Customer Relationship Management ( CRM )

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Review of Stanley Brown’s “Customer Relationship Management”
By , Application Development Manager,

Customer Relationship Management (CRM) in the e-business world is not all that different than CRM prior to the advent of widespread Internet use. Implementing a sound CRM program still requires companies to evaluate many of the same issues present before, but the Internet, and other recent technologies, add complexity and variability into your overall CRM model.

The recent book, “Customer Relationship Management, A strategic Imperative in the World of e-Business,” by Stanley Brown (John Wiley & Sons, 2000) is a good primer on issues in the field of customer relationship management and how those issues are being addressed by new technologies.

The book is actually an amalgamation of business process, case studies, and technology articles from consultants at PriceWaterhouseCoopers (). It gives the reader a solid understanding of the issues surrounding CRM, the components making up a good CRM strategy, and provides examples of successful CRM implementations.

The book has five sections, each covering a topic that builds upon the previous section.

Section one attempts to define and explain the components of customer relationship management.
Section two points out the need to deal differently with profitable and non-profitable customers and how to keep the latter by increasing the level of their service. Retaining profitable customers is a major theme throughout the book.
Section three covers effective channel and product strategies as they relate to CRM. This section of the book also covers e-channels, which you can use to distribute and sell your products and services, and how these channels are transforming the business landscape. It also contains an excellent breakdown of the results of an e-business survey whose participants are members of The Conference Board (www.conference-board.org)
Section Four explains some of the fundamental technologies that are implemented to facilitate a well-rounded CRM program. It explains the use of the data warehouse to capture and analyze customer data and how a company can use the results to enhance the customer’s experience with your company.
Section Five introduces a set of rules and guidelines that a company can use to help guide them through the process of implementing a CRM system. It includes the 20 Steps to Success and defines some measurements that you can use to measure your success.

CRM, it turns out, is what you and your company should have been doing all along, but were not. What you find out in this book is that many of the ideas behind CRM are simple, in theory, but difficult to implement in this era of distributed offices and heterogeneous computer systems.

The book does not evaluate specific software packages that can solve specific CRM issues, but you do get a good feel for some of the features that you will need to look for in a package, such as: Web collaboration, e-mail response systems, and voice/e-mail/fax integration. This brevity on technology choices is understandable since each of the aforementioned components could be a book unto themselves.

The book makes the following points very clear:

You have to segment your customers into logical, homogeneous groups. If you don’t know who you are selling to, how can you effectively market your products and services?
Target those customer segments that will bring you the most profit and get rid of the rest, or at least dedicate fewer resources to them. According to the statistics cited in the book, most repeat purchases are from a small subset of your customer base. Figure out who they are and give them what they want.
Make sure that every customer touch-point has access to the same customer information to enhance the customer’s experience and reduce your own workload. The customer service representative should have the same data at their fingertips as the salesperson. The customer should feel that everybody in your organization is working to help them make their lives easier and business more profitable.
Provide your customer with multiple access points to your products and services. Don’t make the customer have to search for how to buy your products.
The objective of your CRM strategy should be to make customers happy. Happy customers are loyal customers, loyal customers are repeat customers, and repeat customers are profitable customers.
CRM extends beyond just providing customers with ease-of-access services. It can involve your partners and suppliers as well. You can reduce your supply chain costs, reduce your procurement costs, and have your supplies and materials delivered at the time you need them. The reduction of lead-time translates directly into more profits and happier customers.
CRM implementations bring enormous changes to your organization at all levels. If your organization does not embrace these changes, your implementation will most likely fail. Buy-in must come from all levels affected by the CRM implementation, and all levels of the organization must participate in the implementation. You also have to be prepared to change the way you do business to make use of the new system.
Develop a set of measurements to ensure that you can determine whether your CRM initiative is successful. These measures can include revenue produced, overall customer satisfaction, customer retention rates, customer loyalty, and others. Determine the baseline for your measurements before putting your initiatives in place so that you can analyze the numbers in the context of your CRM program.

Most people think that the central issues of CRM are technological. The reality is that CRM is much more than implementing a sales and service system that shares contact and order information. It involves the active management of your company’s most important asset, the customer.

CRM runs across multiple business units and channels, and requires the same strategic planning as the introduction of a new product or service. Implementing the entire system can take months, if not years, so don’t look for the quick fix. Also, don’t rely on technology to fix a fundamental business problem.

If you need to learn what issues you should be thinking about as you evaluate a CRM solution, read this book.