CRM solutions are intended to track a 360 view of customers. What does this mean? Judging by the marketing literature supplied by CRM vendors, a 360-degree view would offer a complete view of the customer corridor throughout the sales cycle: from the customer’s initial touch and transaction history through the marketing program and on to the purchase decision – with some predictive analytics thrown-in for good measure.
Granted, CRM provides a powerful set of tools. They are helpful when it comes to factual transactions in the form of sales events, support transactions, product purchases and the like. Most companies start here when trying to predict future purchases and behavior. For example, if a customer has been purchasing your products at regular intervals, you might forecast that they, or customers like them, will continue to purchase at the same rate.
But what risk do you take by assuming that past behavior is an indication of future behavior? The data is quantitative, and includes facts about the customer-company relationship. But does it measure the qualitative nature of the relationship?
I get email, snail mail and trade show marketing collateral, all promising a customer experience. I sign a contract, purchase and use a product – but it does not live up to its billing. I contact Support – and work through some of my problems – but not all. I still purchase more – since I’m in a contract – but my experience is negative. I’m a detractor. This is the flat world of CRM. The quantitative data trail of my actions shows I will buy more. However, it does not reveal my true feelings.
More astute marketers know the world is round, and as Net Promoter shows, customer loyalty and satisfaction have an impact on growth. What’s the upshot? Unless corrective measures are put into place, you will lose me as a customer.
In the flat world of CRM, it can be easy to fall off the edge. Basing business decisions solely on transaction-based KPIs only solves half the problem. In essence, this implies that you are maximizing the Sales, Product Development and Service experience to squeeze the most out of each touch point the customer moves through. As customers move through the corridor, they have experiences that make them promoters or detractors. If you aren’t aware of these tendencies, you could end up trading short-term profits for long-term, happy customers – and not even know it.
In the round world, the 360-degree view you have of your customers must be measured against the 360-degree view the customer has of your company. This provides a more balanced perspective since it considers business transactions in the context of the customers’ actual experiences.
Does my product live up to the marketing in the eyes of the customer? Did Support deliver a memorable experience or create a detractor? Do I need to recover this customer? Are there issues I need to address for the long-term health of our business relationship? These are some of the questions that are answered in the round world.
Customer experience, as measured by Net Promoter, can help you maximize your business investments without sacrificing customer loyalty. This optimized approach allows you to circumnavigate the world without falling off the edge.
Well you have a point , Pankaj Ghemawat -HBS Prof also argues that the world is not flat , but more from a globalization standpoint
Posted by: Niladri Roy | June 02, 2007 at 08:46 AM