Random acts of CRM?
Sat, Jun 18 2005
Right Now Technologies recently released a white paper titled "Stop Random Acts Of CRM", which got my attention for two reasons: firstly because my company provides a CRM as part of SiteBuilder (in fact you're receiving this email right now because it's being personalised and delivered to a bunch of people all at once using SiteBuilder) and secondly because I've been at the receiving end of "random acts of CRM" recently and it's *really* annoying! OK, let's back up a bit. "CRM" is "Customer Relationship Management", and the term is used to refer both to the general process of managing customer interactions with your business and also to the specific tools which allow that to happen. So CRM is both a process and a piece of software. Using CRM in your business is about keeping track of your clients and suppliers, recording information about when you last spoke to them on the phone, what particular service areas they are interested in, what they've bought from you in the past, all that good stuff. Yes, you could do it entirely with bits of paper - a well managed Rolodex is a primitive CRM system. Modern CRM tools like the Contacts module in SiteBuilder allow you to do much more though, such as ask questions like "which customers bought a dual-stage frobnotzer from us last year but haven't bought anything since?" and have it generate a list of matching customers. Then you can create a promotional email talking about your dual-stage frobnotzer upgrade rebate scheme, and have it personalised and sent to just those people on the list. So CRM is about making sure all communication with your customers is as relevant and meaningful as possible, treating each one as an individual and not just bombarding them with generalised newsletters and such. In the example above you don't want to send information about your frobnotzer rebate scheme to *all* your customers: only those that actually bought a frobnotzer from you. To all your other customers the scheme is irrelevant, and telling them about it won't generate good will: it's just more marketing noise to annoy people. Good CRM helps you keep your communication relevant. But CRM is not always good. Sometimes CRM, like Anakin, ends up working for the Dark Side and becomes the problem it's meant to alleviate. CRM should not be about having the tools to just blat out more marketing, more promotions, more newsletters, more more more: it can certainly do that, but that's not the point. It's critical that you keep in mind that the objective of CRM is to make you *relevant* to your customers. CRM gives you the power to do lots of things, but just because you can do something doesn't mean you should. A classic problem is when a business has multiple departments all responsible for dealing with customers. For example, the sales department handles transactions while the support department handles problems. The sales department will likely have a CRM available to make them more efficient at pushing out promo information and tracking leads, but the support department will also find they need to track support requests, follow-ups, etc. So they start doing some CRM themselves. Other departments also start tracking customers internally with various home-brewed systems, and before you know it the company has customer contact information spread around a bunch of departments with varying levels of awareness of each other. My latest bad CRM experience is a direct result of one of our suppliers suffering this problem. Although IVT runs our own Australian data center, we use a provider in San Francisco for our US-based servers. When I first made contact with this particular provider I asked some questions about the services they provide and received answers from a salesperson. I later asked some follow-up questions, and received answers from a different salesperson. When I was satisfied that they could provide the services we need I placed an order for a server. So far, so good. But at about this point two things went wrong in CRM-land. Firstly, the two salespeople that I dealt with both entered me into their CRM - independently. So I ended up in their database twice. Secondly, when I placed my order with them I should have been flagged as an active customer so they would know I'm not just a prospect they need to keep pitching to. That obviously didn't happen, because even though I've been a customer of theirs for a long time I still regularly get promotional emails along the lines of: "Hi, thanks for inquiring about our services and we'd like to offer you a discount if you sign up in the month of June." This is very bad from a marketing point of view because making existing customers aware of a special sign-up deal makes them annoyed that they didn't get that deal when they signed up. A typical customer who gets a promo like this will feel cheated that they paid full price when they signed up, even if the full price was a good deal anyway. That's just human nature. Then to really rub it in, I get all the promo emails twice - identical in all respects, but with one personalised to appear to come from the first salesperson I dealt with, and the other to appear to come from the second. Personalised email is much better than an impersonal promo blast, but when it's done properly it should be impossible to tell. Getting two identical emails seconds apart which purport to come from different people within the same company pretty much blows that illusion! I've got plenty of other examples of CRM gone bad but I'm sure you get the point. The lessons to learn are: * Integrate your CRM uniformly across your whole company: never allow individuals or departments to build up their own contact lists separate from your official system. * Check your data, and when staff are adding new entries make it easy for them to spot duplicate entries. * Create appropriate customer categories within the system and then *use* them! Don't send sign-up promos to existing customers, and don't treat all your contacts as one amorphous blob. Use the power of your CRM to make each customer feel like you are talking directly to them.