Tuesday, November 13, 2007

CRM - Customer Relationship "Management" Is a Myth

Now that Peter F. Drucker has passed on, I feel almost duty bound to share some of his insights with you, little observations, pointers and gems that simply aren’t in his books or popularly known.

I had the pleasure of studying with the management sage for two and a half years. Much of the MBA I did at the Drucker School of Management, named in his honor, in fact, was in classes with Drucker, himself.

And I had the pleasure of serving as his informal chauffeur on Saturdays, when many of our classes met.

So, we talked.

He was fond of admonishing us to “invest in the customer” and specifically, to “invest in the customer relationship,” because it is one way to get clients to select and to prefer us, a very valuable habit.

But to my knowledge Drucker never called the process customer relationship MANAGEMENT.

In fact, on many occasions he said relationships are fundamentally UN-manageable.

His fondest example was one’s family. He said, “You can’t apply management principles to your family; they won’t work.”

When I told him about the arrival of my first daughter, he reminded me of this notion and then asked: “Is she ruling the roost?”

“Yes,” I replied, “She has us all at her beck and call.”

“That’s the way it should be,” he beamed.

If you’re managing a person, you probably have something different than a real relationship, like an employment contract, or some other sort of business commitment or alliance.

But interpersonal relationships have their own dynamics. Power, for one thing, is shared. We cannot order a customer to come back and buy again, just as we can’t order our relatives to love or respect us.

We can use persuasion, guile, charm, guilt, and incentives, but we can’t MANAGE that outcome as we can manage a salesperson, say by telling him he has to hit his quota this quarter, or hit the highway.

If we aren’t managing customers what are we doing?

We’re NEGOTIATING relationships. There is give and take, concessions are made, and equities are balanced out, if not in the short run, then in the longer term.

All of this is fine, you might be thinking, but what practical difference does it make if we call it CRM or CRN, for negotiation?

Management is a term that signifies superior power and resources.

When we interact with customers we are facing the opposite of being in power. We’re relatively powerless, providing we’re operating in a competitive marketplace.

Customers have choices. They can more readily and inexpensively say “no,” and walk away from a deal.

When we consider customer transactions and the residue of doing many of them, it would be more advantageous to see our counterparts as ongoing negotiation partners, but never as friends, peers, or family.

In non-business interpersonal relationships, the whole is greater than the sum of its parts; in business, there are only parts, no enduring “marriages.”

The sooner we straighten out the otherwise mystifying rhetoric ushered in by CRM, the better off we’ll all be.

Dr. Gary S. Goodman is the best-selling author of 12 books and more than a thousand articles. His seminars and training programs are sponsored internationally and he is a top-rated faculty member at more than 40 universities. Dynamic, experienced, and lots of fun, Gary brings more than two decades of solid management and consulting experience to the table, along with the best academic preparation and credentials in the speaking and training industry. Holder of five degrees, including a Ph.D. from the Annenberg School For Communication at USC, an MBA from the Peter F. Drucker School of Management, and a law degree from Loyola, his clients include several Fortune 1000 companies along with successful family owned and operated firms across America. Much more than a “talking head,” Gary is a top mind that you'll enjoy working with and putting to use. He can be reached at: gary@customersatisfaction.com

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