Thursday, April 29, 2010

Customer Relationship Management And The Greek Crisis

If you are European or familliar with the financial markets, you have heard about the crisis Greece is experiencing right now. Greece is facing a situation where it can't pay back its debt, and therefore is nearby bankrupcy. Indeed, the more its debt increase, the higher the interest rate gets.

Now Greece, as it is part of the European Union, is counting on the help of its European partner to lend it money, in order to pay its debts. Isn't European Union meant for those kind of situation?

It might be. Actually the European Union is eager to provide for about 70% of Greece needs in cash, the other 30% will be funded by the International Monetary Fund. But it would be too simple. Hence, Germany, the most powerful country of the Euro zone, will not lend money unless Greece provides a clear and realistic cost cut program.

Germany is hence doing what the United States have not done while some of their main banks were going down: imposing some concessions and terms for money to be lent. Germany wants to make sure Greece will use wisely this money, in order to change what brought them at this point.

Why do I speak about that, and how do I link this topic to customer relationship management?
Of course it might not seem obvious. But I like how Germany reacts. Indeed, a lot of customer relaitonship management program are based on providing promotions to customers. But as I have said many times on this blog, customer relationship management is about measuring customer value (past, present and future), in order to provide an accurate message).

Indeed, a lot of customer relationship management programs are not profitable, because they have forgot to measure the return on investment, and one's customer potential.

CRM programs implies large amount of investments in order to:
  • Build a strong information system base, which will allow to store customer data, and makes it possible to get accurate knowledge out of the customer
  • Aquire a know how: If you get data, you must be able to analyse and to act based on it. It seems silly, but a lot of company have tons of information and they don't know how to use it wisely.
  • Get a team of people which will animate this data base, and analyse it
Therefore, prior to actually making the statement "we are launching a CRM program, it is important to see if you will actually benefit from it.

Germany did not say it did not want to help nor to lend money to Greece. It just wants to make sure the investment will be worth it. And that should be the very same thing with a CRM program. Customer relationship management must be proparly managed in order to give a clear competitive advantage.