Preface
Customer relationship management (CRM), according to some cynics, is
simply yet another acronym that represents yet another set of technologies
that represents a huge technology market for hardware and software vendors.
Just about every software vendor is jumping on the CRM bandwagon. Every
component technology is being pushed as a must-have CRM "solution."
From call-center headsets to esoteric strategic consultancy and everything in
between, it's all CRM! However, despite this, CRM is beginning to stand, as a
discipline, on its own feet.
This book attempts to provide a new way of looking at CRM. It draws on
my own experience at the CRM front lines, in market research, consultancy,
and, most recently, with a CRM software vendor. Therefore, it presents a per-
sonal view of what CRM should be. The book will be successful if it
encourages those responsible for implementing CRM solutions to consider
how technology should be applied in order to achieve an overriding corporate
ambition: to create an organization that has a customer base of brand
champions.
Few organizations achieve this goal. All too often only lip service is paid to
good CRM practices.
We are all consumers. We all know, instantly, what is good service and
what is bad. We all know what will make us engage with a business that hopes
to sell us something, and we all know what will turn us away and ensure that
we never return. All of us have an implicit understanding of what works and
what doesn't.
We call the shots. We approach only the organizations that interest us.
Often unsolicited cold calls repel us. Increasingly, we're fed up with junk mail
xii Preface
and we watch TV ads for entertainment value only. We know all the market-
ing jargon. We can read through the hype.
We all get a strange sense of satisfaction after having the experience of
bad service, poor quality, or awful delivery when, despite the vendor's protest-
ations, we refuse to remain a customer. We enjoy taking our business else-
where. And if there are barriers to moving our business, we seethe with
resentment and get back by bad-mouthing and carping.
We are more likely to engage in dialog with organizations we know and
trust and have had good experiences with in the past or with those that have
been recommended to us.
So what a relief it is, even though it happens infrequently, when we find
an organization that does things differently~one that listens to us, owns our
problems, and provides a solution exactly suited to our needs. It then checks
back to ensure that we stay happy. Then, after building up a relationship with
us, it will contact us and suggest ways of saving money or doing things better.
Or, more likely, we may contact such organizations ourselves~fully expect-
ing that they will know of previous communications or transactions and will
give us extra special service as a result. What an utter relief, but so rarely does it
happen.
Indeed, I can think of few organizations that I do business with that have
adopted truly exceptional customer-care processes. One is called First Direct
Bank. I have heard so many presenters make reference to First Direct Bank
that I find it almost embarrassing to mention here; surely I could come up
with, say, some Bolivian insurance company that has cracked CRM. But no,
it's that First Direct example again! In the United Kingdom, First Direct
almost defined the model for direct banking and many other banks have cop-
ied them and achieved enviable standards of customer care. In the United
States, several direct (telephone) banks have also achieved higher standards of
customer care and customer engagement processes than those associated with
traditional banks with branch networks.
Organizations that do CRM well are easy to spot. Look for consistent and
understandable branding, articulate communications, grasp of telephone and
Internet technology and customer engagement processes. Customer care and
marketing processes are one and the same in such companies.
This book suggests that CRM, as a technology and corporate concept, is
changing. Customers, increasingly, define the nature of the relationship.
Therefore, CMR (for "customer managed relationships") would be a better
Preface xiii
acronym. However, because CRM is the one of choice for vendors, consult-
ants, and analysts, it's the one that will be used throughout this book.
The change that's happening in CRM is coming about for a variety of
reasons, all of which will be articulated in the chapters that follow. Large
companies are driving CRM in new directions, making central systems
support ubiquitous systems such as Web sites and distributed customer
support operations. New, more open, standards for connecting applications
make best-of-breed CRM tools much more attractive. Marketing con-
cepts are being embraced by CRM as mass marketing and direct marketing
lose their grip on marketing budgets. And CRM, as a discipline, is extend-
ing its influence beyond customer care and into front-office and back-
office areas.
However, more important than all of these trends is a growing realization
that technologies that could ostensibly be described as CRM in the past just
don't cut it any longer. Automatic Call Distribution (ACD) technology that
simply gets in the way of interpersonal communications is not acceptable.
This sea change has come about because of a desire to return to some tried and
trusted principles of customer care that used to be followed before centraliza-
tion caused businesses with local community resources to get rid of them in
the name of progress.
As our society has moved away from local communities to global brands
and centralized services, we have, at the same time, lost the very structures that
used to stand for excellence of service. Think back, not so far. It used to be that
local people from the community provided business services. Bank managers
used to make decisions on lending. Insurance reps used to call door to door.
Household deliveries of life's essentials used to be much more commonplace
before car ownership became ubiquitous.
Early efforts at CRM attempted to put in place what got lost. Costs were
reduced, but so was any sense of involvement. Therefore, customer loyalty
diminished.
Community-focused business was based on four key tenets: knowledge,
reciprocity, easy communications, and local context. Early attempts at CRM
didn't even come close. Let's have a closer look at these four tenets.
Knowledge.
Community-focused businesses had a unique wealth of
local knowledge. This knowledge was tacit, meaning that it was
difficult for outsiders to tap into. However, tacit knowledge was
typically passed on in family-run businesses. Traditional on-the-job
xiv Preface
,
,
o
training systems also ensured that knowledge (along with standards
of customer care) was shared. Customers benefited in terms of more
approachable, dependable local services delivered by people who
were known within the local community.
Reciprocity.
It's a simple fact that in small communities a supplier
often cannot afford to damage a customer relationship, because
news travels fast. In addition, customers may themselves be influ-
encers of other customer relationships. Therefore, the concept of
unscrupulous supplier does not hold in a small community, because
the consequences, in terms of reciprocal action, will be rapid and
severe. Road rage is unknown in rural villages but is common in
urban metropolises.
Easy communications.
Where two parties to a complex transaction
are close at hand and know each other, the likelihood is that both
will be in tune very rapidly. Deals can be suggested and concluded
almost immediately. Where parties are distant and unknown to
each other, third parties such as lawyers and agents may have to be
involved, adding cost, complexity, and excuses for disaffection.
Local context.
Local suppliers have a better view of what the local
community might need. Village stores are quite competent at put-
ting out the most appropriate merchandise at the most appropriate
time of the year. Appropriateness of offering depends on local,
community-focused knowledge.
Modern customer service organizations are rarely part of the local com-
munity in terms of serving that community's needs (even if they are local
employers). Rather, we tend to assume that if we need any type of customer
service, we will be involved in an arm's-length transaction.
Modern service organizations realize this, of course. Phrases from CRM
babble very obviously pertain to this lost community focus. We, as CRM
practitioners, talk about restoring customer intimacy. How can a customer
relationship be intimate when the customer is one of over a million and whose
only method of engaging is via a telephone or a Web browser? It can be. This
book discusses CRM concepts and debates whether current received wisdom
in CRM is appropriate.
Before launching the reader into Chapter 1, where a revised definition of
CRM is offered (recognizing the central importance of effective communi-
cation in creating profitable relationships between both parties to a relation-
ship), it may be worth revisiting the four tenets outlined previously. Would it
Preface xv
be appropriate in developing CRM processes, procedures, and information
systems to reestablish those four tenets? I hope this book is successful in
presenting a case for responding with a simple, unfaltering, and resounding
"yes."
Herein lies a unifying theory of CRM. Central to this unifying theory is
the simple concept of service and brand coming together. This concept is dis-
cussed in much greater detail in later chapters of the book. However, I can
understand why such an idea could make typical IT managers and those
responsible for defining CRM processes a little uncomfortable.
Potentially, it also makes other groups within the corporate body a little
uncomfortable too. If a brand falls within the scope of CRM, then the
shake-up required in terms of typical business functions is radical, even revo-
lutionary. In short, customer support, sales, marketing, and all of those other
so-called front-office functions need to coalesce. There cannot be demarca-
tions between disciplines any longer, because the divisions and demarcations
create political structures that militate against effective CRM processes.
The obverse of this, of course, is the fact that the CRM function itself
becomes one superfunction with multiple facets. Some facets will be mar-
keting-like, others support-like. But the more the separate disciplines can be
transparent and the more CRM provides unifying glue, the more appropriate
customer processes will become.
From a technology point of view there are two main consequences. On
the one hand, so-called CRM suites will diminish in importance because they
do not provide the unifying approach that is required. At this time, no single
software vendor can provide all the key CRM components. Nor will any ven-
dor be able to. In large companies, in particular, legacy data are critical. As we
move forward, the provision of just-in-time applications or information will
cause monolithic and internalized CRM strategies to be torn down. CRM
intermediaries~process outsourcers~will grow in importance. Relationship
aggregators will also be born~channels to market that know how to develop
strong, lasting customer relationships.
The unifying glue will increasingly be provided through the Web services
model, although traditional operational systems will continue to play a key
role in a manner that only the Web services model can allow. In Chapter 4, an
argument is put forward for this. Integration is the new mantra. Integration is
the unifying glue. Increasingly, hard-coded applications will be replaced by
unifying CRM connectivity. From a technology perspective, XML and other
open connectivity architectures and toolkits will grow in importance in the
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