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CRM: $300bn later and customer service is still "abysmal"

1st Nov 2010
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Customer service is still "abysmal" in many industries despite the fact that brands have spent $300 billion on CRM over the last decade, according to a Gartner analyst.

Michael Maoz, a vice president and distinguished analyst at the researcher, said in a blog entitled ‘You failed at Customer Service, so now try Social Processes’ that even though organisations have spent $75 billion on CRM applications and triple that sum on business process improvement over the last 10 years, customer satisfaction had risen by only between 3-5% in most industries.

Despite the hundreds of best practice books that had been written on the subject, this situation was mainly due to "a terrible version of Taylorism" that had gripped the service industry and customer service organisations, particularly in the US. Frederick Taylor was the man who first applied scientific principles to the analysis of business workflows in the 1880s.

"It is this dissection of every item of work into a measurable unit that is, in large part, accountable for the abysmal service delivered in many industries. The relentless focus on efficiencies wrings out any natural inclination of the customer service rep to display their natural drive, passion and desire to commit to the customer," Maoz warned.

It also led to managers ensuring that business processes had room to include as little "fluff" as possible. Such fluff included having customer service reps actually talking to or listening to customers, taking note of their issues or taking the initiative to think outside the box.

But now social CRM was being touted as the new means to "cure the malady of poor service", with the idea that customers would "uncover the bad processes, and point out the poor agents", Maoz said.

In reality, however, it might make just as much sense to just listen to what service representatives had to say. "After all, they hear what the customer is saying, and feel their pain. It’s just that no one in management has cared to tap into the employee," Maoz said.

But he supposed that the industry should at least "cheer that at least we are listening to the customer, whilst at the same time returning to an examination of how we might empower and reward customer service representatives to do what they could do well, if given the chance".

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By chrishansen14
01st Nov 2010 19:13

Interesting that we see that the primary problem is a model that was designed to resolve structure has now created a situation where it has been over-engineered. As an embedded cultural norm, it has become a risk instead of a benefit. Many of these models are outdated because of market saturation. Back in 1880, the vast majortiy of all industry was still open field. Now, in a predominantly professional service and intellectual property-focused industry (as opposed to manufacturing focused), as well as a global economy where logistics is no longer a huge barrier to competitive markets, the rules have changed because the needs of the business models have changed.

It's only a case where we're still holding on to our comfort zones - which is primarily a limitation improsed by the current generation of existing leadership. Not enough focus to see the forest from the trees and adapt willingly, and most of the businesses that will benefit the most are still stuck in a busines smodel that persists and is resistant to change because the expense of migrating forces them to assume a lot of risk that they're not willing to accept, or are incapable of managing effectively.

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