The customer connection: armed with the knowledge that customers hold the key to their companies' success. CEOs are embracing customer relationship management as a valuable consumer science - Innovation & the Customer - chief executive officers

Chief Executive, The, June, 2002 by Molly Rose Teuke

"We see a lot of middle-management executives who are scared of taking a chance, scared of someone above shooting them down and scared of losing their jobs," Feinberg continues. "The pressures for short-term gain are enormous, but this is a competitive business strategy in the 21st century, and you're going to have to do it to survive."

"The stakes in getting it right are very high," agrees Freeland. "The success stories are fewer than the number of organizations that have tried to do this, but most shareholder-driven organizations don't feel they have much choice. In the long run, successfully executing a strong customer-centric vision is going to have the single greatest correlation to shareholder value creation."

The customer's champion

Organizational alignment is fundamental to making innovation possible. It's also one of the toughest aspects of CRM. It means making sure every player -- vertically (in product and service lines) and horizontally (across support functions) -- is focused on what attracts customers and what will ensure they'll keep coming back. If the brand manager who positions the brand has little to do with the customer service group that is on the front lines with the customer, any shot at capturing customer loyalty is undermined. "When that happens, the value proposition of your company becomes very hollow," Freeland says. "You can position your brand, hut the first time a customer checks into your hotel and the fulfillment process is inconsistent with the promise, you've damaged the customer's perception of value."

In most organizations, Freeland adds, the power base resides in product silos, and there's little motivation to change at those levels because it can mean giving up turf. Yet innovation works best when every link in the value chain -- from product development, marketing and sales, and customer service to every front-office and backend business process -- is consistent with the brand positioning, and every customer interaction reinforces the promise of the brand.

A growing number of companies are establishing an executive-board-level position for CRM, someone whose job it is to lobby for the customer and make sure customer needs and desires remain paramount across the organization. But such a role can be a hard sell. "What company wants to admit to needing a champion for their customers?" asks Gartner's Close. "But it's important, because it's how they will attract, retain and develop loyal customers." Two years ago, fewer than 10 percent of companies had a "chief consumer officer" or similar board-level position, she reports. Today, it's 40 percent.

Technology is another ingredient in successful CRM alignment, but this aspect of CRM, perhaps above all others, is fraught with peril. When CRM first emerged, technology was, for many, the visible, definable touch point. Companies lurched into IT implementations and spent vast sums on data warehouses, but few recognized one of the most critical ingredients: deployment of the data in meaningful ways to the internal players who need it. "It was a matter of putting the cart before the horse," Freeland says. "It's easier to spend money on technology and harder to define how this is going to help me create value with customers."