How to Make CRM a Competitive Weapon in Business?

At the sideline of the conference “Customer Relationship Management (CRM) as a Major Competitive Weapon in Business” recently held by CFVG in Hanoi, Vietnam Business Forum had an interview with Mr Frédéric Jallat, - Professor and Head of the Marketing Department at ESCP Europe (Paris) on  CRM  and how Vietnamese enterprises can implement it successfully.

 

As far as I am concerned, I would define CRM as an approach which is based on identifying, attracting and keeping the company’s best customers in order to increase its global profitability. As such, customer relationship and loyalty management are at the heart of the company’s strategy. Therefore, tools and methods which develop and increase these relationships are crucial for the company’s survival and expansion.

 

Perceived value is usually defined as a three-dimensional construct where, aside from objective or performance value and symbolic value or brand image and reputation, relationships play a major role in the differentiation strategy of the firm. As such, CRM is a systematic approach of what appears to be a main competitive and differentiation driver for the firm in a lot of hyper-competitive environments.

 

Vietnam is a country that goes incredibly fast not only in its economic development but in managing the competitiveness of its industries and companies. It seems to me that national companies in Vietnam are acquiring “state of the art” knowledge quite fast in many sectors. I am not really and deeply aware of the whole Vietnamese context and peculiarities of its environment but, to my knowledge, sectors like tourism, banking, airlines or retailing are sectors where the CRM approach is the most developed and well-managed in the country. A proof of that may be the recent inclusion of Vietnam Airlines into the Skyteam alliance -a move where Vietnam Airlines had certainly to prove its CRM capabilities beforehand as a strong prerequisite. I also encountered some BigC managers in Vietnam who already gave me quite a big impression on their CRM and pricing management competences.

 

Not setting CRM from the top could be a major failure to me: CRM is a strategic and transversal project that needs to be nurtured from the top. It is a political decision by essence that usually requests major organizational changes –among other things. If the organization is not customer-centered and processed in the right way first, it won’t work!

 

If not implemented from the top and driven by a truly customer-centered state of mind and culture inside the firm, the danger of implementing a CRM approach in the company may be that, at the management level, everyone will try to get the hand over the project. This may lead to potential organizational conflicts where some people will have a natural tendency to break the project instead of helping it to be successfully implemented.

 

Another very important factor is to find ways of educating and motivating people at each level of the company so that they understand that they will be benefit from the system instead of fighting “against the machine”. In many respects, CRM has much more to do with human resources management and people than with technology. Technology is just here to help a CUSTOMER RELATIONSHIP management to take the best possible shape. As a consequence, managers have to find ways of pushing their employees to use and constantly upgrade the customer data base of the firm. It usually requires explanation, education, performance measures, monetary and non-monetary incentives, user-friendliness of the system that will help them to build a real customer-orientation organization.

 

Last but not least, CRM may not become “the funniest toy” inside the company. Actually, some customers dislike to be systematically solicited. And companies must differentiate their CRM strategies along different customer segments in terms of their respective “relational sensitivity”. In short, too many can kill a well-balanced relationship. Use them with caution and true care.

First of all, Vietnamese enterprises can get a better and more suitable CRM through looking at the “best in class” international practices carefully. Then, maybe through contracting/partnering with international players in their respective sector (see Skyteam recent agreement as an excellent way for Vietnam Airlines to acquire/exchange information on good practices as mentioned before) and/or working with international consultants and CRM software companies... the only problem there being that they usually are quite expensive!