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Relationship between customer and seller under threat

by Glenn Lottering

The Internet, and the globalisation phenomenon that has trailed it into the retail environment, has had a profound influence on South African businesses. The biggest change brought about by the Internet is in the area of the relationship between customer and seller.

Much has been said about the abilities of customer relationship management (CRM) applications to leverage the Internet to cement this important – although fragile – bond.

However, companies have not incurred the return on investment (ROI) they expected from CRM implementations because of their emphasis on sales force automation.

Yet, sales force automation is but one aspect of a comprehensive CRM solution.

Under-utilisation of the full benefits of CRM technology has resulted in low returns on CRM investments and subsequent disillusionment with CRM technology for many companies.

This extends to the customer experience. If companies using CRM tools are disappointed, then customers are far more disappointed at the inability of these companies to engage with them as individuals or as valued customers. The ultimate experience of many customers, in fact, is one of not being valued at all and being treated as a number.

If this is the impact a company it is making, it is in serious need of re-evaluating not the CRM tool, but the manner in which it integrates that took into its marketing strategy.

It’s a simple issue: CRM is a much broader solution than automation of customer relations. It is essentially about customer retention. Therefore sales force automation needs to be linked to the service and marketing components of the CRM implementation in order for CRM solutions to show their real value.

While CRM is intended to improve the bond between the seller and the customer, it is not only a selling tool. Used badly, it can be disastrous. Used properly, it really does cement that bond.

Glenn Lottering is business development manager at Oracle South Africa. He can be contacted on +27 011 266 4000

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The Big Change is a business strategy blog and newsletter published by Arthur Goldstuck, managing director of World Wide Worx, a leading technology research organisation based in Johannesburg, South Africa.

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