REVIEW: The Relationship-Based Enterprise: Powering Business Success Through Customer Relationship Management
By Ray McKenzie
Published 2001, McGraw-Hill Ryerson
How do you define the value of your enterprise? In market capitalization? Quality of products and services? Customer retention? In his new book, Ray McKenzie teaches managers to value the corporation in a new way–through its various relationships. To build and sustain those relationships, and, by the way, company value, McKenzie says managers need to engage their customers in meaningful, ongoing conversations.
Based in Seattle, McKenzie is the Director of Management Consulting at DMR Consulting. Building on the concepts of Customer Relationship Management (CRM), his work will help at least some of your consumers become co-creators in your company’s products and services. By engaging customers, suppliers, employees, and others in rich conversations, managers glean information about adding value to products, services, co-branding opportunities, management techniques–anything that promotes a healthier business.
The book is presented in five parts. Part I defines CRM and the Relationship-Based Enterprise, introduces the vocabulary of his approach, and paints the landscape of the new economy the Internet and other technologies have created. The section concludes with a framework for nurturing valuable conversations and sustaining them over a long period of time. According to his framework, managers should place each consumer into one of four basic groups: patrons, customers, clients, or partners. Each group desires a different level of conversation and offers distinct value to the enterprise. For example, patrons want limited conversations and focus on getting their products at the cheapest price possible. They push the enterprise to create a smooth purchasing experience. At the other end, companies have vast amounts of information about their partners and frequently engage them in rich conversations. Partners help the enterprise define and refine its products and services.
Parts II through IV focus on the “three D’s” of the Relationship-Based Enterprise: Discovery, Dialogue, and Discipline. Discovery is customer identification. It includes not only defining your customers, but also determining what information you must collect from them. The Discovery process helps you learn what the customers want from interactions with your company and the value potentials of the four groups of customers. Dialogue helps you determine the type of relationship you want with each customer, ways to absorb information, and how to share control. Traditionally, companies have viewed information as highly proprietary. The Internet changes that; everything is out in the open. This section seeks to answer: How will the modern corporation provide value in the face of such openness?
The Discipline section discusses the managerial considerations of the Relationship-Based Enterprise. In the Information Age, the rules of business have changed and the behaviors of the enterprise’s human resources must change with them. Getting people out from behind their desks and into rich conversations with customers can be a difficult task. Equally difficult is creating an environment that can change quickly and effectively with the capricious needs of its customers. For some, this will require a radical shift in control.
The Relationship-Based Enterprise is a treasure chest displaying many jewels from this new layer in CRM that should be of benefit to senior executives and managers. While highly appropriate for non-technical managers and those lacking successful experience in CRM, the book doesn’t include much for the implementers in the IT community. CRM software, chat programs, VoIP, and other technologies are mentioned, but the author provides no implementation specifics. Let’s hope Ray McKenzie’s next contribution to CRM builds on his enterprise transformation work to provide the IT community with a roadmap detailing how to support the Relationship-Based Enterprise.
Dave Fisco is a developer, consultant and writer. He can be reached at email@example.com.