Bad Karma, Good Karma
When CRM is good, it's very, very good. But when it's bad...
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When CRM goes awry, it's frustrating for both employees and customers. The CRM project becomes a black hole into which the company pours money, people, time and energy. It's a journey that is never finished, a promise that is never kept.

Employees are told that they will be more efficient. But as the project drags on, they start to realize that the CRM system has become the new "operating platform" for all of the company's intractable problems: inefficiency, turf wars, and organizational chaos.

Well-meaning employees, attempting to solve customer problems or get something done, eventually set up their own rogue systems. The mess gets messier. The CRM system becomes the problem, rather than the solution.

As Swallow Information Systems says in a recent white paper, "Already, stories abound that e-commerce equals bad e-service and bad e-care. Customers are already voting with their feet--or rather their fingers. Internet shopping cart abandonment has reached 70 percent at the checkout, according to Forrester Research. Many companies...[are not] thinking through what the customer actually needs from the relationship."

For an accurate description of the nightmare from the customer's point of view, we have only to read what Horst Schulze, president and chief operating officer of the Ritz-Carlton Hotel Company, recently wrote in the New York Times: "Too many businesses are using these technologies as proxies for real service because it is so much easier to invest in systems, which can be programmed and paid for once, than in people, who need to be trained and retrained, not to mention incentivized, energized, refreshed and promoted. The paradox is that much of what is passed off as customer management is in fact anti-customer and anti-employee, and companies are beginning to pay a price for their steadfast reliance on such tools."

How It's Supposed to Work

We all know how CRM is supposed to work. Every so often, as consumers, we see it in action. My husband, Philip, just had such an experience with L.L. Bean. He called the company's toll-free number to place an order. A human being named Whitney actually answered the phone right away. She asked him for the customer ID number printed on the catalog, which was addressed to me (Kristin), and then she said, "You must be Philip." In that moment, she demonstrated how CRM is supposed to work. It's supposed to help employees recognize the customer in a way that is friendly and helpful. It's supposed to help them interact with their customers more intelligently.

Customer-friendly CRM systems are built around the customer's shopping and buying process, not the company's selling process. The same can be said of successful Web sites. Instead of the company's managers designing a system around their own processes, they analyze and understand the customer's shopping and buying processes. Then, they design a system to support them. Rather than attempting to replace human beings with a system, they see the system as a support mechanism for the human beings who are trying to help customers.

Do You Pass the Character Test?

What makes the difference between the CRM dream and the CRM nightmare? In my experience, it all boils down to one thing: the character of the company's top managers. In business, there are two basic types of people: manipulators and helpers. Manipulators thrive on domination and conflict. They talk about "creating demand," and "managing customers." They always try to win through manipulation and deceit. They ignore the fact that no matter what you're selling, the customer is ultimately in control.

Even if you are the world's slickest scam artist, and you're at the height of your powers, you are living on borrowed time, especially in this age of open communication and worldwide markets. When you anger a customer, that person will make their irritation known to others, through word of mouth, e-mail or a Web site. At the very least, disappointed customers will simply go away. You won't get that customer's money now or in the future. In the age of the Web, customers are not obligated to do business with you because you are the only store in town. There's almost certainly someone else offering something similar, somewhere on the Web.

The other kind of people, the helpers, are not satisfied unless the customer is satisfied. Helpful managers give their employees the tools and the authority necessary to help customers. Helpful managers don't believe they "create demand." They understand that demand already exists in the mind of the customer, and their job is to meet it. They seek to understand the frustrations and desires of their customers--the two forces behind every buying decision--and provide products that eliminate frustrations and satisfy desires.

Customers quickly figure out which kind of company you are. When they come to your Web site, they either find what they're looking for and get their questions answered quickly, or they are frustrated at every turn by self-indulgent graphics and meaningless, self-aggrandizing content.

When they call your company, they are either "greeted" by an automated response system that makes them go through 10 minutes of menus and boring music while on hold before a human being comes on the line, or the phone is answered immediately by a real human being who has all of the pertinent information at her fingertips. As they talk to the employee, the employee is either defensive and accusatory or courteous and helpful.

I have always been amused when people talk about companies having relationships with customers. Companies are incapable of having relationships. It's the individual people who work inside companies who have relationships with customers. Even your Web site was created by an employee or contractor. All interactions, policies, hiring practices and people hired reflect the character of top management.

Building any type of automated interaction system (CRM, ERP, Web site), requires countless decisions. Every decision is made in accordance with the top managers' character. If the top managers "do whatever we have to do and say whatever we have to say to get the business," the system will be unfriendly, frustrating and irritating. If the top managers encourage and help their employees to "figure out how we can help the customer, and then do it," the system will be supportive, intuitive and efficient.

Employers assume that employees only care about money and power. But once you've met an employee's basic economic needs, they are most interested in working where they can "make a difference" or "make a contribution." In other words, they enjoy helping customers. Employees get most frustrated when they know how they could solve the customer's problem, but they are prevented from doing so by their managers.

If you design your CRM system to completely support your customer's shopping and buying processes, there will be times in that process when the customer wants or needs to talk to a real human being. That human being should be able to focus on helping the customer, not struggle with an unfriendly system. David Fowler, senior vice president of worldwide marketing for Kana, says that CRM should be about "how my customers want to do business with me, not how I want to do business with my customers."

One of the benefits of designing your CRM to support the customer's shopping and buying processes is that most of your customers will shop and buy in the same way. Engineers buy like engineers. Teenagers buy like teenagers. Their processes don't change much over time, so your system can be fairly stable once you've supported the customer's entire process. Then, you can focus on continually improving your products and the materials that answer the customer's questions.

If you're working for a company run by manipulators, and you're in charge of the CRM system, you now know how it's going to turn out. But if your top managers are the helpful type, congratulations. You have an opportunity to build a great CRM system.

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