Can customer loyalty really build my business? If I buy the right software can you guarantee customer satisfaction? If CRM is so good why do so many CRM efforts fail? These are questions that a business manager is battling with today. With a proliferation of brands in every market and with product differentiation becoming a scarce commodity, every one is trying to build and nurture relationships with his or her customers. And concepts like loyalty, satisfaction, attrition and retention have become hot topics with the business community. At the same time, a number of businesses that kicked of CRM initiatives, in the race to be the first ones off the block, have burnt their fingers badly. As a result of these attempts (planned or otherwise) to build loyalty, businesses are slowly veering around to the view that perhaps loyalty may not be an easy game to play. The high failure rate of CRM initiatives around the world provides the clinching argument.

Is this the end of the road for CRM? Is CRM just another fad which has had its moment of glory? Is it futile to attempt to build relationships with your customers? I think not. Lasting customer relationship has always been, and will continue to be the basis of business success. Condemning CRM because some (admittedly large numbers) of CRM initiatives have failed is tantamount to throwing the baby out with the bathwater.

CRM initiatives fail, not because loyalty is difficult to build but because of a variety of other reasons—perhaps there was no buy-in from the employees, perhaps the expectations were too high or may be it was just misunderstanding technology for a concept.

More than 70% of the CRM initiatives fail because people believe that technology will solve their problems. But CRM is not about technology—it is about people; it is about building relationships with people. And technology cannot do that for you. Sure, it can help you do that… just like a telephone can help you talk to your wife from a hundred miles away. But the telephone can only carry your voice. It cannot fake an emotion that you do not feel. And that is what the implementers of those failed initiatives assumed; that the technology –once installed- will take over the relationship building.

The second main cause for the failure of CRM initiatives is the abnormal expectations that people have of CRM .It is perceived to be a magic wand that you can wave and hey presto! You have a healthy balance sheet, your reserves have gone up 100%, your investors are smiling benignly and you- the manager are on your way to a well deserved vacation to the Bahamas! Sorry folks, it does not work that way. May be we have all grown up watching too many movies where fortunes are made in forty-five minutes. In real life you have to work much harder. You have to understand your problems well, define what you want to solve through CRM in the first phase, evolve and evaluate at least two different ways of doing that and set about doing it painstakingly. And then hope that those efforts are what the customer expects from you.

The third and perhaps the most important factor that could make your loyalty engine seize is the lack of employee buy-in. If your employees – not just in the marketing department but your employees as a whole—do not believe that your customers are valuable, your CRM efforts are doomed to fail. No matter how sophisticated your technology or how well thought out your strategies are. Imagine a customer applying for your loyalty card being put on hold for fifteen minutes! Or a service engineer not bothering to explain to a customer why some items are outside the normal warranty. You can be sure the customer will switch to the next brand on his list.

Building and maintaining customer loyalty is no mean task. And, even if you fully realize the importance of building such loyalty and are fully committed to the task, it takes years of painstaking effort to win your customers’ loyalty. If you are serious about it be sure you have done your homework well. Assess where your relationship with your customer is, set realistic expectations of what you can achieve from a relationship initiative and share that vision with your employees. Work towards that vision shoulder to shoulder with your employees with dedication. You will soon see that the customer wants your relationship. But if you plunge into it because it is the latest buzzword on the business circuit, or because it seems to be such a good tool to rake in the moolah, take my word for it; it will be baptism by fire.