Customer relationship management (CRM) components are some of the most important investments to be made in 2001, according to a recent Gartner Consulting survey of 600 large enterprises.
Ray McKenzie, director of management consulting at DMR Consulting in Seattle, believes that many organizations are buying pieces of a CRM solution but few have all of the components necessary to create a company-wide strategy.
“I would say that companies are not able to maximize benefits from the initiatives they have taken,” McKenzie said. “This is not exclusive to CRM either, there are reports about success rates of ERP initiatives – they have taken longer to complete, they’ve cost more and so on.”
He added that most people continue to see the value of improving customer relationships. “I don’t think there’s any doubt about that.”
In his recent book The Relationship-based Enterprise, which has contributions from other CRM experts and business owners, McKenzie discusses why these investments are often not translated into business value.
McKenzie stresses the importance of defining relationships. He focuses on the “three Ds” – Discovery, Dialogue and Discipline.
Discovery concentrates on the customer, the customer knowledge, the context of that knowledge and how it adds to exchanges between the customer and the company, and how that leads to the value proposition.
Discipline refers to management, the business outcome, business design and what that brings to dialogue exchange, and how it all leads to the infrastructure.
The Dialogue starts with exchanges – impacted by discipline and discovery – and takes that through to conversations and the relationship. This all leads to the offer made by the company and the content that they show the customer.
McKenzie noted that relationship is the most important word in CRM.
“If you think about CRM, the customers are no problem to define, the management is no problem, but figuring out what a relationship is and how to improve it is the hard part,” he said.
A company must first become a “learning organization,” he stressed.
“They have to share things with their customers. They have to engage the customer through sharing resources. They have to be open, they have to ensure the enterprise is visible and they have to start dealing in real time. They have to respond and dialogue with customers in or near real time.”
McKenzie also noted that no CRM solution can be enterprise-wide or complete without changing the mindset of the entire organization.
“That is an issue as well. It’s about change management. How do we increase our capacity to change? Organizations need to deal with that as it is associated to CRM,” he said.
“They need to have some sort of change management approach to make sure the CRM strategy is acceptable. They may need to change the culture or mindset in order to leverage this strategy.”
He warned that CRM is not a true solution to all problems dealing with customers, because the customer, the organization and society will continually change.
“I think most companies understand that this is a process, but enterprises are under pressure from competition and from analysts to show their quarterly results.”
He suggested that CRM may need a champion within the organization. “Most change programs do. Some organizations are looking to a new kind of role. They’re looking to a chief customer officer to be the champion for this kind of program.”
The Relationship-based Enterprise points out that enterprise integration will not be enough to keep customers. Connecting or relating to customers will always be the bigger challenge.
McKenzie said a true solution will master the process of conversation with the customer and use that dialogue to define the CRM needs of the company.