In most markets, there are one or two companies that outperform their rivals by staying more closely connected to their customers — Enterprise Rent-A-Car, Pioneer Hi-Bred Seeds, Fidelity Investments, Lexus and Intuit are prominent examples. Their advantage, however, does not have much to do with CRM tools and technologies. In fact, information technology is merely a necessary, but not sufficient, condition for achieving this advantage. On its own, as mounting evidence indicates, IT contributes little to creating better relationships with customers.1 Rather, superior customer-relating capability is a function of how a business builds and manages its organization. In particular, it results from a clear focus on, and deft orchestration of, three organizational components:
The first is an organizational orientation that makes customer retention a priority and gives employees, as part of an overall willingness to treat customers differently, wide latitude to satisfy them.
The second component is a configuration that includes the structure of the organization, its processes for personalizing product or service offerings, and its incentives for building relationships.
Information is the final component: information about customers that is in-depth, relevant and available through IT systems in all parts of the company.2
Although each of these components is, by itself, relatively straightforward, it is only when all three work in concert that a superior capability is created. My research has indicated that the most successful companies — those with the best connections to their customers — are those able to create and maintain that integrated focus on orientation, configuration and information. This finding held true for companies in all types of markets, whether they were growing fast or slowly, were extremely or moderately competitive, had many customers or few, or whether they were selling to businesses or to consumers. (See “About the Research.”)