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CRM and the Web as a Communication Tool

Article By Ari Buchwald July, 2000

CRM does not reinvent the wheel

Guess what – customer relationship management is nothing new. Around the turn of the century, mom and pop proprietors built their businesses on knowing their customer’s needs. Point of Sale computers and smart cards did not store data on what cut of meat Mrs. Smith liked, or told Studebaker how often farmer John traded in his wagon and could be up-sold to a better buggy. The success of certain time honored traditions like paying attention to the customer allowed these and other businesses to pave the way for seemingly astronomical growth in the last century. Companies like Wendy’s, WalMart and Apple Computers all started small and grew because they serviced the customer well AND provided a good product at a reasonable price.

As America grew from the industrial era to manufacturing through service, technology and the information revolution, focus has slowly migrated from the customer to the process or the product. Today, companies are not naturally designed to focus on the customer and maximize this critical relationship; rather, they are motivated by market competition, efficiency in production and value to the stockholder. Again, CRM is nothing new, it is a refocusing on an old technique – listening to the customer and responding to the customers’ needs.

Maximize individual processes, not organizational paradigms

Traditionally, process-reengineering initiatives have been championed by sales and profitability goals, or owned by the marketing and operations departments. Examples of these efforts to “climb the higher mountain” or to “right the boat” are Sales Force Automation (SFA), Total Quality Management (TQM) in operations, or Enterprise Resource Management (ERM, ERP, PRM, etc.).

This type of initiative may spawn beneficial change in focus, efficiency or profitability at first, but then just as likely as these efforts are kicked off, they end in failure. The death knell usually is politically motivated, due to logistical issues or key employee rollover. The result is that the project ends in temporary improvement, incremental improvement or no improvement at all because companies cannot redefine themselves entirely either culturally or financially.

The move to communicate properly to the customer needs to occur on all levels in an organization, from the CEO to the CSR and it needs to be owned by the organization as a whole, not just one department. CRM too, as cutting edge as the acronym is, may end up in the old circular file if not implemented correctly.

People, processes need to change

Companies need to move away from encouraging re-engineering that substitutes technology for cultural change. Programs that merely shift traditional company org charts will tend to constrict employee’s processes, steal ownership or create more work for the individual or the department and thus will not foster change, but stifle it. In order to change the mindset, companies must break the existing paradigms as well as traditional roles and organization.

CRM works horizontally

Org charts are boxes and silos and once implemented, the structure is difficult to break. With no one group or person championing the customer, companies default to looking within to measure success. Profitability vs. previous year, and monitoring margins are good indicators of how the process is occurring internally, but what measures are in place to ensure that customer churn is minimized, customer satisfaction is met or exceeded and that the products and services are optimally matched to the customer needs? The solution is to redefine departmental relationships and responsibilities to each other, as well as the customer.

CRM is the first initiative that causes a company to review itself at the core level and look past processes, statistics and data warehouses to see the customer. Ownership needs to be distributed as well as accepted as departments and employees work together crossfunctionally. In this manner, customers will not fall through the cracks, the brand image will be enhanced and profitability will inevitably rise. Focus within to ensure that profitability and efficiency is maintained, but do not forget about the customer.

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