Customer knowledge lies with many
There is a growing perception that CRM investments have become too technologically driven, meaning that system support has become the starting point and that operations have to adapt their processes. There might have been an overconfidence in the systems combined with an underestimation of the effort needed to start using the selected system.
Within the CRM area focus is currently on monitoring customer usage of various technology platforms or applications such as mobile, social media and e-readers. Customer interaction is increasing and expanding into new areas through these platforms. Well-informed customers move across these new touch points which means that traditional channel strategies are being challenged.
It is becoming increasingly urgent for organisations to improve their ability to implement and coordinate the necessary changes – within and between existing channels – to achieve set visions.
In this article we describe how organisations can keep up with the technical development within this area.
Forrester Research published the result of a poll conducted amongst 99 companies. Leaders working with CRM activities in both IT and operations were interviewed. Half of the respondents were very dissatisfied with their investments in CRM support and felt that productivity had not improved.
One reason for the relatively low satisfaction was that many had started in the wrong end, that is acquiring the technology before defining the processes. The conclusion was that there is a great potential in coordinating human beings, processes and technology. The core of the problem is usually that the interface between those defining the CRM strategy and those executing it is unclear or not sufficiently communicated.
The starting point is therefore that many organisations do not have a clear picture of who their customers are and who is best fit internally to add the most value to each point of contact, and they also lack a system support which can support in meeting the set targets.
The trend of increasing number of point of contacts where customers interact with or evaluate organisations – such as through digital media – can give the impression that to change the approach and work methods is a gigantic task. But it is a journey that has to start – if not yet started. In our opinion customer knowledge must be viewed upon as core competence in any organisation. This knowledge must be captured and it must constantly develop – internally as well as together with partners and stakeholders.
Customer knowledge – a core competence
Customer knowledge is key for all organisations when meeting their customer’s explicit and sometimes implicit needs. It is quite obvious – the customer is the one who needs to be able to pay salaries, equipment, dividends and much more. This is the core of many people’s business – whether it goes directly from the customer or via the tax bill.
Our definition of a customer can however differ – it might be a politician, the buyer, the children of the family, Mrs. Smith or Mother Earth. This is a frequent and important discussion. Regardless of who the customer is – if we do not see why and how our customers use our products or services, it will be increasingly difficult for us to improve and to increase profitability, but also to acquire new customers.
At the same time, if we take a more process-oriented approach to our customers – meaning we consider the customer’s process or lifecycle from discovery to decision, usage and repurchase or return of a product or service – we will be more likely to discover who the customer really is.
Customer knowledge – lies with many
Customer knowledge exists in many people in an organisation and they all have different roles and different motivations. Motivations that might not always be in line with the vision and mission of the organisation. Top management might strive towards increased profitability, a middle manager might strive towards a pleasant work environment, while a young graduate might strive towards personal development and a good balance between work and leisure.
At the same time, partners and stakeholders have their own motivations – such as increasing their own benefit. This does not necessarily mean that they will take customers of other organisations into consideration. Organisations that have outsourced large parts of their support functions should take extra interest in reviewing these processes.
Customer knowledge – under constant development
Customers are not static, they change with new insights, market conditions and trends. It is in other words important for organisations to constantly use all senses to understand and to act appropriately. Those who can understand what drives the customer to buy at a specific product or service – crack the code so to speak – has the best chance to succeed. In the digital era of today there is a great opportunity to better capture and meet customer needs.
But at the same time the fact that customers move more freely between sales, payment and distribution channels creates a more complex environment. Interactions are more frequent and more and more point of contacts are added. The traditional channels are faced with new demands as it becomes critical to consider the complete customer buying process and life cycle.
Customer knowledge – new approaches
Organisations are increasingly detecting a need for new approaches in this matter. As described above, the reasons are many:
- Development of new platforms and applications
- Points of contact are increasing and becoming more frequent
- Customers move more freely between the points of contact
- It is difficult to identify and control all parties involved in the process – both internally and externally
- The number of operators who supply the customer with products and services throughout her life cycle is increasing and changing
In times of rapid change, it is difficult to define problems and anticipate turn of events. With the technology-focused history in mind it becomes apparent that development of future CRM solutions needs to be done agile. Meaning that the user should be more in focus and development should be done in smaller steps.
This will also work in favour for organisations to internally find common motivators and a common view of the customers. But it should be emphasised that the organisations should define ownership of the customers and their process – in order to develop core competences connected to the customer. This may ultimately lead to a need to define new roles.
Customer knowledge – some short advice
There are many ways to take on the task of developing customer relationships. Here are some brief tips:
- Make the customer process more visible. A greater commitment can be created within the organisation by increasing visibility. Involve people throughout the organisation to ensure no point of contact is missed. Try to coordinate people, process and technology.
- Rome was not built in a day and the mapping can take time. Start with the person with the most impact on the organisation. It is not a bad idea to invite customers – especially those who are less satisfied with your organisation.
- Do not forget to define explicit and implicit rules governing customer behaviour. Ask questions. Why do customers buy from us? Why do we sell what we sell? Why do customers not buy from us? What are the needs of our customers and why?
- Based on the answers you give – analyse your KPI’s – how well do they capture the customer process and the targets of the organisation. Analyse to what extent different parts of the organisation understands their role in achieving the defined KPI’s.
- Define cooperation with external parties. How well defined the SLA’s are and to what extent following these will meet customer requirements.
- Define and analyse the most critical points of contact. The work effort required, possible solutions and risks.
- Ensure a strong ownership of the process to secure long term commitment. Set up a room where you can visualise the work done.
- Consider the possibility to individually reward those who creates added value to the customer process. It can be an effective tool to facilitate change.