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Successful CRM is about customers - not software

Despite their continuing growth, fashion and popularity, the horrendously high costs and failure rates of Customer Relationship Management (CRM) system implementations have been well publicized this year. CRM is, or should be, the process that enables organizations to build long-term profitable relationships with their customers. As software vendors and IT consultancies have been the main drivers behind CRM’s growth over the last eight years or so, the term is often applied to the software alone.

Automating problems doesn't make them go away

We believe that this fixation on software systems and their implementation is in fact one of the major reasons why CRM implementations fail to deliver on their promises. As we explained in one of last year's editions of our ‘Customer & Partner Briefing’, expensive and complex CRM systems all too often only serve to automate problems in the company’s focus, organization and communications, and the investment would have been better spent on solving these.

Success stories

Of course there are also success stories in the implementation of multi-million euro enterprise-wide CRM software implementations. These are usually found in very large and complex, often multinational, corporations with many divisions and offices, hundreds of products, thousands of employees and millions of customers. And the successful implementers will certainly be corporations who already fully understand that delighting their customers is as much their raison d'être as delivering shareholder value. Ultimately, those objectives are always complementary.

Mutually positive customer and supplier relations

You’ll have guessed by now that Oake Communications doesn’t supply complex CRM software systems, and you’d be right. However we do advise our clients on developing and nurturing mutually positive and profitable relations with their customers and suppliers. In fact, the central element of all CRM and Supplier Relationship Management (SRM) systems is a relational database which records and facilitates customer and supplier communications and details customer profiles. We design and implement bespoke database systems at No.23 for our clients that serve these and other functions – a description of this service can be found through this communicating door, so we won’t repeat ourselves here.

Avoiding hype and acronyms

We’re passionate about customer service, technology that supports business objectives in practice, relationship communications and the frequently untapped potential offered by collaboration between trading parties. But we deliberately avoid the hype and

the acronyms. The actual products and services many companies provide are becoming less important than the way they treat their customers. We think it’s great that customers now have more choice and power. Many companies are still making the mistake of thinking that SRM technology alone will cut their purchasing costs and that CRM technology alone will deliver more profitable sales.

You are your suppliers' customer and your customers' supplier

They forget too easily that their suppliers see them as their customers and their customers see them as their suppliers. We believe the trading participants of many ‘value chains’ are actually losing value for themselves by trusting in CRM and SRM systems in an attempt to increase their profits at their trading partners’ expense. The only group that ultimately gains in this scenario are the buzzword software vendors, in the same way that lawyers are often the only group to ultimately profit from litigation.

Receiving and delivering value

Two key mistakes can be avoided here. The first: believing IT salespeople when they tell you that relationships can be, or even should be, “managed”. Whether between customers and suppliers, employers and employees, husbands and wives, parents and children or friends – fruitful long-term relationships are built on mutual trust and respect. The second: you don’t build a successful long-term relationship by one party trying to extract as much value as possible from the other. Containing or lowering operating costs and maintaining or increasing revenue and margins are obviously sensible objectives, but they’ll only be achieved over the longer run when businesses understand that successful customer and supplier relations are about exchanging value – receiving and delivering.

Communications to build collaboration

The loyalty upon which customer retention depends is built by the value the customer receives. This value depends on the quality of the products and service provided, but also to a very great extent on the quality of the relationship’s communication. The same applies to developing successful relationships with suppliers and business partners (yes, you can buy PRM systems, too). Collaboration is what makes these relationships work, and high-quality, effective communication between the parties is key to developing, maintaining and enhancing that collaboration. Providing consultancy and purpose-built communications media, we enable our clients to successfully communicate the mutual benefits accruing to all parties who collaborate effectively in the value chain. Using the channels which new technologies provide to exchange well-crafted communications, suppliers, providers, partners and customers can develop ‘virtuous value circles’.

Contact us today so that we can arrange an initial discussion of how Oake Communications can help your company optimize its customer and supplier relations.

Customer and Supplier relations
Customer and Supplier relations
Customer and Supplier relations
Customer and Supplier relations
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