Firms told CRM 'not just a switch you can flick on'

Companies are being urged to realise there is no such thing as a 'ready-made solution' when it comes to their customer relationship management (CRM) and it is something they must always work at and measure.

They are also being warned to remember that effective customer service can never be fully automated but rather technology can only scale what we already know constitutes good service.

CRM is playing an increasing part in the way businesses increase loyalty and revenue, while reducing churn and inefficiency. But companies must understand their customers and their own business before they make major investment in the technology to synch the two – understanding that investment in technology does not give them a divine right to customer satisfaction.

Scott Nelson, VP at Gartner, told attendees at the Gartner CRM Summit in London that "CRM is not a 'once and done' – it's a journey".

He said businesses must realise the relationship they have with their customers is unique. Comparison with other companies in the same industry is irrelevant, said Nelson, adding businesses should compare themselves with any organisation that has invested successfully in understanding their customers.

Nelson said: "Companies will spend a lot of time thinking about what is right for the firm but they won't stop to think about what the customer expects.

"Companies need to get more intelligent about what's going on with their customers."

He added: "Just because you are collecting all this data it doesn't mean you are using it most effectively," citing an extreme example of one financial services company which included 40,000 entries of the name 'Mickey Mouse' on its database.

Such large databases naturally require a degree of automation but Nelson warned companies against assuming 'the computer will look after it' and to constantly measure the success, or otherwise of their CRM and track "what's working and what's not working".

With a raft of vendors offering 'out of the box' solutions and CRM on-demand, Nelson said Gartner wouldn't be drawn on which type of offering will prevail.

He said: "We're not going to say one is better than the others but one will be better than the other based on your unique DNA," urging customers to realise the long-term benefits of getting the decision right and managing their CRM effectively.

But realising technology is the enabler, underpinning far more crucial human factors is key.

Nelson said: "CRM doesn't require technology," citing examples of store-keepers who know all their customers personally and remember their requests and their preferences. "But it does require technology in order to scale."

Don Peppers, founder of marketing consultancy Peppers & Rogers Group, said companies must realise the customer is everything to them and the function of their CRM must represent that.

He said: "If you do not have customers you are not a business; you are a hobby."

As such, systems must look to scale the abilities of the experienced store-keeper which customers find so compelling.

Using the example of hotels, he said businesses must remember which newspaper each customer takes, whether they drink tea or coffee and which type of pillows they prefer.

He said unsuccessful businesses will show "no memory of the customer's past and no respect to their future intention to buy".