Strange as it might sound,
customers are human too. So why does the current VM vogue for CRM seem to be
manifesting as a dehumanising fad dreamt up to cross and up-sell?
Whilst it’s a somewhat depressing thought, it would appear that the regular
ebb and flow of ‘management fads’ is here to stay and the automotive industry
appears to be no exception to the rule.
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In the last few years we have had: TQM,
ISO/BSI, kanban, JIT, re-engineering, downsizing, vendor managed inventory,
globalisation, e-commerce, key account management and now CRM – Customer Relationship
Management. The process is always the same: they come, they conquer, disappoint
and then disappear. Meanwhile academics publish books and add the subject to
their MBA courses; publishers run conferences, seminars and launch dedicated
trade titles; the major consulting firms suddenly develop ‘specialist’ divisions
devoted to it, and they all push the merry-go-round faster and faster, until
it’s time to jump off – leaving the adopters alone, in a spin and feeling dizzy!
From the ‘religious’ zeal
with which CRM, and its predecessors, have been accepted and then defended,
the ranks of VM management seem to be populated by those sharing a mind-set
with those from ‘darker’ periods of human history. It’s almost viewed as heresy
to gainsay a vogue in its early stages, however it’s equally hard to make a
really objective judgement at this stage too. CRM is definitely well on its
way to becoming ‘the’ business fad for the early part of the millennium. The
problem is that CRM has its roots in the fields of service quality and customer
loyalty, something that the majority of those consultancies and IT businesses
leading the CRM charge, have neither experience nor success in designing or
implementing within their own organisations, let alone another major business!
It’s equally obvious that their collective quid pro quo is the sale of software
and hardware, good old fashioned product pushing! How ironic that they are so
often portrayed as the CRM White Knights galloping to the rescue, panacea in
tow.
So it’s critical to determine
the substance and ignore the smoke and mirrors. Undoubtedly there exists, in
the majority of organisations, the need to be more responsive to their customers,
so that some form of customised response can be developed. Something that the
entire automotive industry could benefit from particularly with recent developments
from the UK’s Office of Fair Trading!
Indeed in his most recent
book Philip Kotler lists this as the major way to compete successfully in the
new millennium. I can also personally attest to the fact that this approach
works, most recently taking a £2,000 account to £350,000 in two
years – based solely on getting ‘inside’ the customer.
Old segmentation based on
geo-demographic means is no longer relevant, a new paradigm is called for. To
be effective CRM must turn to behavioural and psychographic segmentation – turning
to the techniques long used by those in fast moving consumer goods.
So what are the pointers
to ensuring this philosophy pays off?
Well, a whole variety of
sources accept a five point, or principle, structure:
1. Relationships
involve people and emotions
2. Different people like different types of relationships
3. Be wary of panaceas produced from whiz-bang technology
4. Loyalty comes from trust and value, not bribery
5. You can’t be all things to all people
The problem, it seems, is
that CRM is being discussed in a ‘sterile’ environment as a means to ‘manipulate’
customers – as if it is another programme you switch ‘on’ with windows on your
PC in a morning. As Robert Shaw, visiting Professor of Marketing at Cranfield
University recently pointed out, ‘technology and information are at best responsible
for 25% of your CRM competence’.
Equally a lot of the approaches
imply that there is an ideal formula that an IT system can ‘Plug and play’ into
an organisation – sheer fallacy! How can a standard system cope with the nuances
of individual buyers, their organisations, their buying cycles, and what happens
when all your competitors have a similar, if not identical system? How will
it still deliver an advantage to you?
Transactional buyers will
always be that, they want to use a service or product in the simplest, most
straightforward manner and get on with their life. Often because the product
is of ‘minor’ concern, they buy on the best ‘offer’ – no IT system will ever
change this behaviour. At best you buy a one off hit, at worst you create a
price perception that leads to a downward price spiral – just look at the supermarket
wars for a salutary lesson!
Customers are human and
need to be handled as such, they do not just buy the rational product offer,
they buy the emotional offer too – often this is the reason they buy! People
buy on emotion then justify their decision with fact. A relationship is a warm
two-way communication between human beings, it requires that the desires, needs
and values of the customer come first, not IT infrastructure. That’s why the
crucial aspect of any successful relationship strategy has to be based on the
quality of that interface – customer to supplier.
Whether it’s a sales force,
technical personnel, customer services or anyone else from the supplier, to
excel at CRM they have to be adept in a range of skills and techniques, from
Neurolinguistic programming, personality profiling, psychographics, information
processing and questioning techniques through to report writing, telephone technique
and information gathering. They have to know who likes the high-touch and who’s
hands-off, who likes high-tech and who’s in the Stone Age! They have to manage
a complex mix of brand, product, service, people and circumstances to generate
revenue from increasingly demanding and sophisticated buyers.
CRM systems have their place,
they can be a proactive support mechanism, but only when a skilled and focused
interface between supplier and customer is present, coupled with a company strategy
to deliver service excellence – they cannot compensate for amateurism in this
area. That’s why you are better off investing in developing the relationship
skills of your people; it’s an investment that will save you money and heartache,
as well as giving you a skilled workforce where it matters – at the coalface!
Andy Whalley
HeadWhay Limited
20, Range Green, Tipner, Portsmouth, PO2 8RE
023 9264 4113 or 07974 188057
