The Hindu : Business : `Look beyond CRM to strike right chord with customers'

Online edition of India's National Newspaper
Wednesday, Feb 23, 2005

Business

Business

`Look beyond CRM to strike right chord with customers'

By Our Staff Reporter

Venkat Ramaswamy

CHENNAI, FEB. 22. Companies need to look beyond the conventional customer relationship management model to strike the right chord with the customers.

The changing dynamics of the market, in which customers are well informed and have a wide range to choose from, make it imperative for companies to put in place mechanisms for establishing an active dialogue, said Venkat Ramaswamy, Professor of Marketing at the Stephen M. Ross School of Business, University of Michigan.

"Things have changed ... people want to participate, they want to voice" and simultaneously want the institutions to be more transparent, he said. In an interaction with journalists at The Hindu today, Prof. Venkat Ramaswamy, who has co-authored books with management guru, C. K. Prahalad, said: "Companies cannot unilaterally create value for the customers. The challenge is to create value jointly."

Such a process of co-creation primarily involved focussing on interaction with customers in a manner they like, without being obtrusive. "It may be easier for some industries, but the concept is applicable across all industries," he said, adding that customers were not comfortable with the existing models. One of the irritants for them is the unsolicited tele-marketing calls. The same customer, however, finds it difficult when they want to get through to the senior executives in companies.

Something was wrong with the present equation, as many a time customers were unable to `connect' to the companies when they wanted, explained Prof. Venkat Ramaswamy, Director of the Centre for Experience Co-Creation at the business school. Customers may not mind interacting with the companies as long as it is relevant to them.

One effective process of getting to know what the customers actually want or felt about the services was to provide incentives to the frontline staff to pay more attention to what the customers say. Companies must provide incentives to the staff for learning what the customers want during their interaction with them, the Mechanical Engineering graduate from the Indian Institute of Technology, Madras, said. Today, customers were more informed. "The consumers in India are a lot more sophisticated than we think," he added.

Noting that the traditional models of customer relationship were starting to break down, Prof. Venkat Ramaswamy, in response to a query, however, said that customers might not always be right. Therefore companies should build infrastructure that help customers articulate their response. In other words, "we are talking of democratisation of business," he explained.

The focus of his current research was on exploring the next practices in value creation through experience co-creation.

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