The missing link

When it comes to service management and CRM, can you really deliver one without the other? Chris Hodder, Manager of Enterprise Management, Acumen Solutions UK Ltd, gives us his view.

Most organisations are aware of the need for both service management best practice and customer relationship management (CRM), yet relatively few consider the two to be related. In many cases, this results in different project teams implementing independent processes and supporting toolsets with no relation to the other. The end result, which we are seeing more often after the first round of service desk and CRM-based implementation, is a situation where the desired impact and return on investment of the initial solutions is not being delivered.

The risk of the current round of projects is that companies seem to be in danger of making the same mistake and delivering both a service management and CRM set of processes and toolsets without due consideration of the interaction between the two.

By way of an example, consider the business that has a new service to sell to its customers. Typically the first department to be aware of this will be the sales and marketing department who will promptly start marketing campaigns and selling the product. In the event that the product sells quickly there may be a problem with the service delivery if the service delivery processes are not in line with the sales process. The end result of failing to deliver a quality service is an unhappy end user, i.e. a customer who is unlikely to make a repeat purchase.

Your happy customer or a competitors customer

Let’s put this example into a real world context. To illustrate the fact that we are not simply talking about IT service management, as defined in ITIL, but general customer service management, I’ve chosen the example of a niche hi-fi company with which I recently had dealings. We will refer to them as company Hi-Fi X.

Hi-Fi X intended to release a new digital radio product in Q1 2006. The sales department produced material, developed marketing campaigns and generated sales leads. By Q2 2006 the product had not been released. However, there was little in the way of comment from Hi-Fi X or their distributors as to why the delay had occurred, although the customer interest was there. It is a matter of guesswork to establish how many potential customers went to a competitor at this time rather than wait.

At the beginning of Q3 2006, Hi-Fi X had authorised their distributors to begin taking orders with a view to delivering the product from the middle of Q3 2006 onwards. Again, it is not possible to establish how many potential customers went to a competitor having now waited three quarters of a year.

Ultimately, the product was available for delivery towards the end of Q4 2006, making it the best part of a year late and with Hi-Fi X having held customer deposits for nearly five months. There was consistently little in the way of communication either directly from Hi-Fi X or through their distributors who were dealing with customers. At this point there is no way to establish how many customers cancelled orders and again went to a competitor for their product.

The customer is in a position of chasing the distributor who in turn chases Hi-Fi X with little information flowing back and forth. Given the specialised nature of the industry and the niche player we are using for this example, the information flow is very much restricted to individuals knowledge and relationships.

A little consideration into the service management processes and how they interact with the CRM processes could have led to a much better retention of the initially interested potential customers. There was no initial problem with the sales and marketing strategy as it effectively generated leads and interest in the new product. So the initial element of the CRM process was working well.

The problem in this case was related to the delivery of the product, effectively between the design, production and testing departments. This is where the service management processes will have been in effect. On the assumption that we follow best practice for service management and a methodology such as ITIL, then these departments must be following appropriate change and release process for the design to be released into production and then adopting incident and problem management processes once in production.

In all likelihood the design, production and testing teams knew where the product was in its development lifecycle and could have a number of explanations for why there were delays and set realistic expectations to the rest of the business when completion would occur. The end result of this high level analysis is that effectively both the service management and the CRM processes are working well. This is of little consolation to the customers that could now be moving to Hi-Fi X’s competitors.

In our example, if the internal service management, delivery and support, processes were integrated with the CRM processes the sales people would have been in a much better position to communicate delays and justification for the delays to the customers through various distribution channels, including the distributor themselves.

The improvement of the communication channels between departments within Hi-Fi X would have allowed the customer service team to relay the current position of development back to the business and the distributor. This would have been a relatively small point of process change but would ensure that communication lines were improved and a single interface between Hi-Fi X and their distributor could have been established.

Sounds easy: how to implement?

The principle above is one that a large number of organisations of all sizes have now realised is essential to customer retention and true service provision as well as the follow on returned business generated by satisfied customers. Yet a similarly large number of organisations are still struggling to deliver this in reality.

To deliver true value to both the customer and the business we need to challenge the conventional thinking that CRM and service management are mutually exclusive disciplines; after all if there is no CRM there are no customers to support and if there is no service management the customers will not be inclined to continue doing business to the supplier.

The current position has been partly exacerbated by the sheer number of toolsets available on the market that support either CRM or service management. Vendors of either type of products try to bend their products to accommodate the other and invariably end up missing the mark in both cases. Alternatively, organisations purchase a best of breed solution for both and then try to retrospectively integrate the two, again a strategy littered with failed attempts from any number of businesses.

The way to implement such as solution is to go back to the basics of process development to see at what point the requirements of CRM and service management begin to diverge. This allows us to see the touch points at which the data utilised by the CRM toolset is useful to the service management toolset. Primarily this is likely to be the customer information and the product information associated to each customer.

This allows the customer service function to know who the customers are and what products they may already own as this could be relevant for troubleshooting any follow on issues. Very few things are more annoying to the customer than repeating details over the telephone; details that a) they have already provided and b) the company seemed to have on file the last time they sent out a mail shot! The positive side to this information is that in the event of a problem when the customer contacts the company they feel a valued customer.

However, it should be recognised that the information held within the service management toolset should also be made available to the sales function in order to ensure they have a customer history at their fingertips when contacting them in the future.

Where next?

What we have outlined in this article is a relatively simple solution, but as with all good solutions based on sound principles, they can be scaled and easily implemented from small businesses to large multi-national organisations. Good service management has to go hand in hand with good CRM.

However, there are a number other enhancements to this basic principle that can enhance the customer experience further and lock the customer to the company beyond the products themselves. The use of careful Interactive design between both the CRM and the service management toolsets can generate a spin-off of information to be made available to the customer through the corporate website.

Again the website is an area where a lot of companies invest large sums of capital to promote their products, but these again tend to be islands of information, where, in many cases, information already accessible from the company is replicated in a web environment.

A company such as Hi-Fi X in our example could utilise the toolsets that they have invested in to deliver Service Management and CRM to their customers, and so maximise the return on investment and get buy-in from customers for future sales and product enhancements.

Conclusions

The example studied in this article clearly illustrates how the assumption that CRM and service management and provision are unique areas of responsibility in the business environment needs to be re-examined. There are a number of different areas to consider when developing end-to-end customer solutions. However, the three key points are:

• CRM and service management processes should be integrated.
• Different toolsets specialising in each area are perfectly workable if the processes have been established to enable application touch points.
• Consider maximising the return on investment by not replicating data and workload across the business by integrating your solutions.

At the end of the deal as a customer would I be prepared to deal with Hi-Fi X again? That depends on them sorting out the service management and corresponding CRM to manage me effectively as a customer!