Category Archives: Anticipate Customer Needs

Anticipate Customer Needs

Why CRM Hasn’t Helped

Hint: R really does stand for relationship

Customer Relationship Management (CRM) was originally developed as a way to improve customer experience, under the banner of an “IT-enabled business strategy focused on the development and maintenance of mutually beneficial relationships between the seller and his buyers.”

But it hasn’t improved the customer experience much at all. The issue is simple: CRM doesn’t actually track relationships or experiences, it tracks transactions. As a result, CRM doesn’t take into account the customers’ views of the company, and doesn’t capture how these interactions make customers feel, much less what they want or need.

Yes, CRM does a great job tracking company perceptions of value, and tracking those interactions that are important to the company – sales, marketing, service, etc. – but it fundamentally misses what customers think, feel, and want as a result.

It delivers an inside-out perspective that means the conclusions reached by companies about customer relationships are skewed, based on the interactions that occurred rather than the customer perceptions that resulted.

While CRM can tell the company that two customers have the same set of interactions, it can’t tell which customer is delighted, and which feels trapped, upset, and may be actively bad-mouthing the company online. This is important information.

Billions of dollars were invested in technology to deliver better customer experiences. So what happened?

Today, most CRM implementations are simply data stores of the company’s view of the customer, corralling and distributing what a company knows about its customers while capturing – in some cases – individual customer interactions.

So you’d think that the billions of dollars invested in CRM each year would help companies avoid being so stupid. Add billions more in sales force automation (SFA), business intelligence (BI) and other enterprise-wide technologies to the mix, and you’d expect customer satisfaction and customer intelligence to skyrocket.

After all, in theory the combination of these technologies gives companies the ability to remember everything about their customers and their interactions, and give customers what they really need. Well, not really.

Why not? The answer is simple. Just because a company can remember “everything” by collecting more data doesn’t mean they bother to use it.

[Adapted from the book Smart Customers, Stupid Companies by Michael Hinshaw and Bruce Kasanoff, available now on Amazon.]

Anticipate Customer Needs Disruptive innovation

Don’t Close, Unless You Want to Close Forever


Outsmart your competitors. Buy the book


There are still many businesses where customer service and support is provided only during certain hours: if you call after, say, 7 p.m. Pacific Time, technical support is closed. Seriously? Does the firm really expect that none of their products are installed or used after 7 p.m.?

“CHANGE IS THE LAW OF LIFE. AND THOSE WHO LOOK ONLY TO THE PAST OR PRESENT ARE CERTAIN TO MISS THE FUTURE.”
— PRESIDENT JOHN F. KENNEDY

These sort of time-based restrictions are going to disappear for companies that successfully embrace the changed notion of customer service and customer experience.

Not because it suddenly becomes profitable to stay open 24/7. But because when you compete with firms like Zappos, which operates their warehouse 24/7 even though it’s not the most efficient way to do so, the notion of being “closed” will become suicidal from a competitive perspective.

Competitors like Zappos recognize that the value of delighting customers who order after midnight with a shipment that shows up on their doorsteps literally hours after being ordered can’t be measured by “maximized picking efficiency.”

They’re measuring the value of providing “a wow experience, which (their) customers remember for a very long time and tell their friends and family about.

[Adapted from the book Smart Customers, Stupid Companies by Michael Hinshaw and Bruce Kasanoff, available now on Amazon.]

Anticipate Customer Needs Reward Employees

JPMorgan Chase investor/customer disconnect

Who matters more: investors or customers?

“Just because we’re stupid doesn’t mean everybody else was,” said CEO Jamie Dimon in announcing that JPMorgan Chase had lost at least $2 billion in some very big, very stupid “hedges” against risk.

During the bank’s annual meeting yesterday, Dimon was generally supported by investors. One even told Dimon, “We think you are doing a fabulous job.”

But I suspect customers might not agree.

If you have your life savings of $27,408 sitting in the bank, it might not comfort you to hear the CEO simultaneously say a $2 billion loss was manageable and argue against regulations designed to force banks to take less risk.

You might yearn for the days when bankers were cautious, and community-minded, and perhaps even humble.

You might wonder how a bank could lose that much money protecting itself against risk.

You might wonder what could happen if a crisis happened unexpectedly, when the bank can incur losses this big even as our economy slowly gets better.

You might wish the bank spent less time trying to make even more money each quarter, and more time protecting your savings.

But most of all, you might yearn for better service.

Anticipate Customer Needs Reward Employees

Welcome Baseline readers

How stupid companies treat customers

Baseline Magazine did a great job of turning some of our key messages from the book into a web-based slide show.

Take, for example, their #5 slide, shown at left.

I’ve been extremely disappointed to see many companies use CRM as an opportunity to automate old marketing strategies, instead of launching more effective new strategies.

I once helped conduct a study of CRM that was sponsored by CFO Magazine. We learned that the number one indicator of CRM success was whether a particular CRM initiative had specific benefits to customers.

This may sound obvious, but it turns out that financial executives concluded most CRM initiatives have zero benefits for customers. Those that do, succeed. Those that don’t, fail.

It really is that simple.