Too many customer programs focus on cost, which misses the point of CRM, according to an ICCM keynote speaker.
Posted Aug 16, 2006
As more companies turn to the idea of customer experience management rather than customer relationship management--which may yield the same results though with a different name--they need to make sure that they don't fall into the same traps that have given CRM a negative connotation among many firms, according to Phillip Grosch, partner with IBM Global Business Services. Grosch delivered a keynote Wednesday at the ICCM Conference in Chicago.
If companies continue to focus on processes and cost reduction, rather than on actual customer experiences and enhancing revenues, they will continue to receive below average results, Grosch said. In reviewing several companies' CRM programs, IBM Global Services gave them a collective grade of C-minus.
A lot of the success of a CEM/CRM program depends on how company officials see the focus, Grosch said. For the 12 percent of companies that see CEM/CRM as a way of life, 12 percent report good results. Of the 35 percent of firms that see the program as a strategic enabler, 47 percent report good results. But of the 39 percent who saw the program only as useful, 37 percent reported negative results, according to Grosch.
"Companies have greater success by driving customer programs across the entire enterprise," Grosch added. Companies cannot do this if they are focused solely on cutting costs. By focusing an enhancing customer experiences, companies should be increasing revenues instead, which will have a further reaching impact on the bottom line.
To enhance customer experiences, companies have to consider both the emotive (feelings of trust and integrity) and the rational (the product has capabilities the customer wants) the customer will have toward a company following an interaction.
For example, Grosh said, his BlackBerry is important for him on his upcoming business trip to the United Kingdom. If the device was to fail and the manufacturer wanted to delight him, it would ship him a new device, even if it meant sending it via courier to London. That type of response by the company would not only delight Grosch, helping to ensure his continued business, but he would also become a company advocate by telling others about his experience.
But most companies miss out on these opportunities, Grosch said, so they have apathetic customers. So he recommends that companies map out those different touch points during the customer lifecycle that are "moments of truth" that affect a customer's perception of the company and his continued relationship with the enterprise. From those, pick out the top five or six that have the most effect on customer loyalty, churn, or on operations.
At those points, make sure that the customer experience indeed enhances his perception of the company and its brand, Grosch said. "Few organizations make this level of commitment." Those that don't might not only offend a single customer, but could have a quick backlash from other customers and prospects due to the increasing influence of blogs on customer perceptions.
"These [CEM/CRM] programs are going through constant evolution," Grosch said. "You can't get caught up with the terminology. The program needs to include a number of component parts throughout the organization, including sales, service, human resources and IT."
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