Don't be a 'Me-2-B'!

"Enterprise WLTM customer for one to one involving longstanding partnership of mutual trust and benefit. Interests include..."

Sounds good, doesn't it? But understanding your own brand is essential, before any meaningful relationship can develop.

Customer relationships are like any relationship: they involve dialogue and only end if one partner loses the other's trust or loyalty.

In business, customer relationships often end when companies put themselves at risk with poorly considered point-and-click solutions that might seem advantageous to one party - the supplier, for example - in terms of cost efficiency, but may serve to alienate the customer. Or, as we shared in the piece last week about shabby service at a big-name money lender, the relationship turns sour because the different parts of the business that were supposed to be linked by their CRM strategy failed to join up.

People like to feel unique, although they may be loyal to a brand because they feel that brand meets their current needs or immediate aspirations. This relationship and bond of trust should not be tampered with, particularly in a multichannel environment, which, when poorly managed and integrated, can work against the concept of brand loyalty and encourage people to surf around for the cheapest deal.

A canny company could infer a customer's possible aspirations from the choices they make and lead them into new and challenging experiences - a genuine value-add in the relationship between customer and supplier.

So don't look on CRM as a technology problem requiring a technology solution. For too long business has focused on bolting an e- onto the front of business and commerce, in the fond belief that electronic business is a separate discipline from 'regular' business.

As a result, strategic investment in systems has too often been regarded as an IT issue, and not something that belongs at the heart of every business. The mantra of "think global" has sometimes ignored the need to "act local", a problem exacerbated by IT decision makers still being excluded from the boardroom table. This has created a dislocation between a business's short, medium and long-term objectives and the department whose responsibility it is to deliver on that vision.

This has also created a new breed of companies: the 'Me2B's who have implemented business intelligence and CRM systems simply because that is what their competitors are doing, upping the ante in a technology arms race where the customer is often collateral damage. Too often marketing departments are excluded from IT decisions, or are put in charge of web projects with no understanding of how to create a dialogue with the employees and the suppliers who have to build the systems.

The inevitable consequence? Failed ventures, which discredit both technology and investment, leading to an ever-greater dislocation at boardroom level. Business leaders want to know why there has been no demonstrable return on their outlay; marketing departments often act autonomously, or within punitive financial strictures.

The secret is first to bring IT under the boardroom's direct control and educate both IT strategists, CIOs, CEOs, CFOs and marketing directors in the business benefits of strategic IT implementations. The result: bringing the 'e-' into the heart of business. And that 'e' should stand for effective, enabled, enterprise and evolution, not for electronic. Businesses cannot communicate with their customers if they don't communicate first amongst themselves.

The knock-on effect of doing it this way is a top-down strategy with buy-in at every stratum of the organisation, motivating staff and involving every level of the organisation in the company's vision, and the systems, strategies and investments needed to realise it.

But good CRM is not only about your customer; it is also about your staff. Many staff lower down the organisation are both demotivated and disenfranchised by IT systems which can depersonalise customer relationships, creating a point and click culture which forces an organisation's real asset - its people - out to seek employment elsewhere.

The next thing to remember is that data management is asset management. Over the past five to ten years, there has been an explosion of data populations within medium to large enterprises, yet no widespread census of that population.

Point and click solutions should not mean a point and click attitude to customer relationships and segmentation; yet such systems, when misapplied, often encourage a culture of weeding out apparently unprofitable or 'undesirable' customers by applying a cut-off point in customer value - such as by annual income.

A better, more forward-looking and profitable strategy would be targeting personalised services at different customer groups or, ideally, individual customers who could still have a very profitable relationship with the company.

These fundamental building blocks of a CRM strategy are all too often overlooked. Over the next few weeks, I'm going to be exploring each of the issues alluded to above and take a closer look at them in theory and in practice.

By Chris Middleton
Contributing Editor