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By Dwight Galler

Traditional CRM and other tools effectively track what customers, employees and other people whose actions are vital to an organization do. Enterprise Feedback Management completes the picture by answering an even more important question: Why do they do it?

Despite significant investments in Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), predictive forecasting systems, web portals, and other applications designed to improve management decisions, most companies have failed to realize the leaps in business effectiveness they expected. While these applications provide extensive transactional and historical data, simply knowing what actions people have taken is not enough to improve organizational strategies.

Managers need actual feedback from people to know why they take certain actions. The answer lies in properly surveying employees, customers, stakeholders, and other groups that have an effect on the business processes. The answer is Enterprise Feedback Management (EFM), a new type of enterprise survey solution that enables companies to not only systematically obtain and manage feedback, but also integrate it with other information systems for a more accurate, more informative, enterprise-wide view.

This article, the first of two, will highlight the unfulfilled promise of CRM, and why organizations need to supplement transactional data with attitudinal data to move beyond just the “what” to grasp the “why.” The article will then discuss how enterprise feedback delivers a cost-effective and efficient way to improve strategic decisions.

CRM – A Promise Unfulfilled?
Organizations have spent billions of dollars on enterprise software for CRM, human resources, customer and employee web portals, data mining, and ERP, hoping that a closer inspection of transactional data would illuminate patterns and details that could be used to create closer relationships with customers, employees, and business partners. Managers hoped to make smarter decisions that would increase revenue and profitability as well as improving satisfaction.

For most organizations, that promise was never realized. There have been incremental improvements: better customer segmentation, improved awareness of geographical product preferences, and the ability to track what information was of greatest interest to employees or investors. However, the operational and strategic “big bang” that CRM promised has never come to fruition.

To make big leaps in productivity, efficiency, and market share, companies need to discover the critical “why.”

The disappointment could have been predicted. Business success comes from satisfying your stakeholders. To accomplish that, you must know what they need, what they want, and what they’re thinking – in other words, why they do what they do. Nevertheless, systems companies have focused solely on static transactions – event-driven information that answers the question, “what happened?” Real improvements require you to know “why.” With that answer, management teams can create strategies to drive their businesses forward – and effective web surveys, particularly Enterprise Feedback Management, can help provide the critical path.

Attitudinal Data: Capturing the Customer “Whys”
Transactional systems offer only meager facts: what products customers bought in a given region, what documents investors requested, or what the lead times were for certain components. These facts are important, but they provide only a glimpse of circumstances, not a thorough answer. Facts can have multiple interpretations. For example, customers might have bought more blue widgets because they preferred the color, or because the red widgets were out of stock; but transactional data will not tell you that answer. In the latter case, stocking up on blue widgets would leave a company vulnerable to competitors that push red. Similarly, employees might favor a certain benefit package because it fulfills all of their requirements, or because it was the closest to what they really wanted. Not knowing the difference could mean dissatisfaction and turnover as employees are lured away by other companies.

According to the leading market researchers, companies with loyal customers generally have 60 percent higher profits.

Any organization that doesn’t clearly understand the “whys” can find itself battered from all directions. Customers have more choices than ever before, and customer loyalty can never be presumed. Not only do profits and revenues drop when customers wander, but expenses increase because acquiring new customers is costly. And what investors or owners are willing to accept lower profits?

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Dwight Galler is the Vice President of Marketing for Perseus.
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