Why CRM Has Failed the Customer -- And What to Do About It

An Oracle White Paper October 2011

Why CRM Has Failed the Customer-- And What to Do About It

Why CRM Has Failed the Customer--and What to Do About It

Introduction

Customer relationship management (CRM)--one of the great application categories to emerge over the last decade--has lost its identity. Or rather, it has too many identities--most of them focused on selling to, rather than servicing, the customer. Helping customers efficiently and effectively resolve issues remains a challenge for most organizations--even those with CRM solutions. Some companies, however, are getting it right. And in so doing, they've changed the profile of today's customers. These new customers are more demanding, less patient, and less loyal than ever. Thus, if you cannot deliver the right experience to this new breed of customers, you not only miss out on an opportunity to cement that relationship but you also open the door to competitors. Take heart, though: all that's required to provide the right experience is a return to the fundamentals of customer service. This paper describes how the right CRM solution can deliver those fundamentals--bringing customer service to the fore and providing a much needed competitive edge--by taking advantage of strong knowledge management and intelligent search.

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Why CRM Has Failed the Customer--and What to Do About It

The message is clear: corporations are willing to spend money to raise their top line, but they don't have the same conviction when it comes to keeping existing customers satisfied.

An Untapped Market Opportunity

Investors and entrepreneurs recognize the issues that need to be addressed in the CRM world and sense an opportunity for profit. According to Gartner's April 2011 forecast, CRM spending in all 14 CRM categories will reach $12 billion in 2012. However, just 2 of these categories are customer facing, and 9 are grouped in the sales and marketing categories (including partner relationship management, sales force automation, campaign management, and e-marketing). The message is clear: corporations are willing to spend money to raise their top line, but they don't have the same conviction when it comes to keeping existing customers satisfied. Support is still largely viewed as a cost center with only an indirect (and difficult-to-measure) connection to the top line. Although most everyone knows that it costs less to keep a customer than to acquire a new one, few CEO compensation plans are tied to customer retention or satisfaction. To address this problem, CRM software makers need to return to their original focus--that is, servicing the customer. Quality customer service is built on excellent data and effective search. If both are present, customers can find solutions quickly. This means providing accurate answers to customers' inquiries and making sure those answers are easily accessible. Strong knowledge management and intelligent search software can help immensely--particularly in the area of findability (so similar problems don't have to be diagnosed more than once). Good information is useless if you can't access it effectively and efficiently. The difficulty lies in getting that good information.

Figure 1. A good CRM solution will include knowledge management and intelligent search capabilities that enable support personnel to answer questions and resolve issues easily and effectively.

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Why CRM Has Failed the Customer--and What to Do About It

If you can't solve customer problems through your primary channels, how will adding more channels do anything but exacerbate the problem?

Knowledge management needs to be tightly integrated into CRM tools, and then knowledge-centered support (KCS) procedures must be instilled and habits ingrained if knowledge is to be quickly and systematically captured and reused to resolve problems. Fundamentally, it's about proper tool integration, KCS training, and management discipline. No shortcuts exist, and employee attrition and the pace of change in corporations make it especially challenging to deliver continuous KCS training. Despite these obstacles, some companies are beginning to understand how knowledge management can contribute to customer service--arming agents and Web self-service users with the information they need in order to resolve issues quickly and politely while preventing problems from arising for other users. Successful companies are also helping their employees benefit from colleagues' knowledge--sharing insight so that issues can be resolved quickly and contributing to discussions about how to prevent such issues from occurring in the first place. Fortunately, there are professional consortia, standards, and models to follow, which will produce results if management makes customer service a priority. Unfortunately, companies aren't always getting the best advice on how to proceed.

Playing Multichannel Roulette

Too often companies are being urged to focus on multichannel customer service rather than on their knowledgebase and findability. Got poor Web self-service? Add a chat box. Can't afford to enlarge your call center? Make e-mail a more prominent means of communication, or offer a discussion forum. Does anyone really think these tactics will solve the problem of poor customer service? If you can't solve customer problems through your primary channels, how will adding more channels do anything but exacerbate the problems? Conversely, if you offer Web self-service and contact center support that work, will your customers be unhappy that you don't also provide chat and e-mail? Of course not. Two variables that have a huge impact on how customers perceive their Website experiences are ease of access and content quality. If your self-service Website isn't getting it done, why will your e-mail response system, your chat interface, or even your call center be better? Fundamentally, having the right content that's easily findable is the key. With the right foundation, all channels can be effective-- in fact, you'll discover that you can get by with fewer.

The Second Coming of CRM

The first wave of CRM products focused on helping corporations gain control of their operations. Servicing the customer was part of that equation, but it was not the central theme. Tracking open cases until they were closed, routing incoming calls and messages to agents efficiently, and capturing and acting on sales leads systematically represented the primary uses of the first CRM products.

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Why CRM Has Failed the Customer--and What to Do About It

What organizations need now is honest, customer-geared incentive systems and the discipline to stay the course.

In its next incarnation, CRM will focus on the underserved customer service market and feature knowledge management and intelligent search capabilities at the core of the software stack--a tacit admission that whereas case tracking may help operational planning and analysis, it does nothing to improve the customer experience, resolve problems, or increase satisfaction. For that, you need robust knowledge management capabilities to ensure information quality. You also need superior findability with intelligent search and browse technologies that can find, retrieve, and present information in the context most appropriate to resolving problems. Whether they are accessed from a self-service portal, an agent's desktop, or any other channel, content and knowledge are king. If you can get accurate, helpful information to your customers, your customer service will improve. Equally important will be the KCS processes and models that ensure that quality content is authored, approved, and published in a timely manner. A few trailblazers running knowledge-based support operations have already been recognized for providing innovative customer service and building support organizations that are profit centers for their companies. What organizations need now is executives who believe in the value of knowledgeinfused CRM and the discipline to stay the course. By improving the knowledgebase, organizations can achieve the ROI they've long expected from their CRM implementations--turning tracking databases into transactional applications for resolving customer problems, converting Website visitors, analyzing customer interactions, and harvesting knowledge from all aspects of the user experience.

Conclusion

The rapid adoption of Web 2.0 has reminded people that knowledge exists in many forms--not just in dedicated knowledge management systems but also in everything from content management and CRM systems to blogs, wikis, and forums. This evolution has also changed the way we collect knowledge. Thanks to wikis and blogs, customers have become accustomed to constantly updated and improved content as well as content they contribute. Your job is to make sure that your organization's CRM can take advantage of all of this knowledge--in whatever form it exists--to help you provide a superior customer experience.

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