CRM cannot exist without ERM and VRM

CRM cannot exist without ERM and VRM

Tehrani, Nadji

On a number of occasions in these editorials, I have mentioned that outstanding customer service, customer care, customer retention and finally, customer relationship management (CRM) cannot exist without employee service and employee service management. The more I study what is going on in a majority of companies in corporate America, the more I come to the conclusion that my suggestions may have fallen on deaf ears. For this reason, I believe true CRM cannot exist if top priority is not given to employee relationship management (ERM). It is only logical. Why should an employee care about the customer if the company does not care about the employee? You may say that this is only common sense, but one of the greatest things I have learned in my life is that common sense is indeed uncommon. Every company that wishes to be progressive is talking about CRM, but I don’t hear many companies talking about ERM!

In my view, this is the “chicken and the egg” situation. Before you can have eggs, you must have a chicken and, by the same token, before you have CRM, you must have ERM.

The other problem I see with CRM is most everyone seems to want to solve the CRM problem through technology. But in the final analysis, people like to talk to people. As a result, in marketing, we have gone from shotgun marketing to targeted marketing to one-to-one marketing. In fact, the entire business of telemarketing became an overnight success because it is such an effective way to communicate people-to-people, one-on-one, without the need to meet face-to-face.

Relationship management

Relationship management and development must be, in my opinion, the main objectives of any CRM plan. Nothing in the business world is more powerful in culminating a business deal than having an unsurpassed relationship with the customer.

Not long ago, I visited a mid-sized (100 seat) call center and upon meeting the president of the company (who made most of the center’s major purchasing decisions), I noticed that he had purchased the least-known and perhaps less-proven technology products from a relatively unknown vendor. I asked the president, “How did you decide to buy this particular system?” He said, I met with all of the sales and marketing staffs of competitive companies and I finally purchased the systems from Company X because I had a much better relationship with the salesperson representing Company X.” Need I say more?

My Personal, Firsthand Experience

Every company needs to have a strong financial institution behind it. Not just for a rainy day, but also for funding new products and services. Over the years, I have dealt with a variety of banks and other financial services companies and I was satisfied with none of them. Everyone had a major problem and above all, they wanted to loan me money when I didn’t need it and conversely, none of them wanted to loan me money when I needed it! I often wondered about the raison d’etre (reason for existence) for these institutions. If I didn’t need them, they were willing to lend me money, and when I needed them, they didn’t want to talk to me. Such was the case until I met a truly outstanding financial executive (interestingly, at our TCCS convention, which was the forerunner of our CTI1 EXPO). This gentleman took an avid interest in our industry and studied the call center, CTI and Internet telephony areas and became extremely involved with our great industry over the years. We became good friends and developed an unparalleled relationship. What did he gain from this outstanding relationship? How about the lion’s share of our business! Unlike the banks, he is there when we need him and interestingly, he is there when we don’t need him. Unlike the banks, he appreciates our business and often offers unsolicited advice that has consistently saved us a tremendous amount of money. He has out-performed any other financial institution by lending us funds at a rate one point below prime rate. Most important, he offers us clever ways of financing our business and handling our financial matters in the most cost-effective and expeditious way. Last, but not least, he does not require us to sign documents ten inches thick. How did he gain the lion’s share of our business? Because he really works at CRM. No other vendor even comes close to this gentleman in terms of having a strong relationship with our senior management.

What About VRM?

As I indicated above, the first mistake corporate American management makes is not paying the necessary attention to employee relationship management. The second mistake is that even fewer companies (practically none) pay attention to their vendors. In my opinion, this is absurd, for without reliable, quality-conscious vendors, a company simply cannot exist. For example, among respected publishers, maintaining a church-and-state relationship between editorial quality/ objectivity and advertising is a vitally guarded, cardinal rule. Nevertheless, if the printer (who is a vendor) does not do a flawless job of printing or deliver your print jobs on time, the publisher is no longer in business.

We all recognize that every company is similar to the links in a chain: The company is only as strong as its weakest link. If the vendor link is weak, the company is weak. If the employee link is weak, the company is weak. If vendor and employee relationships are not addressed by management, the company will not have customers and thus there is no need for customer relationship management. Simply stated, a company cannot exist if CRM, VRM and ERM are not respected and addressed equally by senior management.

The Golden Triangle

I call the relationship between CRM, VRM and ERM the golden triangle on which the foundation of every successful business is based. There is no shortcut to this solution. Every link of every chain must be strong for the company to be strong.

During my travels around the United States and the rest of the world, I normally visit dozens of companies annually. I also interact with the CEOs of many of these companies. I have never heard any mention of VRM or ERM. However, almost everyone talks about CRM. Little do they know that without ERM and VRM, true CRM is nothing more than wishful thinking.

We Practice What We Preach

You might ask, Nadji, do you really mean it and do you practice what you preach? The best answer I could give you is to let the record speak for itself Here is an unedited version of an e-mail we recently received from Mr. Paul Cheslaw, managing director of Latitude Communications, Ltd. of the U.K. Mr. Cheslaw discusses Technology Marketing Corporation’s customer satisfaction policy:

“TMC wins the customer satisfaction race and sets a new standard for delivery to Europe!

Being a frequent customer of many of the large online booksellers, I have to award TMC the Gold Medal for your service. I ordered two books late on Friday and they were delivered to me in London first thing on Tuesday morning! I know that customers in the U.S. take next-day delivery for granted, but those of us overseas are not so privileged. In fact, given that there was a weekend between order and delivery, you effectively managed to get my order to me in London in two days without my paying additional for prompt shipment. Compare that to eight days for one large online bookseller and an average of 14 days from another.

Please extend my congratulations for a job well done to all at TMC:’

Naturally, I remain grateful and appreciative of a job well done by all of Technology Marketing Corporation’s staff.

CRM-Not Just A New Technology. But An Evolution

While the human resource matters discussed above are clearly not fully appreciated, there seems to be a rush to develop CRM technologies by several new pioneering companies. We applaud these companies for their visions and understanding of the fact that CRM is not a luxury, but a necessity for competitive survival. During my career, I have learned that 75 percent of buying decisions by customers are based on emotion. As a result, in our highly sophisticated, high-tech world, we simply cannot afford to give CRM lip service only. Companies with great vision are devoting millions of dollars to this subject.

A Use In Point

I recently had the pleasure of meeting with three high-ranking managers from Oracle Corporation. During this meeting, I learned from Marcus Heth, vice president of call center and telephony development, that Oracle has made a major commitment to CRM, call center and CTI technologies. For example, Mr. Heth informed me that Oracle now has a staff of 750 people addressing CRM development and management, plus an additional 100 engaged in the call center and CTI technology development group. Learning about this commitment by Oracle Corporation, which is arguably the world’s leading database company, gave me additional respect for Oracle’s vision of the true CRM evolution. Mr. Heth has been a friend of mine for the last 15 years, since the mid 1980s when Mr. Heth was a senior executive at a company known as N.P.R.I., which later became Versatility Corporation and was subsequently acquired by Oracle. I have asked Mr. Heth to write a sidebar describing Oracle’s vision and commitment to CRM. I urge you to read Mr. Heth’s sidebar for his informative views on current trends and technological developments.

I also suggest that you read the columns entitled “Remote Control” by Technology Marketing Corporation’s Dara Bloom, editor of The columns are available on our Web site at


Nadji Tehrani

Executive Group Publisher


For information and subscriptions:

call TMC(TM) at 203-852-6800; or fax to 203-853-2845 or 203-838-4070.

Copyright Technology Marketing Corporation Sep 1999

Provided by ProQuest Information and Learning Company. All rights Reserved