What is THE Key Goal for Managing Customers?

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What is THE Key Goal for Managing Customers?

Written by Leanne Hoagland Smith

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CRM is Not Enough: A Case for Action

Inspired by renowned hotelier Cesar Ritz, The Ritz-Carlton Hotel Company has long been recognized as a leader in product and service excellence.

While consulting for a large multinational corporation, a senior executive uttered the overused phrase, "We need to collect more data on the customer." With enjoyment, I sat back and listened to an animated exchange during which the executives suggested information they would like tracked through their CRM database. As the idea-fest began to wind down, I simply asked how leadership was using the information they were currently collecting to directly enhance customer experiences. Alas, the room went silent.

Compare that to the role of CRM at The Ritz-Carlton Hotel Company, where data is only as good as the action taken on it.

Inspired by renowned hotelier Cesar Ritz, The Ritz-Carlton Hotel Company has long been recognized as a leader in product and service excellence. Even though Ritz-Carlton has won two prestigious Malcolm Baldrige awards for service quality and maintaining a very loyal customer base, the company's leadership doesn't leave customer engagement to chance. Like many other great businesses, The Ritz-Carlton uses a CRM system. Coined "Mystique," The Ritz-Carlton database is used to track information such as guest preferences, frequency of visits and issues that have come up for guests during their previous stays.

While the data is helpful in understanding an individual guest's relationship with the brand, leadership measures the value of their data on how effectively staff leverage it to create ongoing, memorable and unique guest experiences.

For all the organizational initiatives directed at "putting the customer first," "driving customer loyalty" and "developing consumer evangelists," customer engagement remains elusive. In fact, according to NPD Group, a market research company, almost 50 percent of the consumers who described themselves as highly loyal to a brand were no longer loyal to that brand a year later. So how does a business maintain loyal customers? In a nutshell, by not leaving it solely to technology, but instead making loyalty and customer engagement an integral part of each employee's daily focus and communicating about it daily.

To drive behavior, leadership at The Ritz-Carlton begins a dialogue about the significance of "customer experiences" and "customer loyalty" that starts even before an employee has been selected for the job.

During the interview and selection process, Ritz-Carlton executives continually reinforce the message that they are looking only for individuals who possess the highest level of service talent. By "talent," they are referring to measurable personality characteristics that reflect the prospective employee's capacity to empathize, infer, communicate about and resolve the needs of others.

Upon being selected -- not hired -- new staff members are required to go through orientation before they can begin their job responsibilities. There are no exceptions -- no employee is ever allowed to start work without going through the orientation process. Senior leadership attends every orientation to welcome new hires into The Ritz-Carlton family. During the selection process, hiring managers note the preferences of every applicant. At orientation, directors of learning incorporate the preferences in a way that demonstrates the three steps of Ritz-Carlton service:

1. Extend a warm welcome

2. Anticipate and fulfill stated and unstated needs

3. Provide a fond farewell.

"During the selection process," one new hire said, "they must have asked me about my favorite snack because at orientation I received my spicy nachos and freshly squeezed mango juice. I was wowed, especially when the chef delivered it. It was all so excellent, and then I realized how I can impact other people by just paying attention to details about them." In essence, the preferences of new hires were put into action by leadership to create a memorable experience for the staff member.

It is through such experiences that new hires appreciate the outcomes leadership wants staff to offer guests. Those outcomes are easily identified in the words of The Ritz-Carlton Credo which states:

• The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission.

• We pledge to provide the finest personal service and facilities for our guests, who will always enjoy a warm, relaxed, yet refined ambience.

• The Ritz-Carlton experience enlivens the senses, instills well-being and fulfills even the unexpressed wishes and needs of our guests.

Whether a staff member is the CEO or a bellhop, each Ritz-Carlton employee (referred to collectively as "the Ladies and Gentlemen of The Ritz-Carlton") is responsible for driving customer engagement by offering "genuine care and comfort" in a "refined ambiance" by "enlivening the senses, instilling well-being and fulfilling unexpressed needs." Not only is this expectation communicated during the orientation process, but it is also reinforced daily through a twenty minute meeting referred to as "line-up." Functionally, daily line-up is attended by all Ritz-Carlton staff members worldwide and serves to reinforce the three steps of service, the credo and core corporate values. It also allows for the sharing of "wow" stories of customer service excellence, where staff have taken the information from the CRM and put it into action to engage guests.

In the end, The Ritz-Carlton enjoys world-class customer loyalty -- and guests enjoy world-class service -- because everyone in the company understands that it's not just about CRM technology. Customer engagement emerges from the creation of a service culture, continuous communication about the mission-critical nature of customer relationships and customer loyalty and reminding staff that all business is personal.

Author Bio

Joseph Michelli is the author of the newly released book, The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company (McGraw-Hill, 2008) and the best-selling book, The Starbucks Experience: 5 Principles for Turning Ordinary Into Extraordinary (McGraw-Hill, 2006).

“To be or not to be? That is the question.” Shakespeare’s words came back to me as I read a report by CSO (Chief Sales Officer) Insights entitled “Sales Performance Optimization 2011 Key Trends Analysis.”

Some key sales trends included:

• Sales training investments and quality of sales training are increasing by 9.5 percent per sales representative

• The lack of alignment still exists between marketing and (sales) selling

• Sales conversion rates are low (think sustainability)

• Increased focused and understanding of the potential customer’s buying cycle

• 70 percent of participants surveyed are using or evaluating a social media customer relationship management

Businesses are Non-Employed

Of the more than 2,000 companies surveyed, almost 83 percent were in manufacturing or service industries, just over 42 percent were considered small businesses with 58.7 percent having 25 or fewer salespeople. This data supports what the U.S. Census Bureau suggested: 75 percent of all businesses are non-employed meaning having no employees.

The Confusion Between Marketing, Selling and Sales

What these sales trends mean for small businesses is probably more outsourcing of marketing functions such as social media to sales training coaching to potential customer research. Technology will continue to impact how small businesses conduct business especially the use of CRMs. Additionally, the confusion between marketing, selling and sales is still very much evident and will continue to be present because this confusion helps sales experts to marketing firms at the expense of small businesses.

Marketing is still the Achilles’ heel for the majority of small businesses. The key reason for this is a lack of understanding leading to confusion as to the purpose of marketing and its two primary goals.

Glossy brochures, enticing graphics, flashy websites, paid advertisements, selling (or making your sales pitch) are not the purpose of marketing. The purpose of marketing is rather simple and is two-fold:

• Attract attention

• Build the relationship

From this purpose, these goals are achieved:

1. To make a friend

2. To be asked back for that second, face-to-face appointment or telephone call

All marketing strategies and tactics require alignment not only to the sales goals, but the customer loyalty’ growth and innovation; and management and leadership goals. The lack of alignment creates gaps and gaps generate inconsistencies that are probably the number one reason for the decline in profitability.

Business sustainability and therefore profitability rests on your ability to work with these sales trends as well as others. If you wish to be or not to be competitive in today’s global marketplace is the question on the table that only you can answer.

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Leanne Hoagland Smith
		About the author:
		Leanne Haogland-Smith has over 25 years in sales. Her true joy is selling and helping clients unlock the results that they want. She holds a core belief that the majority of answers are within each individual or organization and, sometimes, people just need an outside perspective to help them discover those answers. Leanne has written more than 1000 articles on sales and process improvement. Learn more about Leanne at www.processspecialist.com .