, executive director for the Centre of
Information Based Competition in Ohio and one of the new gurus of
the CRM scene, says this is an issue that has been with us for as
long as human beings have been selling goods to one another.
"CRM has been around since 2000 BC, part of every great
civilisation, part of every great economy. It is only in the past
100 years that we have had a catastrophic CRM failure rate and
it's only in the past ten years that we have started to have a
rebirth of CRM. It will take another 20 years for us to regain the
intimacy that a storekeeper of a century ago had with his
customers, even though he used no technology at all."
McKean is far from alone in his view that big companies have,
until recently, lost the plot when it comes to dealing with the
people who are their reason for being in business.
The bad news is that the massive spending enterprises are
making on CRM is, in the main, wasted, he says.
"The worldwide success rate for CRM is 3% - in other words
a 97% failure rate. Too many companies have focused on technology,
not their information competency. CRM is all about being good at
using information."
For him, technology is the enabler and the downfall of many CRM
schemes. It offers huge potential to standardise the information
seen throughout the buying and selling process. A customer may now
be looking at the same screen as a sales person when he she is
placing or querying an order.
"The cost savings from a web-based infrastructure are
mindboggling. But in real terms I only see pockets of brilliance
when it comes to CRM adoption," he says. "The technology
is only one part of the equation. It is how it is implemented that
really matters. When it's done right, it's fantastic."
And as anyone who has hung on line for 15 minutes to call
centre music knows, when it's bad, it's awful.
What brings down today's CRM efforts? Any number of problems,
says McKean. Companies may install the right technology but fail
to adapt their corporate culture to a new, customer-conscious age.
Executives may swallow the idea of CRM but be unwilling to lead
staff in its implementation.
"Maybe they find out they have the technology but they
don't have the people skills to use it. In reality, most firms
probably haven't spent enough on technology and they haven't
balanced it with the other factors. Technology gives you the
capacity to succeed, not the ability. If you just go out and write
a cheque for the technology then put it in the corner you will get
worse."
The adoption of CRM and the move to web-based e-commerce are
also accompanied by a number of common, fatal misconceptions. Many
companies believe that their customers online will be the same as
those in the bricks-and-mortar world. Others are convinced that
all they need is to erect a web page that acts as a window onto
their existing corporate structure, without adapting the
underlying business to meet the demands of e-commerce.
There is also a common misconception about timing.
"Companies think that if they create the right web strategy
now it will remain the right strategy for at least a couple of
months. The reality is that you probably have to change that
strategy the day after you create it."
Levels of customer service may change too. In e-commerce,
McKean says, margins may well be much lower than they are in the
conventional world. The profits that allow customer service staff
to answer every call within 30 seconds in the bricks-and- mortar
world will probably not be there online. When customers face a
five-minute wait to talk to a human being, some better
customer-care strategy will be needed to keep them loyal.
McKean believes that success or failure on building customer
information skills depend upon seven different guiding principles,
outlined on his website at www.informationmasters.com. These are:
people, process, organisation, culture, leadership, information
and technology. McKean has no doubt which is the most crucial in
changing old-fashioned, mass market giants into the lean, hungry
and responsive organisations of the future. The biggest stumbling
block lies in transforming the corporate culture for the change.
According to his centre's research, most firms that have
attempted to introduce CRM techniques have bought the technology
but not the idea. The result, too often, is chaos.
"Transforming the information legacy requires an organisation
to think differently and think about different things."
Few companies seemed ready for this challenge and, at the same
time, they underestimated the number of staff and the personnel
skills required to bring about change. "In fact, most of the
firms cited personnel challenges as being the single biggest
obstacle to success. In most cases, there was no specific plan to
address the personnel issue," he says.
Another crucial mistake was the lack of leadership from the
top. "One of the most crucial elements of the firms who were
on the road to information mastery was the existence of an
individual who represented the heartbeat of the firm's information
transformation. This individual represented a multiplicity of
roles within the firm - information visionary, whipping post,
corporate hero, chief troublemaker, change agent and master
salesman."
The people who were able to make a difference in these roles
were, McKean says, "information renegades" trying to
transform corporate attitudes to business information at the risk
of their own careers. In the end, they will be the ones who take
the firm from the old, business-as-usual stance to tomorrow's
prosperity.
For all the buzzphrases, McKean believes that CRM comes down to
basic principles that would have been understood by any Victorian
storekeeper. The key to a good relationship with customers. he
says, is based on personal values, even above the features of the
product you are selling.
"Some 70% of delivering customer value is about making
them feel like a human being," he says. " This is the
most profoundly simple idea that everyone in the customer arena
tends to miss."
David Hewson, Copyright 2000 Times
Newspapers Ltd.
Photograph: Hulton Getty
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