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The New CRM
The buzz from the Gartner CRM Summit: Go multichannel or go nowhere.
“CRM is only as good as your last interaction and your weakest channel,” Scott Nelson, Gartner’s managing vice president, application strategies and governance, said during his keynote. The message from Nelson and other Gartner analysts is that organizations need to meet customers' increasing expectations for consistent multichannel experiences and access or risk irrelevance.
Nelson also reminded attendees that CRM is a strategy, not a technology whose “on switch” will suddenly renew a business. Done incorrectly, “CRM can mean that you can more quickly and efficiently tick off customers rather than fundamentally change the way you do business,” he said. “Companies are coming to a watershed change. They realize how difficult it is to do CRM and are changing their business approach to focus on customers.”
One challenge companies have, Nelson noted, is that sales, marketing, and service are not process-oriented disciplines, which is why making the process changes necessary for a successful customer strategy can be so difficult. Process mapping is often a serious pain point, he said. Nelson predicts a major focus on CRM processes going forward as companies evolve their customer strategies. "CRM is not once and done," he noted. "It's always changing and improving the way you do things."
What else were speakers and attendees talking about at the Summit? Check back tomorrow for another show update.
Don Pepper, your story about the airline says it all.
Another Case In point, A Canadian Retailer:
The company had evolved a sophisticated forensic-like returns and adjusting procedure. They could ferret out the bogus claims among the numerous valid claims in ways that would impress a CSI. It was a near perfect process, executed to the letter, by good and faithful employees who did exactly what they were told to do, for years. Clerks wrote down details and sent the product for testing.
In other words, the person who faced the customer couldn’t help the customer.
Someone challenged the math. The system cost more than the product being returned. Then they challenged the process with a question. “How much revenue do we lose when the good customers get tired of the third degree and stop coming here?”
Now, when a product comes back they do a couple of basic things like check for a receipt. They trust employee judgement and throw the product in the garbage and give the customer a new one, with an apology. They tabulate the returns and take the vendors to task on defective product, not the customer.
There is still a clear process but now the person who faces the customer can actually help the customer and make things right!
This change required a fundimental shift in how mamagement viewed and ibteracted with front line staff and process, so they could implement the brand.
I think Matthew’s suggestion that leadership is critical for CRM success is absolutely spot-on. Too many organizations place ownership of the CRM initiative in the hands of the senior-most customer or IT executive – and some companies push it even farther down the chain. But we all know that treating different customers differently requires integrating a company’s operations across a wide array of functions, beyond just the “customer facing” side of the business. I saw an IBM survey that said CEO ownership of a CRM initiative improves the chances of success by roughly 50% (we cited this study in our book, Return on Customer.)
However, there is a way to interpret Matthew’s comment on the importance of process in CRM, and square it with Scott Nelson’s comment that marketing and sales are not fundamentally process-driven disciplines. On the production and operations side of a business, processes are rightly concerned with outputs. But on the sales and marketing side (less so in customer service), processes cannot really affect outputs so much, so the process mapping must concern itself with the inputs to good marketing and sales, or which is perhaps why Matthew says the real trick is to have a good understanding of the behaviors of the people involved in the processes.
I can’t help but recall the posting I just did, in another string on this blog, using my own family’s experience when we booked two different airlines last spring, out of London, to highlight the importance of employee culture, rather than simple process change (see: http://www.1to1media.com/weblog/2006/09/the_one_absolute_must_for_cust.html#more).
In my view, no matter how good the process mapping has been, CRM success still requires having a customer-oriented culture – a culture in which everyone’s mission is to treat the customer fairly and competently, and the first question to ask in solving any problem or resolving any issue is: “What is in the interest of the customer here?” But culture, of course, brings us squarely back to the issue of leadership, which is the point that Matthew came in with.
I believe that the greatest impact on CRM begins with leadership. An effective CRM module would map the relationships between leadership attributes, attitudes and company values and how that relates to customer loyalty. As few leaders actually interact with the end customer, the correlation will be linked through the employee’s attitudes, behaviours, and satisfaction. You can’t effectively tell or manipulate an employee to get better at CRM, but you can influence their behaviour by modeling it at the leadership level. The old adage of “children learn what they live” is at the heart of such a model. I don’t mean to say that employees are children; I am saying that we adopt the behaviours of the leadership we experience every day. Either that or we reject it and sublimate the discontent into less than ideal behaviour.
I believe that the use of process mapping is absolutely crucial in CRM, but not in the way we might expect. The trick is to understand the behaviour of individuals within the process relative to the desired outcome; it’s not necessarily about the process at all. Process map makers spend way too much time documenting linear task with the expectation that people will model their behaviours accordingly. That concept defies our natural instinct of creative response to our environment; and that is a fundamental building block of survival and success. Process, to a degree, governs front line employee behaviour. Business requires efficient process to remain cost-competitive so ruling that out of the equation is not an option.
I would go as far as to say that CRM is absolutely dependent on business process. If you use process modeling to engage employees in figuring out how to achieve the desired outcome, more often than not they will engage, get excited about it, improve the process and follow through with it. The leadership act of consultative-service to your front line employees models the behaviour you want them to exhibit when they face the customer; consultative service.
To add depth to Scott Nelson’s comment “…sales, marketing, and service are not process-oriented disciplines”, I would argue that they are very much process-oriented disciplines. The real question is, are the employees fully engaged in the rapid evolution of process with the intent of better service? Has management fully engaged the employee, the way they want the employee to engage the customer?