CRM goes beyond mere satisfaction to commitment

Updated: Jan 21 2002, 05:30am hrs
Think customer. That forms the crux of the customer relationship management (CRM) philosophy. The customer is central to any CRM initiative. However, the customer needs to be defined both as internal (the employees) and external (the end consumers). CRM thus is also all about ensuring employee buy-in, encouraging innovation, empowering employees and employing feedback mechanisms, besides bonding with the customer. While in the West, the dividing line between a customer and a consumer has become very thin, in India we still need to remove the confusion between the two. The customer is the retailer, distributor, trade, while the consumer is the end-user of the product or service. Both need equal attention of the company. The customers’ encounter with the company’s employees can make or break a relationship and ultimately affect profitability. CRM goes beyond mere satisfaction to commitment.

These were some of the points discussed at the CII-sponsored international conference on CRM.

Speaking on the road ahead, Mr Bob Thompson, founder, CRMGuru.com, said CRM was an ongoing journey and corporates should never be completely satisfied with their efforts. CRM is a business strategy that is enabled not driven by technology, he said. It is essentially a battle for the customers’ heart. As such corporates need to take care of the ‘little things’ to provide the best customer experience. While it is a strategy that has to be CEO-led, it is also a ‘team sport’ that requires a retinue of empowered employees. The bottomline thus is: customer satisfaction is linked to loyalty that in turn is linked to profitability over time.

He listed the lessons for corporates as:

* Understand and anticipate changing industry dynamics

* Be obsessed about the customer

* Cherish complaints as opportunities to improve

* Follow the 80/20 rule. Focus wisely to know your customers

* Concentrate on processes, preferences and people

He said companies should pick CRM partners with care and also use effective process analysis and planning to avoid costly and time consuming rework at a later stage.

Mr Mahendra Swaroop, CEO, Times Internet, and former executive director, Pepsico India, pointed out that CRM can’t work unless you reward innovation. In fact he went as far as to say that the shareholder and the employees who innovate are at par.

With increasing parity in product features there has been a paradigm shift from product differentiation to value differentiation—in delivery systems from ease of purchase to offering something beyond the product. In the new scenario as far as relationships go, bonding should get precedence over sales where earlier the relationship was seen as almost ending with a sale.

CRM can also help in tackling competition by taking on new competencies, delivering value for money, institutionalising TQM, reducing cycle time and building strong brands. In fact, CRM can help build strong Indian brands, he argued. At present, except for hotels, Indian companies have not been able to build strong global brands. Instead of providing manpower and knowledge to foreign companies, who then rake in the rewards, effective CRM should help build global brands.

Mr Gautam Thapar, vice-chairman and managing director, Ballarpur Industries Ltd, pointed out that majority of corporates were facing competition from domestic companies who detect a flaw in their product or strategy and hit at this vulnerable point. It is here that CRM can help tackle this problem and strengthen companies by improving processes and services and closing the weak points.