ROC & Roll

Source: Technology Digital

Date :10/05/2007 09:22:49

Alan Thomson invites you to ROC and roll with a look at the CRM market

The CRM market has always been a confused and cluttered one with CRM solution vendors presenting all sorts of offerings from analytics to sales force automation and business process automation to telephony systems.

As a result the focus of where to achieve value from CRM has been vague at best and disastrously wrong in some instances. There’s been much discussion of the issues of return on investment but there’s more to it than that. Perhaps it’s the basis and tenability of the goals and achievement measures that we need to consider.

The 2005 book from Don Peppers and Martha Rogers Return on Customer work says that a return on customer (ROC) measure is needed by businesses to reflect their long term growth and to provide a sensible valuation for the effects of customer management. The ROC measure will not replace return on investment (ROI) in the business but provides an additional view, avoiding the short term thinking found in so many ROI driven companies, particularly those with stock market expectations to maintain.

The overall view of how to develop ROC is through developing a trust relationship, where neither party is unduly greedy, the organisation not bombarding the customer with inappropriate offers and the customer accepting the need to share data to develop the relationship.

To achieve this it is necessary to earn the trust of customers by encouraging employees to communicate fairly and openly with all customers at all times. Indeed encouraging the employees to use CRM processes requires development of a separate trust relationship, particularly in areas like the sales-force where staff can usually do their initial job just as well without the system.

Whilst this approach impacts across the whole of an organisation, the focus for CRM is clear – look after the customers you have, because losing them destroys value. In turn this provides direction for the application of CRM technologies, to concentrate on providing what the customer expects and needs rather than gathering data in order to exploit the existing customers and play on their inertia to change.

The longer view

Now that’s a simple statement but it doesn’t negate the need for any particular type of functionality. Sales force automation may not instantly appear to be what the customer wants – but if implemented as a system to make sure that all leads and enquiries are fulfilled and that all customers receive regular and appropriate contact then it can be a major contribution to an effective relationship. In this context it’s the account management aspects which matter more than the instant increase in sales which has so often been used as the justification.

Similarly…

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