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CRM: The Bumbling Continues

Don't put the technology ahead of the marketing

CRM: The Bumbling Continues

Recently, I was consulting with a large casino company that was preparing to open another huge gaming property. At its existing properties, the company was still grappling with the typical problems associated with customer data analysis-low levels of carded play, outdated customer contacts, inability of legacy systems to talk to one another, problems with data integration, and the like.

Despite these problems, the company decided to sink a few million dollars on customer relationship management systems for their new property. By the time I got on the scene to resolve some other marketing issue, it was supposedly too late to reverse this decision. All I could do was to see if the company’s “people side” of the CRM equation was in place.

To assess the situation, I gave 20 key executives a “CRM-Readiness Survey” to fill out, seeking information on how well-defined the customer base was, the relation of employee performance to customer satisfaction, and other factors.

Normally, there is a tendency among top executives to over-estimate the performance of their company when it comes to issues such as customer orientation and customer satisfaction. Discounting this upward bias, I have found that companies that do a good job at customer relationship management and customer retention typically score above 75 percent on my survey instrument. In this instance, the mean score was 58 percent, well below what is adequate for a company to be considered “CRM-ready.”

For this company to be considered a serious contender, substantial work would be needed by way of change management. Change management here would have required an overhaul of the company’s culture, processes, organization and systems, a task that would have taken a minimum of six months to complete in the hands of a competent consultant and with motivated executives. I conveyed this to the client.

In response to my suggestion, the client wrote, “With regards the CRM recommendations, while I agree we may not be as ready as we should be, we simply cannot delay the roll out of the technical systems while waiting for the people skills to come up to speed.”

I would have also liked to have reported that such a response is atypical; unfortunately, this is more the norm.

The fascination of casino executives with CRM software and hardware in absence of CRM-specific skills and capabilities within the organization defies explanation. Would you invest $300,000 in a Ferrari 430 or even $40,000 in a BMW 135i convertible for your son and have the car in your driveway before he even knows how to drive? Would you rather not have him take some driving lessons, gain some road sense, and get his early experience in a beat-up Chevrolet instead? Or would you say, “I simply cannot delay the delivery of the Ferrari while waiting for my son’s driving skills to come up to speed?”

Cutting-edge technology is never a panacea for a poor customer experience. I have said this many times before and I will say it again: The technological requirements of most casinos desirous of practicing CRM are fairly modest-in most cases all you will need is a good email program, Microsoft Excel, and the standard SPSS package. Investing in state-of-the-art CRM systems is not going to crate customer delight, and it is not going to triple your theoretical win overnight. At best, technology allows you the capability to optimally execute your CRM strategy. Technology cannot define the strategy for you, let alone execute it.

Before investing further in CRM-related gizmos, executives should ask themselves if any stock has been taken of the customer-relating activities already in place, and whether there is sufficient alignment across these activities. Customer relationship management does not always mean multimillion-dollar data houses and the latest in data mining software. Logs of customer emails, the “black books” of casino hosts, and customer interactions at the call center are also significant CRM enhancers.

Prior to CRM capital expenditure, senior executives need to explore what else they can do to further their customer relationships without spending an additional cent on technology.

CRM has three pillars-people, processes and technology. Unlike a stool, however, each pillar does not equally share the load of CRM activities. Based on my experience, successful CRM requires 65 percent of effort to be devoted to people issues, 20 percent to process design and re-engineering, and 15 percent to technology.

The pro-technology bias in CRM frequently leads to someone in IT becoming the CRM champion for the organization. I have worked a lot with IT executives and have tremendous respect for them. Unfortunately, in most casino organizations, very few IT executives have ever seen a customer in flesh and blood, let alone interacted with him.

Having an IT person head CRM initiatives is like making the architect who designed your hotel building its COO. IT executives can create the infrastructure required for successful CRM; they seldom possess the experience or knowledge to design cohesive CRM strategies.

Change management, the heart and soul of virtuous CRM, should never be short-changed. For sure, change management is painful, even terrifying. It takes a significant amount of time; it can be expensive. Company culture often needs to be drastically altered, people’s long-held assumptions need to be challenged.

But these are significant ingredients in the CRM recipe. They create the platform for strategic orchestration of the customer experience. Technology, for the most part, can tell you what your targeted customer desires and the way he or she behaves. Your people and processes make it possible to utilize this knowledge to consistently delight the customer and maximize her lifetime value.