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After years of implementing, reading learned
articles, books and papers plus heated discussions
with vendors, consultants and pundits about
the success or otherwise of Customer Relationship
Management (CRM) solutions, I am becoming convinced
that real money has been wasted by a simple
mistake. The simple mistake has been to
confuse inputs such as money, time, leadership,
commitment, technology and re-engineered processes
with outputs such as changes in behaviours,
increased customer loyalty, retention, bigger
sales pipeline and improved profitability (figure
1). The expectation that by merely going
through the motions of input you will get the
hoped for outputs maybe naïve and hope is not
a strategy whilst garbage in is often equated
with garbage out. Of course this all depends
on your definition of ‘simple’!
Now I don’t mean to say that
these inputs are, or were, wrong but the way
they get employed are not efficient, effective
or sufficient. Figure 1 identifies a number
of the areas where the inputs have not led to
expected success.
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Inputs
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Outputs
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Why does this
occur?
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Voice of customer
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Failure to Innovate
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Customers don't know
what they don’t know
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Segmentation and analytics
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Human behaviour different
from expected
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Customers are unpredictable,
increased customer awareness of special
offer, rebate or mark down
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Systems and technology
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Failure to connect with
users and customers
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Lack of integrated ‘Tacit
Knowledge’. Systems and technology driven.
Lack of human behaviour integration
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The Business Case
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Unrealised ROI and benefits
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Unrealistic assumptions
supplied by a 3rd party never
revisited once solution implemented
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Training
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Avoidance, stealth disruption
and failed systems.
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Training is not pushing
buttons – little culture change, education,
or explicit benefits tailored to the need
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Process Reengineering
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Straightjacket processes
that may initially enhance productivity
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The impact is both practical
and emotional this equals employee mistrust.
Fails to support task and no clear line
of sight to what’s in it for the user
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Sales Force Automation
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Heavy duty admin overhead,
straightjacket processes, stealth and
blatant avoidance
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Few benefits valued
and system onerous. Value is in the eye
of the user it needs to be seen and heard
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All the changes expected from
the inputs are predicated on enabling and motivating
people who have often not even been consulted,
involved or even taken into account as feeling
human beings that have a stake in their future
and the success of the organisation they are
working for.
Voice of the Customer
An analogy that that might
help make the point clearer comes from the world
of innovation where for years the idea was accepted
as gospel that you must include the voice of
the customer in any new product or service you
develop. Yet customers often don’t know what
they don’t know. There is no one voice of the
customer that identifies what they really want
and this has led to all sorts of practical and
academic arguments and difficulties of application.
On a number of occasions the voice has not created
the winning solution or product but a dud.
Outcome Driven
Lately the new gurus of innovation
are questioning the accepted wisdom by identifying
that there are different questions we should
be asking and these are about what the customer
is trying to do or get done. Asking customers
what they want in its older guise is limiting
as customers often cannot conceive of that breakthrough
product or service. They are not in the
position to appreciate what is really available
in terms of packaging, technology or components
so their desires are often limited by their
perception of what could be. They run into two
major psychological blocks ‘functional fixedness’
and ‘contradictory needs’[i].
Put simply the customer/user just doesn’t know
(See figure 1).
It’s the un-articulated needs
that are the ones that will create the new innovation
- so far from getting rid of the voice of the
customer they are saying we should listen more
carefully and with a discerning ear; the real
focus should be on outcomes. What is the customer
trying achieve through the use of the product
or service. Listen carefully to the right
voices that help you isolate those required
outcomes has to be the right way to go.
Outcome Driven at
last
We have carried out a number
of projects that are based on the outcome approach
including manufacturing, higher education, telecommunications
and financial services. In one of our
projects at one of the largest banks in the
UK we helped initiate a CRM programme for their
Corporate and Wholesale bank where we identified
the outcomes the relationship managers needed
to be successful. This bank has over 500,000
customers in the corporate sector ranging from
tens of millions of pounds sterling turnover
to many billions across the whole spectrum of
business types. They needed to replace their
legacy admin heavy SFA with a solution that
could improve sales effectiveness and reduce
the admin overhead.
Relationship Managers
Relationship managers may
have one customer to support or up to 80 depending
on customer size, industry and or specialized
needs. The major requirement of all bankers
is to know what products and services the customers
use, where, why and how much revenue and profit
do they make or could they make. This bank was
no different; so we helped them identify seven
major outcomes (identifiable job benefits that
would create success) the teams wanted from
their CRM/SFA solution. We applied our
specialist’s knowledge to this customer to also
understand the driving need for a clear analytical
focus on particular customers that could drive
revenue creation and the unique drivers of that
customer value. Who are those customers and
what do they look like and do they have a need
for a particular product and/or service? The
idea is to identify the next or new product/service
needed by using existing data to model the customer
base and so on (to go further requires a new
article?). In their phased rollout the
success of this approach is very apparent.
The outcome approach works and enabled this
organisation to make a success of their implementation
so far.
To attempt to put the idea
of outcomes into perspective you need to take
a holistic view of CRM but break the whole into
two parts that make up CRM: analytical CRM and
Operational CRM. Then figure out what
your internal customers want as outcomes and
what are the external customer required outcomes
– expected experiences are. Oh so easy to say.
About the author
Michael Meltzer is the co
founder and a managing partner of Active Management
Techniques that specialises in improving organisations
performance.
[i]
Turn Customer Input Into Innovation’ - HBR Jan
2002 and ‘The Innovator’s Solution’ by Christensen
& Raynor - HBS Press 2003
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