Don't talk about CRM: do it
by: Camilla Ballesteros
Everyone is talking about the importance of CRM, but pitifully few have taken action to implement it, writes Camilla Ballesteros
|Aren't you sick of people telling you that "the important thing is to focus on your customers"? And that "increasing retention by five per cent increases profitability by 25 to 95 per cent"? And even: "The secret is to understand and respond to their needs to increase your share of their wallet"?
No! Really? You mean, if I look after my customers, they'll buy more? Radical!
As someone who has been in customer relationship management (CRM) for a decade, I'm fed up with being told the blindingly obvious. While the CRM and e-CRM industry, in all its facets, measures in the billions of dollars and, according to the Forresters of this world, is set to grow enormously over the next five years, there seems to be an awful lot of bland talk and not a lot of action.
So - back to this wallet. How much money are companies making from CRM or e-CRM? Where are the good case studies?
In the online world, Dell and Amazon are still quoted as good examples, but they were the ones cited by panellists at e-CRM forums back in 1997! I was recently talking to a personalisation software sales consultant who, when asked for a good example of his/her product in action, said "There aren't any. Clients don't really do much with the product in terms of customer communication."
According to a YOUCentric survey, over 65 per cent of managers expect CRM to increase sales revenue by more than ten per cent. Given the current economic climate, if I were the chief executive of a company that has recently spent millions on customer database development, campaign management tools, loyalty programmes, personalisation software or related systems integration, I think I'd be bellowing: "Show me the money!"
Why the delay? The most common misconception is that CRM and e-CRM are about technology. Somehow, if I spend a fortune on software licences and development, my customers will buy more and become more loyal. This is compounded by the development companies seeing dollar signs the moment CRM is uttered.
Customer relationship management is about managing your relationships with customers. It is about communication and the quality of communication. Many clients budget for the cost of a database development or, in the online world, a personalisation platform, but there is nothing in the budget for using the technology thereafter to communicate with customers.
One major blue-chip company invested over £10m online but then refused to take e-mails from customers on the grounds that "the call centre could not cope with the influx". Another said that being the foremost in CRM in its industry was its second of three main objectives this year. Yet somehow it still felt able to reveal: "We're not doing any customer communications in 2001."
It's like buying a car and then refusing to put petrol in it on the grounds that you can't afford it.
How do they get away with it? In my lifelong quest to persuade clients to deliver value to their customers through relevant, targeted communication programmes, I have heard a number of reasons. My favourite, and a frequent one, is: "Without proper integration, we might send out conflicting messages. What if a customer gets an e-mail and direct mail piece on the same day, due to lack of a common database?"
God forbid! If I received a mailing piece and an e-mail from a company on the same day, I'd sue! Come on. What is the overlap? If there is one, it can often be solved by a quick phone call internally to get a copy of the communication schedule, rather than by massive database integration. Data integrity and synchronisation is a worthy cause, but given the lead times, it shouldn't put an embargo on all customer communications. As John Lennon said: "Life is what happens when you're busy making other plans."
Furthermore, given the potential infrastructural investment, companies need to get moving to deliver business cases for e-CRM.
The assumption is that the right communication will increase profits, but where is the evidence? Loyalty is not always rational - look at Mary Archer.
Perhaps this is where the inertia comes from. Those who are responsible might fear a hard evaluation of the return. What if there isn't one? Their fears may be justified in that the true effects take a long time to evaluate; CRM is for life, not just for Christmas. But too much caution means that by the time all this CRM investment finally kicks into gear, the customers may have gone.
Until they feel a personal responsibility to deliver on customer value and show a return, marketers will not be "customer-centric", no matter how much lip service is paid. The reasons given for delay are often just excuses. Companies could be delivering compelling customer programmes right now, but there are still pitifully few doing so.