CRM becomes Customer Experience Management

Customers are not a trend in themselves. They are, in fact, the rationale of your organisation’s existence. This begs the question as to why customer relationship management was once hailed as a trend. A top manager at an insurance company argued in an interview that all the CRM software had brought them nothing in the end: there had been no rise in the average number of policies per insured over the years. This illustrates that there are companies that ventured into the world of CRM without considering a shift towards a more customer-oriented approach. CRM is more than a centralised customer database, channel management or set of campaign tools aimed at forcing the maximum number of products down customers' throats. Have customers become any wiser from all that CRM? No. Operations are still not customer-efficient enough, nor has it led to an improved level of service.

Customer drive as a farce

A high-profile US study by Bain & Company showed that 80% of the top managers believe that their company provides superior service, while only 8% of the interviewed customers of these companies feel the same way. Few companies nowadays truly base their actions on customer perception. We might claim that our businesses are customer-driven, but there is no data to support this. After all, being open to dissatisfaction is an extremely uncomfortable position in which to find yourself. It’s not something managers like to hear about. But if you fail to introduce complaint management and error reduction efforts in the service processes, you will soon notice that you're losing customers to a company that is willing to take better care of them. CRM is becoming more important than ever before, especially in these uncertain economic times. Those who neither persevere nor reinvent CRM in the form of customer experience management (CEM) are throwing away their future. A company that neglects its customers is not worth much at all. In fact, customer satisfaction levels are one of the factors companies such as Philips look at when they want to take over another company.

Recessions and customer-unfriendly behaviour

When the economy declines, customers are often the victim. Service is seen as an expense, so controllers are quick to let fly with the cutbacks. Those at the top often forget that positive customer perception actually generates money. This is partly because few managers actually come from a service-oriented background. The failure of the Sprint Nextel merger, for example, was largely due to customers pulling out because of the shockingly poor service. The churn rate (the percentage of withdrawals) was no longer a KPI and therefore not detected by the organisation’s management radar. Instead of being driven by ratios such as solving percentages or customer satisfaction, the customer service centre focused on keeping the calls as brief as possible. That would never happen to us, you might say, but many a top manager is unable to even list the customer-oriented KPIs applied in his company. If you dig to the very heart of the matter, you will soon find yourself surprised by the results that these KPIs can generate. If you don’t know what the goal is or how to optimise operations from the customer’s perspective, then CRM is not the place for you. Chances are that some of the companies will put CRM on the back burner, whereas a smaller group will persevere and take the step towards CEM.

Customer perception also important in operational excellence

The number of proponents of operational excellence always rises significantly in turbulent economic times. If we look at industrial processes, Lean and Six Sigma have been used for well over two decades now to bolster product development and prevent production errors. Lean can increase a factory’s productivity by an average of 30% over a five-year period. The advantages are even more spectacular in a service company, as the same work can be done with a mere third of the original workforce. Even when the entire focus is on improving efficiency, you’d be well advised to think from the customer’s perspective. First time right ratio saves money by the fistful and helps improve customer perception.

IT’s ombudsman role

When working on CRM, you as an IT worker should guard against putting your blind faith in specifications and impressive business cases. Rather take an outside-in approach so you can gain insight into customer interaction in practice. IT is one of the few departments able to have a helicopter view on both the physical and digital chains that run from supplier to customer. Use this insight to focus attention on the interests of customers. And that is why we say that a CIO who reinvents CRM is also a customer experience officer.

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