Yesterday an email came from Genesis Energy titled "Check you are on the best plan".

This is a good idea. But it is so poorly done, I'm less happy with Genesis as my energy provider.

I probably won't change provider, but today I'm thinking about it. Before I saw the email I wasn't.

Here's how Genesis screwed a decent customer relationship:

The email says I used 22,623 units of energy in the past year.

It then says if I used less than 8000 kWh (kilowatt hours) I would be better off with one plan and if I used more I'd be better off with another.

Easy-peasy, the letter says I used 22,623 units. That's 22,623 kWh isn't it? So its the big hitter plan for me.

Not so fast. 22,623 kWh is a huge amount of electricity. I've a Physics degree and while I'm out of touch with the subject, I still remember this would be a lot of kWh.

So, I ring the 0800 number at the bottom of the email and ask about the relation between kWh and 'units'. We'll forgive the poor English implicit in this – technically the kWh, or perhaps more accurately the Wh is a unit in the usually accepted sense.

On the phone. And lo. I'm asked for a customer number. Now I have this to hand, it's in the email, but I'm buggered if I'm going to let them know it's me who is calling. For all I know, Genesis might regard this kind of question as impertinent and mark my CRM record as a "difficult customer" to be deliberately given the run-around in future encounters and charged extra "difficult" fees.

Three times the phone system asks me, and not politely to enter my customer number. Eventually it gives up and I reach another menu where I have to listen through a long list of options before reaching the "all other enquiries". My telephone handset has a timer. It took nearly three minutes to reach a human. There was no music on hold. That's a big plus point for Genesis.

Eventually I reach an operator. I explain about the email and the mention of "units" and ask how many units are in a kWh. She then asks me again for my customer number and almost cuts me off when I don't provide it. She says she can't help me without looking at my customer records.

I tell her she isn't listening. The question is generic. It is independent of my customer record. After a couple of turns of the loop, she gives in and tells me there are 660 units in a kWh.

Now I'm curious. What exactly are the 'units' we are talking about here? It's clearly nothing to do with electron volts eV. It could be related to the Joule or perhaps the calorie. Can anyone enlighten me?

Last week the Bennett family toaster died. Its last moments were spectacular with arcing, sparks and flames.

I suspect it was dangerous.

It is a Tefal model we bought last year. When it gave up the ghost we did the usual sales receipt hunt so we could take it back to the shop and get a warranty replacement or refund.

Although the toaster is 13 months old and the company claims it isn't covered by the warranty, New Zealand's Consumer Guarantees Act says otherwise.

A new toaster should toast for more than a year.

The issue is moot because we lost the sales receipt.

I called Tefal's 0800 700 711 customer support line.

When I explained what happened the representative told me  to take the toaster to a repair centre.

I hadn't mentioned the missing receipt although, technically I could argue proof of purchase isn't the point. Goods should be fit to do whatever they are sold to do regardless of paperwork.

But that's not my point. The toaster only cost $80 – which I had already written off. In fact by this point we had already bought a new toaster – though not from Tefal.

I wanted to report the dangerous arcing to the customer service representative. My aim was to give them valuable feedback that could save people's lives and help the company build a better toaster.

But the customer service representative wasn't interested.

I also had a very clear impression she was trying to get me off the line as quickly as possible.

When pressed she said she was "transferring me downstairs" whatever that means.

The call transferred to a voice mail line where I left a short message and a telephone number where I could be contacted. The phone hasn't rung.

So the only conclusion I can draw from this is that Tefal isn't interested in a potentially dangerous problem with its products.

This scares me.

Moreover, what is the point of a business having customer relations when this kind of information isn't collected? Or am I completely out of touch with realty expecting a manufacturer to care about these things?

By Bill Bennett

If you listen to some of the companies selling customer relationship management (CRM) software applications, you could get the impression it is an all-or-nothing proposition needing to be implemented big-bang fashion.

The problem with this approach is that the era of disruptive, large-scale information technology projects with headline-grabbing budgets is very much in the past.

These days, if firms are spending anything on IT development, they choose smaller projects. Typically, these will take three to six months and deliver modest, but real, benefits from day one. New projects are usually fully integrated with existing systems.

Larger technology programmes are not unknown, but nowadays they are generally implemented piecemeal in small bite-sized chunks. Each incremental step has to deliver usable functionality and often needs to be justified in terms of a quick and demonstrable return-on-investment before further stages are implemented.

This contrasts with some of the noise coming from CRM vendors. They often ask prospective customers to rebuild their entire IT infrastructure in order to accommodate the software packages that allow firms to forge closer customer ties. At the same time vendors may argue that a CRM software implementation also requires sweeping business process changes across an entire enterprise.

It’s ironic that there should be such an apparent contradiction between the way companies selling CRM applications approach the market and the way real world firms actually roll out new technologies. After all, CRM is supposed to be all about getting closer to customers, understanding customer needs and delivering beyond their expectations.

In practice there’s less of a contradiction than it may seem. Rod Bryan, PwC Consulting's Asia Pacific leader for CRM Solutions says that while CRM is definitely an all-or-nothing proposition, that doesn’t make it an all-or-nothing technology proposition. The all-or-nothing part is about committing to a way of doing business, not to a set of tools. The key to success lies in the strategy, not in the software.

He says, “It’s absolutely not about technology. Technology just happens to be a valuable piece of the equation. You just need it to realise the strategy.”

Bryan emphasises just how wide the gulf is between CRM technology and strategy. For example, he says, “You can have two competing organisations, let’s say they are banks, they might be exactly the same size and have more or less the same product set and customer base. The two banks might both go and install exactly the same CRM technology, but if they are using different CRM strategies they will get very different results. Buying CRM systems does not take away the responsibility for setting that strategy.”

This view jars with the way CRM technology vendors peddle their wares (see other story). Their marketing often confuses the strategic aspects of CRM with the delivery mechanisms. Not surprisingly brochures, advertisements and PowerPoint presentations show software enabled workers delivering great customer relations.

Bryan says the vision is good, but something often gets lost along the way; the idea that firms need to make the technologies work for them rather than the other way around.

Gartner research director, business applications Kristian Steenstrup says in reality there’s less dissonance than you might expect between the vendor approach to CRM and the pigeon step development now favoured by most firms.

He says, “You need to have a vision of how you view the market and how you would like to be seen by the market. Then once you have this in place, you can start implementing the various reorganisation and training programmes along with the technology projects that help work towards that vision.”

Steenstrup says there’s no technical problem adopting the piecemeal approach; companies can simply undertake their smaller projects within the framework of a bigger plan. He says that it is possible to roll-out a series of smaller three to six month projects that each deliver various CRM functions and reach various return-on-investment milestones.

The only real difficulty with this approach lies in the way individual projects are justified. He says, “It was always easier to do this with ERP (enterprise resource planning) projects because 90 percent of them delivered measurable efficiency gains. There still are efficiency gains with CRM, but 80 percent of the gains lie in effectiveness – for example you might want to get a better yield from your customer base.”

Another trap in the short-term gain approach to rolling out CRM is that successful implementation often requires an in-depth planning process that might stretch beyond the attention span of senior managers expecting three-monthly progress reports. Rick Clark, director of strategic consulting for MSI Business Solutions, Australia’s largest home-grown CRM player, says, “You should never be in too much of a hurry to implement CRM”.

Clark thinks the piecemeal development approach makes a lot of sense, but he warns that there needs to be a lot of spade work done before any projects are started. “It’s vital to get the information architecture correct from the beginning. A number of CRM programmes have failed because the firms got halfway through developing their systems only to find that the data isn’t structured correctly.”

In his view the danger is that a company shoot a few short-term small-project goals, only to find further progress is impossible.

He says organisations often fail to spend enough time defining the business problems before starting, he says the pressures to show quick returns means they can end up implementing systems rather than solving problems.

For example, they might start out worrying about getting a single customer view or building applications that help provide opportunities to up-sell to individual customers. “In fact they should start by asking themselves what kind of relationship we have with customers and what kind of relationship do we need, how can we increase the value of each customer.”

The danger here is that by looking for a quick return-on-investment a company might interpret the idea of increasing customer value as ‘let’s sell them another product’. Clark says it can work, but in some cases a ham-fisted attempt to sell an existing customer an extra product might draw the wrong kind of attention to the firm and cause them to put their business elsewhere.

This is what Clark calls ‘a moment of truth’. He says, “Most valuable customers can be lost for ever in a single moment of truth. For example, you might be happy to continue doing business with a bank that treats you badly for year after year. They might make a lot of money from you. But the moment they bounce a cheque or hit you with an unexplained charge, you’ll move your account.”

He says it’s not uncommon for companies to rush into a CRM programme and quickly build a system that gives a single view of the customer. This might provide information about which products each customer has purchased. The list is then handed over to a telesales department who are asked to fill in the blanks, up-sell or cross-sell more products to people. When this doesn’t work the company concludes that CRM doesn’t work, but the truth is such as system is simply managing customers and that’s not the same as managing relationships with customers.

This brings us back to the mismatch between the way CRM vendors approach the market and the way companies actually implement and use the tools. The all-or-nothing and big-bang aspects are real enough, but they apply to CRM in its broader sense, not the technology. There’s no inherent problem with a piecemeal approach to developing technology and rolling out systems, but it’s important not to be in a hurry and neglect the initial planning stages.

This story was published in the Australian Financial Review in July 2002.

You probably have all the business contacts you need; managing them is the challenge

Whatever your business, there are people you communicate with regularly. The most obvious will be your customers or clients — people who pay money for your services or products. When you look for further sales or more work, these are the best starting place.

Knowing when or under what conditions you should rekindle an earlier contact is potentially the difference between a thriving business and one that struggles.

There are other key groups. Some almost as important as paying customers. For example, as a freelance journalist, mycontact list is almost as vital as my list of editors and publishers.

If you make or sell things, your suppliers matter. You may need to stay in touch with sub-contractors, trade associations and others who service your business needs.

In the old days, the best tools were card indexes. Bigger cards worked better. People would write notes on these cards each time they called a contact. Some people still swear by cards, clinging to their boxes full of paper as if computers aren’t here to stay. It’s doubtful there are many of these reading this, but who knows?

Cardfile and Windows Contacts

Early computerized contact databases closely resembled their physical counterparts. You may remember the Cardfile program with earlier versions of Windows. We’ve moved on since then. Today’s tools are much more advanced.

The closest modern application to Cardfile is the overlooked Windows Contacts program built into Windows Vista. If you run Vista and you haven’t tried it yet, go to the start button and look for it under the All Programs menu. Another contact manager you may already own is in Microsoft Outlook.

There are plenty of alternative contact management tools, but strangely, there are few decent free online contact management applications.

Customer Relationship Management

Companies use more advanced contact applications allowing workers to share contact details. When combined with databases storing other information, possibly huge amounts of other information, they are known as Customer Relationship Management systems or CRM.

The same principles apply to all contact management tools. Choose whichever works for you.

Look for flexible solutions that integrate well with the other tools you use on an everyday basis.

First, above all else, use your contact software as much as you can. It sounds obvious. If you phone someone, keep his or her details open as you talk. Making the data available may help jog your memory about things. You may like to record details of the conversation for future reference. Log calls in the database. Use reminder functions to automatically let you know when you should call someone again. Enter appointments in your diary or calendar from the contact database.

Second, make sure your data is good. Scroll through your contact list regularly. Check details such as telephone numbers and email addresses are up-to-date. When you learn that information has changed, make updating your database a priority. If you suspect major contact details have changed, get in touch with the person. They may have moved jobs, this gives you a good opportunity to strike up a conversation.

Communications channels

Modern businesses use many communications channels, so use your contact manager to make sure you choose the best channel. For talking it could be mobile, landline telephone or Skype. They may prefer email, instant messaging or SMS messaging. Record people’s communications preferences in your contact database. Make sure you have all their telephone and fax numbers as well as email addresses and so on.

Third, organize your contacts. The better applications allow you to assign categories to contacts. Use as many of these as you can. So, when you need to send a circular letter to all the left-handed Tasmanian fishermen who have birthdays in November, compiling the mailing list is a cinch.

Forth, share your data with co-workers. This information is more valuable if more people have access to it. You can do this using a network, though that may not be necessary. Data sharing is not such a good idea if you are a commission-only sales representative in a competitive organization, but most modern companies are team-based. It looks bad if different people from the same organization make similar or conflicting calls to the same contacts. On the other hand, coordinating data wisely can make even the smallest firm look professional.

Used properly, your contact manager will return the investment in days. It’s one way small business can perform on a level field with larger operations.