Do companies have too much CRM and not enough common sense?

Is it possible that companies are so fixated on automating their customer relationship management that they forget how to relate to customers?
Written by Joe McKendrick, Contributing Writer

Is it possible that companies are so fixated on automating their customer relationship management that they lose their common sense?

All too often, executives think if they throw enough technology at a problem, it will somehow turn their organizations into shining beacons of success.

'You cannot nurture relationships with a bunch of bits'

Take CRM systems, for example. In a new post, Jerome Pineau dares to ask the question: what good is all this technology doing, anyway?  He goes further to say that customer relations, in general, cannot be improved or enabled by technology. Rather, good CRM is based on having good, well-trained people within a customer-driven corporate culture.  No amount of technology is going to fix a mismanaged, rigid or hidebound corporate culture. I say that all the time here at this blogsite regarding SOA deployments. No amount of "service-orienting" is going to fix a repressive corporate culture.

As Pineau puts it regarding CRM:

I am going to get a lot of heat for this statement but, truth be told, CRM is a hoax. There is no such thing as CRM. It’s all smoke and mirrors, and you cannot nurture customer relationships (or any other form of relationship) using a bunch of bits.

Pineau also takes a swipe at our long march to an analytics-driven culture, observing that the constant, over-analysis that we're doing -- enabled by ever-more-powerful tools -- is actually clouding or decision-making abilities. Not helping, but hindering customer service.

As Pineau observes:

"The companies and industries making the most use of CRM packages are those with the worst customer service. This in itself should be eye-opening. Airlines are perfect examples. Can anyone think of an industry with worse customer service? I can’t. Yet they spend gazillions on CRM and boast about it frequently."

Retailers, telecommunications companies, and car rental firms are just as guilty, he says -- Big CRM, still lousy service. (In all fairness, I have to say I've been very satisfied by the service I've received from car-rental companies. Just my humble opinion on that...)

So, Pineau says, pull the plug on that CRM system, and get out and mingle with customers. Do away with the data overload. He also refers to Malcolm Gladwell's book, Blink: The Power of Thinking Without Thinking. Gladwell had a few things to say about snap decision-making. That is, there is conclusive proof that snap decisions tend to be just as spot-on, or even more so, than decisions based on piles of data. Sometimes having too much information results in "paralysis by analysis."

Gladwell describes an elaborate Pentagon exercise, in which two teams -- Blue Team and Red Team -- were pitted against each other in a mock battle in the Persian Gulf. The Blue Team had a huge arsenal of information continually being made available to it, while the Red Team operated on a more ad-hoc fashion, leaving decisions up to local commanders to do what they thought best in given situations.

Red Team: Not overloaded with irrelevant information. "Meetings were brief. Communication between headquarters and the commanders in the field were limited."

Blue Team: "Blue Team was gorging on information. They had a database, they boasted, with 40,000 separate entries in it. In front of them was the CROP -- a huge screen showing the field of combat in real time. Experts from every conceivable corner of the U.S. Government were at their service... They were the beneficiaries of a rigorous ongoing series of analyses of what they're opponent's next moves might be."

The Red Team prevailed in the exercise. Gladwell summed it up with a quote from a military commander: "Did it matter that the Blue Team was many times the size of the Red Team? ...It's like Gulliver's Travels... The big giant is tied down by those little rules and regulations and procedures. And the little guy? He just runs around and does what he wants."

Another interesting example of decision making under duress is at the emergency room of Cook County Hospital in Chicago. Here, as Gladwell illustrated, emergency room teams were hamstrung by their attempts to garner huge volumes of information, in a short timeframe, to determine the right course of treatment for distressed patients suffering from chest pains. The unit only had eight beds. Most incidents of chest pains are not serious. When is further testing called for? Physicians would ponder every option.

The hospital ER moved, over a two-year period, to a faster, simpler "decision tree" that looked at key symptoms and responses. The ER saw a 70-percent rise in successful diagnoses, treatments, and outcomes for chest pain treatments.

The lessons from the Pentagon and Cook County Hospital experiences? As Gladwell wrote:

"We take it, as a given, that the more information decision makers have, the better off they are... All that extra information isn't actually an advantage at all; in fact, you need to know very little to find the underlying signature of a complex phenomenon."

Business intelligence and analytics is a great advancement for enterprises. However, in the process, decision makers get overloaded with information and data. A smart approach is to find ways to filter and simplify the information streaming to decision makers, thereby reducing the incidence of paralysis by analysis.

Editorial standards