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Customer relationship management involves building and maintaining relationships with customers to construct lasting connections that are of value to both the business and the customer.

Over the past decade organizations have invested in computer systems and technology to manage customer relationships. From the earliest pop-ups that identified callers to the latest CRM systems that gather, collate and stratify enormous amounts of information the majority have overwhelmingly failed to deliver on their promise.

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The fault is not with the systems themselves but with the business strategy, or lack of it, that accompanies the technology investment. Customer relationships are about people, not technology. Technology is merely an enabler but too often it is seen as a panacea or at least a shortcut to implement the latest next big thing for business success.

Traditionally a company's customers had a one on one relationship with company sales people. The salesperson would understand the customer's business intimately and often friendships would develop. These relationships overrode price competition and product differentiation developing and cementing loyalty to the business and its products.

With the drive for efficiency and the downsizing of organizations these personal relationships were retained only for a company's key customers or largest accounts. Commercial sales forces were replaced with call centers and customers lost their connection to the individual business and the people working in it.

Without loyalty, customer retention became dependent on finding a competitive edge in either price or product improvement. Competitive edge however was, and still is, fleeting; the innovation that sets a company apart is quickly followed by some while others jump a step ahead.

Companies began to recognize that efficiency alone would not guarantee success and may not ensure survival. While it was impractical and unsustainable to return to the days of large mobile sales forces companies needed to find a way to reconnect with all their customers.

Technology developers stepped in to provide systems that could record, sort, stratify and present information on customers that would allow the business to understand their customers in a way that could be used to develop relationships.

What has been forgotten in many cases is that there also needs to be a cultural change for customer relationship management to be successful. Call center measures of performance were developed around short talk times and minimal hand offs. Typical accounts receivable measures likewise are on days sales overdue and total overdue percentages. They are all efficiency based targets.

Until measures of customer relationships such as customers won, lost and grown are applied more broadly to teams other than the sales team, employees will not use a CRM system for its intended purpose. Instead of using the information to add a personal touch to conversations or find solutions that work for the individual customer they will enter a cursory note about the contact and move on to the next call.

CRM systems provide the opportunity to regain the benefits of the relationships developed by a mobile sales force in a more efficient and effective manner. They are capable of presenting information to everyone in the company that used to be retained by one employee alone further protecting the relationship from being lost through employee turnover.

To be successful however, before even one dollar is spent on technology, a business needs to have a well thought out strategy to develop and strengthen their personal relationships with customers. The strategy must recognize that managing relationships with customers to develop loyalty involves people connecting with people and no technology system on its own can do that.

 

 

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