CRM: without people it's just technology

CRM as a term has been so maligned that it is difficult to believe that it actually stands for "customer relationship management", but the truth is that it doesn't have to be that way.

Certainly, CRM became tainted in the late 1990s through a number of very expensive implementations which failed to deliver, but instead of giving up the concept smart businesses are realising that its not simply about technology, its about the people in your organisation and changing your culture to provide - with some technology assistance - a better customer experience.

In the past, some organisations viewed CRM as a "silver bullet solution" in a box. By paying the money and putting in the system they believed they had done pretty much what they had to do.

But effective CRM is not a one-off spend or a once-off initiative. To succeed, it must be a continual process, which includes effective staff training, intelligence gathering and analysis, and ongoing improvement. This, of course, requires commitment at the very top of an organisation.

Recent analysis by Accenture has found that, as a general rule of thumb, 80 per cent of the value of a CRM investment comes from 20 per cent of the spend, and that critical 20 per cent is delivered through a customer insight capability which comes from talented and creative people using sophisticated analysis with good quality data.

Under-investing in the performance aspects of the change and in a customer insight capability can undermine a CRM project before a dollar is even spent.

In the earnings pressure many organisations have been under in recent times innovation has also been significantly neglected, and yet our research shows that customers would respond positively to innovation if they were presented with it.

Across five countries we found that consumers would be willing to spend more money if they had the right products and services on offer, and the classic conclusion was that they weren't getting that and were spending less because they weren't seeing innovation from the organisation.

In the financial services industry, for example, products and services are becoming increasingly commoditised and effective CRM has a major opportunity to build a differentiator for the brand in the market place.

To do that, however, the industry faces enormous challenges. Typically, banks and financial services providers have operated in a classic silo situation, with business units cut off from each other and little or no sharing of information taking place between the different channels.

The larger the organisation and more disparate the channels the harder it is to close that information loop so it can be effectively mined and become a major asset.

Part of that, of course, is putting in all the data capture and warehousing systems to aggregate the information, but beyond that is a major task in analysis, tracking and the often neglected area of measurement - both the customer responses and the effectiveness of the organisation's response.

The world does not stop for a CRM implementation - it's akin to having open-heart surgery as you walk down the street.

You can't stop your business to rethink, put things on hold, and say "I'll get back to you".

Because you have to keep doing business, making money by servicing customers and attracting new ones, the best approach is to factor in CRM as part of the ongoing transformation of your business, which never actually stops once it has begun.

CRM is not about technology. It's about the way you do business and interact with the customer.

Even if the term CRM is now so discredited that it disappears from view, the need for effective innovation in customer interaction and offerings will remain, no matter what we decide to call it.

Joseph Najem is senior manager, CRM practice, Accenture Australia

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