4.1. Merging CRM and the Internet
In Chapter 1, we discussed many of the changes in the marketplace and the impact of those changes on business success. The Internet has certainly been one major source of change. Now that customers are so much more in control, the importance of building strong customer relationships has greatly increased. This impacts all companies, no matter which value discipline they focus on. CRM impacts both operational excellence (using information and automation to improve performance and reducing the cost of providing products and services to customers) and customer intimacy (to improve customer experience and build loyalty). But even for companies focused on product superiority, the Internet has raised the bar for what is considered acceptable in the two other disciplines. Customers get to choose, and we want them to choose us!
4.1.1. New Customer Expectations
There are five key areas in which the Internet has impacted the way we do business. Increased access, control, speed, and globalization have raised customer expectations both on and off the Internet. Elimination of direct customer interaction by automation has changed the way we deliver experiences, but customer requirements about the quality of that experience haven't changed.
Access: The Internet provides an unprecedented ability to deliver information, goods, and services to businesses and consumers. Customers are able to get information and do business whenever they want from wherever they can get connected. The Internet has made more information available to customers, giving them much more knowledge than they've ever had before. Although it is possible for companies to get information about customers surreptitiously over the Internet, this is not CRM! Building loyalty depends on building trust. Abusing customer privacy is not the way to achieve trust. We discuss this further in Chapter 22.
Control: Additional knowledge gives customers an unprecedented opportunity to review all available products and select the one that has the most value for them. Customers have never had so much power before. As a result, customers' expectations are higher than they ever have been. Access to more information, more choices, and increased control are part of the baseline that customers now expect. It may sound like we're in an arms race where companies rush to implement the latest and greatest Internet and CRM solutions. This is why the CRM strategic planning step (discussed in Chapter 8) is so critical. Does your company need CRM to improve intimacy, to improve operations, or just to make sure that you meet the minimum new standards that customers expect? You will not find a one-size-fits-all CRM program. You will have to decide what's right for you.
Speed: The Internet has impacted the speed at which business happens. We get an email acknowledgment of an order within seconds; a company is born—and sometimes dies—within a few months; products and services are delivered at breakneck speed. “Internet time” has dramatically changed customer expectations of how quickly everything should work (wait times at call centers, responses to e-mail inquiries, answers to questions).
Globalization: The Internet has effectively eliminated country boundaries. Companies that are already dealing with global customers, but often interacted with them in fragmented geographic silos, have felt the impact of globalization most significantly. Before the Internet, customers usually had access only to local products, terms, and pricing. A company's geographic business silos weren't visible and didn't cause many problems. Most global companies knew that geographic fragmentation caused internal operational problems and expense. But that didn't become a big issue until customers could go online themselves and see all the internal disconnects. We know that customers now know about the fragmentation affecting many of our companies, and they have begun taking advantage of our silos. A large Internet infrastructure provider that sells online business- and customer-relationship management solutions recently discovered that many of its global customers were shopping around the company's web site to find the cheapest “country” price. The customer would then place all of its global orders in that country. Not only was the company losing money, they knew that this practice actually made them look stupid and ineffective to their customers. They weren't “practicing what they preached.”
Automation: Finally, and maybe most important, the Internet has eliminated the people component from processes that have been moved online. For most companies that have been in business for any length of time, it has been the employees who have shielded and protected customers from the complications and disconnects of the company's business processes. People can know how to link a customer's order to the relevant discount information (like a purchase agreement or a special offer) even when the customer or discount has not been identified the same way in the two systems. If there is no common identification scheme (which, sadly, most companies don't have), there is no way for a computer to know where to look for the right piece of information.
Not all these changes affect all companies to the same degree. Very small companies that target a particular country market may not be heavily affected by the globalization of the marketplace. They may force customers from other regions to do things their way or go away. As long as the volume of international purchasers remains small, this might be perfectly acceptable for some. However, turning away customers isn't a very appealing strategy for most companies, certainly not for those that are committed to growing and expanding their businesses.
For most of companies, the fact that the Internet has increased customers' expectations for access, control, speed, and service is a big deal. If customers are more in control, then loyalty (preferring us over competitors) is even more critical. Loyalty is built on strong relationships and positive experiences. Because the Internet has eliminated much of the direct employee-customer interactions, companies must find different ways of building customer relationships on the web.
4.1.2. Why e-CRM Is So Important
With all the changes brought about by the Internet, isn't it just too much trouble to deal with? The Internet gives customers more control and takes control away from us, so why should we bother? Of course, ignoring the Internet is not really an option for most companies for these reasons:
Customers want and expect the benefits that the Internet gives them. They get more information and more control, and they like that. If your competitors are using it, so should you—to maintain parity if nothing else. After all, in this book we're talking about making business decisions based on positive impact on the customer and becoming more customer-centric.
The Internet is an extremely cost effective medium for delivering customer interactions. Employees are almost always the most expensive element of most companies' front office activities. Automating elements of sales, order-taking, and customer service and support make great economic sense. Don't forget that even though we want to make decisions considering the customers' viewpoint, CRM is not about being so focused on the customer that we no longer make money! In other words, decisions should be made considering mutual values: the benefits the customer gets from the relationship and the profits that the vendor gets.
The Internet is a fact of life in the new marketplace. There are huge potential economic benefits, and customers expect it. It's our job to figure out what e-CRM is, how it's different from the relationship-building activities we've been doing for years and how to integrate it in to our current activities. We need to identify the risks that the Internet adds to managing customer relationships and pay special attention to those risks that we can reduce with extra strategy and planning. It's important to remember that just like traditional CRM, e-CRM is not a silver bullet. As you know, you can't hire a consultant or go to the store and buy the solution to all your problems.