Comments

Steve, you could argue that my definition is no definition - but it doesn't include the words, "software," "application," "system" or "database!" :) http://www.felgner.ch/2007/11/customer_relation.html

Posted by Harald Felgner at January 3, 2008 11:21 AM

Tom

Good afternoon, from the potentially snowy climes of Lincolnshire, Happy New Year to you, as one of the few in IT (maybe) on these pages?

ITIL (IT Infrastructure Library V3) defines service value thus

Service Value: defined in terms of the customer’s perceived business
outcomes, and described in terms of the combination of two components:

 Service Utility: what the customer gets in terms of outcomes supported and/or constraints removed

 Service Warranty: how the service is delivered and its fitness for use, in terms of availability, capacity, continuity and security.

It also defines Business Relationship Thus:

Business Relationship Manager (BRM): BRMs establish a strong business relationship with the customer by understanding the customer's
business and their customer outcomes. BRMs work closely with the Product Managers to negotiate productive capacity on behalf of customers.

I don't see any of the words you describe?, however, this is IT providing its services to its customers (the one's that pay for the IT! is the ITIL definition) It requires IT often to understand how the service impacts the paying customer as well! I have always had my IT staff sit alongside my Business customers to understand their customers, equally I have offered the opposite and for the Business to understand IT by sitting on an IT service desk for an hour!

For the relationship to work through the whole piece requires clear communication and simple listening at each boundary in the Business process this is vital at the point at which you hit the paying customer(s).

A starter for 10 as they say!

Here is to a great 2008 !

Posted by Patrick at January 3, 2008 12:00 PM

Wow, it sure looks like Patrick's definition was written by an engineer. It is an IT department's version after all.

The problem with defining CRM without using the words you mention is that the term was initiated as a marketing tool to sell software to replace what used to be known as Customer Service. Refer to Mr. Yastrow's earlier post about the lack of airline customer service, who by the way were among the first to adopt CRM.

In an Utopian world you could enter the data into a system's database where it could be accessed by an application to provide the customer with their preferences for a service or product. It is the pinnacle of the "One to One" Relationship idealized by Don Peppers way back when.

Now that I have mentioned every verboten word, here is my definition. The ability to recognize your customer, provide your product or service in a manner your customer prefers and will satisfy his reason for doing business with you.

Recognition is vital. Mel Helitzer, a Public Relations professor I had the great fortune of knowing, practiced what he preached. He said, "There is no more important thing than remembering someone's name." Public relations, sales or customer service cannot be adequately accomplished sitting behind a desk typing on a keyboard. It is done by being genuinely interested in your audience or customer and interacting with them on a regular and consistent basis.

Willy Loman practiced this type of salesmanship until, sadly, corporate American determined it needed to be more efficient, sell more and faster, and relegated him to the role of a tragic court jester.

Posted by Steven Herron at January 3, 2008 12:42 PM

Well woven insights Steve. Perhaps Customer Data Management (CDM) would be more in line with the definitions you found on wikipedia and whatis. Of course technology plays a key role in organizing high volumes of customer data. I think that most people use CRM as an adjective as in CRM systems.

Interestingly, wikipedia uses the following definition for Human Resource Management (HRM):

"Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techniques of managing a workforce."

Interestingly, 'people' were left out of both definitions.

Posted by Tom O'Leary at January 3, 2008 1:45 PM

‘For the relationship to work through the whole piece requires clear communication and simple listening’- Thanks for reminding us Patrick that an emotional connection underpins any effective customer/business relationship.Happy New Year to you Patrick from a chilly Warwickshire – snow just reaching us Thursday evening :-)

Posted by Trevor Gay at January 3, 2008 1:48 PM

Technically, the 'M' is the problem. Whether, practical (IT-based), or theoretical (HR-based), it gets down to what Pat suggested, Service Utility (Client Outcomes) and Service Warranty (Producer Capacity), and the inability for software to illicit desired outcomes, and appropriately distinguish unique performance....

Posted by mikel at January 3, 2008 1:59 PM

Here's the short version of a customer experience I had with Ritz Carlton some years ago. In about April I spoke at the Ritz in Philadelphia on a Friday. Since I was pushing a book deadline, I extended my stay by a few days to finish the manuscript. I asked a person at the desk if I could borrow an office chair for the weekend because the chair in my room wasn't good for working long stretches. When I got back from a walk, there was a chair in my room. Good enough.

Some months later I checked in to the Ritz in Aspen for a speech. When I got to my room, I found that the regular desk chair had been replaced with an office chair. For that chair to show up in Aspen, several things had to happen. The person at the desk in Philadelphia had to be willing and able to act on my request. There needed to be a system for her to record that request as a guest preference. When I checked in to Aspen someone had to have already checked the system, discovered my preference and found a desk chair to put in my room.

I think that all the jargon sometimes obscures the fact that the best customer experiences in today's world are often brought about by the combination, of engaged and enabled people and well designed systems, some of which are on computer.

Posted by Wally Bock at January 3, 2008 4:02 PM

Wally, you're very close, but you're missing an important piece. As was brought up a couple of weeks ago in the comments on the discussion of Hilton Honors points on a cheap reservation, there is an organizational component to excellent CRM.

Having a killer computer system is important to make the plumbing of CRM work, but it (despite the sales peoples' emphatic insistence otherwise) has little to do with the actual end-customer experience. As you note, having people who care is crucial too.

But to me, an organizational specialist, the most important component is an organization that values, recognizes, prioritizes, and rewards excellent customer relationships -- from top to bottom.

Even the most talented people supported by the best computer system will be driven into the kind of mediocre behavior we all see time and again by an organizational culture that places short term financial metrics at the forefront.

Posted by Chris Williams at January 3, 2008 4:58 PM

Great comments from everyone. What fun to get off of a plane and read this.

Actually, Chris, i think Wally is right in line with you. The Ritz story happened because the computer was a memory aid for the people, and the culture let it happen.

Hey, is one of us going to edit the Wikipedia definition of CRM?

Posted by Steve Yastrow at January 3, 2008 9:15 PM

A century back, Mahatma Gandhi said:

He (the customer) is not an interruption of our work. He is the purpose of it.

More here:
http://ideaburger.blogspot.com/2008/01/will-anyone-suggest-definition-of.html

Jay, from Bangalore

Posted by Jayakumar Hariharan at January 3, 2008 10:21 PM

Jay - awesome quote. Enjoyed your post on your blog.

Posted by Steve Yastrow at January 3, 2008 11:31 PM

Anyone have any comments on the memory portion of the post, i.e., that once we have "technological crutches" to help us remember things, we get lazy and stop remembering things on our own? (Speed dial to the 10th power)

I'm certainly not suggesting that it isn't good to have automated memory working for us, since computers are so much better at remembering than we are. I'm just suggesting that we have to use the systems to help our brains, not replace them.

Posted by Steve Yastrow at January 3, 2008 11:33 PM

Harald's riff on his blog (link in the first comment) is cool. He shows us how Brand Harmony makes all of this happen. Marketing is not the jurisdiction of the marketers.

Posted by Steve Yastrow at January 3, 2008 11:39 PM

Not a definition, a formula for CRM, especially valuable in the age of the "iPhone Hackers 2 Steve Jobs 0" .

E©

"Empowerment(customers)= Information + access + decision making + choice + customization + perception of control/ownership".....Tom Peters (1998)

I recently read "Wikinomics
How Mass Collaboration Changes Everything". It appears that we are leaving the world of "consumers" behind and will soon be dealing with "prosumers", open source, pirating, hacking,....oh excuse me..."co-innovating" is the term I believe was used. It seems as if the formula above is a great place to start redifining CRM if this is indeed the trend of the future. I'm not sure if "perception" of control will be adequate but you never know!

Posted by Dave W at January 4, 2008 12:47 AM

Trevor/Steve/Everyone

Your right about the definition I proposed (note not always in agreement with!) and yes for me at the heart of all this stuff is people, IT doesn't happen without people, the requirements from customers are people requirements, so the requirement to shore up a persons or group of people's memory with technology comes from the people who request this stuff, it is IT's role as a provider of service to deliver it to the people who ask for it, there are of course issues of listening, quality, improvement, communication and relationships, BUT, its a person request that has been fulfilled and that in turn is a support mechanism for the memory!

Liked the Ghandi quote.

Trevor the snow didn't hit our piece of Lincolnshire, as I write the sun is out!!!!!

Patrick

Posted by Patrick at January 4, 2008 5:16 AM

The following is a little heavy for me, but given the Gandhi opening above, I'll let it rip:

“What would happen if we looked at a customer and saw the face of God in them? To most people it sounds like a lofty idea. But if you see the face of God in a flower, why wouldn’t you see it in the face of a customer? If we treated customers and honored the God within them—if we loved them—we would not need a ‘quality program.’” —Lance Secretan, founder of Manpower, Inc., and most recently author of One: The Art and Practice of Conscious Leadership

Why not, indeede?!

Posted by tom peters at January 4, 2008 7:29 AM

I can't see anything 'heavy' in that brilliant statement from Lance Secretan. For those I love I would do anything - why not love customers? The biggest problem in business as far as I can see is that the 'God' is money.

'Love' is a much more meaningful currency – what’s the problem?

Posted by Trevor Gay at January 4, 2008 9:15 AM

Hate to rain on your feel good parade for Lance Secretan, but please remember that he made his money and his success on the backs of underpaid temps from whom he stole significant portions of their already low pay. For God's sake don't hold him up as an example of anything positive.

Posted by Red Island Rhodes at January 4, 2008 9:38 AM

Technology can't build relationships, it's just a tool that you can use, with great effect, to help you organise yourself. I believe, and I think its Steve's point too, that far too many of us confuse the "process" with the "tools", which is why when asked, most managers will define CRM in terms that lean heavily on the use of words like "software", "application", "system", and "database".

I took this up on my blog and my definition is there:
http://thefullblog.wordpress.com

Posted by Phil Darby at January 4, 2008 9:49 AM

Definition CRM = The people and necessary things they need to to address customers physical, emotional and rational(product/service) needs.

Customer Relations & Don't treat men and women the same on these issues

A. Customer relations 101:

1. I have a problem with a product or service, or an interest in more information on same
2. I call and actually get to talk to a human being with only one or two dial pad pushes and that person can speak my native language, is knowledgeable and actually sounds interested in helping me
3. Someone follows up with a call, an e-mail or a letter to make sure I was taken care of
4. The company maintains an open dialog with me on an ongoing basis through either the e-mail or snail mail to keep me informed of new things I may be interested in

B. Customer Relations myth - men and women want customer relationships to be the same. Answer = False

A recent study of customer service needs at retail proved the point and validated many things we already new. The logic is extendable to customer relations in businesses other than retail. Think about the differences and needs between your clients/customers on a male/female basis.

Remember that women make or influence 80% of consumer goods and services purchases:

"When it comes to shopping, women are from Nordstrom's and men are from Sears.

Women are happy to meander through sprawling clothing and accessory collections or detour through the shoe department. They like to glide up glass escalators past a grand piano, or spray a perfume sample on themselves on their way to, maybe, making a purchase. For men, shopping is a mission. They are out to buy a targeted item and flee the store as quickly as possible, according to new Wharton research.

In a study titled, "Men Buy, Women Shop," researchers at Wharton's Jay H. Baker Retail Initiative and the Verde Group, a Toronto consulting firm, found that women react more strongly than men to personal interaction with sales associates. Men are more likely to respond to more utilitarian aspects of the experience -- such as the availability of parking, whether the item they came for is in stock, and the length of the checkout line."

for more info:http://www.proteusdesign.com/men_buy_women_shop.aspx

Posted by Tom at January 4, 2008 10:19 AM

Re Manpower's boss, we simply disagree--but your cynicism is not a topic about which there is any doubt in my mind. But that's just a snippy aside. More fundamentally, I would adopt a quote from the devil if it made sense to me and was said better than I'd said it--I could of course always fake the source, and attribute it to Winston Churchill, a perennial safe bet. If we were forced to quote only those about whose excellence there was no doubt, we'd all be left quoting only ourselves.

Posted by tom peters at January 4, 2008 10:48 AM

Yes, or instead of relying on snippets of supposed wisdom from multitudes of others we could come up with something original ourselves.

Posted by Red Island Rhodes at January 4, 2008 11:56 AM

Tom,

I invite you to learn more about VRM (Vendor Relationship Management), conceptually the reciprocal of CRM. Fellow Doc Searls at Harvard's Berkman Center for Internet and Society is behind it.

http://projectvrm.org.

Posted by Joe Andrieu at January 6, 2008 9:32 PM