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The Customer Management Myth

Mark Crocker - January 12, 2022 - 0 comments

Our view on Customer Relationship Management (CRM) is unambiguous. For us it is all about getting the right product, to the right customer, at the right time, via the right channel at the right price supported by excellent, and integrated, customer service. We do however struggle with the term ‘management’ in this context as we think it isn’t actually possible to manage customers – they are free thinking individuals that can take their business elsewhere.

CRM however is fundamentally about generating revenues for the long-term sustainability of your organization. The basics are simple. Qualify a customer to find out their needs, deliver a product that fulfills that need in a timely manner, at a price that delivers value to the customer and profit to the organization, via a delivery mechanism (channel) that suits both parties – all supported by a robust and quality customer service program throughout the life of the relationship. A fair business bargain.

Qualification of the customer is key and effort at the initial investigations will bear fruit further down the sales pipeline. Confusion, different interpretations and misunderstandings of any element of the customer’s specific requirements all conspire to make the delivery process traumatic and worse still the potential for loss of income.

Customers experience customer service activity across all of their interactions with an organization and across all media – face to face, telephone, letters, marketing literature, social media and the Internet. It is important to understand that the answers to questions such as ‘How well are we doing?’, ‘What can we improve?’ and ‘What do competitors do better than us?’ can be obtained from customers for each key experience that they have with the organization, especially the ones that they rank as most important. The organization must not merely measure satisfaction but rather must try to get at what defines true customer commitment to the company.

All of this starts with understanding the value, behaviours and attitudes of different customers and customer groups. Once value, behaviours and attitudes are understood, planning can start for the cost-effective acquisition, retention and penetration of the customer base – current and potential. The organization must look for sales and marketing plans that reflect specific acquisition, retention, penetration and efficiency at the customer or product-group levels.

The enhanced understanding derived from the analysis and research will help identify the groups or segments of customers who should be the focus. The next step is to define the proposition to each of the segments and to plan the appropriate offers. The proposition will normally be defined in terms of price, brand, service, transaction operations, relationships, product and required service standards. It must involve all of the functions within the operation that impact on the proposition and customer experience. The proposition, once defined, must be effectively communicated to the customers and the teams responsible for delivering it.

And let’s not forget this important fact that our people deliver the activity. Clear, understandable objectives linked to the overall business goals and employee satisfaction are two key elements to ensure the customer interactions and organizational structure support the business objectives. Appropriate competencies need to be identified and developed to ensure that the activity is effective.

Measurement of people, processes, profitability, proposition delivery and fulfilment, channel performance and customer activity must underpin the vision and objectives as well as to enable the assessment of success and failure. Identifying performance against plan will allow the refinement and redefinition of future plans and activity.

Information and technology underpin the whole model. Information needs to be collected, stored and used in a way that supports the strategy, the way people work and the way customers want to access the organization. Technology needs to be used to enhance the way that customers are interacted with (from analysis to data at point of contact) and enable, rather than disable, the core management practices.

Perhaps most importantly always remember that everyone in the organization supports the customer relationship and revenue generating activity – those that support customers directly, those that support those that support the customers directly and those that support those that support those that support the customers directly……

So, you can’t manage the customer but you can manage the things that go into making the customer loyal to your company. Focus on those things and the profits will follow……

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