CUSTOMER RELATIONSHIP MANAGEMENT...(A definition and a vision)

No one company has written the book on CRM. And rightly so, says this author, whose examination of how companies practice this much-talked about discipline led him to develop comprehensive guidelines for enhancing a company’s returns from CRM.

That few companies are achieving the results they expected from their investment in Customer Relationship Management (CRM) is not news. That most companies continue to invest in CRM without a roadmap for increasing shareholder value or even for forging closer customer relationships is also not surprising, since there are few best practices in CRM for companies to follow. In fact, based on our own research and consulting, and a recent examination of best practices in 35 Canadian and U.S. corporations, we could not find one company that excels in every dimension of CRM. However, we did find examples of one or two specific best practices in individual companies. This article discusses these selected best practices, which, we believe, companies should consider when trying to improve the performance of their CRM initiatives. It also discuss the changing role of senior managers that are developing a relationship-oriented organization

There are many definitions for CRM, and best-practice companies adopt one that is shared across the organization. Otherwise, the very term “CRM” will conjure up many things to different people and lead to confusion. These companies see CRM as a series of strategies and processes that support and execute a relationship vision for the enterprise. In their eyes, CRM is a series of strategies and processes that create new and mutual value for individual customers, builds preference for their organizations and improves business results over a lifetime of association with their customers.

With this definition, an organization can focus on developing the only asset of the enterprise that matters in the long term, progressively deeper relationships with valuable customers. By sharing the definition, they can put the customer first and avoid sending their staff into cycles of interminable CRM programming.

These organizations then create a vision for how CRM will change their companies. Some develop the vision according to attributes that are important to both the customer and the company. These include attributes that affect customers’ perceptions of value, how they can bond with the organization, product and company preference and purchase intent.

This vision sometimes changes as the firm gains experience in CRM and as technology makes new things possible. For example, at a major Canadian bank, the vision has evolved. Initially the vision was associated with the development of customer information systems. Personnel then identified five components that the firm built in stages to implement key aspects of the vision. These components were associated with developing a complete, real-time, single and accurate view of each customer. Simple though it sounds, it took several years to accomplish given the sheer scale of the enterprise. In this example, the vision was initially conceived in terms of a strategic capability, that of customer information. Today, the vision is more focused on the delivery of differentiated value propositions through products to customers. This illustrates that once best-practice companies put a strategic capability in place to enable CRM, they tend to modify the vision to use the capability for customer bonding, a learning relationship and competitive advantage. Strategic capabilities are even more important than specific strategies in best-practice CRM companies.