What key factors should companies have in mind when they introduce or upgrade CRM telecoms and IT systems?
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The basic technology is now mature and all the leading vendors have good robust solutions channelling multiple communications streams into single customer records. However, one key question is whether to go with a specialist company, such as PeopleSoft or Salesforce.com, or to opt for a big player such as Microsoft, Oracle or SAP.
Businesses need to ask themselves: How easily will the product integrate with existing core technologies? Are the business and its CRM needs typical mainstream or is it important to have a vendor who understands the peculiarities of a particular sector or niche? Businesses also need to ask themselves, what is the business case? Objectives could include cost cutting; improved service; increased reputation, better marketing, greater customer loyalty.
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These objectives are not mutually exclusive, neither are they automatically achieved through the adoption of a certain type of technology. A lack of management support, clear objectives and management systems are the most common reasons for the failure to realise the potential of CRM systems.
What are the keys to maintaining a healthy relationship with customers through CRM and what are the most common pitfalls companies fall in to?
It is important to distinguish between the process of managing customer relationships and the technology that supports that process. The major pitfall is in believing that the job is done once the technology is up and running.
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Common metrics used by businesses to monitor CRM solutions include average waiting times and the number of problems solved at the first point of contact. However, many of the most common means of improving these metrics can have a negative impact on customer satisfaction.
Second, CRM projects often make the mistake of suggesting solutions, such as re-installing a piece of software, or de-fragmenting a hard-disk, that will require a customer to terminate the call and have a low probability of actually being successful.
Third, businesses also should be aware that while CRM helps ensure a minimum standard of service, this can all too easily become the target standard. Finally, organisations need to work hard on developing robust customer profiles and on maintaining and updating those profiles. The earlier customer type and request type can be differentiated, the more likely it is that customers will feel they are being listened to and the more trust they will place in the organisation.
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The process of understanding and profiling customers and types of contact is also a key source of business intelligence that should feed from CRM to inform all levels of management.
What are the best ways to monitor the performance of systems?
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It depends on the business objectives. The best measure is usually customer satisfaction, but no systems metrics give a direct measure of this. That means that three different aspects need to be considered: technology performance, analysis and customer satisfaction/value.
There is a certain hierarchical relationship – the better the technology works the better the analysis that is possible and the better the analysis the more informed the customer management process will be. However, while failure at the lower levels will have a negative effect, each higher level requires additional effective processes and management commitment for its own success. So a measure must be made at each level.
A key technological measure is data cleanliness – the “garbage in garbage out” maxim still holds true. Closely associated is the effectiveness of integration with other systems and data-sources. Internally, the value of business intelligence generated by CRM is a good guide to the level of integration and of exploitation within the business.
Follow up surveys are probably the best mechanism for measuring customer value – however these are frequently used to measure operative performance rather than customer satisfaction.
Can you identify any exciting new developments in the CRM field?
Customer Interaction Management (CIM) and Customer Communications Management (CCM) technologies are both interesting. CIM and CCM focus on managing the multiple streams of communication to simulate a single point of contact – which knows and understands a customer through “conversational interaction”.
Meanwhile, e-mail Response Management (ERM) and Automated Call Distribution (ACD) are both maturing and are worth exploring. All of these technologies can improve operations. However, they do not, in general, add to customer loyalty or profitability.
Are there trends being seen in interne-based businesses that might be adopted successfully elsewhere?
Sainsbury’s “try something new” approach appears to emulate on-line CRM operations such as Amazon’s recommendations technology and its “other customers who bought…” techniques in its attempts to improve customer service. But it is not clear that the food retailer will be able to pull it off – this kind of thing relies on personal knowledge and understanding, rather than pure technology.
Are there any compliance issues that businesses need to be aware of?
The overseas outsourcing of Customer Service Representatives and Call Centres could have data protection implications if information is cached locally. Also, data should not be exported to counties that do not have equivalent DP legislation.
However, in general, a single data source for all customer communications makes it easier to comply with DPA – provided robust rules are in place to demonstrate data is not kept longer than necessary and only used for stated purposes (though this can be tricky). There are obvious human rights issues that could arise if data was misused, but I am not aware of any relevant case law yet.
Any suggestions for further reading in this field?
The Handbook of CRM: Achieving Excellence Through Customer Management by Adrian Payne, has many examples of companies that have got CRM right – and wrong.