For many of us CRM or/and Customer Management Systems are simple or synonymous to a IT Application and processes but the truth is “ CRM is a centurion effort” of last 20 years of work in this Customer Management discipline than have been renamed as CRM. These years have been years of success and years of frustration. The lasting gain from these twenty years has been a wealth of experience in all aspects of CRM, from defining it to implementing it. A discipline of technology grows the more it is questioned and put through the furnace, It may come out as Gold or may turned to ashes but this exercise is must for it see the future far beyond from next few years.
In the market today for CRM and related ideas, supply exceeds demand. Small Products have collapsed. The Big CRM companies are much less bullish. Many large consultancies and marketing service agencies were at the time of writing 'letting go' many of their staff. Analysts were busy publishing reports showing by how much systems suppliers and consultancies over-estimated returns and underestimated implementation difficulties in their attempts to push up the price and desirability of their services - as if the analysts themselves were not heavily tarred with the same brush. As the salesmen of these new ideas retire to lick their wounds, what are marketers left with? Can marketers continue to practice and teach marketing and selling as they always did? Have the central ideas of marketing, such as branding, been completely unaffected by the temporary intoxication of senior marketing management with CRM and e-business ideas?
It's not unusual to hear senior managers claiming that their company is aiming to recreate the 'customer intimacy' that was characteristic of the corner shop in earlier generations. Of course, most corner shops sold to poor consumers at very high margins, and in some cases used credit as an insidious loyalty device to ensure that the customer's business did not go elsewhere. In the distant past, for some workers the only shops that would trade with them were company shops, working on terms that were severe enough to trigger the foundation of the co-operative movement. Such analogies can be misleading because they do not ask whether a giant telecommunications company, bank or a retailer should even be aspiring to such 'intimacy'. Today's self-service era has cut out 'unnecessary' human intervention, allowing big companies to supply vast numbers of individuals with products and services that are far cheaper in real terms than those bought by our supposedly 'lucky' forebears, while for those of us who like privacy, the absence of human intervention is a blessing.
This raises some interesting questions. Are large companies going too far in trying to match their offer to individuals? Are CRM initiatives that aim to recreate customer intimacy for very large companies doomed to failure because they aim too high or because they aim to do it too fast? Do those large companies that succeed in creating customer intimacy do so only by adopting an unprofitable business model? Do most customers prefer to avoid intimacy, now that they have discovered that they can get much of what they want from large companies without getting too involved?
The answer to all of these questions is 'possibly, yes, in most cases'. Most analysts agree about the relatively high rate of CRM programme failure and how it is induced by trying to do too much too soon. However, the story is not all doom and gloom. In fact, many of the larger companies that are succeeding (by their business measures and by measures of customer satisfaction) in customer management are doing so almost by stealth, over a period of years. In these companies, we see a steady rise in value per customer, declining recruitment of low or negative value customers, better customer retention, and increasing cost-effectiveness of customer management (largely driven by propositions which make it easy for customers to get what they want by using lower cost channels and by their taking on themselves some of the costs of being managed). In these large companies, we find programme management disciplines being observed, by teams which combine marketing, customer service and systems people, working to common objectives and with a clear mandate from senior management to take time to improve customer management, on the condition that returns to customer management are achieved not too long after the investment, and that the benefits of improved customer management are visible in cost savings (eg use of lower cost channels of communication and distribution) as well as in revenue gains (which usually take longer).
Most noticeable of all in these companies is the relatively high proportion of internal input (relative to consultancy input) at the beginning of the journey, with most of the external spend being later, on implementation rather than on reconsidering directions. Putting it another way, big companies cannot do CRM through consultants - they must have critical mass of people in areas such as marketing, IT, customer service and operations who are committed to improving customer management, who have the knowledge and skills required to do so, who are committed to staying with their company to see it through, and perhaps most importantly of all, are wise enough to see through the nice CRM phrases into a more realistic world where it is understood that managing customers is mostly about managing people who manage customers (and only rarely about doing it entirely through computers, as on the Web).
So, size matters in a strange way in CRM. It does make succeeding in CRM more difficult, and makes it take longer. But it probably also means that when you have 'got CRM going', and when you are measuring your progress carefully, with metrics that include not just what customers are doing (hopefully buying more, more often, additional products etc) or thinking (hopefully more satisfied) but also your internal process metrics (fewer leads lost, faster reactions to customers, better targeting), it becomes self-sustaining, partly because success breeds success. Customers like it when companies get the basics right, and so do staff.
Seize the day, Gentlemen and Make your CRM little more better every day
Loving P&C
DC*
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