Chapter 23: Relationship Management

Richard Hochhauser

Overcoming Misconceptions and Customer Relationship Challenges

There is a phrase, relationship management, which is also often called customer relationship management and has the initials CRM associated with it. I prefer to use the first term because an organization could be focusing on GRM (guest relationship management for the travel industry), or DRM (donor relationship management for the non-profit industry), PRM (partner relationship management, for business-to-business marketing), or other client-specific terminology. So relationship management lets you encompass all of them.

During the past five years, we've seen the rise and fall and rise again of relationship management. First, it flourished as a discipline and as a way to organize an enterprise. Then, as an investment, but with no clear-cut vision as to where success would be measured. And now, it has returned, with return on investment (ROI) being the very necessary component, as well as a focus on metrics that seems to have eluded the earlier relationship management tryouts of some businesses.

The biggest misconception about relationship management (RM) is that it is a software buy: buying technology suffices and delivers RM success. However, there is a great deal more to achieving profitable customer relationships than buying technology. Courage is sometimes required to align an organization's objectives and a customer's goals. Profits and customer relationships need to be in sync, and the payback gap is often longer than people may think or plan for, partly because the upfront work - planning, defining objectives, understanding measurements and deliverables - may not get done properly, if at all.

Building enterprise-wide buy-in is one challenge when implementing a relationship management system. The department with which a project is most closely involved is not necessarily the only department in the client company that has an interest in its implementation and success. Other departments may have some level of very real input into the project, such as the sales, marketing, customer service, c-level executives, and the IT [information technology] department.

Sometimes there are political or power struggles between these departments, which seems so silly since the RM is built to help all of them. Regardless, and no matter how much two or more departments don't get along, it makes sense to get the perspective and buy-in of every department that touches the relationship.

To deal with disparate data sources and legacy systems, and to assure data quality in every step of the build and execution, all of these departments must be involved as each owns a different piece of the puzzle. The concept of "garbage in, garbage out" has buried many database and RM systems. In addition, unrealistic measurements of success are also a challenge in dealing with customers, and these measures will vary depending on where in the organization the questions are being asked.