By David Sims
[email protected]
The news as of the first coffee this morning, and the music
is 1993’s Cracker:
First CoffeeSM’s been hearing about that Forrester
Research report earlier this week discovering that the market’s “rife with dissatisfied
customers… betting millions of dollars on products and services that do not
fully satisfy their needs,” says one
report.
Well, duh, if you’re
just “betting” you deserve to lose. If you’re “intelligently investing,”
that’s something else. First CoffeeSM can almost hear his old friend
and colleague Bob Thompson, founder
of CRMGuru.com shouting “It’s not about the technology! CRM’s an attitude, an
approach, not buying a bunch of stuff!” Amen, Bob, you were right then and
you’re still right now. All those jeremiads we wrote…
It’s curious that the Forrester report would only evaluate
and rank four CRM players, Amdocs, Oracle, SAP and Siebel, and no hosted
products. It’s perfectly predictable that the study found that “integration,
ease of use and customer service are all pain points… 29 percent of executives
surveyed said they are satisfied with how CRM applications integrate with existing
data, while just a third are satisfied with how easy it is to work with CRM
vendors after they have purchased applications and services,” according to
industry observer Carol Krol.
Bob did a research study years ago showing that compared to
other industries, CRM vendors rated poorly on how they serve their own
customers. Sure they’re selling all this stuff to help airlines, banks and
hardware stores better relate to their customers and improve loyalty and all
that, but they themselves, Siebel and Onyx and Oracle and E.piphany and other companies
now out of business, did a woeful job satisfying and building loyalty with
their own customers. If memory serves, Onyx had the highest customer
satisfaction scores in the entire industry and even those were under 50
percent.
Evidently things haven’t improved.
Of course, here’s how a typical CRM system got bought back
when Bob did his study, the first of its kind in the industry, and First CoffeeSM’ll
bet a year’s supply of espresso things haven’t changed substantially:
Purchaser: So, what
I’m saying is, this stuff’ll solve our customer service issues? Just plug it in
and we’re all set up?
Vendor: It’ll do
everything it promises to do. Here’s the written guarantee.
Purchaser: That’d be great. Boss’s been on us to improve
customer service, it’s a line item in the budget now, we figure y’all have a
good name – hey, nobody ever got fired for buying IBM, right? This stuff’s
state-of-the-art, it’s pricey and your testimonials from our direct market
competitors look great, so why not? Get the problem solved ASAP.
Vendor: Exactly. Sign
here…
Forrester analyst William Band found that companies will
spend about $3.2 billion on CRM license costs alone, not to mention hardware
purchases, training, software integration, consultant fees, maintenance and
what have you.
After all that’s done and spent and the stuff’s taken out of
the boxes and plugged in and everyone’s trained and it’s run for a while and
the next set of customer satisfaction and retention and upsell and cross-sell
numbers come in – unchanged, maybe a little worse – the company calls the
vendor who says it’s operating just as we said it would, if you have personnel
or data cleansing or warehousing or ROI metric issues that’s really not our bailiwick,
and they’ll be basically telling the truth but the CEO steams off at all the
money down the flusher for “that CRM crap,” and “broken vendor promises,” it’s
thrown in a closet and everyone goes back to the old way of doing things.
CEO: Henson, I thought
I told you to get this CRM thing on track.
Purchaser: Yessir, I
bought CRM from [Market-Leading Firm], you should’ve seen the testimonials from
[Leading Competitor], we followed the installation instructions, had [Expensive
Consultancy] set the whole deal up for us, training and everything.
CEO: Oh well, lesson
learned. All right, here’s what we’re going to do to improve customer service, should’ve
done it at first. I want you to get 10,000 customer comment cards printed up,
and put one in every customer follow-up packet we send out…
The only thing First CoffeeSM’s ever seen that’s
actually worked in improving an organization’s overall customer service, the
crucial step, is incentivizing employees
to give better service. Increase their pay, give them bonuses, trips,
recognition for measurably improving customer service metrics, buy the tools
they need, investing in your employees’ incentive to give customers better
service is how to do it.
Otherwise nothing else you do will work. Buy the most
expensive, highly-recommended software you can find, give flashy pep talks
introducing the stuff, it’s worthless if employees view it as something that
makes management’s life easier but doesn’t improve their lives or ability to do
the job they get paid for. It won’t improve customer satisfaction if the
employee using it doesn’t care if it does or not.
Companies who succeed with CRM first decide what their
problem is (“Too few customers returning”), figure out how to solve that
problem (“Improve product quality, advertising and marketing, customer service
and follow-up”), and look at improving customer service as a measurable entity
(“We want half of our customers doing business with us again in a year’s time”).
Then they hammer out a decent business strategy for doing so
(“On-site visits, knowing their entire customer history when they contact us,
compare their purchases with related purchases in our catalog, proactive
contact three times a year to touch base and fill them in on products they
might like”). Next they decide what kind of ROI they’re looking for (“If we can
get reasonable retention and upsell we can get an extra half million a year”)
and how they’re going to get it (“Knowing everything we can about our customers
and having it all at the fingertips of whoever picks up the phone when they
call and on the laptop of the sales rep who goes out to the site. I mean, up to
the second, if they call while the rep’s in his car he needs to know that before
he gets to the site”).
Now and only now does technology enter the discussion:
“Okay, we’ve decided we need something to help up track all customer
interactions across all touch points, will integrate with the Oracle database
we have, scale to our regional offices, and will come in at a budget where if
we achieve our ROI – which we’re gonna measure every step of the way – it’ll
make sense. If we’re hoping to get a
half million bucks extra business we’re not going to buy a $600,000 system.”
So vendors are vetted, testimonials followed up on,
references checked out, claims examined and consultants used – sparingly, but
used. A tool is found that fits the
company’s predetermined business objective, ROI expectations and that has a
measure of accountability built into the contract. “How will this tool help our
employees achieve these specific business goals?” is the $64,000 question to any
vendor. Never ask “So, what can this baby do?” All you care about is if it can
do specifically what you know you need it to do. Never, ever ask a vendor an
open-ended question about their technology.
A check is written to a vendor, the stuff’s installed,
employees are shown how it will improve their lives, they’re incentivized to
use it – which they will be if management’s done enough homework to be able to
explain why the stuff’ll work if used properly, if management’s throwing up a
prayer they’ll cross their fingers, not incentivize staff.
Since a vendor who has a verified track record of working
well with clients – their references were followed up on and more were asked
for and followed up on – was chosen a few steps ago, bugs and glitches are
worked out and lo and behold, customer retention and upsell improves to the
expected ROI. Technology helped because it was brought in at the right time –
at the end, not beginning, of the discussion.
CRM tools and vendors frequently get blamed the way Home
Depot’s wood, hammer and nails get blamed when the bookshelf Klutzo made falls
apart. Sure, CRM vendors are frequently culpable of inflated claims, and
massaging the process, but what do you expect? If you pick up the phone and
call them before you know exactly what you want from them hey, that’s your
fault. You haven’t done your homework, you’re pushing it off on the vendor to tell
you what you need and why you need it? Don’t be shocked, shocked if he takes
advantage of that. You would, too.
If read off-site hit http://blog.tmcnet.com/telecom-crm/
for the fully-linked version. First CoffeeSM accepts no sponsored
content.
