The next few years will also bring more vertical offerings to the market. Horizontal CRM suites will give way to verticalized products that understand the needs of customers.
The products for small and midsize companies will improve greatly. Microsoft's CRM offering will become a serious contender, particularly for small and midsize companies. What impact has self-service technologies had on CRM - either positively or negatively?
Back in 1996, when the Internet first became "hot" many believed that web-based sales and marketing would replace salespeople. The reality was and is that the Internet is a great alternative channel. The Internet does allow enterprises to reach people at all hours and in ways "live" salespeople cannot, but there is still a need for salespeople. The Internet has given customers choices that we didn't have as recently as ten years ago. Self-service applications empower people to help themselves. Organizations that use self-service technologies effectively appreciate the importance of giving customers choices – in this case, the choice to request "live" assistance or to help themselves. Technological innovation has been rapid and the market has seen significant improvements in self-service technologies and applications – from those designed to facilitate web-based purchasing to those that enable customers to research and resolve their own inquiries. Self-service technologies have improved greatly during the past five years and the current products are strong, even though there will always be room for improvements. The real issue is how enterprises implement and use self-service technologies. If customers are given the choice of using a self-service solution or receiving live assistance, and if the products are well designed and implemented, the outcome is likely to be positive. The good news is the market has seen innovation in self-service best practices as well as technological advancements during the past five years. What are some of the biggest mistakes companies make when deploying CRM technologies in their contact center?
CRM suites are still relatively new, having entered the market in the 1996-1997. Enterprises have learned a great deal about implementing these suites during the past seven to eight years, but there is room for improvement. The most common mistake that contact centers and enterprises make with CRM implementation is trying to do too much at one time. The "big bang" may have happened once, but it's unlikely to happen again in your contact center. Separating major initiatives into six-to-nine-month quantifiable phases greatly improves a company's chances of succeeding with any project, including a CRM effort. The second common mistake contact centers make is not benchmarking their operations before beginning the effort. If a contact center doesn't know what its costs were prior to the effort, how will it measure success? The third common error is believing that one suite can do everything "out-of-the-box". Yes, there are functionally rich CRM suites, but getting them to work often requires a great deal of customization, much more than most companies anticipate. Companies frequently underestimate their consulting budget and this accounts for many project over-runs. Lastly, a good CRM strategy impacts people, processes and technology. The technology is just the enabler of the strategy. If organizations do not adapt their processes and people, the best technology in the world is not going to make a difference. Business process management must accompany a CRM implementation to make it successful. Too many companies continue to miss this step. What 3 tips would you give to a contact center manager who is looking at CRM technology solutions from a number of different vendors? CRM seems to be an industry buzzword, what are its origins and, in reality, have companies been focusing on CRM before it became a buzzword?
The term Customer Relationship Management (CRM) started to become popular in 1997. I am a former VP and Research Director at Gartner. Back in 1997-1998, we defined CRM as an enterprise business strategy for maximizing the value of each customer's relationship and profitability. CRM also emphasized the importance of getting the sales, marketing and customer service organizations to work together, a goal that has continued to elude many companies. (Sales force automation (SFA) preceded CRM. Early on, many people who discussed CRM were really referring to SFA efforts). Vendors define CRM as a suite of software solutions designed to address all the customer-facing challenges of the sales, marketing and customer service departments. And this is the generally accepted definition of CRM. Siebel made this use of the buzzword CRM popular. It is rumored that Siebel invested as much as USD$200 million per year for a three-year period on marketing initiatives that promoted this term and its suite. CRM was and is (depending on your perspective) a great buzzword because it helped to funnel investment resources into company sales, marketing and service organizations. Sure, some of this money was wasted, but there has also been much innovation. But keep in mind that sales, marketing and customer service are functions that have been around since commerce began and will remain long after CRM is forgotten. What are the common misconceptions that executives have about CRM?
The most common misconception is that CRM is an application and is something that can be purchased. Which industry sectors are leading the field in deploying CRM?
The financial services industry has led the field in deploying CRM-related strategies, systems and best practices for many years. Do you feel that enough attention and expenditure is directed on training frontline agents/reps in the value of developing and maintaining customer relationships?
No, and the quality of service too many of us receive when we call a contact center is proof. Contact centers are very tight with training budgets. Training is generally viewed as a cost for which there is little return, when the reality is very different. Most well designed training programs pay for themselves in three months or less. While there has been improvement, agents are too often rewarded based on productivity, and not on building and enhancing customer relationships, which is something that is hard to capture and measure. Over the last 12 months, do you feel companies you are a customer of have provided better or worse customer service?
I am sorry to say that it appears as if the quality of service has decreased during the past few years. But, it makes sense that enterprises would cut back on service during difficult economic times. The question is, will these enterprises invest in their service organizations now that the economy is improving? In your experience, have some companies invested heavily in CRM training initiatives and how has this worked?
Companies that invest in training in support of CRM initiatives have a much better chance at succeeding than those that do not. Keep in mind that it is much more difficult to change people, processes and culture than a system. For example, it's relatively easy to put in a new SFA system. The hard part is convincing the sales staff to use the new system. Early on, few companies invested in the necessary training. In recent years, companies are paying more attention to training needs, but still not enough. Do satisfied customers equal loyal customers?
No, studies show that satisfied customers do not equal loyal customers. Many products and services are viewed as commodities. And commodities, by definition, are interchangeable. If the price isn't right and the product isn't any more compelling than another one, it's very easy to do a web search and find a better price. This is now the case for products and increasingly will be for services, including specialties such as medicine or law. The challenge today is to build a compelling value propositions that keep customers interested and gives them no reason to look elsewhere. Does the value of a brand dictate customer expectations on service they will receive from the organization?
Brand is very important and absolutely conveys a message and sets expectations for both product and service quality. Consider the car industry – American cars are not expected to last while German and Japanese cars are. What is your definition of CRM?
I am a former VP and Research Director from Gartner's CRM practice and believe that CRM is an enterprise business strategy. The definition I am providing is a Gartner definition. CRM is an enterprise-wide business strategy to maximize the return and profitability from each customers. All of the technologies, from the CRM suites, to contact center infrastructure are all enablers of this strategy. In your opinion, do you feel contact centers offer consistent CRM across all channels?
Contact centers do not yet provide the same level of service in all channels, but we've seen vast improvements in this area in the past few years. Consider that calls are generally answered in 4 to 6 rings (approximately 24 to 36 seconds) but emails typically take 24 business hours before a response is sent – and that is considered good service. Some would argue that CRM is strictly technology, and others say it's a process. What are you views on this?
CRM is not strictly technology; it's a business strategy. Enterprises that succeed with CRM initiatives are those that simultaneously address business process - people, processes in addition to technology. How does a company who has invested in CRM strategies and technologies motivate its workforce to embrace CRM and what it stands for?
It's very difficult to introduce change, as many organizations have found, unless the company takes a very active role in promoting the new system and retraining the staff. Why should a successful salesperson voluntarily migrate from a manual approach to an SFA system? Why should they enter and share their personal contacts and leads into a corporate-wide CRM system? Or why should an outstanding customer service agent take a risk and try to up-sell customers, when their approach to servicing customers has worked for them for years? Enterprises that are succeeding with CRM efforts are those that take the time to patiently retrain their staff and explain the value proposition of the new applications. These are often the same companies that involve stakeholders and users in developing the new systems, so they take ownership and want to see them succeed. Should agents rewards be linked directly to the strengths of the customer relationships they are building and why?
In an ideal world, contact center agents would be rewarded for building, maintaining and enhancing relationships with customers. The problem is that it's very difficult to measure the strength of a customer relationship and/or the role an agent played in building that relationship. Sure, there are times that customers write letters or emails to compliment an agent. Or a customer survey finds an outstanding agent, but this is not the norm. New contact center performance management applications can provide a more comprehensive view of each agent's contributions to the corporation, but it still can't tie back to the strength of a customer relationship. When was the last time that you had a good call with a company that built a good relationship? Or when was the last time you had a bad call that destroyed a relationship?
My most recent customer support experience was a classic, but all too common, bad one. My cell phone provider misencoded my payment and did not credit my account for the full amount of my check. As a result, I had an outstanding balance. I called to explain the mistake but my explanation was not heard. You see, there is no procedure for believing the customer. I spoke to two "empowered employees" who told me that it was my responsibility to show proof that I had made the correct payment. Keep in mind that I've been a customer for more than two years and never once made a partial payment. This means that my cell phone provider makes a mistake and it becomes the customer's responsibility (and time) to contact their bank, obtain a copy of the front and back of the check and fax it to them. (Note: I could have easily obtained an electronic copy of the check and emailed it to them, but their procedures didn't allow for electronic copies.) The best part was that when I asked to speak to the contact center manager I was told that "he didn't talk to customers—he handled administrative issues." No wonder the cell phone companies have huge customer attrition rates. The catch was that the dollar difference was less than USD$30. I'm sure the cost of my seven or eight phone calls (keep in mind that I had to call repeatedly to see if they had received my fax and corrected the mistake) and time spent on research far exceeded the difference. If I had a choice, I would have immediately switched to a different cell phone service. Unfortunately, I had to make the decision between poor customer service and poor coverage and had to accept the poor service. But once I have an option, I will switch providers.
About Donna Fluss
Donna Fluss is the Principal of DMG Consulting LLC, delivering customer-focused business strategy, operations and technology for Global 2000 and emerging companies. Ms. Fluss is recognized in the area of Customer Relationship Management and a sought-after writer and speaker. She is the author of the 2004 Quality Management/Liability Recording Product and Market report and the 2004 Guide to Successful Offshore Outsourcing. About DMG Consulting LLC
DMG Consulting LLC is a strategic advisor to companies large and small. The company's mission is to leverage technology, process and people to optimize operational efficiency, sales and profits for its clients. The actionable strategies and tactics effect change in internal process and technology to maximize the return from all customer-facing activities - sales, marketing and customer service. The company's methodology includes in-depth analysis of all processes, systems and staff that touch customers. | 
