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May 2000


Defining CRM With Lessons From The Village Market


As the leading publisher in the call center CRM industry for nearly 20 years, I make it my business to keep up with the latest information on the industry disseminated from sources on all fronts: publications, trade shows, analysts, consultants, vendors, etc. Over the last six months to a year, I have been disturbed by the growing confusion among these sources on what CRM really is. It seems the more commonplace the acronym CRM becomes, the worse the confusion becomes. I believe this is because the various factions of the industry are trying to squeeze a very broad concept into their own narrow little niches to make the public believe that their limited role in the industry is all there is to true CRM. Let me set the record straight once and for all. CRM, or customer relationship management, is simply the process of making and keeping your customers happy, which in turn, makes your business profitable. You can't buy CRM in a box; it is a fluid concept. It encompasses all aspects of a business; it is an enterprisewide philosophy/process that must emanate from marketing, field sales, the call center, upper management, distributors and partners and everyone else in between. CRM has been the basic tenant of business since the beginning of time.

What's Changed In CRM?
What has changed is the dynamics of CRM. First, the very fact that we have an acronym for this process, a very popular one at that, means we will encounter a large number of "me too" business forces seeking recognition as industry players. This is all fine and good as long as they truly are what they claim. (Let's not forget the spate of customer service "experts," sales and marketing "gurus" and TQM or total quality management "enthusiasts" who have so eagerly offered our industry assistance in the not so distant past.)

The Village Market Transformed
Second, and this is very significant, is the organizational structure of business today. Throughout history, the village market has been the gathering place where people built a community by getting to know their neighbors by talking about politics or the weather or asking about the kids or haggling the price of a goat. The beauty of village markets was that merchants knew their fellow townsmen's preferences because they had built a history by adding together the memories of their past transactions and conversations; they had mental portraits of them and knew their customs. The transformation of the world and business during the past two and a half centuries of the industrial, transportation, communications and computer revolutions (and quite a few political ones as well) has led to the demise of community building by local markets and led in the past 50 years to the ever-accelerating pace of the impersonalization of customers being boiled down to numbers. This has left customers feeling they are just one of the herd, thinking, I need to find another vendor, a business where they remember who I am and know what I want. I need that sense of community, the personal interaction of the village market.

The Organizational Remedy
Of course, businesses have not been deaf to the outcries of their customers. They have tried over the years to remedy the situation by creating organizational structures designed as customer touch points, thus the marketing department, the PR department, the field sales force, the call center, the distributor, the partners, etc. Each one of these subsections of a business has its own needs for accomplishing their specific role in the CRM process. However, this is where I believe much of the confusion surrounding CRM originates. CRM solutions providers will target one of these specific subsections of the CRM process, say field sales, for example, and pretty soon, all those involved in field sales believe that CRM is only about product or service solutions that aid the field sales force. Of course, those solutions are CRM solutions, but they're only part of the picture. As I alluded to earlier, without the cooperation of marketing, field sales, the call center, management, distributors and partners -- and the open sharing of information between them -- there will be no CRM. That brings me to the third, and most profound, change to the historic concept of CRM: technology.

The evolution of communications technologies in the past century and a half, culminating in the Internet, has made possible the local on a global scale. By eliminating physical boundaries, the Internet has created a village market where anyone in the world can drop by to sample the merchandise. The Internet has the potential to not only supply goods and services from anywhere in the world, but also bring back the intimacy of the village market. But it cannot do it by itself.

CRM is what will bring back the intimacy of the village market. When well-executed, a CRM business philosophy wedded to today's business technologies can provide the personalization of the merchant in the village market: both the recognition of a valued customer and the collective memory of the past transactions that made that person a valued customer in the first place.

Where Do You Buy CRM?
So, you say, this sounds great, where do I buy CRM? Well, you can't buy CRM. CRM consists not only of the technologies of modern business, but also of a business philosophy of recognizing the lifetime value of customers and giving them personalized treatment and superior service with each interaction they have with your business. CRM is the optimization of every customer contact; it is weaving together all threads of information into a unified portrait of your customer.

Human beings are a wonderful hodgepodge of likes, dislikes, preferences and desires. Some may enjoy the carefree, sunny afternoons of late-19th-century Parisians captured by the Impressionists, others may prefer the quiet, meditative interiors of the 17th-century Dutch school, while still others the enduring grace of the sculpture of classical Greece. Portraiture not only presents a glimpse of the person portrayed, but also a picture of the world in which they live.

Data Sharing Is The Heart Of CRM
Garnering a picture of the people who honor our businesses with their patronage, securing valid data on the world in which they live (read likes, dislikes, preferences and desires) and making those customer portraits accessible across the enterprise is the heart and soul of CRM. Indeed, intelligent data sharing is like a jockey riding the horse of business to victory! Yet to be truly world-class, a business needs a focal point, a strong hub of data communication. That, of course, is the call center.

Remember The Call Center's Raison d'tre
I believe most readers would agree that customer relationship management is the overriding raison d'tre of their call center work. After all, regardless of whether your call center's function is inbound, outbound, inbound and outbound, Web or electronic communication, sales or service, you are forging a relationship with a customer or potential customer at all times. The sheer volume of customer contact in the call center cannot be matched in any other segment of business.

Since there is no physical and as of yet little visual contact between call center personnel and their customers, clearly no other segment of business is in greater need of customer relationship techniques, technologies and services than the call center. Fortunately, businesses with call centers have become technology savvy over the years and have made great strides in implementing the necessary tools for both pleasing customers and sharing information within the enterprise. But nothing in business can ever be static (especially today) and the call center is no exception. It is imperative for call center management across the board to stay informed of and start to implement the latest technologies for CRM being offered in the marketplace. There is a vast array of very important technologies to consider, so you are well advised to make a concerted effort to stay abreast of the latest developments in order to make judicious purchasing decisions. As you go through this exercise, always keep in mind that CRM tools must adjust to your business rules and philosophies rather than forcing you to reengineer your business to fit the technologies.

Now More Than Ever
As more and more in-house and third-party teleservices call centers are expanding to include Web-based sales and service as customer contact vehicles, the need for the best customer relationship management tools and techniques has reached an all-time high. There is absolutely no denying that competition in this arena is burning hot. While competition is usually a good thing for a business (it keeps us on our toes), it necessitates unwavering dedication to customer relationship management. Nowhere is this truer than in the virtual world of e-commerce/e-sales. Let me put this into perspective for you with a real-life example of a company that did not pay attention to this advice and the customer experience it provided one of its customers.

A Tale Of Customer Dissatisfaction
A customer went Web surfing to look for a particular blue shirt he wanted to buy. He found the shirt he wanted to purchase on the Web site of a large, reputable clothing manufacturer that operates a string of brick-and-mortar stores. There was a photo of the shirt and a description, but he had a question. Because he is a tall man, he wanted to know if there were tall sizes available. Unfortunately, there seemed to be no way to immediately contact a sales representative. He checked the FAQ section on the Web site, but found no reference to sizing. There was a link to click to send an e-mail to the company, which he did (after filling out an extensive form requiring all his demographic information for marketing purposes). He received a confirmation that his e-mail was received and would be responded to as soon as possible. Unfortunately, he wasn't sure if that meant one hour or one week. After a day went by and no reply was received, he decided to go ahead and order the shirt.

A week passed in which he received no communication from the company. The shirt finally did arrive, and it was the right size. Unfortunately, it was lime green...not blue. How could he return the shirt? He visited the Web site again and sent another e-mail to ask about return information. Once again, he received an auto-reply. His next step was to call the company's toll-free number listed on the shirt's packing slip. A pleasant agent picked up the phone, but she was unable to help him, as she said she had no knowledge of the company's Web transactions, and his purchase was not in her computer. Sorry, sir.

What alternatives does this experience leave this customer? He can put the shirt in his car and drive to the nearest store location and try to return it, but chances are the sales reps there will give him strange looks and tell him that their computer systems are different from those of the Web sales branch of the company. Sorry, sir. What's his next step? Finding someone who would like an extra-large, lime-green shirt as a gift? Probably. And what will he do the next time he goes online to make a purchase? Find a different merchant? Most definitely.

Don't Be Clicked Out Of Business
To ensure that you do not become a company caught in the noose of poor CRM, the most important thing you can do is to remember that CRM encompasses all aspects of your business. Do not let the business goals of outside enterprises pigeonhole your decision making when it comes to CRM. Spread the philosophy of CRM throughout the enterprise. Optimize every customer contact. Weave the threads of all customer interactions into a unified portrait of your customer. Have a strong knowledge management system in place to keep corporate knowledge in tact despite turnover. Be sure you employ the best technologies to achieve your CRM goals, and remember that CRM is more than technology; it is the attitude of the people using the technology. If you cannot do any part of this, do some research and outsource.


Nadji Tehrani
Executive Group Publisher

Technology Marketing Corporation

2 Trap Falls Road Suite 106, Shelton, CT 06484 USA
Ph: +1-203-852-6800, 800-243-6002

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