Business Management Articles
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by Rene T. Domingo (email comments to

Customer Relationship Management or CRM is about increasing sales and profits through enhanced customer service and satisfaction. In particular, CRM aims to identify, attract and retain good or profitable customers. It also tries to increase customer life cycle revenue through cross selling using proactive approaches like data-mining.

CRM should not be confused with state of the art technology and other elegant solutions to attract customers. It is just too easy to be overwhelmed by the numerous CRM products and services currently being offered and marketed, and pick your choice based on elegance and bells and whistles. CRM is a management philosophy backed up by a reliable system. It is therefore about practicing basic good management, or more specifically, good service management. If these fundamental principles are violated or compromised, any CRM is bound to fail regardless of whether it is the brick-and-mortar type or a sophisticated web-based B2C variety.

One important principle often overlooked in CRM design is the coordinated balancing of front line and backroom operations and capacities. The efficiency of the front line CRM determines how fast the bank can acknowledge or accept the customer – his order, complaints, questions, payments, and other transaction. That of the backroom CRM determines however how fast the customer or his request is actually processed or resolved. To put it another way, the frontline CRM determines how fast the customer can enter the bank’s system, and the backroom CRM, how fast he is processed and released by the system. From the point of view of the customer, his satisfaction is decided by the total time consisting of how long he waits to get into the system (access time), and how long he waits to get out of it (response or resolution time). In layman’s terms, what matters to him is the total of the queuing and service times.

Two common problems can and do occur when CRM is poorly designed and managed in this regard. The first and perhaps, the more common, problem is an efficient and attractive frontline CRM that is served by a relatively slow and inefficient backroom operation. Most of the CRM technologies marketed today focused on just the front-line speed, efficiency, and attractiveness. These include e-mail, call centers, web-based internet banking, WAP mobile phone banking, and other new economy technologies. Surely many of these frontline CRM solutions can achieve their goals of attracting customers, calls, inquiries, queries, or hits. In fact, they are too successful in doing their jobs, that masses of customers are accepted efficiently and quickly into the system without almost no waiting or queuing time. The unsuspecting customers are misled to believe that the resolution or processing time would be equally swift as the access time. They are disappointed to realize that while the CRM did not make them wait in accessing the system, it will make them wait irritatingly long while inside the system. The bank, too excited to buy and install a frontline CRM, essentially forgets to beef up or set up the appropriate backroom support system.

For example, the system allows you to send queries through e-mail, web-site queries, or voice calls. The message is sent and accepted immediately. It does not bounce back or the call center answers the call in one ring all the time and a live operator answers. The problem is that customer does not get an immediate response or answer to his queries. He may wait to weeks or forever for a satisfactory answer, electronic or not. In case of call centers, his call is passed around among several incompetent stations or personnel, called handoffs. In some cases, the call or a customer order may even be lost inside the system. The backroom system does not find the right person with the right answer and the customer is asked to call back later. He may get a satisfactory response in the next attempt, but the service fails because it was not completed during the first moment of truth. Obviously, in most cases, customers, especially new and potential ones, do not access the system again after the first unsatisfactory and disappointing experience. They become lost customers. In case of web-site inquiries and accesses, the surfer is irreversibly lost by the bank. Expensive CRM is therefore a waste of money and investment if it is only good in attracting customers but not in serving them.

The second and equally serious problem with many CRM’s is an inefficient frontline or interface served by a very fast and capable backroom support. In this case, access to the system is slow and extremely difficult. But once the customer gets in, he or his request is processed very fast. Though he may get the right answers without waiting too long, he is nevertheless dissatisfied with the total experience because of the long queuing time to access the bank’s system or frontline operations. In all probability, this customer may not come back or try to call or access again the system whether it is a website or call center. This second type of CRM problem is often characterized in the brick-and-mortar operation by long queues in front tellers or customer service representatives (CSR), who may be very fast and efficient once you get to them. Another example is frequent busy signals, calls answered after 12 rings, and call centers that play music endlessly because all CSR’s are tied up. In the case of internet banking, an example of frontline breakdown is long download of the bank’s website homepage or even difficultly in accessing the website because of technical problems like intermittent shutdown.

There are of course CRM systems that suffer from the two problems discussed above. Customers could experience both long access time and service time when dealing with banks with these types of systems. These inferior CRM’s would be very short-lived unless the real problems are recognized and addressed. The ideal CRM would be efficient in both frontline and backroom operations, and the customer will enjoy a pleasantly short waitingtime dealing with it.

To ensure a well-designed and well-planned CRM that will endear customers, the following principles should be observed:

  • match the CRM’s overall capacity with the expected demand from your customers
  • balance the frontline capacity with backroom capacity
  • synchronize and coordinate the frontline and backroom operations
  • use only the appropriate technology where necessary to achieve the above goals
  • continuously reduce frontline and backroom operation cycle times to delight your customers
  • don’t cross sell other services unless the core or basic services are delivered properly and completely as promised or expected


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