The original article was published (in Romanian) in Business Magazin, #9/2017
CRM Is not a German Opera Aria
— The market is in decline, that’s the truth! We don’t know what we’re going to do. We’ll just survive.
Andrei hung up and leaned back on the chair, rubbing his eyes, tired. It was the usual call he received at the beginning of each week from his partner and financer. Over the past months, he had been analysing the activities in the firm and he had implemented changes, which proved to be very positive. Among these was the retechnologization of the assembly line: the impact had been spectacular. But now, nothing seemed to work: and the explanations he came up with seemed more and more pathetic.
The business had started well, only one year before. An intuition (his friends had called it a flash of genius) had made him notice a service and product niche, uncovered by the main players on the market; he designed a unique “packaging”, the funding came almost immediately and, soon enough, the money started to flow. However, the competition had a prompt comeback and, only 10 months later, the battle was tough. And now it seemed lost. The latest sales report, though positive, confirmed the decreasing tendency of the last trimester. Two more equally bad months and the business would have gone into a dead end with no way of getting out.
He had a busy day: a management meeting in the morning, then the departure to London for a business meeting with strategic suppliers, and, in the evening, the partners’ invitation to the Royal Opera House of Covent Garden performance. That was precisely what he didn’t need now – opera. He had never liked it, it did not attract him. He thought of a joke he could tell his British friends: “I can’t get why the police won’t interrupt the performance, surely they heard women screaming for minutes? Not even the loud symphonic music could cover their screams.”
Predictably, the management meeting had not generated any solution for the setback they were facing. Surely, the investments in technology were beginning to pay off, the production pace was increasing and the quality proved better than ever before. No problem here. But he simply did not sell enough. The advertising campaigns, increasingly expensive, were not bringing more clients, while the pressure from the competition to keep the prices down was cruelly diminishing the profit. For the first time, he had taken a series of ruthless, but just decisions: he would not increase the budget for advertising, he will decrease it. And he would reinvest the remaining sum in marketing; however, he had no idea where precisely. On his return, he would decide with the Production Manager the first persons to face technical unemployment. As for the sales team, layoffs were about to be carried out. All of these cutbacks would have assured the functioning of the company for months, but the future still looked dark in the absence of a long-term solution.
As usual when travelling abroad, his gloomy thoughts faded away. He did not know why. Maybe the change of scenery made him change his mood or simply the contact with his British partners’ environment inspired him; the fact was he felt good every single time.
Nevertheless, this time, the meeting with the suppliers did not work out as well as it used to. The number of orders was in decline, the payment instalments he was trying to negotiate were larger and harder to obtain. However, even worried, his partners had not changed their attitude towards him, but seemed more curious than ever to know the nature of the problems he was facing. Furthermore, William, his account manager, was providing him with all sort of information related to the industry, particularly from Eastern Europe. The overall growth of the market he was active in was indisputable. And the information was real and very concrete, confirming what he had read and not quite believed in the market study reports*.
Surprisingly, the opera performance impressed him the most. He had never ever imagined he would like it that much, not to mention that it was a relatively modern piece, Der Rosenkavalier by Richard Strauss. He was congratulating himself on not revealing the joke he had thought about in the morning and which seemed to him harsh now. Moreover, it was not only the music that fascinated him, but also the fully booked 2,400 seat auditorium. He had been expecting an old, mature audience, and the diversity he saw in the hall raised some questions for him. The Royal Opera offered more than just a good performance. The bars and restaurants in the building allowed reservations and orders of meals that one could eat during intervals. And the terrace of the theatre offered a wonderful view of central London.
He decided to repeat the opera night experience one month later, during his next visit, when he invited William to a ballet performance. The English National Ballet had a stunning show, Giselle, and the leading ballerina was Alina Cojocaru, about whom he discovered she had a legendary, worldwide reputation.
The process of online booking premium tickets proved to be a simple process, even though it was not limited to strictly one transaction, and the marketing questionnaires were not intrusive, but rather interesting. By filling them in, he felt the need to answer the questions enthusiastically, just because he had a good experience the other night. Once he returned home, e-mails about the Opera future productions started coming in. They were interesting and their frequency did not make him mark them as spam.
While discussing with William about the Opera audience and while searching himself for answers to obvious questions, he soon reached an interesting conclusion concerning the diversity of the public. He had noticed 2 large categories: on one hand, the youth, at their first experiences, drawn by the fancy advertising of the theatre; on the other hand, the mature audience, loyal due to its passion for music and also due to the strong communication with the theatre. The experiences could be different, but the satisfaction was the same. Wasn’t this the same model as in a business market? The clients are like the spectators: some are recent, others are older, constant and knowledgeable. The relationship with these clients is essential.
He started to analyse his theory and he soon discovered that he was on the right track. Indeed, his sales team rarely used to reach to an older client in order to create loyalty. The business’ initial pace was galloping, so the conquest of new markets seemed more important than the consolidation. The advertising was only part of the solution; it was so very clear now, during difficult times, that the relationship with the clients, like any other relation, needed to be cultivated. Conducting researches, asking and discussing around, he discovered that instruments aimed at strengthening this communication existed. He recalled that account managers from different firms, including the competition, complained about filling in some data in ”CRM”, but he had never been curious to find out what it meant.
A semester later, the results were spectacular – the market position was dominant, and the older clients’ requests hit volumes he had never dreamed of**.
Indeed, implementing the CRM had been a success*** and this was not only the result of an efficient software and a skilfull implementation consultant. After all, many firms had done exactly the same thing. The fact that the system was working was due, firstly, to his belief that it was a necessary project, with sustainable and measurable results. Therefore, he had the patience to explain to the sales force that it would not be only a monitoring instrument, but also one that would drive profit. Even though he put more effort into it than he had planned, the project was rapidly implemented and with almost no hassles. The transactions volume had a spectacular raise, and the sales volume to new clients remained constant, as always.
This was the moment when the employees passing his office started to hear soft opera music every day.
* Most CRM implementation initiatives began in 2009-2010, during the economic crisis, which demonstrates that, in fact, CRM has proven to be an attractive solution for banks that have shifted from attracting new clients to retention of the existing ones, as a result of harsh conditions on the market.
** Our study shows that most implementations last for 6-12 months especially if we speak of medium-sized banks and implementations of several isolated modules. On the other hand, when we look at several very large banks we can find implementations which last for up to 4 years.
*** The key success factors of CRM implementations are: internal human resources (64%), external consultants’ support (56%), quality of the technical solution (45%), change management capabilities (36%), system customization (36%) and financial resources (18%).
Sursa: Ensight study: “CRM in the Romanian Banking System”