So, twenty years later, do we need CRM?

There’s a diagram you’re probably all familiar with. I call it the ‘1999 CRM diagram’, but it pre-dates that by some way, I think. It has different contact channels coming in, usually from the top, usually illustrated with clip art – phone, letter, email (you can check how outdated it is by whether it includes fax, pager or quill, or excludes smartphones – and how optimistic it is by whether it includes interactive TV!)

These contact channels hit a big rectangle – the ‘customer contact layer’, which sits above an even bigger ‘customer management / CRM’ rectangle. Below that are dotted lines showing ‘integration’ with a load of big cylinders or ‘legacy ICT systems’ – and if you’re lucky, somewhere on there are some squiggles for service areas delivering actual services!

At RedQuadrant, we have some very fruitful disagreements within our teams about the value or otherwise of CRM systems. My view though is that every organisation does need a ‘customer relationship management’ *strategy*. But most customer contact thinking is about just that – customer contact. This focuses on reducing unit costs, optimising the use of resource. As the ‘seven ways to save and improve’ shows us, this is good where it supports customer and organisational purpose, understanding of demand, economies of flow and good processes. And is very very naughty where it undermines those things! I thought the days of the four-year ‘transformation’ programme based around a mega-CRM implementation and mega-call centre set-up (cost: £79m, payback, £27.732m per year after year two) were long gone, but perhaps not.

What is interesting is that having moved from completely disparate, unmanaged, and often very very poor customer contact management (though sometimes brilliant) – where each individual and business unit had a telephone number which might or might not get answered – into a centralised model of contact centres, the best organisations are now finding ways to distribute the contact BACK to the people who have to deal with the actual underlying customer issue. This can only be a good thing (ask me if you want to read Gabriel Garcia Marquez’ thoughts on lean!) but it *doesn’t* mean we’ve abandoned the underlying principles of good customer contact management. Rather than the pendulum just swinging back, things have actually moved on and improved.

Nor does it mean that centralised CRM and contact management are always, automatically, a bad thing. I have seen very good call centres, with some limited use of phone menus etc, actually deliver brilliant customer services – 90% is in the implementation, as with everything in life – you just set yourself a bigger challenge if you start from the wrong place (but then, that’s often where you have to start).

Once, everyone had to come in to the office in person. I’ve worked on customer contact with the government of Armenia and believe me, it was chaos – people wandering the halls and hoping to bump into the Minister! Then we organised and rationalised – a competent receptionist, different queues. Then technology switched much of it onto the phone and as the technology improved and we all wanted a phone on our desk, and exchanges gave us all outbound lines, we moved back to the chaos in a way. So we put in a (massive) phone receptionist. Now, as things move on, we are moving back to distributed customer contact – but having learnt the lessons, both good and bad, from the centralising experience, it is very different from how it was before. (and of course, face-to-face contact and phone still need to be managed as people increasingly use newer technology to do things online).

So, what lessons have we learned? A few are:

- it’s a good idea to have a single view of the customer. But it’s hard, and the payback is uncertain, and good research shows that CRM is consistently the fifth, sixth or seventh most reliable source of customer data in a local authority! If you have competent and responsive IT people and can get a good enough enterprise architect, and sustain investment in a true customer database, you should do that – if not, don’t

- economies of flow trump economies of scale/optimisation of resources

- optimising part of the customer contact process at the expense of the whole is a stupid idea – so one system that everyone uses, with simple steps, optimal hand-off to real life people/service delivery, and a shared knowledge base, just makes sense. This could be CRM or simple web forms plus a dashboard of data – and when I say ‘everyone uses’, this should be everyone from service to chief exec to customer service operator to customer on the phone, customer on the web, customer on a paper form, customer using an iphone

- this needs to be fully and sensibly integrated into any other systems used – ‘back office’ or service delivery processes

- some outsourcing/partnerships worked and some didn’t – the reasons are not too hard to learn

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