08/03/22CRM & Customer Orientation 2022 – Time for a Paradigm Shift?

CRM as a successful corporate strategy needs a paradigm shift, proclaims Georg Blum, CRM expert, university lecturer and managing director of 1A Relations GmbH in his CRM-Manifesto. Drawing on a profound wealth of knowledge and more than 30 years of experience from his time spent consulting with more than 100 companies, he talks to us in this interview about the necessary changes companies have to consider when designing successful customer relationship management.

customer orientation 2022- Georg BlumMr. Blum, what has happened in customer relationship management? Has the perception of working with customers changed?
Yes and no, not much has changed in terms of building personal customer relationships. Even in the past, customer relationships were managed correctly and intuitively according to the "corner shop principle". It refers to the fact that the corner shop owner knew their customers personally, remembered their preferences, maintained personal contacts and was always able to make individual product recommendations. Even today, the "digital corner shop principle" is a success factor for the best customer relationships. Knowing your target group and conveying individual service authentically are the decisive factors. Companies that live customer orientation intensively today, used to be product-, market- and competition-oriented, only to discover that it is not the competition that is the focus of entrepreneurial thinking, but the customer. It is a question of how I position myself as a company and what self-confidence I show, for example, in pricing. Here it is important that the "customer value" (from the company's point of view) and the "value to the customer" (from the consumer's point of view) are in balance and that positive experiences are created for both the customer and the seller. In other words, authentic customer focus is created automatically when the aspects of personalization, identification and differentiation are taken into account in customer care.

Authentic customer focus – how is that supposed to work in B2B and mass business?
Not every business model enables close and personal customer contact, and the many possibilities of the digital world make individual customer communication more difficult. This is where the automation idea comes in: to create customer proximity via existing data and with the help of technical means. Some messages work digitally and can be effective. But automation can also be counterproductive, for instance, whenever the recipient gets the feeling of being just one of many. To avoid this, it is important to be as individual as possible, even with automated communication. Personalization, individualization and differentiation are the success factors. Today, modern tools make a lot possible, for example, taking persona models into account or with the help of AI (Artificial Intelligence). However, we should not forget that the basis for such automated communication is well-maintained data. Often, at the start, just 15 variables are enough to create a sense of customer focus and a feeling of individualization. Couple this with making personal contact at just the right time, which convinces and inspires, and you have a winning formula. It would be a mistake to only think digitally. It is just as important today as it was in the past, to make customer focus authentically tangible and this is also just as valid for face to face and telephone interactions.

Will customer relationships continue to change? Where is the journey heading? What do companies need to prepare for today?
"Wake up your HR department!" – Customer experience and user experience are becoming increasingly relevant and should always be kept in mind. Companies should restructure themselves procedurally, culturally, collaboratively, technically and organizationally and train or empower their employees with regard to customer orientation. Managing directors and executives must give their team decision-making freedom and create trust in order to establish self-organizing customer orientation within the company. What this means, is that every employee should be responsible themselves for making customer-oriented decisions intuitively and without prior approvalCRM is a mindset that has to be lived. To do this, it has to happen quickly, without long queries and hedging. It requires a change in organizational form and thus new positions, new roles, new goals and usually, new company capabilities. The first step is to change the corporate culture, and the next step is to introduce digital tools such as CRM that support their vision. CRM solutions that help employees in their (eventually) new roles, help to make their day-to-day work more efficient, intuitive and customer-centric.

Are new tools, digitization and technological developments like AI the solution?
I always say: The software can do it, but it is more important that the customer-oriented culture is anchored in the company. So no, digitalization is not the solution. Digitalization serves and supports customer orientation. It is clear that digital tools help to gain more freedom for both personal and individual customer care. A CRM solution is an indispensable tool as a digital assistant in everyday work in terms of accessing customer information quickly, transparently, and in compliance with GDPR, as well as for providing the best possible service. That said, customer centricity is actually something that happens from moment to moment, when decisions are made with the customer in mind. After all, business is still done between people - and digitalization measures are of no use if the digital process only adds value to the company, but not to the customer.

You often take this a step further when talking about a goal- and customer-oriented form of organization which includes customer-oriented leadership management. What does that look like?
It is about breaking down function-oriented corporate structures, think about functional silos, and establishing a customer management organization with customer-oriented processes and goals. The orientation of every corporate measure should be based on the different target and customer groups. To this end, these should be differentiated from one another according to clearly defined rules. For example, new and existing customers have different interests and needs that must be met. In principle, everyone knows one aspect of customer management: key account management. The difference is that this principle runs completely throughout the entire company.

All customers and target groups are assigned to special customer management teams. These new teams use internal coordination to ensure that the measures proposed by the specialists from each of the departments such as marketing, product management or service are always performed in the interests of the customer. Not every specialist department has to serve all customers, but the customer management teams think and act in terms of the corresponding customer group. They act as an internal mouthpiece for the customer group, therefore preventing silo thinking on behalf of the individual functional departments.

One thing is certain, a company which aligns its processes and its entrepreneurial mindset with the needs of the various target and customer groups automatically achieves the personalization and individualization of products and services already mentioned above.

Do you already have experience with this new form of organization?
Unfortunately, there are currently only a few companies that live customer orientation in all its forms while placing customer loyalty in the foreground. The proof is in the pudding and the companies that have made the switch are showing extreme growth.

It is wrong to measure sales success primarily in terms of new customer acquisition and sales. In order to stand out from the competition in our transitory times, you simply have to tackle customer orientation and long-term business relationships - this saves resources, is more sustainable and contributes significantly more to the company's success.

Embarking on this path requires new leadership management including a new culture and a common vision: "If you want to change existing thinking, you have to destroy existing structures". Says Rupert Lay, Jesuit priest and management consultant. That is why I say there has to be a paradigm shift in companies.

How can medium-sized companies overcome the hurdles of organizational restructuring?
Radical decisions are never easy. It is important that the management group pulls together. Companies should conduct a pros and cons analysis: What happens if I realign my company? And what happens if I don't? This should also involve the entire team to sort through all the challenges. Asking simple questions such as, what should we change to be even more customer-oriented? More often than not, this yields a goldmine of reorganizational ideas and it is vital that this inspiration from the team is used. After all, the entire organization is being changed or realigned. This gives HR a very important role, it must accompany employees on the path to their new roles and responsibilities as well as strengthen and enable competencies for new tasks.

Shying away from change is not a viable option for the future. Overcoming these hurdles is possible if you set off courageously with a clear goal. We all had to learn to run and we all did it - it is worth it in the end.

So in conclusion: When is the CRM corporate strategy most successful? And what advice do you have for companies to enable them to reach their Olympus of customer centricity?
The vision and the goals set the direction. In addition to customer focus, involving employees is just as important, because employee loyalty is customer loyalty. Do not go it alone, but rally your team and sail off together. It is very important that you release and transfer responsibility for customer-focused work to your employees. Do not separate marketing, sales and service, but align yourself instead with target and customer groups - break down silo thinking. Do not be afraid to establish new positions in the company and eliminate unnecessary ones. Always have the customer benefit in mind in all your digitalization measures. In addition, do not think that just by implementing CRM software your company will immediately become customer-centric. Because the CRM software is only a tool that supports the implementation of the strategy (operational measures). A congruent customer-oriented corporate strategy or corporate culture, lead to absolute top performance, because the customer comes first, it is not about internal efficiency. When all is said and done, CRM is more than just software – it is a mindset.

Finally, if the vision is clear throughout the company, then everyone can contribute to the best customer relationships and help to drive sustainable business success. CRM as a corporate strategy is most successful when it has permeated through all aspects of the company.

Find out more about the customer management organization:

Download CRM-Manifesto by Georg Blum

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