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DSC Tech Library
Customer Relationship Management
This section of our technical library presents information and documentation relating to CRM Solutions and customer relationship management software and products.
Providing timely customer service information is vital to maintaining a successful business. Accurate information provided in an organized and thoughtful manner is key to business success.
TELEMATION, our CRM and contact center software, was originally built on this foundation. The ability to modify Customer Relationship Management software is important in this ever changing business environment.
Telemation Customer Relationship Management solution and contact center software is ideally suited for call centers throughout the world.
CRM Is Not Bad, It's Just Drawn That Way
By Marco De Veglia, The CRM Group
I was asked to help with a CRM program for a food company. Always skeptical when I hear the duo "FMG-CRM," I started working the numbers to see if and how the company could make the thing work. It already had a somewhat database of customers with some appended data and a somewhat communication channel, so the very basics were there.
But the numbers couldn't lie. Even with some tricks, the lifetime value could hardly increase with CRM activities. The investments for loyalty activities ate all the profit increases and more. It was clearly not a good case in point for CRM.
When we called the client, anticipating the issues we were going to discuss in a couple of days, the client person said "Mmmh...this lifetime value thing...I think we aren't going to go into such detail...No, we aren't interested in this part."
And so this company will happily waste money on a CRM program without any chance of success because decision-makers "don't want to go into such detail." Clearly, in this company, the CRM process was screwed up just a little bit.
Sailed the Great Plains lately?
In my experience, both personal and through overseeing dozens of CRM case studies, this behavior is not uncommon.
Companies adventuring in CRM seas pay lots of attention to the boat (technology), the crew (people), the sailing training (seminars), the maps and GPS (strategy and analysis). However, few consider that they can't go from Dallas to New York by boat. Even with the best of everything, it can't be done. But nobody cares to check.
A screwed-up process? You bet. How's that possible? It's possible because seeing a CRM route isn't as easy as drawing the course on a map. You have to forecast in hard dollars what influence your relationship activities will have on the profitability of your best selected customers; define a technological infrastructure, a communication infrastructure and a people infrastructure; do something; test; measure results; change; re-do something; fight some internal politics; keep everything on track; and repeat the whole process as you please.
I can see a thousand little hurdles to overcome. Can you?
As they say, "Marketing is not rocket science," but CRM is the closest thing to rocket science you can find in marketing land. It's no surprise few marketers can manage all the details. It seems they had worked so hard to understand the technical details, the direct marketing details, the customer service details, the internal organization details and even (somehow) the data analysis details, that now also checking if this thing will work is a bit too much to ask.
"Caring about the customer can't hurt," many CRM newbies seem to say. Of course it can't hurt the customer, but it can and will probably hurt the bottom line of your company (and your job, ultimately). Because keeping your customers loyal isn't the goal: Keeping them loyal, if this makes you more money is the goal. Can you spot the difference? You should.
Sometimes 1 to 1 simply doesn't compute
The One to One Future: Building Relationships One Customer at a Time (One to One) by Don Peppers and Martha Rogers has been a seminal book, opening a completely different way to think about customers, launching the 1-to-1 concept and many other ideas that have permeated CRM land in the last years. I personally loved that book, and it changed my professional life quite a bit.
However, there is another book that has precedence over all the ideas expressed in the work of Peppers and Rogers. It's called a general ledger.
No matter how fancy or creative the idea of creating a relationship with your customers is, if you will spend more money than you get back, the CRM strategy is a loser. And you won't "make it in time," you'll just lose more money in time.
There are many markets where CRM can't work:
- You have a tiny margin (think FMG).
- Customer behavior is unpredictable (when are they going to need to buy our widget again?).
- Purchases are too spaced in time (bathtub CRM program?).
- You simply haven't a clue about customer purchase acts (now, think again about FMG).
- Your customer simply can't care less about a relationship with you (felt tip pen CRM program?).
But you don't have to ask yourself if your company or product is OK for CRM: Ask the numbers. Ask lifetime value (LTV).
Because the goal is growing the lifetime value of your customers via CRM activities, you can make a simple Excel spreadsheet with the LTV formulas and values and see what happens. What happens when you increase retention rate or spending rate via relationship activities? Are the added CRM costs less than the added profit?
It's very easy to do and see. And if you can't make it work on a spreadsheet, you won't in real life.
The CRM process is really that simple
"Just the other day, I heard a senior scholar seriously reject a younger colleague's work because more than five people could understand what he is doing. Literally."
--Peter F. Drucker, author, professor and management consultant
If it's understandable, it can't be real CRM is the thought. Sometimes I wonder why CRM people are making it so hard. Buzzwords. Unreadable diagrams. Thick books. Reports.
The correct process for CRM is not hard to understand and do:
- Work out your LTV numbers. Make educated guesses. Just don't cheat yourself. See if it can work or not. Period.
- If the LTV numbers work, evaluate your customer database state. Get these names and a few pieces of information ready to use. Don't get involved in Pharaonic data warehouse projects.
- Define a relationship plan: what to say, what to do, to whom to say and do these things, why to do them, how to do them and how to manage feedback.
- Take a test sample of your customers to test your assumptions and START.
- Measure results. See how they stand against the assumptions you made in at the beginning of this process. You'll have probably to revise most of them.
This process will take six to 12 months. In this period, you will see CRM at work, you'll learn a lot and, possibly, you will have more fun than being the pampered client at a TV commercial shooting.
The above five points cover what CRM is all about. And they have to be done in that order.
Of course, you can spend most of your time evaluating software platform strengths, weaknesses, scalability and compliance with your IT evolution path--or consider a thorough assessment of all the contact points of your customer path or discuss for a couple of weeks about the deliverables you want to get from the project manager of your CRM program. And on and on and on.
You can make the CRM process as hard to manage as you please, up to total paralysis.
But if you want results, keep the CRM process as simple as it really is.
As Jessica Rabbit said, "I'm not bad, I'm just drawn that way." Same with CRM.
Marco De Veglia has worked in marketing communications since 1990, both inside international advertising agencies and as a consultant on the integration of traditional and digital marketing. In 2001 he founded the CRM Group, a group of affiliate professionals offering CRM consulting and services to Italian companies. He also founded CRM Italia, the first newsletter and portal dedicated to CRM in Italy. Currently, he is supervising the CRM unit of ARC, the digital-relationship marketing agency of Leo Burnett Group. http://www.crmgroup.it
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