CRM – more philosophy than technology

Written by: Petr Vykoukal

Implementing Customer Relationship Management (CRM) systems without proper advance preparations is like putting the cart before the horse. While CRM’s “introductory stage” is long past, unrealistic expectations among managers are still common.

IN THIS COUNTRY we’ve been aware of the term CRM for many years. During that time lots of things have changed, and foreign words have become a part of the language. “The situation in the Czech Republic and its neighbors with respect to CRM changes every year – firms are quickly learning what CRM can mean to them, so they’re no longer merely discovering what CRM really is,” says Alena Sochorová, telecommunications and hi-tech manager for the Czech branch of Accenture consulting company. Although there has been some improvement in the knowledge of Czech managers regarding CRM in recent years, many experts are still critical. They think that many managers have in mind something like, “we should start using CRM,” while the procedure they should choose is actually just the opposite.

Petr Bučík Photo by: Andrea Horská

The beginning is decisive
CRM is usually seen as the first step in the creation of a customer-friendly firm. “The CRM philosophy is that a firm learns to recognize the value of its customers, and to approach them accordingly,” Sochorová says. Good advance preparation is crucial for successful implementation, and endeavoring to introduce CRM as quickly as possible, without a well thought-out strategy, can lead to disappointment. “Whether the implementation is successful and meets expectations generally depends on how it is begun,” notes Václav Kadeřábek, the quality, security, and key programs director for Eurotel. “I see the milestone as formulating a company-wide strategy, its harmony with CRM, and setting up the correct processes,” he adds. One must always keep in mind that, according to Petr Bučík, a financial services management consultant with LogicaCMG, “the software is the cherry on top.” The result of launching a poorly thought-out and hasty CRM program can be a firm’s acquisition of a several-million-crown phone book.
Unsystematic implementation, where a firm launches CRM only partially, can likewise cause problems instead of greater efficiency. According to Sochorová, many firms have made the mistake of not wanting a CRM program until they have a problem, so they prepare the solution without considering the impact on the other parts of the firm. “This means that they are far from taking advantage of the CRM solution’s full potential,” says Sochorová. “Furthermore, investing in this limited solution further development of CRM within the firm can essentially be blocked for some time, because from the start its additional development wasn’t planned for.”
But the opposite extreme also occurs. Companies that decide to build entirely new, comprehensive CRM solutions become frightened of the price tags (larger implementations can run into the millions of dollars), suspend all CRM implementation activities, which basically delays any benefits.

Václav Kadeřábek Photo by: P. Poliak

Everything in its time
If the implementation of CRM is necessary for a company’s development, it shouldn’t be postponed, because, among other reasons, it takes a long time. Setting up a system in a large company with tens or hundreds of thousands of customers takes many months, or even several years, and smaller firms also have to count on at least a few months. For example, Michal Seifert, CRM & DWH program manager at Česká spořitelna, says that the preparatory phase alone – introducing new service methods at branches – took a year, and the next phase, implementing a data warehouse and CRM applications at the branches, took two years and is currently nearing completion. The case of eBanka was similar. “The process of CRM implementation is lengthy, and since the bank was founded in 1998, more and more functions have been gradually added. We believe that implementing and improving CRM solutions is a never-ending process,” says Pavel Makovský of eBanka. David Seibert, the director for customer development and retention at Český Telecom, shares this view. “Implementing the technologies that support work with customers is a process that can never be completed, because the CRM support systems develop with the needs of the market and the way business is done,” he says. As an example, he cites the fact that ten years ago ordering a telephone line over the Internet wouldn’t have occurred to anyone, while today most customers expect it. “Tomorrow, downloading movies in digital form instead of going to a video rental shop will be an everyday matter. Of course, the technologies and processes within companies will have to be adjusted for this,” he adds.

A road full of obstacles
Simplifying CRM to just a technology or a set of activities is the wrong way to go about it. “CRM is primarily about people and processes first, and only then about technology,” explains Bučík of LogicaCMG. Motivating the company’s employees is one of the hardest parts of implementing a new system. “When you launch CRM, the most difficult thing is to involve all of the levels of the company in its implementation,” says Romana Kubalková of Raiffeisenbank. David Seibert also sees the human factor and motivation as critical. “The hardest thing is to motivate the employees to see everything through the customers’ eyes,” he says. “Český Telecom is gradually implementing many technologies in this area, but their use depends on our employees, and that is what we pay the greatest attention to today. Our goal is to motivate our employees to truly orientate themselves to our clients’ needs,” Seibert explains.
And CRM should reveal its greatest advantages in precisely this area. Motivation need not be only financial in nature, but CRM’s benefits can be quantified in specific cases. It mainly involves maximizing business efficiency and sometimes cutting costs as well.

Speaking clearly

The most frequent form of CRM is the call center. Because it is often the first point of contact between a client and a company, the impression made by its operators is very important. One of the elements that can affect this impression is the speech of the operators. But different companies approach this issue in different ways.
” We didn’t take into account the operators’ accents, and we have no information that clients notice various accents, what they notice is accomodating behavior and willingness. When we choose operators they take a test on their ability to communicate,” says Petr Hajný, the IT department manager for Středočeská energetická. Komerční banka has a different approach to accents. “One of the conditions when hiring employees is literary Czech, which means accentless Czech,” says Markéta Dvořáčková of the bank’s press department. Komerční banka built its call center near Jablonec nad Nisou, where the colloquial is the closest to literary Czech. Petr Šindler of Český mobil, whose call center also features Slovak operators, takes a third approach. “We have not yet had any complaints about our operators’ accents. We see the way the operators react and answer questions and how they handle communications with demanding clients as the most important things,” he says. The linguistic similarity of Slovak might lead one to think about building call centers in Slovakia. Why don’t firms go that route, since the labor there is cheaper? “One could talk about setting up a call center in Africa if they spoke good Czech there…but let’s be serious. The idea of building a call center in Slovakia doesn’t seem like a very good one to me,” Hajný says. Dvořáčková is of the same opinion. “The condition of Czech spoken without any accent is one of the reasons it would be difficult to set up a call center in Slovakia.”

Satisfaction is crucial

Michal Seifert Photo by: Petr Poliak

The term CRM began arising frequently in connection with the liberalization of the power market. However, many other companies with large numbers of customers are already working with this concept to some degree or other, for example, banks and telecommunications companies. For all these firms CRM should bring better ways to serve existing customers and better react to their needs. Michal Seifert, CRM & DWH program manager for Česká spořitelna, describes the reason on behalf of all the others. “The room for acquiring new clients is limited, while the room for developing the value of the existing portfolio is huge.”
Český Telecom wants to change the way its whole company is perceived by its clients by applying CRM principles. “We are striving to transfer CRM principles into the way many departments actually function. This should lead to a change in work style, with the final effect that our customers will have positive experiences with Český Telecom. This should be reflected in our retention of existing customers and their increased long-term value and thus increased value for our shareholders,” says David Seibert, director for development and customer retention for Český Telecom. As the market becomes more competitive satisfied clients are crucial.
Power distribution companies are still waiting for the market for the general public to open up, but many of them are already prepared. According to Petr Hajný, the IT department manager for Středočeská energetická, CRM should lead to the creation of a unified environment and improved quality and professionalism in contacts with customers. It should also result in expanded services provided to customers that are more convenient for them than personal visits – via telephone, e-mail, or fax.
Information about clients’s demands are also gaining importance. CRM allows better tracking of customer needs. “Thanks to this we can now react more quickly to changes in customer requirements and adjust the development of our services and products accordingly. Then we can launch services and products that our customers really want and will use,” explains Václav Kadeřábek, director of quality, security, and key programs for Eurotel.

The CRM magic formulaThe question as to what precisely CRM (Customer Relationship Management) means is far from a simple one. “Each firm supplies its own individual content for the term CRM,” says Romana Kubalková of Raiffeisenbank, adding, “We see CRM mainly as a concept for the organization of the company and the provision of services to clients in such a way that we can accomodate their requirements.” On the other hand, Václav Kadeřábek, director for quality, security, and key programs for Eurotel, characterizes CRM as follows: “It involves the introduction of analytical tools for marketing needs, for running marketing campaigns, and also for implementing front-end solutions with customers, that is, for example, including corporate web sites or WAP services.”
However, it is this very broad concept of CRM that can also lead to a decision to avoid the term. “The term CRM is a buzzword under whose label various firms sell everything from information technology through consulting services to training employees how to speak with customers. It’s up to each company to define the term for its own needs,” notes David Seibert, the director for development and retention of customers at Český Telecom. “We decided not to use the abbreviation CRM, and instead focused on specific procedures that affect how customers perceive our firm,” he adds.