How to Use Customer Feedback
Customer relationship management (CRM) is all about understanding consumers’ connection to your company: how they find out about your products and services, what they’re buying, how they make purchases and so forth. As such, an effective CRM plan is based on collecting information on their patterns and preferences. But what data should you gather, and to what end?
Information and service are two of the most crucial components of today’s economic environment, and CRM is where they intersect. There are plenty of options available to the CRM professional, ranging from high-tech solutions offered by companies like Siebel and SAP to simple customer service procedures. One method that has emerged recently is the online community, which is being successfully employed as an engine for developing customer data, said Michael Lowenstein, vice president of the Customer Management Center of Excellence at market research firm GfK NOP and author of the book “One Customer, Divisible.”
“There are a lot of ways,” he said. “It’s almost limitless. Every touch point where there is interaction between a customer and a supplier represents some form of opportunity to update information about customers, gather new information about them and look at their needs, wants, complaints, issues, etc. When you look at the array of media that impact customers and the array of experiences, whether it’s direct or online, any of these is an opportunity to gather viable, good information about customers. You then have an opportunity to do CDI (customer data interchange), where you’re blending different streams of data.”
While customers have a multitude of options when it comes to their interactions with an organization—including the Internet, call centers, salespeople in the field, and dealers and partners—the information they seek through all of these channels is more or less the same when you get right down to it. “I think it’s actually pretty straightforward,” Lowenstein said. “What companies do in terms of process, touch points, all forms of contact, including things involving employee engagement—that’s what creates the customer’s experience. We’re really talking about CEM, or customer experience management. That creates mindsets, and mindsets lead to action and behavior in the marketplace. The degree to which companies can manage this—their competence, their capabilities—means that they get (good) performance in the marketplace.
“What companies look at optimally—and what CRM is supposed to be, if you boil it down into its basic elements—is having a single, integrated view of the customer across the entire enterprise,” he added. “Whether it’s technology-driven or collection through informal sources doesn’t matter in the end, as long the company is able to gather, collate, share and apply the information. That’s where a lot of the challenge is.”
Another step in the CRM process is linking implementation of systems and value delivery on the back end. This means asking a long list of questions, including:
- What have you learned?
- What are you improving?
- What gets upgraded?
- What gets fixed?
- What stays the same?
- How customer-centric are you?
- How is that guiding what you develop and execute?
According to Lowenstein, CRM strategies require qualities like orientation, discipline and commitment, but not every technical platform under the sun or a budget that reads like an international phone number. “It’s not an issue of scale,” he said. “We’ve seen single supermarkets be able to very effectively manage the customer life cycle. There are opportunities to succeed. Any company in virtually any industry—irrespective of size—can do it.”
Even after executing a CRM plan, organizational leaders might not be interested in the results. To get their attention, Lowenstein recommends conducting a pilot study around a particular market, product or customer group. “Not a lot of money has to go out, and not a lot of time has to be spent,” he said. “You don’t have to reach beyond the horizon. For senior management, a lot of these big CRM programs have fallen short of expectations because they try to reach beyond the horizon. They’re doing too much with not enough of the right people involved, too much money has been spent, and expectations have been overblown. It’s like the old rule in direct response: test and refine, test and refine, test and refine. You want to build on and build out every success you get. You want to see it cascade into something larger. You can’t take on the entire database initially, and you shouldn’t.”
Additionally, if you’re too focused on the database, then you’re missing the point, which is to build advocacy, Lowenstein said. “Advocacy means that you are managing not only their commitment to the brand, but also the way they communicate with each other about the brand. That’s what you’re trying to do. There’s a road map here. We’re trying to create customer advocacy, and data is one way of getting at it. Effectively managing customers inside the organization is another way.”
The data derived from CRM should be used to simplify and streamline organizational processes and strengthen other business units, such as sales, marketing and service. These make client transactions more profitable while decreasing costs. Unfortunately, many leaders don’t quite have the hang of this yet. “Companies are great at assessing financial performance, but they’re not so great at assessing how they manage customers,” Lowenstein said. “Most companies are challenged at defining the value proposition for the customer.”
Furthermore, several of them don’t fully comprehend the role their workforce plays in all of this. “Although companies intuitively understand how employees influence customer decision-making, they haven’t gone any further than that,” Lowenstein said. “When you’re able to understand how effective you are at managing customers, when you define the value proposition, when you incorporate employees, when you start understanding the impact of media and communication, now you get to the point where you’re world-class. It’s like circling the wagons—you have to be able to pull all of these things together.”
CRM is essential in the service-oriented economy of the United States and other economically developed nations, but success is contingent on taking a holistic view of these ventures, and not espousing massive amounts of information or leading-edge technologies for their own sake. “I think you have to be very clear about what CRM represents,” Lowenstein explained. “If it’s data only, and not relationships with customers, and unless everything is managed carefully and coordinated, then you’re going to have challenges. In the end, it’s how well you understand customer behavior and how well you’re able to leverage customer behavior to your benefit. That’s what data needs to be doing.”
Brian Summerfield, firstname.lastname@example.org