Customer Management: 10 questions to ask yourself

It really does seem quite logical to any reasonable person: the better your customer management, the stronger your revenues. And yet the evidence is in that few commercial entities worldwide are taking the time and trouble and making the requisite commitment to quality relationships with their customers.

Research conducted by our UK-based partner QCI late last year, and released in January, shows clearly that companies worldwide are not obtaining the benefits they expected from investments in CRM (customer relationship management) systems; and that far from improving and enhancing their relationships and value with their customers, they are in fact eroding and undermining this value.

(For instance, QCI reports, only 13% of senior management have regular contact with a broad range of customers; and two thirds of senior managers do not give clear, visible leadership in achieving excellence in customer management.)

As a direct consequence, QCI has shown, companies' revenues and their market value are in decline: QCI has shown an undeniable causal linkage between the way in which companies interact with and manage their customers and their economic performance.

Stated bluntly, companies can create and destroy economic value through customer management just as easily as they can wipe billions off a share price through damage to their reputation by being "named and shamed" for dubious practices.

Please don't misunderstand me: I'm not saying CRM and its various technology enablers are valueless, or that you should dispense with your current CRM approach, no matter how frustrated you currently are. There is enormous evidence to indicate that a correctly aligned and implemented CRM initiative will deliver great benefits for your business; but before embarking on what will be a costly exercise, you would do well to ask yourself these 10 key questions:

1. Can you identify which customers you want to keep and develop, normally your most valuable customers?

2. Can you identify the most valuable prospects you want to find and attract?

3. Do you know what these customers and prospects need and want from you, and what will cause them to seek your product out over your competitors?

4. Can you take what you have learned about the needs of customers and prospects and define, in practical terms, what your competitive customer proposition's) or brand experiences should look like and why you will be better than your competitors at delivering this?

5. Do all functions and partners involved in delivering the customer experience agree what organisational behaviours and competencies are necessary to do this?

6. Do you know, in detail, how you will deliver your propositions, and measure your success delivery?

7. Can you predict how much it will cost to do this, and what the benefits are likely to be?

8. Can you align your organisation to deliver your propositions and develop the right customer competence in systems and people, and is there always inter-departmental cooperation to ensure that delivery is consistent?

9. Do you have the required leadership skills in your organisation?

10. Can you develop a set of customer measures, which will apply across functions (marketing, sales, service) and across their journey with you (will not refer to one touch point or transaction, but across the whole customer experience)? This will help you understand:

* How well you are retaining the customers you have chosen to manage
* What they enjoy and don't enjoy about you actual service
* How well you are acquiring the right customers
* How much share of their spend you have, for your category of products
* How much it costs you to manage them, during their interaction with your company

These questions define good customer management and on the face of it they are self-evident. Yet the record worldwide shows that organisations are not consistently asking these questions; when they do, they are not necessarily answering honestly and truthfully.

Customer management is a vital and yet misunderstood aspect of business today; during the course of this year, through this forum I'll be sharing key insights and lessons learnt so as to help you accelerate your customer management capability, and, along with it, your financial performance!