Customer Relations Management - The name has it completely right, Customer First, Relations Second, Management Third. So why is it then that we are constantly seeing this being about the company managing their information, their leads, their sales figures, and somewhere in the bottom tier, we remember that fancy speech the CEO made about customer centricity and throw in something about customer satisfaction.

Even though we know that the customer relationship is important to success; CRM software is sold and bought without this being much of an actually concern. This is why so many companies get the wrong results. They are looking for the quick measurable metric. Somewhere in that thinking, we forget that the customer was supposed to come first. Those who sell CRM software knows that the company is more interested in being able to measure success than in actually achieving it, you can see that in their sales pitches.

Don’t believe me? Go take a look at Microsoft’s Page for their CRM solution.
In a list of 10 compelling reasons, number seven is when they first mention customer satisfaction. And out of all those 10 reasons. Only that one deals with it at all.

The Harvard Business Review has an article about how Customer Loyalty isn’t all its cooked up to be.

The article comes down on pretty hard on the CRM software and how the expenses spent on Customer Loyalty isn’t paying off.
They talk about expenses of $2 million, 16,000 customers in the data, calculated correlation coefficients etc.

It’s really a very impressive article, almost as impressive as it is wrong…

The HBR article mentions nothing on how this money was applied, if it was applied to actually improve the customer experience, or whether it was simply slapped on there to make the sales force more effective in bothering the customer. Their idea is that a marketer should be able to more exactly predict the future spending habits of a returning customer. Exactly predict the future of any human behavior?!?

If we spend money on something, but do it for the wrong reasons and in the wrong way, we can’t expect the right results. As long as we call something Customer Centric, but make it about streamlining our own efficiency to do the same thing we’ve done before in higher volume and with greater precision, we are not focusing on the customer, we are annoying them. That is hardly going to produce the results we are looking for.

To try and find a way to exactly predict the customers’ behavior is not about loyalty, that’s about pencil pushing. To equate the customer that buys less often but comes back every time he is buying your product or service as less profitable and less worthy of attention means that you have completely misunderstood what loyalty can do for your company.

Since so many companies buy CRM based on the wrong reasons, and implement it based on those reasons, the mere thought that it would actually increase loyalty is ludicrous. To then measure it, without taking into consideration if the money was actually spent on the customer experience as opposed to just giving the sales force more data to bother the client with is borderline absurd.

CRM is a tool, like any tool it can be used in many different ways, some more effective than others. Until you use it to improve the customer experience, it isn’t going to do much for customer loyalty. It will end up being a huge waste of money.

If you want to measure your sales team, then pick the tool that is designed for that. If customer loyalty and their overall experience is what you are actually trying to improve, then make that number one on your list. Not number 7 of 10.