October 2012 – The ABC of CRM

Why I have changed my view on CRM technology

For years, I have been preaching to anyone that will listen that the strategy must come before the software. People + Processes + Technology. I have used examples such as buying a car to explain my argument.

Most people would not go out and buy the car that looks best. They would first of all decide what they need a car for. They might then decide on a few criteria to narrow the search depending upon their own needs. safety, Speed, Economy, Luggage capacity, Auto, Price etc. Once this “strategy” had been reached, the search for a car could begin.

I have always believed that CRM software should underpin the business strategy and facilitate providing benefits to the organisation and its clients. However, maybe I was wrong?

Technology is now at a stage where it is providing features and capabilities that can INFORM a Strategy. In other words, a business strategy could be built around a CRM tool. Having seen some of the latest tools and capabilities from the likes of Salesforce, Sugar, Oracle, Kana etc, I am increasingly convinced that for many organisations thinking about CRM, the software could give them market leading strategies and game changing capability. There are capabilities that many companies would not have thought of which might create huge value. In the past, industry processes led the design for software. Now it seems that software design is opening new doors for business processes. Just look at how Social Media has “forced” organisations to change its internal and external processes. Does your organisation have a Social Media strategy? If so, I bet it has only been developed in the last two years.

I can imagine young or smaller enterprises could benefit from this wave of new capability. App Exchanges and Open Source platforms are driving a wealth of rich, new CRM capability that is beyond the imagination of most companies.

With immature processes and potentially tight budgets, a software led strategy can help enforce new processes (that could be leading practice for that industry) and can help cement in customer centric processes.

However, I still believe that larger organisations will need to develop strategies first and then find software that can support and extend those strategies. It will be interesting to see how the SaaS model affects uniformity and adherence to standardised processes and whether we do start to see software led customer centric transformations.

I would be very keen to hear any thoughts or experiences on this topic.

The real “X Factor”

What is the X Factor in building a profitable brand? This post argues that it is the Customer eXperience and demonstrates why organisations have to deliver a consistent and compelling customer experience across each and every touchpoint.

Forget your TV. The real X Factor will allow you to perform better than your competitors and achieve long term results to delight your shareholders and stakeholders.

The X Factor is on most CEO’s agenda’s yet it often alludes many organisations.

The X factor is widely known, yet rarely understood.

So what is this corporate X Factor?

The X factor is eXperience. The Customer Experience or Cx as it is often abbreviated to.

It includes the User eXperience (or Ux), whoever the “user” might be, as a user could be a customer, a partner, an employee, a Supplier. It all adds up to a perception gained by an individual or collectively by an organisation which will affect the relationship between both parties.

Every interaction between an organisation and its Stakeholders is a “moment of truth” where these perceptions, either positive or negative, are gained. The sum of these “moments of truth” lead to an overall “customer experience” that can affect the economic relationship. Let me use an example of how this might apply to Financial Services.

It used to be that upon getting your first job, you set up a Bank account (often with your parents bank) and you banked with this organisation for life. When you came to buy your first house, you might visit your local Manager who would interview you and then arrange a loan. How times have changed. These days, Banking is highly competitive and has moved to touch every point of our lives. It is easy to change banks, or have many banks. Some specialise in certain types of products but they all want our hard earned cash. The transactional cost of changing banks has lowered so that customer loyalty is far less than it was in previous generations. Therefore the retention of customers has become more important than acquiring customers to most banking organisations. So how does a bank retain your business? It can make its products more attractive and tailored, but this comes at a high price to the bank and has not always been a unique differentiator. Therefore banks have gradually come to realise that by improving every touchpoint with their customer, it not only makes the bank easier and convenient to do business with but also improves our perception of their brand.

The Customer Experience must be considered across every single touchpoint, across every single channel and needs to be consistent for every single customer. Therefore if a Bank has great, customer centric staff in every branch, this is clearly advantageous but a Telephone Banking service which uses a poorly designed Interactive Voice Recognition (IVR) menu, long wait times or is not 24/7 might negate all the good work done in the branches. Similarly, a great Mobile App which allows you to do your general banking might be negated by a difficult to use Online Banking web site.

It is true that different customer segments are likely to use different channels, depending upon their needs but few Banking customers will stick to one channel. Therefore every single touchpoint must be looked at and tested from a customers perspective to ensure that they receive a positive and consistent experience. The loyalty generated will drive longer term financial reward, especially in a Social world where good and bad experiences can be shared and communicated globally in seconds.

I have used Banking as an example but the laws of Customer Experience are universal. Create great and lasting Customer Experiences and the rewards will repay the effort over and over.

One for the CRM Hall Of Shame….

CRMOutsiders

By Chris Bucholtz

Last week, I wrote an article for CRM Buyer that said, essentially, this: you can’t control what your customer does, what he says, where he says it or who he says it to, but you can control the experiences he has with your company. If you do that right, everything else ought to take care of itself.

By “customer experience,” I don’t mean the marketing-generated jargon variant of the term that’s thrown about loosely as a way to sell technology. I mean customer experience, with no quotation marks – the common-sense definition that explains it as the cumulative experience that a customer has while in contact with your company, your services and your products.

You can’t control every aspect of the customer’s experience, because he or she brings something of himself into the interaction. If the customer’s dog died that morning, nothing you do might give him…

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Becoming Customer Centric…5 Top Tips

The difference between experience and wisdom is a subtle one. To learn from an experience, one will make a mistake and learn not to do that again. That is learning by experience.

To learn from wisdom is to learn from the experience of others so not to have to make that mistake in the first place. That is learning by wisdom.

Therefore I find it puzzling that many organisations still prefer to learn by experience when attempting to fulfil their promise to become a truly customer centric organisation. Therefore, here are five quick tips that uses the wisdom gained from other organisations (who shall remain nameless but all of whom I have worked with) that can help on that journey towards customer centricity.

Tip #1: To change behaviour, change the comp and hire appropriately.

If you want your Managers accountable for delighting the customer and improving retention, then change the comp plan to focus them on that objective. If it is important, make it something that becomes an economic necessity! In a similar vein, ensure that your hiring policy is aligned to ensure that only applicants who can demonstrate a passion for customer centricity are hired. Gradually, the culture of the company will change.

Tip #2: Give the Customer a voice in the Boardroom

Invite the voice of the customer into the boardroom by appointing a Chief Customer Officer. If you cannot afford one, get a cardboard lifesize cut-out and sit it on a chair in the boardroom. At all relevant moments during a board meeting, turn to the cardboard cutout and ask “What does the customer think about this?”. Believe me…it works!!!!

Carboard Cutout — Welcoming the CCO to the Boardroom

I had been preparing a blog post on this subject but I would rather defer to someone who has the experience of being a Chief Customer Officer. You can learn more from her excellent blog here.

Tip#3: Interview your churning, loyal and indifferent customers

Do you provide Employee Satisfaction surveys, exit interviews and other such HR charm offensives? Well, why not extend similar concepts to former customers, current customers (noth advocates and the silent majority). Hold focus groups, use Social Media, surveys, bribes whatever it takes to gain the insight you need to gain a true customer perspective on what you do well, what you do not do well and what they would like to see you do. It is very powerful. I heard a stat recently that said in a survey of clients, 95% said their customers “loved them”, a perception that was only supported by 6% of their customers.

Tip#4: Educate, Empower and Enable everyone

Everybody within your organisation must feel empowered and able to provide an outstanding customer experience. To do this, everyone needs educating. Who are THEIR customers? What benefits will this approach bring? What behaviours and values need to be developed? This education should not be a Webex or DVD to watch. It must be participative, ongoing and cross functional, involving every staff member from Chairman to Janitor. One organisation invited all of its directors to spend a day answering phones to “real” customers. Only half took their turn. Those who did found the experience “career changing”. Those who didn’t turn up, in my opinion, should have been given an ultimatum to do their stint or leave. Customer Centricity needs to be fully inclusive.

Tip#5: Consistency across customer touchpoints

Finally, the great experience being delivered by Sam in Sales could be completely undermined by a poor after sales experience by Paul in Service. Not only is it important for everyone interacting with the customer to behave in a customer centric fashion, but it is also vital to offer a consistent LEVEL of Customer Service. I believe it is better for everyone to be very good than have one excellent and another mediocre. That alignment can be measured by surveying each different department at each customer touchpoint. The internal initiative should then focus upon improving the “lagging” departments to provide greater overall consistency.

Oh, there is a sixth tip: “Do not let I.T drive the initiative”, but that deserves a blog post of its own!

Of course, this list is not inclusive or exhaustive. Success could be achieved without these tips but I believe that they will increase your chances of success.

The Bermuda Triangle of CRM

Many Projects and Programs disappear into the Bermuda Triangle, never to be seen or heard of again. By understanding the relationship between Time, Cost and Quality, you can set a course through the triangle and avoid making fatal compromises.

The journey towards Customer Centricity can be like a Roller Coaster ride. Sure there are ups and downs but consider the dilemma most of us go through before getting on the ride:

It is scary, I’m afraid.

Look at that queue. I just haven’t got the time to wait.

It is expensive and surely not worth it.

It is unsafe. I have heard of accidents.

However, all of the while there is this niggling urge to do it despite these concerns and fears. You just know that your esteem will rise for having overcome your fears….and excuses!

Facing up to any transformation, whether it is a Customer Experience Transformation or a change to your working life, it can be just as daunting and the same fears can rise to the surface. However, these fears are very real and to increase your chances of success, I believe it is necessary to plot a course through these concerns, which I refer to as the Bermuda Triangle, where many Projects and Programs disappear never to be seen again.

The Bermuda Triangle is located between three waypoints that each have a major bearing on any type of project. The interesting thing is that you can only be in one place at any one time and you will therefore compromise on the other two. Therefore determining which waypoint is of primary consideration on your initiative will help plot a course and set expectations appropriately.

Lets consider each in turn.

Time

You are in a hurry and need the transformation to be completed within this Financial Year. To achieve that outcome, Cost and Quality are likely to suffer. You will probably need more people in order to complete tasks earlier and to take shortcuts that probably compromise quality. Conversely, if time is in plentiful supply then you could compromise on cost (spend more) to give you high quality or compromise on quality to help lower costs and obtain quicker results.

A great example is the building of the Segrada Familia.

Clearly Cost and Quality were impacted hugely because it was determined to take as long as it takes. It is a very costly and high quality building. Hopefully your project will not take as long!

Cost

How much is your budget and are you willing to compromise either time or quality to get the outcome you are seeking within your budget? If cost is the biggest consideration, you may have to consider lower quality (ever heard the “pay peanuts, get monkeys” expression?) and/or take longer. The GFC has left us with many examples of unfinished projects that simply ran out of cash. Perhaps it is better to compromise on cost by setting an affordable budget which will deliver something, albeit at a lesser quality than one might have hoped.

Quality

If you want High Quality, it will typically come at a price (cost) and take longer (time) but as at the Segrada Familia, that may not be an issue. I am amazed at how often I have met business leaders who say Quality is THE most important aspect yet they are unprepared to find extra money or time to enable quality outcomes. By compromising on Quality, you might be able to get a quicker or less expensive outcome.

That is why this conundrum is the Bermuda Triangle of Projects. Without a clear understanding and agreed direction amongst Business Owners and Project Sponsors within the Cost, Time and Quality dilemma, the project will struggle from the first point at which a decision needs to be made regarding a variation of any nature.

Talk about each of these considerations and agree where your project sits within the triangle. This then determines the SCOPE of your initiative which delivers against these three considerations. Be wary of “scope creep” where additional requirements get added in to the scope. Once more, this variation will cause on impact on Time and Cost if the additional scope is agreed to, Quality if the additional scope is rejected.

This dilemma is not specific to CRM but I thought I’d share it as it is pure “common sense” and as my Dad always told me “common sense ain’t too common”. I hope this helps in some small way.

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Time

Cost

Quality

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