It used to be that an entrepreneur knew the name and the names of all of the children of each customer who walked through his door.  As his business grew, he might have jotted those names down in a small book he could carry in his vest pocket, just to jog his memory.  As the business expanded with more clients and employees, that notebook expanded into files that expanded into rooms of filing cabinets and forests of paper.  Finally, the art of remembering all of those clients’ names was christened with its own name, CRM.

Content Management Systems

CRM, Customer Relationship Management is the organized and purposeful management of the relationship of an organization’s customers, clients and contributors.  In its mature form, the communications among many customers are accomplished in a way that is specific to the customer.  Rogers and Pepper called this One-To-One Marketing in their best selling book of the same name.

Very small companies sometimes scratch their head on this one; they deal with customers one to one every day! But larger companies that have customer service, sales, and accounting departments, generally lose the direct touch that allowed their growth to the department level of organization.

It’s one thing for a small company to add the database and have the desire for more specific communications with customers; and another, probably daunting experience, to maintain a database that easily interfaces with communications in the typical MS Office environment. Generally, accomplishing all the necessary tasks requires a large system, with big-company budgets to afford the technical people to keep it taped and wired together.

Until recently, the small company has been left out of the huge rush to CRM, based on the scale and cost of systems such as Siebel Systems or PeopleSoft.  These systems are built for the large enterprise and can require months or years to deploy.

The smaller business has been forced to rely on software built for the PC under the general category of PIM or Personal Information Managers, such as ACT or Goldmine.  These systems use databases to organize information useful to many of the contact needs of CRM; but each seems to be focused on a particular function such as sales.  Today, even with Cloud Computing systems like Salesforce smaller businesses still have not mastered this basic need to know your customer better.

One smaller business, The Henehan Company, has solved the dilemma with an application called Commence.  This unique application is like a spreadsheet for CRM.  It has the flexibility to be modified to any business, yet does not require any programming. As a result a company can install the template package and start adding contact information the same day!  When the level of understanding about how to implement CRM in your business is realized, the system can easily be modified to add many fields, automated tasks, and multiple desktops for different levels of need or department functions.  While using an experienced Commence consultant makes sense in many cases, users with the inclination (just like with a spreadsheet) can learn most of the functionality.

Seeing that cost effective solutions are actually available “gets the creative juices pumping.”  Then new processes and people in place can really change the way communication is done, service is implemented and products are delivered.

The Henehan Company is a case is point.  An Inland Empire benefits and executive compensation insurance agency, Joe Henehan has used Commence to completely change the way his company collects, stores and uses client information.  “We are able to attach all products and policies to the client, and all of their employees to all three,” state Henehan.  “Notes, memos and comments can be attached to any number of relevant data.  The information can, in turn, be used to report to clients, deliver faster service and capture all the transactions with clients; something that was previously so time-consuming to record and file.”

The result?  Much better client service at a lower cost.  “We can assist with Cobra and carrier billing issues that can just kill a company without a full time benefits manager.  Commence, and our custom configuration, brings us up to speed with the largest agencies in technology.  Now our small company has the same (or better) technology as larger companies, enabling us to service even fortune 500 companies,” states Henehan.  “We tried doing this with two specialized insurance packages and a full time IT guy for two years, and never got there.”   Surprisingly, Henehan has found that his customized Commence system has allowed his company to act as a corporate memory bank, offering history and continuity to his larger Fortune 500 and publicly traded clients who experience frequent employee turnover.

Henehan has experienced a renewed level of creative thinking about how to accomplish what he used to do as a single agent, with a few clients, 20 years ago.  The Henehan Company can continue to grow and know that the quality of its customer service will not be compromised.

The Henehan Company represents one small company, in an industry with large players, that will be able to survive and prosper based on increased service provided at the same cost to the client.  Today some database programs are cost effective to most small businesses, and in a few years other CRM solutions will exist on the Internet also.

It must be noted that no application is the magic bullet required to really accomplish CRM.  The database (tailored for CRM) is the starting point, combined with coaching from CRM experts, changes in office procedures and continued employee training.  The Henehan Company is an example of how technology and Customer Relationship Management are used as a strategic tool, to grow business.

Customer Relationship Management is a new name for an old idea, an idea that seems to work well when the costs are controlled.  In a world where big companies are using CRM to act intimately like a small company, the small companies can’t forget that this is their primary weapon against larger competitors.  Small companies must respond with the sophistication of large companies, or they lose their advantage.

Customer Centric Organizations

A recent conversation with a veteran businessman during the great recession: “Six Zigma, Lean Manufacturing? They don’t mean a thing when what we need is more volume to hit break-even.”

Phobias on quality can lead companies to spend on over-delivering minutia in the form of tighter tolerances and exacting details. This happens in preference to common sense limitations that are driven by perceived customer value.  Eliminating production defects is a fine goal, but the real issue is the customers’ perception of any defects.  If customers really wanted perfection, the manufacturers’ outlet industry would never have gotten off the ground.  Many people take pride in buying a Polo shirt for $19.95 because a stitch is pulled, instead of the $60.00 retail price!

What was thought to be a noble cause can really be something else.  CRM, Customer Relationship Management has turned from a well meaning philosophy, to packaged software that touts a solution, but is usually only the start of a long voyage.  It is true that gathering data is important to understand the customer, but the company culture that acts on that information (even limited information) is far more important.  The large number of failed and underachieved installations of CRM software is a telling sign of business leadership that has missed the point.  Some experts place the failure rate at 60%!

A Customer Centered Organization is one that focuses all its systems, processes and people on the customer, not the product. A Customer Centered Organization does not  only rely on the accounting system that measures revenue and profit. It does not rely on the old traditional organizational structure that was designed to control communications in the Industrial Age of the 1800’s.

Emphasizing the customer sounds easy (and is accomplished in varying degrees by many companies), but becoming a Customer Centered Organization requires an attitude that is counter to most companies. “Focusing all systems and processes on the customer” may mean scrapping your current accounting system for instance. Accounting systems have always been oriented toward revenue, expenses, profit and assets. Accounting de-values assets bought with cash, but creates no value for strengthening life-time customer relationships!  It measures the cost of employees, but has no place on the balance sheet for the knowledge and skill levels they have!

Most companies start the process of becoming Customer Centered from a disadvantaged perspective based on accounting and a product orientation. The number pushers, and production managers are well paid; the Customer Service departments are entry level jobs!  Even marketers talk of  “differentiation” in their products, then paint them a new color!  With the world production capacity beyond demand, how many products are really different? In-fact the vast majority of products today are in a commodity category.  The vast majority of differentiation is not the product, but service and aesthetics.  Both are controlled by marketing, personnel, and customer service! The Customer Centered Organization elevates the emphasis on the customer, which becomes a competitive advantage.

Becoming a Customer Centered Organization can mean changing a company culture.  It acknowledges that it is “becoming” and may never arrive.  It may be the slow destruction of an existing organizational structure and it regularly sacrifices sacred cows.

One of the most successful retailers in the world has done just that.  Nordstrom’s literally turned the organizational structure upside down.  The president is on the bottom and the sales person on the floor is on the top.  The managers’ and executives’ jobs are to support those above them.  This system is not a new idea; it is a proven idea.  The entire culture is different than the competition’s. Nordstrom sells the same goods as other retailers and has similar stores in similar locations.  But most of their competition buys from the top down, from the merchandise manager to the department manager. At Nordstrom the buyer is king, because he or she must be “on the floor” with the customer.

A Customer Centered Organization has an organizational chart with the customer in the middle of a concentric circle. The first ring (level) includes the all important customer service team, all those that interface directly with the customer. Paper and computer systems are fashioned specifically to gather customer information, not generate invoices.

The information flows to the second level in a way that provides different information for different parts of the organization, yet is accessible to all. Transactional information (deliverables to the customer such as products, services, advice, problem corrections, and communications) are gathered and turned into dollars at the second level.  Physical deliverables (products, packaging, letters) become sales, inventory, and expenses for the accounting functions; while intangible deliverables include services delivered, information passed to the customer, and feedback for marketing functions.

In every case the issue is “what is the complete nature of our relationship with this customer.” Sure it is “One to One” and Relationship Marketing, and market oriented at the same time.  It starts with people relating to people, while gathering information, and ends with compiling numbers for management reporting and financial statements.

This is not easy.  Finding affordable systems that can gather this information is hard, and changing your people culture is harder; but by most measures, tangible improvements occur that even your toughest CFO would love.  Increased profit margins, faster adaptation to markets, faster growth rates, and higher productivity can be documented by companies that are perceived as having higher quality and better service.  A Customer Centered Organization that exists for the customer first, can be the way to your CFO’s heart, once he allows it to work.

How Customer Centered is your company?

http://www.ieweb.us/business/how-much-does-your-company-really-care-about-customers/