by David English

Sometimes you know something, but you don’t know it well enough. A portion of your mind understands, but the rest of your mind resists because it’s too hard to commit.

Everyone knows that customers are important, and every CRM book can quote, chapter and verse, how customers are essential to your organization’s success. That part is easy. The real challenge is taking the giant leap of faith and accepting the undeniable importance of being customer-driven. No half efforts, and no backsliding. In today’s competitive climate, either you move forward or you’re pushed aside by competitors more willing to take on the hard tasks.

If you’re looking for some old-fashioned, fire-in-the-belly inspiration, two books might encourage you to take up the good fight. Though their writing styles are different, both books zero in on the necessity—and complexity—of giving control of your company to your customers.

A fresh approach
Forget everything you know about your business. Now repeat after me: It’s all about the customers. Not convinced? Then take a look at Patricia B. Seybold’s The Customer Revolution (Crown Business; $27.50). This follow-up to the bestselling Customers.com delves deeper into Seybold’s dictum that companies must be customer-centric—or face inevitable extinction.

According to Seybold, a subtle shift has occurred over the past four years. “Economic power has shifted from suppliers to customers,” she explains. “Why? Thanks to the Internet, the Web and to other ubiquitous technologies, customers now have access to information that lets them make much more informed decisions. They are no longer willing to be ‘locked in’ to suppliers who don’t value their time or their patronage. Customers are now in control.”

You can find this same view in other CRM books, though Seybold’s book is better than most because it’s filled with useful examples, offers practical advice and isn’t written in a dry, pedantic style. Many CRM books set the bar so high, you feel defeated before you’ve begun. Seybold offers a compelling mix of real-world anecdotes and you-can-do-it guidance. For example, she reveals that Cisco’s CEO, John Chambers, spends 80 percent of his time in conversations with customers, and that every Cisco executive is required to spend 50 percent of his or her time face to face with customers.

Lest you think that your company’s employees would never agree to such a radical approach, Seybold argues that most employees want to be customer-focused. “Customer-centric companies have a much easier time attracting and retaining employees because companies that have a strong, unwavering, customer-focused culture are much more fun to work in than those with warring, product-centric fiefdoms. It’s much easier to make budget decisions based on customer priorities than it is to argue over product-centric goals and objections.”

What do customers want? Seybold lists a dozen demands that apply to most industries. These include open and equal access, real-time information, fair and global pricing, information portability and a choice of distribution channels. Part of the challenge for any business is to understand who its customers are. Some businesses target the wrong groups of people. “Pharmaceutical firms focus on doctors, not on patients,” explains Seybold. “Newspapers focus on advertisers, not on readers. Automobile manufacturers are obsessed with dealers, not with drivers.”

Case studies provide valuable lessons in how far some companies have taken the customer-centric ethos. Gateway has determined that its customers spend an average of $1,000 to $1,500 on a new computer, but those same customers will spend more than $5,000 over the next five years on software, Internet services, upgrades, peripherals and education. Snap-on has developed such a strong name brand among auto technicians and tool lovers that would-be customers routinely flag down company vans.

Seybold isn’t the first to point out the significance of customer loyalty, but she is one of its most ardent supporters. Her advice is well-reasoned and easily applied to a wide range of businesses. Her optimism in the Internet does seem a bit overblown, given our second-half 2001 perspective (the book was published earlier in the year). However, her meticulous research and detailed arguments are highly convincing.

Back to basics
Some books resemble quilts. They weave their arguments from a diverse mix of textures. Other books resemble tightly woven blankets. They follow a linear path that systematically encompasses almost every aspect of a subject.

Building the Customer-Centric Enterprise (John Wiley & Sons; $44.99) is an ideal example of this second type of book. Written by Claudia Imhoff, Lisa Loftis and Jonathan G. Geiger, it provides a roadmap of the ins and outs of CRM. Where Seybold draws loose circles around her subject, these authors are painstaking in their step-by-step approach. It doesn’t make for easy reading, but it does provide explanations that are far more detailed than you’ll find almost anywhere else.

For example, you may think you know who your customers are, but many companies misinterpret this very basic task. Telecoms often count customers based on the number of billing accounts. According to the book, “If multiple users are associated with one billing account, these additional customers may not be included at all. If an individual or company has several billing accounts, they may be counted several times, once for each account.” For some companies, a full tally of its customer types might include agents, beneficiaries, bill payers, households, competitors, employees, guarantors, prospects, referral sources or suppliers. Explanations and examples are given for each type.

Think you understand your company’s C2C (customer-to-customer) relationships? Using the example of Bob and his parents, the book explains how customer relationships can extend beyond a traditional household. Bob’s bank discovered the household relationship of his parents through a combination of a joint account ownership and a shared mailing address. “The organization must then understand how these types of relationships can influence the behavior of its customers.

In the case of Bob’s parents, the couple functions as a decision-making unit, which means that all key financial decisions for the household involve both parties.”

To the degree that Bob’s parents seek his help on financial matters, he becomes part of their extended household. Anger Bob with unreasonable fees, and the bank risks losing both his business and his parents’ business. By not understanding Bob’s relationship with his parents and assuming that his business is expendable (because he doesn’t do a lot of business with the bank), the bank could jeopardize its relationship with his parents.

With sections on defining customers, determining their importance and understanding their life cycles, the book provides information on implementing a practical and comprehensive CRM plan. For example: “Dealing with CRM requires both business executives and technologists to change their perspectives on what constitutes a critical success factor. When technologists build customer-oriented systems, they can no longer look only at traditional concerns such as resource constraints or technical skill sets. Similarly, when business executives implement CRM corporate strategies, they must broaden their view to include more than external factors or specific technology constraints.”

Building the Customer-Centric Enterprise is more textbook than page-turner. Its methodical style allows the reader to examine—or reexamine—almost every aspect of CRM. Even if you think you already know the subject, you’re likely to find new insights into the very concepts you thought you understood. T

David English covers new technologies from his base in Greensboro, N.C.
Photo by Bob Ponzoni