Industry analyst IDC says US businesses will spend nearly $US12 billion on customer relationship management tools (CRM) by 2002. Big business is throwing immense technological resources at getting close to the customer the way a hermit crab gets close to a snail shell.
It's not only big business getting into the CRM act. I recently visited Agillion, a company, based in Texas, that is aggressively marketing a highly touted CRM product for smaller businesses. One of its clients, Team Lynch - a small real estate agency - claims that customer referrals, a key measure of customer satisfaction, jumped 70 per cent after deploying it.
Almost every company has gone full bore into customer care. But even as I write this, tens of millions of dollars worth of CRM products are going for naught because so many companies fail to grasp a fundamental truth: CRM is not about technology; it's a state of mind. There are excellent CRM tools available to attack long-standing customer issues. What is lacking is an empowerment of people up and down the company to point out the obvious places where these tools could be deployed.
Consider the following examples of customer relations in action:
A long-distance phone company approached a business user in the US offering a discount rate better than his business already received from its current provider. The customer called his provider to enquire about the upstart. The customer service representative warned the customer that upstarts are free to change rates at will, usually upward, to eventually earn a profit, while selling initially at a loss. The customer then enquired about his existing long-distance rate and was quoted one 50 per cent higher than what he thought he was paying. "We had a rate increase in July," he was told. Said the obviously embarrassed customer service representative, "In your state, we are not compelled to tell you of rate increases". A CRM tool could have easily informed the customer of the rate increase thereby helping the company keep the customer - who has since changed carriers.
In another case, a business customer held significant funds in a money-market account of a bank that was acquired earlier this year by another bank. The customer had routinely made phone transfers to his cheque account from the money market account. But when he tried to do so after the takeover, he was told the following: his money market account had been switched - unbeknown to him - to a money-market fund with the acquiring bank; the bank needed more "proof" that the person calling in the transfer was who he said he was, despite his answering all the password questions correctly; and if the customer wanted to get at his money, he would first need to get his lawyer to write to the bank proving that the customer was who he claimed he was! A CRM tool could have placed this customer automatically in a group that, at the very least, could have triggered a phone call from the bank, informing the customer of the pending changes.
Then there's the frequent-flying businessman who arrived breathless at the gate 10 minutes before departure. The gate was still open, and the ground staff hadn't yet begun boarding standbys. Ample seats were available, but the frequent flier, holding a paid first-class ticket, was told that the standby fliers "had been waiting a long time, and you are late". He couldn't board and missed his connection home. The simplest of CRM database applications could have tagged the flier with a status that would have marked him as a valued customer and sent him speedily to his next connection. Now he has a new first-choice airline.
These stories are true, since I was the customer in each case.
CRM is a state of mind, something that escapes many companies. For CRM to work, it has to focus singularly on one thing: the customer's pain. Deploy customer management tools at your own convenience, and that's just what you'll cause.
Bill Laberis is a consultant and former editor in chief at US Computerworld. Contact him at firstname.lastname@example.org