Another study with a CRM knock

As though the Customer Respect Group’s survey of last week weren’t enough, here comes another consumer report that makes certain aspects of the CRM industry look very bad indeed. In the middle of May, the international research and consulting firm CRG released their “Second Quarter 2006 Online Customer Respect Study.” The report card given certain CRM companies and the industry in general was none too pleasing. And in CRG’s “communications” section, most of the big twelve CRMers certified were dubbed “poor” in the category.

Now here comes another one.

Entitled “Customers Say What Companies Don’t Want to Hear” (let the pessimism begin), the research study polled thousands of consumers regarding some fundamental business management concepts. The results indicate gaps of understanding, perceptions of unsympathetic CRM providers, and growing customer dissatisfaction. Richard A. Lee and Dr. David J. Mangen co-authored the study. Mangen is of Mangen Research Associates while Lee calls High-Yield Methods the office; the two have worked together many times previously.

The foreword is by Paul Greenberg, author of CRM at the Speed of Light: Customer Strategies for the 21st Century. Greenberg has quite the high opinion of Lee and Mangen. Most importantly, CRM guru Greenberg comments that “there are lessons in this study for customers, marketers, advertising agencies and CRM practitioners” and that the study “proves a mission-critical strategic point. Businesses need to rethink their logic and develop new operating models based on customer centric behaviors and valuations.” One would think such philosophy is obvious, but given that the findings have already been called “shocking” while rippling through the trade press, clearly Lee and Mangen are on to something. Some of study tidbits being bandied about in popular press include the acknowledgement of the presence of a growing gap between customer expectations and company behavior.

The study authors go on to note that this condition actually creates opportunity for some companies, should they be paying attention to market forces. And on the subject of market forces, the study states that “buyers are taking widespread control of buyer-seller relationships, and many companies don’t know how to respond.” As indicating in the CRG study, the amount of direct attention given the customer is overwhelmingly the single most important factor in consumer decisions. Meanwhile, the option of online customer service was nearly irrelevant in purchasing decisions. CRM was singled out in the survey for its focus on technology-laden solutions and support rather than taking that customer-based focus so ardently wanted by consumers.

Again, the Mangen and Lee study is akin to that of CRG’s, producing the conclusion that CRM firms are erring in exactly the area in which they ostensibly specialize. Indeed, Mangen has an airtight answer for the would-be debaters of the conclusions printed in “Customers Say”: “Frankly, contesting the core findings means telling customers they don’t know what they’re talking about–and that’s pretty far down the slippery slope of doing what you want to do, not what customers want you to do.” After all, the study’s statistical measures and fact finding has been praised as “comprehensive and straightforward.” Neither critical acclaim nor a bit of backlash from the business world are new experiences for the study leaders.

Mangen is a highly credentialed customer expert and author of eight books. Lee is an internationally-respected consultant and author in the customer-centricity field. Predictions of Siebel Systems’ fall helped get Mangen Research and High-Yield Methods on the map in a big way, or, more previously, the demise of Siebel two years later did. Another Mangen and High-Yield joint effort indicated the present-day slowing of the CRM industry, dude, to the gradual diminishment of spending on CRM. Greenberg, meanwhile, has jumped on board in time for Mangen and Lee to warn about the newest industry-wide Titanic. Contributing a foreword available for free reading online at www.the56group.typepad.com, Greenberg both sells the book and eloquently urges careful studying of the book. First, the hype. Paragraph one: “[Mangen and Lee] have this tendency to initiate groundbreaking studies every other year. They ALWAYS find something that companies don’t want to hear but have to hear. And they ALWAYS seem to be right.”

As Greenberg sees it, Mangen and Lee’s findings are not surprising, but actually seeing the hard data to back up the philosophy and prognostication is. Greenberg (and, by inference, the study’s authors) imagines that our world is now a consumer ecosystem, as opposed to the corporate business ecosystem that dominated in the late 1990s and early 2000s. He figures Mangen and Lee to be among the first to realize this and that CRM professionals had better become “disabused” quickly “of serious misperceptions.” (Just to satisfy the curious, top kudos were given to Amazon.com for its high customer-centricity, and Wal-mart was deemed the least such. Lee has implied that he sees a dark future for Wal-mart.)