The 30,000-Foot View
By Joe McKendrick
McKendrick & Associates home page
A couple of years back, I had the opportunity to talk with Allan
Frank, chief technology officer for AnswerThink Consulting Group Atlanta and
formerly national partner-in-charge of enabling technologies for KPMG Peat
Marwick LLP. "How do you can a Jedi master?" he asks. "How do you store the
collective learnings of the organization? Why did we win that sale? What have we
built somewhere else before? What did that design look like? We can take a
relational database, slice it, dice it, and cut it, rotate those cubes, and do
data mining. But in the end, the difference is what really animates an
organization is a human being."
Companies have attempted to can institutional knowledge, spending millions of
dollars on CRM systems. Management guru Tom Peters hit the nail on the head a
while back when he declared that most businesses don't know squat about customer
relationships. The ones that do have a sliver of common sense stand out like
shining beacons. That still holds true today. The difference is that we are now
trying to automate our way to customer-driven excellence. However, when you
automate poor service, you get automated poor service.
That's a shame, because while many large businesses are spending as much as
$30 million to $90 million over a three-year period on CRM systems, they still
may be underestimating the costs of CRM projects by as much as 40% to 75%,
according to Gartner Inc.
What are we trying to accomplish with CRM management?
Ultimately, the way a company treats its employees reflects directly on the
way it treats its customers. The companies that succeed with customers invest
not only in technology, but also invest heavily in employee training and
development. "The companies that don't do very well in establishing a good
relationship with their people are also the same companies that don't do a real
good job of establishing a good relationship with their customers," says Bill
Brendler, author and frequent speaker on CRM issues. "These companies tend to be
internally focused, 'thing'-oriented, and back-office focused. To shift to
relationship management, you have to build a relationship with your employees to
make that relationship happen with your customers. That's the complicated part."
Many CRM projects fail because of a lack of focus, without a vision, as well
as a lack of attention to the human dynamics. To be effective at CRM, a company
needs to be willing to change the way it does business. You can always sense
when you're dealing with an operation with high employee turnover, versus a
well-run shop. What's also troubling about CRM is that it's rapidly converging
with a related initiative called "knowledge management." In essence, information
about customer relationships is institutionalized into some type of system, just
as knowledge management attempts to capture all scraps of structured and
unstructured data to preserve for future organizational endeavors.
This is probably effective for mass-marketing organizations. For example, a
bank may be able to track when a customer's auto lease is up, and go to that
customer just before the lease expires with a financing deal to purchase the
car, or renew with a new vehicle. That history is maintained for all future
customer representatives to see. Business-to-business relationships, on the
other hand, rely much more heavily on personal contact, and are often driven by
serendipity. Repeat business is golden. Relationships - the old-fashioned
person-to-person variety -- are a competitive advantage. If your sales director
knew that your best customer's daughter just had a baby, you know to send some
kind of gift. Likewise, if you had insight into a new acquisition your customer
was planning to make, you could be there to lend support and reap new business.
Some companies recognize the value of serendipity. One company built a
three-story headquarters building, but instead of elevators, they purposely put
escalators in the center of the building, a big open space. Because studies show
that people talk, and you can enable that serendipitous communication on
escalators much more effectively than on elevators. The company wanted to
encourage employees to bump into one another. The facility's planners knew that
this was a good medium of information exchange.
Likewise, trade shows owe their existence to their promotion of serendipity.
Can we automate and institutionalize this? Should we?
Copyright 2003 Joe McKendrick
How Do You 'Can' a Jedi Master?
What's troubling about CRM is that it's being presented as a
techno-fix to customer relationship management problems. Those companies that
are already good at customer relations are enhancing their capabilities with CRM
systems. Those that need to work on customer relations, however, need to address
the root causes, rather than throw technology at the problem.
Check out more of Joe's Previous 30,000-Foot Views