January 23, 2001, 9:43 AM — Last year, you were a hero. You brought your company to the forefront of the customer economy. You preached about the empowered consumer and the merits of personalized treatment, and you led the charge to invest millions of dollars in customer relationship management (CRM) infrastructure because it would yield returns tenfold. You spoke of missed opportunities across the enterprise of your organization because customers weren't being treated as individuals. "Loyalty and relationships are the key to beating our competitors," you said. And you were mostly right -- so why are you so nervous?
At a recent conference I attended, a premiere industry analyst boldly declared that less than 1% of companies had gotten the desired return on investment from their CRM investments. Indeed, CRM hasn't lived up to its promise -- yet. If you've spent lots of money on building a CRM infrastructure, so don't panic -- you've done the right thing.
But it's time to adjust your strategy to make these investments drive your bottom line. In general, loyal, growing relationships are good, but they don't necessarily make you money. Personal treatment of each individual customer is also good, but if personalization is based on a limited view of the customer, it can cost much more than it earns. To make money, you need to stop managing customer relationships and start managing customer value. Here's where to begin: Connect your customer channels.
This sounds basic, but believe it or not, according to a recent Gartner Group Inc. report, only 33% of companies can interact with customers via more than two channels. Another research firm recently proclaimed that only 23% of telephone agents can see customers' Web activity. Connecting customer channels enables you to accomplish five things that are paramount to driving your bottom line:
- Tie together disparate CRM systems in real time