Readying the workforce for CRM

The stakes have never been higher for executives with "chief anything" in their titles. And if they have customer relationship management (CRM) in their job descriptions, it must often feel like a pure crapshoot.

Not that CRM isn't getting plenty of executive attention. Take any study you like, the predicted spending on CRM is astronomical: IDC says $60 billion two years from now; AMR Research says $17 billion.

But take a look at the results. For many people, they paint a picture of job insecurity. In a recent survey, only 20% of the respondents claim their CRM solutions increased customer profitability. Question: who's worse off -- the 4% whose customer profitability decreased or the 63% who couldn't tell?

But that's not the real question. The real question is: Why are we getting so little after trying so hard and spending so much? The germ of the answer can be found in a report by Saddletree Research: "Workforce management software, which enables efficient scheduling of multiskilled agents ... has become a high-profile market segment as the value of human resources in the evolving customer care industry has continued to increase in importance. It is expected to grow at a compound annual growth rate of 74% through the year 2004," according to Saddletree Research. (Business Wire, Feb. 6 -- our emphasis added)

More and more, companies are remembering what their customers and shareholders never forgot: The workforce has a profound influence on customer satisfaction, loyalty and profitability. Sure, IT is vital in terms of enabling the workforce. But while customers have a big appetite for sales and service innovations, they also take them for granted. "Twenty-four-hour telephone access to my account? OK, thanks. Web site with full interactive capabilities? Nice, I'll use that, too. Keep it coming. Oh, by the way, I still want to visit your store -- don't you have one closer?"

In fact, the workforce matters now more than ever in terms of influencing customer behavior. After all, if busy customers can take care of most of their transactions electronically, it stands to reason that when they take the trouble to seek out a personal interaction, they need a knowledgeable, informed and empowered individual.

And yet, as one of our clients ruefully acknowledged to me, "We spent the past few years dumbing down the workforce, hoping that we could get the job done with better information and technology."

So now, the best companies in the world are acting on the growing and indisputable evidence that the key to increased customer profitability is an enabled workforce.

In an article subtitled "Online banking is finally succeeding, thanks to an added ingredient: people" (again, our emphasis), The Wall Street Journal (Feb. 12) noted: "Citibank folded its Internet-only bank into its older Citibank Direct Access service, which offers customers Web access as well as access to branches. ... Juniper Bank, an online start-up, lets customers make deposits at thousands of Mail Boxes Etc.'s locations."

"The traditional firms have done such a great job integrating the Internet into their model that they've basically relegated a pure e-broker to being a high-tech deep discounter," says Richard Strauss, who follows the securities industry at Goldman Sachs. "There is a flight to advice right now," adds Bob Sloss, executive vice president and director of marketing at Morgan Stanley Dean Witter. (The Wall Street Journal, Feb. 13)

Online-only companies are also catching up. ETrade, an icon of the IT-driven enterprise, is opening new physical branches to increase customer profitability.

It's easy to see why companies are once again concerned about the workforce. The American customer satisfaction index confirms that customer satisfaction dwells at rock bottom, below 1994 levels. The plunge is ironic, as it has paralleled an explosion in customer information and technology intended to create just the opposite effect.

Companies bent on improving service adopted exciting new technologies to enforce new process and disciplines -- to make them operate more predictably and efficiently, if not more wisely. Accidentally but inexorably, management found the technology more appealing than the workforce -- easier to buy and install, always motivated, works three shifts without breaks and scales faster. Inevitably, management's overdependence on technology dumbed down the workforce, muting its initiative, draining its energy and diluting its accountability.

According to Xchange's research with Bank Administration Institute ("Survival at the Front Line: Best Practices in Building a Sales Culture"), 49% of frontline managers surveyed feel their sales goals are unfair, 50% say management isn't actively involved in developing a customer-focused organization and 78% feel pressured to sell beyond customer need. An aggrieved workforce is serving an expectant but perennially disappointed customer base.

But we are observing a return to an equilibrium that will profit all three interested parties: customers, workforce and shareholders of the enterprise. Now companies are struggling to match their gains in customer IT with a workforce better enabled to maximize it.

Our client Terri Dial, longtime head of retail at Wells Fargo in California, says it best, referring to our workforce empowerment initiative in their Los Angeles market: "It seems to me we are now living an interesting retail banking paradox. At no time has our success depended more on managing to a system or a process, which is generally seen as constraining and limiting personal choice/action. Yet paradoxically, our success also depends on liberating information and marketing. If you think about what we are doing in Los Angeles, it is a good example. We are demanding that marketing follow a well-defined process with a well-aligned system. Yet we've liberated customer information and local sales and marketing like never before. I find it exhilarating."

And so do the workforce and the shareholders. And so would chief whatever officers searching for a return on their CRM investments.

Robert Hall is executive vice president and general manager of the Enact Business Unit at Xchange Inc. in Boston.

The company's Xchange EnAct solution, deployed at financial institutions around the world, combines software, consulting and methodology for customer value management. Author of The Streetcorner Strategy for Winning Local Markets, Hall can be reached at rhall@xchange.com.