De-bunking the Myths of CRM

What are the 6 Common Myths of CRM?

Myth #1. CRM is a software package that must be purchased (it isn’t; CRM is a mindset that permeates throughout a company when the business puts its customers’ needs first);

Myth #2. CRM requires full-scale implementation (it doesn’t; businesses can take small steps and still implement effective CRM initiatives within their organizations);

Myth #3. Technology builds relationships (it doesn’t; relationships can only be built one-on-one);

Myth #4. CRM is about managing your customers (it isn’t; in fact, it’s our customers who manage us – they are the ones who make the buying decisions that keep us in business);

Myth #5. Sales can be automated (it can’t be; selling is a one-to-one relationship – what can be automated, however, is the order-taking process);

Myth #6. Analyzing customer data is the key to your success (it isn’t; analyzing your customers’ buying patterns may improve their experience with you – but analyzing their buying patterns will not influence prospects or new customers to buy from you).

Elements that Create Value in a Relationship

There are the two elements that create value for customers: the uniqueness of the product or service you’re offering, and the relationship experience your customers have with you. While we would all like to have unique products to sell (for example, products on which we hold patents), the reality is that most of us offer products or services that are available from other sources. The easiest way to differentiate your business from competitors is to work on improving the relationship experience that your customers have with your company.

The relationship experience consists of two components:

• Operational Excellence is how well you execute your business from your customers’ point of view;
• Customer Intimacy involves understanding or predicting a need or a desire that your customer may have, and then providing that customer with a customized experience.

Example: If our business is selling gasoline (which most people would agree is a commodity), there’s very little we can do to distinguish our product from other gasolines. But we can control the relationship experience our customers have when they fill their cars at our gas station. Some of the Operational Excellence and Customer Intimacy components we can focus on include:

Operational Excellence

• Safety: Well-lit; attendants on duty
• Cleanliness: Bathrooms, over-all station
• Convenience: Location, Self/Mini/Full Serve, credit card readers, open 24 hours
• Product Availability: All grades of gasoline always in-stock
• Amenities: Vacuum cleaners, air, food mart
• Other: Overhang, squeegee, paper towels

Customer Intimacy

• Give customers their preferred newspaper, without asking, with each fill-up
• Give customers their preferred beverage, without asking, with each fill-up
• Provide special incentives to frequent customers
• Provide an express or discount island for frequent customers

Areas of the Business for Management to Review

To develop a roadmap of CRM initiatives that you can implement in your business, management can begin by asking itself the following questions:

1. Is our customer database as good as it can be? A business needs a central repository of customer and vendor information, accessible by everyone in the organization simultaneously. If a customer notifies you about a new address or phone number, into how many different systems within your business must you enter that new information? Installing or improving your existing shared database is an important step in your information technology strategy.
2. Is there information in any of our existing systems that may be of value to our customers? Data that already exists in your system becomes knowledge when you make it available to your customers in a format that’s useful and meaningful to them. Would your customers benefit from having access to statements of account online? Could a trend analysis or a report of their buying pattern or shipping history be of value to them? Implementing simple reporting techniques is another beneficial use of technology.
3. Would our customers like notification of events that affect them? Perhaps they’d like to know when a warranty of theirs is due to expire, the status of a job or project, or when it was time to re-order an item before they run out of it. Simple notifications like these can be valuable to your customers to have, and are easily handled by today’s technology.
4. Is our product information consistent, and readily available to our customers? Is your product literature easily accessible to your customers and employees? How about answers to commonly asked questions? When your customers call, will they receive consistent answers from everyone in your organization? Making it easy for customers to get the information they need – and via the method that’s most convenient for them – is important in adding value to the relationship. A knowledge base or literature library is the solution to this simple problem.

Conclusion

Unless the product we’re selling or intangible service we provide is somehow unique, customers make buying decisions that will be influenced by the relationship experience they have with us. Therefore, businesses need to focus on what we call Customer Relationship Experience Development (CRED®). CRED® does not require spending large sums of money. However, it does require that our customers’ needs – not our own – be the driving force behind our business and information technology strategy.