CRM culture a challenge for Asian businesses

Although Asia has a strong tradition of treating the customer well, that alone is not enough. Organizational structure and culture must change to achieve successful CRM experience.
Written by Thomas Chen, Contributor

At a recent roundtable of Customer Relationship Management (CRM) specialists, a journalist tabled this question: "If I'm a company that is very traditionally Asian, with a strict hierarchical structure, family-owned and small to medium in size, would I have huge barriers (to overcome) before I can even start talking about CRM?"

Neil McMurchy, Gartner's regional services director for Asia Pacific shot back: "You've certainly got significant challenges, absolutely."

Although there is a strong tradition of treating the customer well in the region, that alone is not enough, McMurchy said.

According to him, Asian organizations are saddled with command-and-control type management that reserves decision-making for the higher-ups. That makes for poor customer service culture, as decisions often have to be made at the point where the organization meets its customers.

"What happens much too often in the countries in the region, is that, too often, the person you speak to can't solve the problem," he observed. "They have to refer back up the hierarchy, and that results in a less-than-happy customer service experience."

Even the customers in Asia are different from those in the West, said consulting company PricewaterhouseCooper's Craig Ower, a director of management consulting services.

"You can't just look at the organizations (in Asia) and say you're not providing good customer service," said Ower, "it's very difficult to bring a lot of the CRM concepts that have worked in the US and Europe here because the customers will reject them."

Asians generally still prefer traditional channels of person-to-person contact even though those channels may be less efficient for them, he noted.

"If you go to a bank at anytime of the day here, you'll see a larger number of people queuing up because people (in Asia) still want the knowledge and security of handing the money to the bank and getting the receipt," said Ower. "They are willing to stand in line for that personal security."

The key lies in a generational shift in the region, where younger Asians are beginning to turn toward the electronic medium and technological means to interact with business organizations, he added.

"You're starting to see people who are 35 or younger completely bypassing (physical channels) now," said Ower. "They are moving much more toward the direct channels which is driving a lot of the new CRM technology in the direct interaction and personalized stuff."

CRM, a technological solution aimed at enhancing a business organization's ability to deal with customers by organizing and presenting customer information more efficiently, has enjoyed huge gains in the US and--a little later--in Europe, since making its appearance in 1996-1997.

Despite the introduction of the technology by telcos and large consumer product manufacturers in the region, the market for CRM solutions in Asia continues to lag behind US and Europe.

A recent report by research company Ovum forecast that the region's eCRM market growth would continue to lag behind US and Europe through to the year 2005, reaching revenues of US$1 billion, compared with the US$6 billion projected for the US market and US$4.4 billion for Europe.

Henri Barenholz, PeopleSoft's CRM director for Asia, attributes the lag to the relatively newness of the technology to the region, as well as Asian firms' tight-fisted approach to technology.

"Companies in Asia are very scrupulous about their technological spending," said Barenholz. "When they invest in something, they want to see the value immediately, whereas in the US and Europe, companies are more likely to buy into CRM solutions full-scale."

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