Several months ago I had the good fortune of hearing from Professor David Dobrzykowski who teaches CRM at the College of Business at Eastern Michigan University - university of some 23,000 total students safely ensconced in Ypsilanti, Michigan. Dr Dobrzykowski a.k.a. Dave, told me that his class was using the 4th edition of CRM at the Speed of Light as a text and he was wondering if I had any reference materials. But, given that I didn't write it explicitly as a text and I have a lazy bone or two, the answer was no I didn't. So I offered instead, out of gratitude that they were using the book and guilt that I couldn't figure out a way to support it, to speak to the class virtually which I enthusiastically did. I also found a smart, and enthusiastic class who told me of a project they were doing to actually audit a couple of companies when it came down to their CRM programs. I thought, this would be a great thing for them to put out there so I asked them if they would be willing to do a guest blog post on the audit.
They were willing. This is the result. So what you are seeing is what is one of the few field programs I've seen from students in CRM and one that I think merits some real discussion. And kudos to the team who did this. They are the ones mentioned below as authors for the blog post.
Take it away, CRM Eagles. (That's EMU Eagles, not the dreaded Philadelphia variety).
Lessons from an MBA CRM Audit - best and worst practicesAuthors: The authors for this blog are as follows. Team Reliable Packaging: Timothy Howse, Janice Marchetti, Kevin Balint, and Mike Harrison. Team Cool Kitchens: Marian Pascu, Kurt LaTarte, Richelle Marks, and Jorge Martinez. The professor is Dr. David Dobrzykowski, College of Business, Eastern Michigan University.
Something different!You're probably accustomed to reading insights about CRM compiled by seasoned professionals who have many years of experience in the field and offer those insights gleaned from years of experience. Today, though, we're going to present a fresh perspective on CRM that you rarely encounter - from two MBA student groups in a Customer Relationship Management Class at Eastern Michigan University (shameless plug - EMU is home to one of the Princeton Review top 300 business schools for 2011). While the assignment sounds fairly straight forward, what the students found might surprise you - in the form of ‘best' and ‘worst' practice companies!
Each group was tasked with conducting a CRM audit for an established company. For the purposes of this discussion, we will call the companies profiled here as "Reliable Packaging" and "Cool Kitchens." As you know, one of the challenges that B-school students face is applying what they learn to the "real world." Given their findings, some of the insights these students gained from the fascinating world of CRM surprised them!
The mission (which we chose to accept)Our professor, Dr. David Dobrzykowski, gave us the assignment of conducting a comprehensive CRM audit for two companies. It just so happened that we solicited Reliable Packaging and Cool Kitchens for our projects. The projects involved assessing many dimensions of the company's CRM program including the organization's strategy (the business, customer, and CRM strategy), industry, customers, competition, CRM tools and metrics. For this project, we visited each company and explored their CRM program and practices by interviewing multiple employees. We asked the employees a multitude of questions about how their company collects information about their customers, what methods they use to store this data, how they handle customer complaints, etc. We then compiled our data and determined if the company had an effective CRM program and how it was affecting their performance.
Who are the players?
Cool KitchensIn order to fully understand the company's CRM strategy you must first understand the company itself and the business that they do. First and foremost Cool Kitchens produces kitchen cabinets and other accessories for the kitchen. They are a Fortune 500 company that has several manufacturing plants and service centers located throughout the United States and Canada. Cool Kitchens is split into three different companies that all sell similar products but are made with different customers in mind. For the sake of writing this blog let's assign names to the three companies: Division A, B, and C.
Division A's (for Affordable) products are made to be sold strictly through contractors and are not sold in any retail distributors. These are affordable high quality cabinets that are sold in large quantities and offer a variety of different colors and styles. Division B's and C's products are sold through distributors such as Lowes and Home Depot and people can also order them directly from the company. Division B (for Big Box) concentrates mostly on selling innovative and new ideas where Division C (for Custom) looks to offer "build to order" custom cabinetry.
Unfortunately, due to the economy their sales have taken a bit of a dive, but on the plus side; between the three divisions the company still holds the largest market share in their industry.
Reliable PackagingThe second company, Reliable Packaging, is a well-established, family-owned paperboard manufacturer of a wide variety of packaging materials. The company's stated values are to exceed customer expectations, work hard, act with integrity and demonstrate an unwavering commitment to quality. Their culture is very people-oriented and customer-focused.
In their marketing, they pursue other large companies in the distribution & manufacturing industries with over $250,000 in sales of items that require corrugated packaging. Also, they differentiate themselves from the competition by offering high-quality packaging materials at premium prices.
An "A+" for Cool Kitchen's CRM Program AuditAs you might assume the companies all have different ways of handling their customers. Division A primarily deals with contractors and for that reason they must alter their strategy to best suit their customer. They advertise their products through trade shows, their website, and word of mouth from previous customers. Since they advertise mainly to contractors they have no social network pages such as YouTube, Twitter, and Facebook. Although, Division A does make it a point to keep all the order information about the contractors available to make their transactions fast and efficient every time they call.
Division B and C take different approaches to their customers since their customers are usually regular people looking to remodel their kitchens. Division B's main customers are younger city people that live in small homes such as condos or apartments. To reach this group of people they have brought on Curtis stone, a famous chef from the Food Network to go around America and advertise their product at tradeshows. Curtis Stone also interacts with the customers and invites them to try out the products while they cook in the kitchen with him. Division B also has a YouTube, Twitter, and Facebook page that they update often.
Division C also markets their products towards people that are looking to remodel their kitchens themselves. To reach their customers Division C chose to put their product on a very popular home makeover show. The kitchens and all of its features are showed off every episode by the television show and all Division C must do is provide the kitchen. They also keep in touch with customers through all the major social networks.
CRM SystemsAs we mentioned before Division A finds it very important to keep track of the contractors information to keep transactions quick and efficient but, Divisions B and C don't do the same with their customers. Since the average person only buys one to two kitchens in a lifetime Divisions B and C keep track of basic information such as:
- Addresses/Phone Numbers
- Warranty Information
- Items ordered
This information not only helps them when dealing with warranties for their products but it also helps them when deciding which retailers are the most effective partners. Whenever a retailer decides they want to sell their product all the information about that area is taken into consideration. Through acquired information from previous orders and surveys they gather information about:
- What people have purchased in that area before
- Average salaries
- What types of families live there
With this information they can determine what products best sell in that area. They also take the opportunity to train all the employees of the retail chains that will be selling their product so the customers get the best service possible.
With all of their social networks available to the public the company has also taken many steps in preventing web terrorism. They have a system in place where every comment that is posted on any of their social networks is responded to within eight hours of being posted. This ensures that everybody is well taken care of and there aren't any negative posts causing trouble on their pages.
An "F" for Reliable Packaging's CRM AuditReliable Packaging has the right customer-focused orientation, but we were shocked to find that they were definitely lagging in adaptation of many technologies available to help them enhance customer relationships remotely. Not every company thinks the same way that we "computer geeks" do...especially when it comes to CRM technologies.
Here are the reasons why they get a failing grade for CRM:
- They only utilize an Excel spreadsheet for storing customer data. This tool is very limited, because it makes it difficult for their sales & marketing staff to have essential customer data that they need at their fingertips - especially when making phone calls to reach customers.
Reliable Packaging should consider utilizing SalesForce.com, because it is an effective tool that would allow their staff to store much more extensive information about their customers, including notes from phone calls, company information, and other essential info that would help them to make better financial decisions and serve their customers more efficiently.
- Their sales materials used for customer acquisition are also weak. When you want to find out more information about a company, where do you usually go?
You probably guessed it...the company's website! Company B's website is probably not effective for attracting new customers for the following reasons:
-The design is boring. In fact, it looks very "old-schoolish" and does not appeal very well to the customers of this generation. It doesn't grab your attention. When a website doesn't jump out at a customer, what do they often do? That's right...hit the "Back" button.
-The website is written to emphasize the company's credentials. You got it...how long they've been in business, complicated terminology that doesn't relate to your problems, awards, staff & certifications, etc. Doesn't it bother you when a company does not answer the fundamental question, "What's in it for me?" on their website?
-The website could also use a stronger "value proposition." A strong value proposition explains how customers benefit through utilizing a company's products. A good example of a strong value proposition is Fedex's proposition: "On Time Every Day or It's Free" (Duct Tape Marketing, p. 35). Doesn't that grab your attention?
-The website has no testimonials...no case studies...none....zip. Think about what they're missing out on. When you buy a product, you don't want to listen to a sales pitch, do you? You want to see what others are saying about a particular product, so that you can make a wise purchasing decision.
Why not include not only written testimonials, but also audio & video? That would be a compelling way for them to establish credibility online.
- Their sales staff have high turnover. Even though they provide them with training, the high turnover is a concern. Because their sales staff often do not stay with the company very long, it becomes difficult to develop long, lasting relationships with their prospects and customers.
The above are a few of the reasons why we give Reliable Packaging an "F" rating for CRM. Obviously, there's a lot of room for improvement.
What did we learn from Cool Kitchens?By doing this project we had an opportunity to better understand what types of companies utilize CRM and what types of companies don't use it. We found that our company was successful for using multiple CRM processes in their day-to-day operations. First and foremost, their wide range of product offerings and pricing was a major contributor to their success but, their multiple touch points with customers before and after the sales was also crucial. Overall, we found that CRM is becoming an important part of every company that wants to be successful in today's business world.
What did we learn from Reliable Packaging?Overall, this was an enlightening project, and we realized that this particular company has a lot of room for improvement in the area of CRM. Here are some of the most important take-a-ways from this CRM audit:
- A compelling website is absolutely essential for customer engagement.
- Potential CRM strategies & tools must be tailored to the needs of the company that you work with.
- No matter what tools are used for CRM, it's important to communicate in the "language of your customer."
- Even in this increasingly competitive business world, it seems that some companies (like Reliable Packaging) like to stay with the same tried-and-true and only work with customers within a particular radius from their warehouses.
- It is important to take note of current trends in CRM and adapt to those necessary to better connect with the customers and their ever-changing needs.
So that's it. What did you think? Weigh in if you care to. This is a compelling effort by some, young, excited and capable future CRM gurus. I, for one, am glad they did this. Thanks, all.