Leader: Why CRM fails to deliver

Getting to know customers better is vital to gaining a competitive edge over rivals in today's cut-throat business environment. So why is it then that so many companies are still struggling to realise the benefits of hefty investment in customer relationship management systems?

Retail is one sector in particular where investment in CRM is seen as a way to combat the fact customers are no longer as loyal to brands as they used to be. (For more on that check out silicon.com's just-launched Retail & Leisure section.)

But contrast that with the actual customer experience and you'll uncover a different story - in short, the CRM technology being used by companies is failing to deliver customer satisfaction.

Cultural change is the key to fostering brand loyalty, not some newfangled software application or, heaven forbid, another automated customer service phone system.

A study by Accenture out this week shows what most of us already know, which is that automated phone services are deeply frustrating to use for anything but the most straightforward or simple transactions, and that most people prefer in-person contact.

It should also be no surprise that 60 per cent of UK consumers say they have taken their business elsewhere in the past year due to poor customer service.

But why is this, when so much is said about and spent on CRM? The simple answer is that too many companies still approach CRM as a technology project that will magically build a deep relationship between a business and its customers, when in fact good customer service is more about a change in culture and thinking that needs to go with the technological tools.

This cultural change is the key to fostering brand loyalty, not some newfangled software application or, heaven forbid, another automated customer service phone system.

CRM needs to be more than a marketing tool for bringing new products and channels to market, and if that's all an organisation is buying a CRM system for then it's a pretty expensive way to go about it.

With the right foundation and organisational culture, however, CRM technologies can be invaluable in helping to build an intimate relationship with the customer.