Build Healthy Customer Relationships

You would presume companies realize that customers are treasured assets. You’d expect companies to know that first-rate customer relationship management (CRM) promotes success. You’d think companies would view CRM as a business strategy, not just a technology fix. You would suppose that companies strive, up and down the supply chain, to balance operational flexibility and customer relationships. But you might be wrong.

C. Kenna Amos

Aug. 1, 2007

3 min read

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Patric Timmermans insists that nothing is worse than flexible companies with little customer knowledge. It’s no better, though, if a company says, “Sorry, you are a very valued customer, but these are our rules.” That inflexibility “doesn’t make a person feel [like] a very valued customer, does it?” asks this director of CRM for business software provider Infor Global Solutions (www.infor.com), Alpharetta, Ga.Maybe companies don’t know who or what a customer is? “It’s the supply chain and potentially every other supplier—or anyone who interacts with your business,” offers Isher Kaila. He’s a Toronto-based research director in Gartner Research’s global CRM Strategy and Implementation Group. That’s part of technology research and advisory company Gartner Inc. (www.gartner.com), Stamford, Conn.Revenue originBut whatever or whoever customers are, it’s time to include them in the supply chain, emphasizes Timmermans. “After all, all your revenue comes from your customers, not from your product. Your greatest asset is your customer, not your product or anything else.”Some companies are beginning to understand this. Calling CRM “very hot now,” Kaila says organizations have spent the last three or four years mulling over what they want to do. “[Now] they’ve come to this: ‘We’re now ready for CRM—or we’ve waited too long.’ ” Kaila calls CRM a business strategy. “Successful CRM helps to enrich a customer experience, to drive loyalty or satisfaction, which, in turn, will turn into positive business value.”Dale Hagemeyer sees some companies struggling conceptually with CRM as business strategy. “Organizations with distribution channels or distribution partners of some kind are not necessarily paying appropriate rewards and incentives that will drive enrichment of customer experience,” says this Ridgway, Colo.-based research vice president with Gartner Industries Advisories Services. Widespread stumbling blocks include “mismatches of technology solutions, non-synchronized data—and passing the buck when it comes to customer resolution.”Another problem is companies’ blindness to what it means to fully serve customers, Hagemeyer adds. “From some organization’s perspective, once goods or services are delivered to the customers, operational success has been achieved.”CRM should be all about serving the customer quickly and accurately, stresses Julie Fraser, principal and industry analyst with consulting group Industry Directions Inc. (www.industrydirections.com), Cummaquid, Mass. “[And that’s] whether through customer self-service, a call center, or links to field service, sales and other customer-facing people inside the company.” With CRM technology, Fraser sees software’s best uptake in large companies, because of the amount of data they have to manage. “Most smaller companies are using contact-management or sales-force automation tools that either are built into ERP (enterprise resource planning) systems or provided as an online hosted service,” she notes.But regardless of where CRM software is used, Fraser voices three principal concerns. Will the software effectively support customer-facing business processes? Will it integrate easily into other information systems including ERP, product lifecycle management, supply chain management and manufacturing execution systems or plant floor? And is the software’s user interface and functionality such that sales and customer service will actually populate it effectively with information? Like Timmermans, Fraser champions customers as companies’ most valuable assets. “Don’t you want to manage that in the best way possible, particularly in the face of global competition?” Fraser challenges. Who would dare answer negatively?