Customer Relationship Management Program Evaluation, Research Paper Example

Customer Relationship Management is a crucial part of international business practices both at home and around the world.  Every day, these techniques are used to help employees relate and interact with customers in a positive and productive manner while still maintaining the goals and purpose of the organization – to earn profits.  Many organizations and third parties have programs designed to help educate and train employees and managers to use customer relationship management techniques in everyday business practice.  One such program is utilized every month through the company McKinsey & Company.  With this organization, companies and employees from all over the world can receive first-hand, internationally-ranked training that is designed to improve any business practices.  However, not every program is properly efficient or well-designed to offer the best results, which is why many business professionals use evaluation tools and methods to find the positive and negative outcomes of the training program.  McKinsey & Company is no exception; whereby, the training professionals use questionnaire and survey information to accurately gauge the effectiveness of the program to better provide trainees with the best training program possible.  To properly evaluate this training program, a background of the organization must be explained including a detailed analysis of the steps and procedures associated with training and evaluating the trainees throughout each program.

McKinsey & Company is a New York-based worldwide organization founded in 1926 that specializes in marketing and management consulting for companies and employees around the globe.  This exceptional organization has been the top ranked consulting company in the world for over six years by Vault.com and it has been a top employer for brand new MBA students fresh out of college since 1996 (Huey par. 3).  Due to the high esteem of this organization, it became clear that the customer relationship management program for this company was of high importance for a quality evaluation.  The organization specializes in training and educating international companies for proper customer relationship management, logistics and quality assurance techniques.  The mission statement for McKinsey & Company states that the goals of the organization is “to help leaders make distinctive, lasting, and substantial improvements in performance, and constantly build a great firm that attracts, develops, excites, and retains exceptional people” (McKinsey.com).  The mission statement is further elaborated on the company Web site with the statement “We help people and companies explore extraordinary opportunities, manage and sustain growth, and maximize revenue” (McKinsey.com).  It is clear that the main goals of the organization involve assisting clients with achieving success in a number of areas.  However, this organization utilizes corporate and business philosophy to help guide its own employees to make proper decisions and treat its clients properly.

In order to achieve these goals, the company engages in many different philosophical and practical business practices to help its clients achieve successful outcomes.  These philosophical principles include: Follow the top management approach; Use our global network to deliver the best of the firm to all clients; Bring innovations in management practice to clients; Build client capabilities to sustain improvement; and finally, Build enduring relationships based on trust (McKinsey.com).  The people at McKinsey & Company focus on providing recommendations and positive suggestions to follow the top management approach through training based on factual information received through research and industry statistics.  “We rely on facts because they provide clarity and align people. Facts are the global management language. We work with facts to provide credible recommendations” (McKinsey.com).  In many cases, individuals can focus most of their efforts to build a relationship and build trust that they feel that an “ownership” may exist over the rights to a client or relationship.  The second principle of the organization offers the insight that the best way to serve the client is to allow all individuals with multiple backgrounds and strengths to provide their services and expertise.  Furthermore, innovations cannot be derived and delivered solely by one individual.  This is why McKinsey & Company emphasizes group work and group thinking for clients that request their services and have built a strong relationship with the organization. “We invest significant resources in building knowledge. We see it as our mission to bring this knowledge to our clients and we publish it for the benefit of business and government leaders worldwide and to force ourselves to think about what is next” (McKinsey.com).  This statement refers to the quarterly publication that the company publishes internationally with management and marketing techniques, including case studies and factual-based suggestions and recommendations.  All of these efforts are made to increase the client’s trust in the company and to provide the best possible services for the customer’s benefit.

These philosophies continue to be utilized in the Customer Relationship Management training program offered by McKinsey & Company each month.  “Customer Relationship Management (CRM) training is a crucial part of business management practice that emphasizes teaching employees and managers how to properly interact with customers and provide positive business practices based on building relationships and increasing revenue” (McKinsey.com).  These goals and philosophies are utilized to help train and educate McKinsey & Company clients the best business practices in a first-hand, interactive environment.  CRM is a strategic approach to help organizations and employees manage customer values and customer experiences to not only improve current interactions, but also to emphasize the importance of customer attrition whereby customers will continue to return to the organization for its services.  These approaches do not involve an increase or decrease in technology, although technology can often improve the speed of communication with customers; instead, the approaches focus on the interpersonal communication in face-to-face or over the phone situations that may arise.  Many business professionals are not properly trained in college or high school how to manage interpersonal situations and communicate with a customer.  For this reason, McKinsey & Company has designed a CRM training program designed to incorporate this aspect into the training as well as to provide constructive insight in a number of areas.

The training program at McKinsey & Company involves a strict two or three day in person seminar that directly trains employees and managers utilizing many of the top industry training techniques.  The top management professionals, and two multi-lingual employees responsible solely for conducting the seminar, engage in educational and training exercises to illustrate different CRM practices and the importance of CRM on the success of each organization.  Individuals learn business theory and interpersonal communication techniques through lecture, role-playing and group exercises.  The lectures are initially designed to provide trainees with concrete, factual information to show the benefits of CRM practices on customers and on achieving successful business outcomes.  The trainees begin by learning the importance of CRM practices through this form and then engage in role-playing and group exercises where the learned information is then utilized in interactive scenarios.  Carefully constructed scenarios are used to help train individuals to properly and constructively interact and communicate with customers in any given situation especially including hostility.  Finally, the program culminates in a final demonstration whereby each trainee is responsible for conducting a customer relationship management scenario or explaining a particular program designed to improve CRM within their own company.  This culmination scenario helps stimulate creative thinking and taking the skills and techniques learned through the training program to become implemented in real-world scenarios.  Nevertheless, the importance of CRM training is clear and the McKinsey & Company training program offers insights in a number of different areas.

First of all, the training is geared around the understanding that employees and managers must constantly work to understand the customer.  Customers are all diverse and come from a number of different backgrounds and can have any of multiple attitudes at the time of interaction.  Therefore, it is importance to not only understand the customer’s complaint or query, but also to understand how best to handle a situation to communicate with the customer.  For instance, the company describes a scenario of a previous client to illustrate the diversity of customers: “By definition, not all customers are identical; for example, one bank we worked with discovered that the top 30 percent of customers generated 115 percent of profits, meaning that the other 70 percent either made no money or were served at a loss” (McKinsey.com).  This situation shows that not all customers have the same behaviors, and it would be wise for that particular bank to emphasize business practices that are geared towards tending to the top 30 percent of customers.  Again, McKinsey & Company continue to utilize factual information to even illustrate the importance of understanding the customer.  “Companies can then understand the customer behaviors and needs that drive economic improvement in those priority areas and formulate effective programs that create real value” (McKinsey.com).  These programs can vary from marketing efforts to customer attrition efforts.

After customer relationship management efforts have been discussed on an interpersonal level, the company also shares many programs and business efforts that can be utilized to increase CRM for positive growth and expansion.  McKinsey & Company has specifically laid out four dimensions that can significantly improve results from CRM initiatives: Understand the customer; Design programs; Deliver on details; and make good decisions (McKinsey.com). Once the strategies have been discussed, it is important for the trainees to experience a clear view of their usage in a business setting.  Therefore, “the next step is developing sales and marketing programs or customer experiences at the point of sales or service that generate economic impact with key target segments” (McKinsey.com). In other words, it becomes the job of the management personnel to begin to devise various programs that may be useful to improve CRM and help achieve the successful goals of the organization.  Such programs can include customer acquisition, cross-selling of multiple products, customer retention, customer and company loyalty, and high quality customer service.  It is the goal of McKinsey & Company to help recommend positive programs and train individuals to utilize these programs to benefit businesses in specifically “tactical CRM” environments.  These programs have largely been tested in pilots and utilized within other organizations only when McKinsey & Company has verified that the impact of such programs will be positive and have demonstrated successful results in the pilot studies (McKinsey.com).  The company’s ability to produce specific pilot results allows it to be one of the premier training and consulting organizations in the world.

Following the creation of the programs, it then becomes highly crucial that the company follow through with the details of the program and make good decisions.  McKinsey & Company provides efforts through training to show individuals how to devise the specific CRM programs, but then to implement their complicated intricacies within any given industry or corporate environment.  Technology is also quite useful for the CRM programs.  “CRM technologies are the enabler of customer-focused initiatives” and “these technologies are best pursued as a sequenced, targeted set of IT investments designed to begin paying off in the near term” (McKinsey.com).  For this reason, the training program briefly discusses possible technological mergers to help advance the CRM strategies; however, they offer more advanced technology-based training and consulting in other venues that the CRM training program.  Nevertheless, the company focuses on showing the benefits of factual information, technological advancement and CRM tactical strategies to make good quality decisions both for the short term and long term.  Due to the extent of the information that could be covered over the 3-day training time period, McKinsey & Company focuses more on the specific strategies than the detailed examination of a case-by-case technological breakdown or any similar scenario.  In other words, the training is meant to train individuals to use the strategies immediately in customer service and planning efforts; meanwhile, the other details can be covered on a private consulting relationship.

Following the program, McKinsey & Company submit two different documents to the trainees and the managers of the trainees that have graduated from their program to evaluate the effectiveness of the training seminar.  First of all, the final session ends with the culminated role-playing or reporting scenario that has been previously described.  Afterwards, the individuals at McKinsey & Company hand out a survey to all trainees that is designed to evaluate their immediate response on the effectiveness of the program.  Prior results show that most of the trainees believe the program is highly beneficial.  The survey provides a rating system on various topics such as information learned, effectiveness of training exercises, and transitioning from training to actual practice.  These topics are rated on a 1-5 scale, one being very unsatisfactory and five being outstanding.  This survey helps provide an understanding for training professionals on the positive or negative outcomes that have been provided to trainees over the course of the program.  Trainees are also provided a section in the survey where they may provide any additional written comments for specification or to provide additional information not covered in the survey itself.  The final evaluation tool is a questionnaire that is sent to the administrators of companies that have utilized the services and implemented the CRM training for business practices.  Administrators have an opportunity to share with McKinsey & Company any potential benefits that they have gained through receiving and implementing the material as well as any negative impact that has occurred.  Again, the goal for McKinsey & Company is to improve upon their training and consulting methods in order to appeal to a broader range of clientele.

Upon careful examination, it appears as though the training program is highly successful and efficient for McKinsey & Company as well as trainees and their companies.  Through the excellent research that the organization is able to produce through its quarterly publication and individual pilot studies, the company is able to stay up-to-date on the best training and CRM strategies within the industry.  Furthermore, the company engages in multiple training methods to help appeal to a broad group of trainees that, similar to their customers, are quite diverse.  The use of lecture, role-playing and group exercise methods allow all individuals to receive hands on training and also to receive immediate feedback on CRM strategic errors or interpersonal communication problems in direct face-to-face scenarios.  Finally, after training is complete the organization uses two evaluation tools that are essential for validating or disproving the efficiency and benefit of the training program.  It is one thing to have these tools, but it is quite another to actually use them.  No direct information was present on the program to suggest that trainee comments or administrator questionnaires are truly utilized in re-evaluating the total program.  Still, the mere appearance of two evaluation tools and the extent of their industry research show that McKinsey & Company value change and utilizing change to constantly improve their product in the training program.  Just as they suggest customer retention as a CRM strategy, McKinsey & Company also take pride in offering a quality product to continue to retain and gain potential customers for the future.

It is quite clear that the benefits of Customer Relationship Management are quite vast and can have an immediate impact on the success of any given organization.  McKinsey & Company focuses on providing an outlet for quality research and industry examination to train and consult with other professionals.  The main goal of their organization is to help other companies and individuals become successful, and part of the success can be gained through learning and implementing CRM strategies.  The research for the company’s quarterly publication, pilot studies and self-evaluation tools are able to boost McKinsey & Company to be one of the top, if not the number one marketing and consulting firms in the world.  This excellent knowledge and experience is able to be provided to companies and business professionals through the CRM training program and offers a hands-on opportunity to benefit from this information and research.  One of the potential weaknesses stems from the use of evaluation tools.  While the company has two specific evaluation tools, it is unclear whether the information is truly utilized to mold and shape the program differently from group to group.  Furthermore, the efficiency and effectiveness of the program are unknown as well because there are no statistics to support it.  However, the reputation of the company and the excellent organization structure of the CRM training program provide a potential learning experience for even the most advanced business professionals.  The strengths of the company and the training program are greatly utilized to educate and train individuals of all backgrounds to become successful in their fields and use CRM strategies for occupational and financial growth.

References

BusinessWeek.com “McKinsey & Company, Inc.: Private Company Information – BusinessWeek.” Investing & Stock Research by Company and Industry – BusinessWeek. Web. 04 Dec. 2009. <http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=101502>.

Huey, John. “How Mckinsey Does It. The world’s most powerful consulting firm commands unrivaled respect — and prices — but is being buffeted by a host of new challenges. Here’s the inside story.” CNN Money (1993). Fortune 500: CNN Money. 1 Nov. 1993. Web. 3 Dec. 2009. <http://money.cnn.com/magazines/fortune/fortune_archive/1993/11/01/78550/index.htm>.

McKinse.com “McKinsey & Company – Marketing & Sales Practice – Our Service Lines – Customer Relationship Management (CRM).” McKinsey & Company – Home Page. Web. 03 Dec. 2009. <http://www.mckinsey.com/practices/marketing/servicelines/crm.asp>.