CRM vs. Call Centers: Whose Fault Is It?

The marriage between CRM and contact centers hasn't exactly turned out the way one would have wanted or expected.

The global contact center industry is estimated to be worth some $130 billion annually. And one recent survey found that organizations are simply not all that jazzed about the value of Customer Relationship Management (CRM).

The 2008 Datacraft / Dimension Data Global Contact Center Benchmarking Report, which includes survey responses from 300 contact centers in 36 countries across five continents, found that "only a minority" of contact centers have established CRM practices and capabilities.

Weren't we all supposed to be beyond this by now? Wasn't CRM supposed to be a given for contact centers, a slam-dunk no-brainer?

Or is the problem maybe with the… other half of the relationship?

Karina Majid, Datacraft Asia's General Manager for Customer Interactive Solutions, noted sadly that only "minimal" progress has been made in adopting a more customer-oriented, CRM-based approach within the contact center environment over the last 10 years.

"When we compared this year's findings with those from our inaugural 1997 Report, the picture is not positive," she said.

Ten years ago, according to DDD figures, 39 percent of participating contact centers possessed a single view of the customer, an accomplishment showing you're at least somewhat serious about CRM. About 45 percent of centers planned to implement a single view within the following two years.

But this year's study found that the percentage of centers with a single customer view has actually dropped five percent, to 34 percent.

That's not the way the line on the graph's supposed to go, people. Assuming, of course, we're talking about real, gen-yoo-wine CRM here.

In 1997 many organizations stated their intention to deploy a more sophisticated set of customer metrics within their contact centers, including the usual shiny suspects -- customer lifetime value and profitability, et al.

However, this year's statistics show that contact centers able to measure or actively employ these types of metrics are in the minority. "For example," study officials said, "less than 10 percent of centers surveyed have the capability to measure lifetime value, and only 18 percent of centers use customer profitability as a metric."

Overall, "these findings indicate that the development of a more holistic and sophisticated approach to customer management is less of a priority than it was 10 years ago," Majid said, blaming what she calls a "back-to-basics trend," with contact centers "focusing more on basic performance efficiencies and cost reduction."

Hey, fair enough, this reporter's all for performance efficiencies and cost reductions. But wasn't that what CRM was supposed to do? Opting for "performance efficiencies" and "cost reductions" over CRM is like opting for "reliable transportation" over a 1963 Dodge Dart -- it tells you exactly how CRM and 1963 Dodge Darts are viewed.

The DDD study found, in fact, that only 16 percent of participating centers ranked "creating direct customer relationships" among their top three commercial drivers, compared with over 50 percent 10 years ago. That's what we call a "drop."

So what do contact centers value? When surveyed, 38 percent of contact center managers polled by the DDD survey believe that "a contact center agent's ability to resolve a query during the first call" is the most important factor in service improvement. Fully 74 percent rated it in their top three.

Aha.

Relax, CRM. It's not you. It's call centers. As Beagle Research's Denis Pombriant observes, "I'd bet that the survey is skewed toward low wage countries. That's important because I expect a lot of bad management habits are causing the problems the survey surfaces."

Such as? "Rigid time management. Rather than working on providing customer solutions call centers are focusing on and measuring time -- time in queue, time on the call. Nothing wrong with that, but in addition you have to solve a problem. No solution and all your metrics turn to sand," Pombriant notes.

There's also the factor that people are inexpensive in those markets -- "which is why call centers located there," he says. "Unfortunately, low costs breed bad habits in call center operators, like 'my way or the highway' management -- do it exactly as you are directed or we'll get someone else who is more compliant. That's not CRM, that's an indicator that management is trying to keep costs down by using largely finance-oriented metrics."

CRM guru Bob Thompson noted that the main issue is business leaders looking at call centers "as a cost of doing business, not as an investment in their customer relationships that will pay off in increased loyalty and retention." In other words, cherrypicking CRM just for the fun, slash-costs stuff, ignoring the other aspects and claiming you've implemented CRM and that you really care about providing a superior customer experience.

Saying you're "doing CRM" when what you're doing is trying to control costs is like saying you're "campaigning for President" when you're really just tossing the occasional scrap to a fawning, captive press in front of carefully selected adoring audiences, and counting on the media to airbrush out all the warts. Which never happens in reality, of course. Bad example, sorry.

Thompson isn't even "sure I agree that that there is a 'dismal state of CRM adoption' in call centers. Our research find that companies are making steady progress with customer-centric business management. It takes time for strategic changes to be adopted, involving people, measurement/reward systems, processes and technology."

Contact centers still do, in fact, rely on the standard efficiency metrics, Majid said, noting that "abandon rate is the most commonly used target, with 90.1 percent of participating centers using it as a key metric, while only 63.4 percent of centers use First Call Resolution as a performance target."

Referring to Majid's quote above lamenting that only minimal progress has been made in adopting a more customer-oriented, CRM-based approach, Pombriant says "CRM is failing because call centers aren't really implementing CRM, instead they are using CRM as a defensive shield to fend off customers.

The results, he notes acidly, are "exactly what you'd expect."

Article originally appeared in the author's TMC archive.