Finding CRM's Holy Grail

With the possible exception of the 360-degree view of the customer, there is no concept in the CRM industry that is more frequently mentioned--and seldom seen--than turning a call center into a profit center. The idea of transitioning service requests into selling opportunities has been bandied about by innumerable CRM proponents for the better part of the past decade. The question now is whether companies should be giving up, because many clearly are. I recently helped field a survey of customer service/call center executives at an industry trade show, and the results indicated that old-school customer service is making a comeback. It is becoming more and more common to see a reversion to traditional metrics--benchmark figures like average handle time (AHT), average speed of answer (ASA), and other efficiency-based metrics. In other words, the failure to achieve the grail of CRM has, unfortunately, caused many companies to revert to managing their call centers as cost centers. I certainly don't advocate dropping the idea of enlightened customer service, but you do need to put it in perspective, particularly these days when financial metrics (ROI) rule the day. To gain support for CRM begin with cost savings and build your business case around it. After you are able to deliver value and build organizational credibility, then and only then you can look to revenue enhancement. Use the traditional metrics as the foundation of your business case. Lowering the cost of service (without compromising value) is not nearly as sexy as building a case on loyalty-based--but ephemeral--metrics like customer lifetime value. But it will make a much bigger impact on your CFO. Remember, this is not simply about choosing the "right" CRM software. It's a financial evaluation more than a technology decision. Look at new approaches (i.e., self-service rather than assisted service), as well as new locations (i.e., offshore outsourcing), and understand how these decisions will impact your financial case. The concept of transforming a service request into a selling opportunity is not invalid, but has been broadly oversold. It's a matter of when you make the pitch. And it's a matter of long-term loyalty, not short-term selling. Yes, there are opportunities to cross-sell and upsell. But if you don't deliver basic service effectively, you'll never have the opportunity to get there. The most common refrain I hear from customer service executives is, "We've got all the CRM technology in place, but our reps just don't seem to want to (or know how to) sell." My usual reply? It's your fault, not theirs. I'm always amazed at companies that spend huge sums of money on CRM technology, and then skimp on the staff behind the systems. Part of this is training people in how to make use of the technology, but an even bigger and often overlooked factor is their compensation: By managing agents according to traditional call center metrics, you are effectively paying reps to hang up on customers. De-emphasize traditional metrics like AHT and ASA, and build compensation around sales and service quality. Pay reps based on sales that are made through the contact center, and pay them based on the quality of service they provide, rather than the quantity. You'll be surprised at the results, and at the degree to which your CRM technology investments will bear fruit. Chris Selland, managing director of Reservoir Partners, founded the consultancy and research firm in October 2001. Selland helps companies define, prioritize, and execute customer-facing relationship management strategies. Contact him at cselland@reservoirpartners.com