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The Birth of CRM
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 By Rod
Travers
Senior Vice President, Technology
No one is certain exactly where or when the "CRM" phenomenon
began. Being a technology professional with a wary view of the technology
industry, I sometimes wonder if CRM wasn't conjured up to fill the massive void
that was forming as the Y2K spectacle was coming to a close. Just imagine this
scenario:
It's 1999. Tens of thousands of technology professionals are
working diligently to mitigate the risk of Y2K catastrophes. Then, as the new
millennium approaches, those professionals are so thorough that they work
themselves right out of a job. Someone who is motivated by sales realizes a
"new" technology imperative is needed–and soon–before budget season is over! So
somewhere in the hallowed halls of a large technology consultancy, a strategy
session is called to identify new business opportunities. In the midst of
whiteboards and flip charts and stacks of insightful research, someone stands up
and says, "What we need is a Create Revenue Model." Cheers
and applause erupt as the idea takes hold. "Great acronym!" someone shouts
enthusiastically.
Then a marketing director, already drawing up inscrutable
PowerPoint slides for the new CRM marketing campaign, speaks out. "Wait a
minute. We can't call it that. It's too obvious," she says. "But I do love that
acronym. It is better than ERP!"
After more furious whiteboarding and some carefully placed Post-It
notes, a solution is quickly created. "We'll call it Customer Relationship
Management," says the newly appointed Director of CRM Technologies. "Now, lets
figure out what it is. And keep in mind, our customers don't care about ROI.
This is the Internet era!"
In a matter of weeks, CRM conferences are scheduled, original
research findings are published, and all-new software suites are introduced.
Existing products are hastily renamed and repositioned. And just like that, a
billion-dollar juggernaut is off and running.
Okay so maybe this is a little oversimplified, maybe even a little
cynical. Maybe, maybe not. Take a look at the state of affairs with CRM today.
Tens of millions of dollars have been invested, yet most company executives
cannot objectively say what if any return on investment has resulted from CRM
initiatives. Many can't even say why they took the CRM plunge in the first
place. (How do they get away with that?) According to CIO Magazine, CRM is
"expensive, hard to implement, time consuming, and it may not work." Remarkably,
in the face of what has become a frustrating reality, some estimates peg the CRM
market at over $40 billion within two years. (By the way, where do they
get these numbers?)
There are dozens of experts now telling us why CRM does or does
not work. I won't bore you with more arcane analysis. But I'll share a few
observations that may help if you are involved in or are considering a CRM
initiative.
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There are no silver bullets. Repeat this one thousand times every
morning. |
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People and companies have been taking care of customers since the
beginning of time. Customer relationships are nothing new. Why, then, is "CRM"
seemingly so new and difficult? In my opinion, the "newness" and the difficulty
came when the focus became technology instead of customers. Consider these
comments from a senior operations executive at one of the largest and most
admired multi-line insurance
carriers: |
"Our company has been doing customer relationship management as
well as anybody since 1922–long before [technology] was all the rage. Ask
yourself the following: What are the elements of a successful relationship with
your customer? What tangible things can your customer contact workforce do to
reinforce the relationship? Have you identified the specific behaviors (not
products) that reinforce the relationship?
One of the secrets to our success is that we have never tried to
maintain our relationship with our customer on the basis of products. The
products (and associated revenue) are an element of the relationship we have
with our members - but the relationship itself is the prize.
We have been watching the CRM frenzy unfold and too many people
are looking for the right enabling technology as part if this. The technology is
additive - not the answer alone."
Incidentally, this insurance company has never purchased any "CRM
software packages." Instead they have continuously evolved their business
processes and administrative systems to address the ever-changing market and
deliver exceptional customer service.
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The most important aspect of customer relationships is
understanding what your customers expect and what they need. Ask them on
a regular basis. If something isn't important to your customers, don't waste
your resources on it. If you want to expose customers to innovative new ideas,
then conduct small inexpensive pilots before diving in head
first. |
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The most challenging aspect of CRM is improving your operations
and business processes. Remarkably, there seems to be universal agreement on
this and it has proven to be true in every one of our customer service projects
(yet nearly every CRM project inexplicably begins with technology). Sometimes
major surgery is required, other times it's just fine-tuning. In every case,
however, requirements must be clearly and objectively defined. Most of the
desired upside of CRM is left unrealized in this critical
area. |
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The easiest part of CRM is the technology. There are literally
hundreds of wonderful CRM-related technology solutions on the market. If your
customer relationship strategy requires a certain supporting technology, you can
pretty much rest assured that the technology exists to meet your needs. But
invest only in those technologies for which you have detailed business
requirements and that can be objectively justified. |
Oh, and by the way, now that CRM is maturing, there are new "technology
imperatives" being incubated for that day when CRM loses its luster. Skeptical?
Try searching the Internet for "Web Services", "Enterprise Application
Integration", or "Agile Development". The next billion-dollar silver bullet is
just around the corner. |
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