Customer Centric Culture - Organizing Term Paper

Excerpt from Term Paper :

All those nice customer-friendly marketing techniques notwithstanding, White notes, customer-centered personalization can't work well without being linked with high-quality, high-visibility customer service.

Even some of the most successful corporations, like IBM, apparently stumbled along for a time, totally failing to "get it" when it came to customer-centric strategies. According to the industry publication Chain Store Age, in the early 1990s, a customer-centric culture "was foreign to Big Blue" - and to Wal-Mart - until fairly recently. The writer goes on to explain that when considering Wal-Mart and Target (two retail giants that are becoming "more alike than different"), "sameness" is a "trap" that happens when a company "takes its eye off the brand to focus on the numbers, loyalty goes by the wayside. It happened to Sears," the article asserts.

RESISTANCE TO CCS/CRM: In the Jossey-Bass book, Designing The Customer-Centric Organization (Galbraith 2005), the author suggests that businesses that hesitate to create customer-centricity are likely suffering from "fiscal myopia." And moreover, Galbraith continues, there are apparently two good reasons for some companies resist transcending product-centric strategies and moving into customer-centric cultures. One is based on the fact that half of all the CRM implementations "fail to achieve the desired results" and "one in five actually damages customer relationships" (Galbraith 2005). Apparently many of those that fail did so because they underestimated the dramatic changes that are required in order to create a customer-centric system. Meanwhile, word gets around fast that many attempts fail, so other non-customer-centric companies shy away from this strategy.

The second reason companies may resist customer-centric systems is that, according to Galbraith, is that they believe they already are customer centric. They have labored long and hard to become "close to the customer," and believe in their heart of hearts they are "customer focused," the author continues. To be truly customer centric, the entire firm "must literally organize around the customer," Galbraith reminds. And in Chapter One of his book, he observes that some managers can be "fooled into believing" they have left product centered strategies behind, when in fact those strategies are still "running the show" and the customer centric world is just a "cosmetic gloss of customer focus sprinkled around the edges."

The author flatly states: "Today, nobody owns the customer. The customer owns you." That may seem a bit bold or exaggeratory, but largely because of the Internet, and the new global nature of doing business, the customer is greatly empowered, Galbraith explains. He offers four bullet points that explain why the customer has risen so high in the world of business and corporations. One, "the globalization of the customer"; two, the "preference" that today's customers have for "partnerships or relationships"; three, "the rise of e-commerce"; and four, the desire of the customer to find "solutions."

Another reason why some companies may shy away from the move to customer centric approaches is that a "shift in culture of this magnitude calls for a transformation of epic proportions, not to mention top level" leadership, according to an Ivey Business Journal article (Angel 2004). How many companies, it is fair to ask, are truly equipped to transform their culture in "epic proportions"? How many have executive leadership with the vision and clout to pull such a transformation off? The answer is blowing in the wind, but one can surmise from even a cursory glance at American companies that not many would fit into that category.

Meantime, Angel makes a very good point when he writes that customers today are "armed with a wealth of information" hitherto not available to them; and, moreover, customers are far more aware of their options - and far more "value conscious" - than previous customers have been, and hence, they can "no longer be relied on to buy the message being pushed at them." This, Angel asserts, is the most revolutionary change in consumer dynamics in fifty years (since Madison Avenue began its powerful marketing machine). And so, "consumers are making more purchasing decisions in environments where marketers have less direct influence," says Proctor & Gamble's director of global marketing, Jim Stengel (quoted in Angel's article).

Customer Relationship Management

CRM ORIGINS: When did Customer Relationship Management (CRM) begin to emerge as a strategy for businesses? CRM emerged out of the "sales and marketing systems environment" in the middle 1980s, according to information found on the Microsoft Web pages www.searchcrm.com (November 2003). The CRM movement grew out of the early "Sales Force Automation" market, as alert CEOs and executives began searching for a "more strategic and broader reaching platform" through which to handle customer interactions and customer data all across the board. What came out of that search was CRM, albeit "some might say that the CRM industry is still trying to hit the CRM requirements' nail on it's head,"

Exactly what is Customer Relationship Management? According to the information on the Web site www.destinationcrm.com, it is a "strategy" - that should be implemented company-wide - designed to solidify customer loyalty. And in the process of solidifying the loyalty of the customers a company already has, costs are cut and hence an improved profit margin. The three key elements in any successful CRM initiative are "people, process, and technology," according to writer David Weiss. "If customer relationships are the heart of business success," Weiss asserts, "then CRM is the valve that pumps a company's life blood" (Weiss 2002).

The people in a company that is going the CRM route must be thoroughly tuned in and trained in CRM for it to work; the process must be well thought out, and the technologies used must be top shelf in order for the best client data to be available to all employees at all times, according to Weiss's article. Moreover, along with better customer (client) relations, a smoothly functioning CRM should bring increased "call-center efficiency, added cross-sell and upsell opportunities, improved close rates, streamlined sales and marketing processes, improved customer profiling and targeting, reduced costs..." And again, better overall profitability.

Starting a CRM project isn't necessarily an overnight event; Weiss writes that it could take from a few weeks to "a year or more." And along with the training and full participation by the employees, Weiss suggests that the culture itself should "create an internal bond" among the staff. And at the end of the day, if executive management insists on growth and less employee turnover along with references and sales "that stick" and invoices "that get paid," those executives certainly have to buy into the CRM and back it 1,000% as well.

Another Weiss article in www.destinationcrm.com ("A Long-Term Approach to Customer Relationships") discusses (again) the importance of management must get behind the 8-ball on CRM or it will fail. Indeed, Weiss writes that the competitive advantage that a company achieves through the successful implementation of CRM is that loyal buyers, happy customers, "don't shop the competition" to see if they get a better deal somewhere else. And beyond that, happy customers who are "very satisfied" are "six times more likely to buy than merely 'satisfied' customers," and, importantly for the bottom line, it costs 10 times as much to get a new customer than it is to keep your current customers.

A white paper by CRMUK & SECOR Consulting (CSC) ("Customer Relationship Management: Introduction to Customer Centric Culture") alludes to the fact that many businesses have switched from transactional to relationship marketing - putting the customer at the center of all business activity. "Countless organizations" have been "oblivious" to that concept (putting the customer at the center of the universe of a company's strategy) the CSC group asserts, but the evolutionary process of bringing a business into focus on the customer is gaining appeal and participants. In fact, businesses that have caught on to the fact that customers "must be vehemently studied and their needs accurately identified and translated."

And once a company institutes a CRM, they must "constantly change the business model" as they learn more and more about their customers. This obviously takes some courage, because businesses (employees especially) are not noted for embracing change (change is a threat in many cases, even though it shouldn't be) and yet, the customer "...must be the catalyst for the reengineering of the processes," the CSC white paper continues.

CRM TECHNOLOGY: Meanwhile, to many people in business, CRM is not just a philosophy and an approach; it's also important technology (software). Good clients are "...a firm's treasure," and as your client's business prospers, "so does yours, so it's important to hold on to them" (Hayes 2006). How to hold onto those customers - assuming your company has already attracted them into your matrix with enviable quality services or goods - is a question that writer Michael Hayes goes into depth to answer. In his Journal of Accountancy article ("Get close to your clients: you already have CRM capacity.…

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