Successful Customer Relationship Management

Customer Management is at a crucial point in its development. It is emerging into, potentially, a management tool of great strategic importance. The future development of Customer Management depends not simply on more investment in IT, but on understanding how Customer Management really works; building transferable knowledge and turning it into effective practice.

We have all known for a long time that providers of both goods and services have to focus on the needs of their customers and try to build a long-term relationship with them. The relationship that the brand holds with the end consumer is equally important to overall success.

Therefore customer satisfaction at multiple levels is the real key to competitive advantage in business today. However, most companies continue to be driven by more basic metrics such as short-term profitability and, even more basic, gross revenue. Therefore it is worth looking at how others try to manage the customer interface and extrapolate from that to glean the key learnings which can be then adopted more widely.

The first point to note is that there is still a long way to go across the spectrum – only 24% of companies, when asked, saw management time spent with customers as important and only a third offer any form of customer training for their staff. Sadly the key point we can take from this is that, while organisations may wish customers to be loyal to them, in reality they are not willing to invest in the return relationship. Anyone who has tried to get lost luggage returned, renegotiate a mortgage, return a product without a receipt or ask for a reduced rate on an insurance renewal will be only too familiar with this conundrum.

So, having concluded that customer management is worth embracing, what climate is needed to make sure it can be a success? Like any new initiative, balanced foundations need to be in place otherwise it may fail to gain roots within the organisation. These need to be evaluated prior to the implementation of a customer management system and continually monitored throughout to ensure that the environment is ideal for prosperity.

Lesson 1: CM is not for everyone
It’s only worthwhile pursuing CM if the company is set up to act on its data by tailoring its value proposition. Companies that can vary communications, people, channels and other parts of the mix between customers, can create advantage by flexing their overall value proposition – whatever the product or service. 

Lesson 2: It’s best fit, not best practice, that matters
The idea of CM best practice was emphatically debunked in the research. The ideal form of CM depended on the nature of the market and the capabilities of the company. As a result, we identified five ‘subspecies’ of CM, each of which fitted a place in the CM ecosystem. 

Lesson 3: Justify your investment, not someone else’s
Justifying investment in customer management is never easy. Marketing departments that depended solely on financial arguments could never make the case for CM because so much of the benefit is hard to quantify.

Lesson 4: Manage the team over time
Successful CM requires exceptionally effective cross-functional working. However expecting everyone from board member to customer service assistant to be in on every meeting is clearly unworkable. We discovered that the critical variable is the project life cycle stage. Effective project management deployed very senior but narrow teams at the start, gradually broadening them and introducing less senior membership as the project advanced. The critical features of this approach included a ‘brain storming pool’, as the project went from definition to the building phase, and the careful channelling of the team’s effort by project leaders, to avoid the whole task going off down a blind alley.

Lesson 5: It’s insight that matters, not just data
Firms that extracted real customer insight were those that had synthesised both hard, digitally held data and soft, qualitative knowledge. They grasped that data was only a means to an end – the understanding of customer motivations.

Hopes you liked those tools and now onwards make customer relation, the foremost priority of your business