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Putting CRM to Work
Actions, not information, are the true mark of intelligence.
Posted Feb 25, 2009
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CRM has always supposed to have been about managing customer relationships. Yet all too often, CRM becomes an exercise in managing customer information instead. This has to change -- we must focus on managing our customer relationships and we must put our CRM systems to work.

Many CRM systems do a fair job collecting and integrating customer data, and of presenting it to staff. With the increasing focus on the use of analytics, some have invested heavily in tools and techniques for analyzing the data to make it more useful and actionable. Good information about customers, while necessary to manage the customer relationship, is not sufficient. To manage the customer relationship we must focus not on the information we have about our customers but on the actions we take that affect them. Our customers' experience is the sum of these actions and their experience determines our relationship with them.

The first step in more active management of the customer experience is often a focus on providing suggested actions or options to staff. Instead of simply presenting information about a customer, such as information about the products they have purchased and their recent behavior, suggested actions and allowed responses are presented. Such a system no longer requires that the call center representative be able to correctly interpret that the data shows that this customer is a retention risk or that this one is becoming increasingly profitable. Nor does it rely on training or manuals to ensure that they make an appropriate retention offer. Instead, the information available is analyzed to create probabilities and propensities that control which offers and actions are proposed. Contact center staff focus on the conversation -- on capturing good information -- and rely on the system to guide them to the right offers, the most appropriate actions. The CRM system does more of the work.

At the same time self-service and more numerous channels are forcing more automation into the customer relationship. Many customers use the Internet, mobile devices, kiosks, and ATMs far more than they use staffed channels. To improve their customer experience it is not enough to control the options available to a member of staff. It becomes essential to have these systems take appropriate actions and present compelling and useful options directly. These automated channels must cease to be passive deliverers of information and become a genuine part of the customer experience. Yet the more limited nature of many of these channels, and the lack of a "human touch," means that these offers and actions must be even more carefully selected.

Consistency also becomes an issue. To manage our customers' experience effectively we must do so across all these channels. If we have made an offer in the mail, it should be available through the call center. If a retention offer is the most profitable next step in the relationship then it should be made through whatever channel the customer uses. We must move toward delivering the best next action that is consistent across channels. For customers with multiple products and more extensive relationships with us, the best action cannot afford to be product-by-product any more than it can be channel-by-channel. Our actions must be appropriate in the context of the total customer relationship.

The actual automation of actions and displaying of options is not what makes this work. After all, most systems can display additional information and call services to make things happen. What puts CRM to work is decision-making. To take the right actions for a customer we must make the right decisions about those customers. We must decide if this particular customer will respond positively to this offer. We must decide how hard we want to try to retain this customer or how flexible we should be in collections. We must decide if a cross-sell is appropriate given their current state and concerns, and what cross-sell we should use. We must decide that the tradeoff is worthwhile before we offer a new product to replace an existing one.

To put CRM to work, then, we must do more than collect and analyze the data we have about our customers. We must identify the decisions that affect the customer relationship and manage them. Managing these decisions across channels and over time allows us to inject the right actions into the current environment to build and grow our customer experience -- to truly manage the customer relationship.

About the Author

James Taylor (james@decisionmanagementsolutions.com) is a recognized expert and independent consultant in decision management. He published the book Smart (Enough) Systems with Neil Raden and is a regular blogger and writer. For more information go to decisionmanagementsolutions.com/crm

Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors. If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

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