Making CRM Work

Gaining & Sustaining Competitive Advantage

In the mid-1990’s, following the disappointing results of internally-focused Enterprise Resource Planning (ERP) and efficiency improvement initiatives, businesses across virtually all market segments began to realize the then re-emerging priority of Customer Relationship Management.  New competition, new distribution channels, new technologies, new market structures, and new ideas drove the search for new competitive advantage. 

With the aid of powerful analytics, enterprises re-discovered that existing customer retention and enhancement was comparatively far more profitable than pure new customer acquisition, and that marginal improvements in revenue production had dramatically more positive impact on profitability than expense reductions. 

The re-emergence of CRM—which thrived in key industries in the late 70’s and early 80’s—motivated the development and distribution of a wide range of software-based process automation tools for sales force management, contact management, customer service, marketing automation, data warehousing and related analytical business intelligence capabilities, and call/contact center administration:  all under the universal moniker of “CRM”. 

Implementation of CRM, almost always characterized by the deployment of one or more of those various functionalities, on a range of network platforms or distribution models (these days “Software as a Service”), was lauded as the ultimate solution to business success.

Between 2000-2007, analysts reported low satisfaction and implementation success rates for CRM.  InfoWorld had a cover story “CRM Runs Amok: All They Wanted Was Customer Satisfaction…What They Wrought Brought Them To Their Knees”.   For many organizations, even though direct ROIs have improved in recent years because of lower-costs of ownership (cheaper, faster software, smarter deployments), the real-world outcomes of CRM continue to fall below expectations.  Why?

The answer is that the core of the problem is not What CRM is, or how its automation has been deployed, but How it has been implemented. 

The fundamental premise of CRM, that organizations and their consumers maintain relationships to their mutual benefit, is sound theory and basic market economics.  The challenge is that under the traditional, and superficial, conventional wisdom, the generalized “Company-to-Customer” relationship demands an insurmountable leap from concept to execution, without the participation of the key constituency in the transaction:  the Workforce.

The real-world, field-proven reality of CRM is that it is the organization’s Workforce that actually “have” the relationships with Customers, not the “Company”.  In health care, “bedside manner matters”.  At your most-frequented restaurant it’s the people and the service they provide that bring you back, not just the food.  In financial services “people bank with bankers, not with banks”. 

In every market segment, successful day-in, day-out, “on-the-ground”, “in the trenches” CRM is about people:  your customers, and your workforce.  Simply stated, CRM cannot succeed unless the organization’s workforce is fully-engaged, fully-enabled and completely integrated into the process.

In today’s environment of hyper-reactive competition, few organizations can sustain long-term, or even medium-term, competitive advantage by relying solely on intellectual or technological advances.  Market and product innovations are rapidly co-opted by competitors.  Segment participants can easily acquire like technologies and processes in quick response to competitive initiatives.  CRM software (or SaaS) implementation simply doesn’t provide any competitive advantage if every segment competitor has it.

The secret to long-term competitive advantage is not ideas, processes, products or technologies.  It’s people.  Your workforce.  Technology enables business processes.  Business processes enable people.  And, people achieve the success. 

How then, to optimize workforce performance, so that the workforce can optimize the full and true revenue potential of CRM?  The answer is as fundamental to business success as Financial Resource Management and Customer Relationship Management itself: it’s Employee Performance Management (EPM).

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