Wooing the customer just got harder
Customer expectations are changing, and a lot of companies are being caught short.
“Customers expect better service than ever before.” You've heard the claim, right? You probably heard it from somebody trying to sell you CRM software, and you took it with a large pinch of salt. But it's not a thumb-suck. In 2009, as in the two previous years, Accenture surveyed customers around the world about their expectations and experiences of customer service. For companies in emerging markets, some of the results were both surprising and alarming. Everyone reported having higher service expectations than they did five years ago, but in the emerging markets of South Africa, India, China and Brazil, a full 75% of consumers said their expectations were higher than five years ago. In South Africa, 42% reported increased expectations even in the past 12 months.
The bad news is, those expectations aren't being met - and consumers are not taking it quietly. A quarter of all consumers will talk about their negative experiences online for others to see, and the figure rises to 40% in emerging markets. Ninety-eight percent of South African consumers had told others about negative experiences, and 31% had posted comments online.
They're also voting with their feet: a massive 81% of South African consumers had left at least one service provider in the past year due to bad service.
“The goalposts are moving,” comments Nikki Tyrer, CRM lead at Accenture South Africa. “The technology is moving at such a pace that it's hard to keep up, and consumer expectations are going to continue rising.”
So what happened to all the millions that have been invested in CRM systems over the past 10 years? Were they the wrong systems, were businesses not ready for them, were they poorly implemented?
The answer, of course, is a little of everything - and a caution not to be too pessimistic.
“We all look at our day-to-day lives a little too much when we think about CRM,” says Softline Accpac MD Jeremy Waterman. “We tend to judge our world based on our experiences of the banking and mobile industries, which definitely still have a long way to go. But there have been some great successes, especially in the mid-market.”
Desperately seeking integration
Companies that get CRM right, says Waterman, are those that integrate it thoroughly into the rest of their business systems. He describes one client that manufactures and sells vehicle tracking systems: “They've integrated their customer experience into their ERP system. It starts with sales force automation; then, once a customer is signed on, they're transferred automatically to accounts receivable, to the service management department for installation, servicing, parts and so on. Their CRM is driving their whole customer experience.”
The much discussed “360^0 view of the customer” is a product of this kind of integration. “Everyone needs to know what we're talking to the customer about, what he's bought in the past, what service requirements he's had and everything else,” says Waterman. “Typically that kind of information is sitting in the silos; it's notoriously difficult for sales teams to get account or service information. So for CRM to be useful, it can't be an island. Ideally, CRM is just the customer module within your ERP.”
So, it can be done right, but that doesn't happen often. Waterman estimates that only 10% to 15% of companies in the mid-market serviced by Softline Accpac have seen the value to be gained from integrated CRM.
“CRM hasn't taken off in South Africa yet,” confirms Pastel MD Steven Cohen. “The problem is that you can survive without CRM in a way you can't survive without a financial system - it's about improvement, not just survival. The penny hasn't dropped yet about the way CRM can improve a business.”
But if getting CRM right means getting integration with the rest of the business right, things aren't going to be easy.
“When people are stuck in the rut of using CRM just to manage their call centres, it's usually because of power plays inside the organisation,” says SAP CRM Solution manager Manti Grobler. “If you want to do proper CRM, you need to collaborate: sales, marketing, service and accounts all need to talk to each other. If you don't have strong executive sponsorship to push that through, CRM gets stuck in departmental silos.”
It all comes down, in the end, to a concept that receives a lot of lip service: putting the customer at the centre of the business.
Poor service quality remains the number one force pushing customers into the arms of waiting competitors.Accenture 2009 Global Customer Satisfaction Report
“If you are serving customers at all, everything should revolve around the customer,” says Grobler. “That includes your processes, transactional systems and ERP system; they should be organised around the customer experience, not the other way around.”
It's a recurring theme: Successful CRM is about good business processes, rather than software.
Opinions differ, however, about how to get those processes right in the first place. Some say software systems can help to get things moving in the right direction, while others say software should always be secondary.
It's the processes, stupid
“People think that if they install CRM software, their processes will magically come right, but it doesn't work that way,” says Tracer CEO Cobus van Graan. “In fact, we've seen cases where CRM actually killed good processes. We had one client with a great customer strategy, but when they put in a CRM system, they suddenly started measuring and incentivising people by the number of calls they made, not the quality of those calls. They just followed the way the system was designed, and it had a dramatic negative effect on their business in the short term. People suddenly started chasing calls and new business again, and they neglected their best customers.”
Your customers don't care what software you're running. They care about the quality of their experience.Nikki Tyrer, CRM lead, Accenture
Van Graan says it's possible to achieve dramatic results without spending a cent on software.
“We saw one company where sales reps were faxing through orders from all over the country, and they were dealt with on a first-come, first-served basis. Orders were delivered within 48 hours countrywide, but the industry standard was one day - it was a problem. So all we did was identify the 16% of their clients that accounted for 82% of their business, and prioritise them. It didn't cost a cent; it just took a note from the salespeople on the order form to say 'this is a priority client', and then for the rest of the business to treat them accordingly. Now they can deliver to those clients within six hours. Software could help to streamline things, but it's not what makes the difference.”
That's one view. On the other hand, says SAP's Grobler: “Old processes with new technology are just very expensive old processes. The technology can make you question why you're doing things the way you are, and give you a fresh eye.”
Pastel's Cohen is even more blunt: “I don't actually believe most people have real processes for customer service. They just react to whatever comes along. If you want good processes, the software will lead them.”
Cohen confesses to having been somewhat of a cynic about CRM, but says a recent global initiative by Sage, Pastel's parent company, has changed his mind. “They decided to differentiate themselves in the market by giving an extraordinary customer experience, and actually aligned the whole organisation around that, right down to remuneration. Our bonuses are now at least 50% tied to customer perceptions of our service levels. We've recognised that if you don't provide decent service, and understand your customers, your profitability will suffer. But you can't do that unless you have a decent CRM system.”
So, CRM systems can help to get good processes. Maybe. If you do it right.
“If you visited all the businesses who've bought my CRM software in the past year, you'd probably find 80% of them not using it,” says Cohen. “Some of those will be people who thought the software would solve their problems for them; the others will be people who just don't need anything that complex. We need to get back to basics.”
Van Graan agrees: “People tend to fall under the spell of CRM and buy whatever they can afford that has the most bells and whistles,” he says. “But actually, the more frills you have, the less likely people are to use the system. There are three things you need to do for successful CRM: have good customer processes, find a system that will support those processes and then make sure the system is easy for everyone to use.”
One key ingredient of ease of use is accessibility: CRM systems need to be accessible to everyone in the organisation, including those who are on the move. As almost everyone points out, sales teams need to be out in the field, not back in the office updating their CRM systems.
We need to get back to basics. CRM has been far too complex.Steven Cohen, MD, Pastel
Mobility has been a problem for many systems, though. It's all very well to promise mobile access, but if users spend 20 minutes getting through the corporate firewall each time, it's not going to work. Web-based systems are popular for that reason, and so are systems linked to smartphones, although a system that offers mobility needs to offer it on all smartphone platforms, not just one or two.
“It should be possible to do just about anything on your phone,” says Ryan Purvis, sales lead at Mint Management Technologies. “Placing orders or looking up order histories are obvious starting points, but you should also be able to flag customers with delivery problems for immediate attention, or take photographs of store displays for the marketing department, for example. You can drive a lot of things with a one-page form.”
Adds Waterman: “Managing your CRM shouldn't be much more difficult than managing your diary.” In fact, many CRM systems now offer integration with Outlook, a familiar application many people use each day.
Go where the customers are
An additional complicating factor has crept into the picture over the past couple of years: the role of online communities and social networking sites like Facebook. Not only do customers increasingly air their views in these highly public forums, they expect to be heard. The newest buzzword on the block, accordingly, is “social CRM”.
Strong executive sponsorship is the number one requirement for successful CRM.Manti Grobler, CRM Solution manager, SAP
The field is so new, however, that there's little agreement yet about what social CRM should involve.
George Chauvet, CRM divisional manager at EOH Oracle Services, says companies should be encouraging customers to interact on their own portals. “If your customer wants to have a live online chat with a customer service rep rather than make a phone call, that should be easy to do via your Web site,” he says. The records of those chats, of course, should also be stored in your CRM system.
This makes sense for South Africa in the light of one of the more surprising results of the Accenture customer services survey - that emerging-market customers are much more likely than their mature-market counterparts to use text messages or online chats to interact with service providers. (Although it's worth treating these findings with care - the survey was conducted online.)
Should companies track all the customer chatter about them on Facebook and other sites? Opinions vary. On the one hand, says Andrew McPhail of 3fifteen: “You need to find your customers and interact with them outside of your company walls. Companies need to be monitoring networks like LinkedIn and Facebook, analysing those discussions and acting on what they learn.”
On the other hand, says Chauvet: “You'll never want to pull all the information from Facebook and Twitter onto your own system.” There's too much of it, he says, and it's too difficult to keep track of. Instead of trying to keep track of random conversations, he says, companies should rather focus on making customer interactions pleasant and engaging, whether they're dialling in to a call centre, sending an e-mail or chatting on a Web site. “Your customer should always be able to get through to someone who can actually help them, whatever medium they choose.”
Which is, after all, the goal of the whole exercise in the first place: getting through to someone, somewhere, who can do something. Until that day arrives, the secondary market in secret phone numbers for those guys at Telkom who actually do stuff will continue to thrive.