CRM Composition

My point of view in the last blog was that CRM today consists of 3 pieces, customer experience management (CEM), customer management and the technology platform. This view provides some level of organization in an industry that covers a wide range of components, philosophies, technologies, etc. This view also helps businesses put their arms around the scope of CRM whether in their business or external review.

CEM is broad in itself. For example questions that should be asked: are customers empowered to help themselves when they need information?; can customers contact a business by the channel of their choice?; when a customer calls a business they know that that customer got an email from us earlier in the day?; do we continually exceed our service goals? CEM is an industry in itself and an outgrowth of CRM.

Customer management has become more important because of privacy liabilities. For example, does your company have a CRM strategy and vision in place in the first place? This would be the guiding light to ensuring that all legal and regulatory needs are being met. Do you have a CRM focused organization in place? Who is managing the VOC? Is there a Chief Customer executive? Do you know your customer's ROI?

If you answer no then how do you design an effective CRM campaign emulating from an approved and supported strategy? Any organization that has implemented or is thinking of implementing a CRM capability needs to have a governance structure in place so that privacy is protected, opt-in/out requests are honored, and so that product marketing is appropriate and allowed. Finally, have you enabled communication between customers, employees and even prospects? This social media opportunity requires a large amount of customer management in order to protect privacy and data.

The platform is the third piece of my point of view on CRM. The platform or enabler needs to be selected and sized based on business opportunity and ultimately the ROI. The platform needs to fit the business model so that it becomes seamless to business operations while providing enhanced customer interactions.In many cases when CRM capabilities fail it is because the capability was not designed based on end user input. In order for users to embrace CRM they really need to feel like the system was build just for them. They need to see and understand that the system will make their life better in some way, whether financially or operationally.

When deciding to implement or evolve a CRM capability a business should look at CRM in three pieces, experience management, customer management and technology platform. This will ensure that all pieces are considered and that there is an understanding to what it will take to create a capability that will meet current and future needs.

In following blog posts I will dig more deeply into each of these CRM components.

Where Did CRM Come From?

Customer Relationship Management (CRM) evolved from direct marketing (DM). Before the computer and email became prevalent, DM had been composed of offline media like direct mail, catalogs, self-mailers, faxes, postcards, billboards and then media like radio and television.

When the computer and bandwidth became affordable direct marketers were not far behind with emails campaigns including newsletters, banners, rich media, and now social media. Direct marketer's have a marketing toolkit that has doubled in size over the last 10 years.

Once traditional offline and new online tactics were merged together the term CRM became relevant. Early on the left hand didn't know what the right hand was doing in sales and marketing organizations. They needed something that would help them mange the messaging to and from customers. CRM was the philosophy or process to make sure customers were not getting bombarded with messaging.

Notice I say CRM is a philosophy. It started this way then technology was applied to the process and the technology platform then became CRM, losing the view of the philosophy. This has caused many platform integration failures and even still, in the integration houses and application providers use cases to drive integration are less prevalent then the technical specs to install the software. The fact is that you don't need a technology platform to implement CRM, just good processes.

In addition to the old school CRM there have been many new terms and acronyms as offshoots to CRM. For example, customer experience management (CEM) or social CRM (sCRM). Then you have the technology platform itself which has been labeled as CRM. This was enough for me to step back and rethink the pieces of the puzzle.

My point of view is that CRM today consists of 3 pieces, CEM, customer management and the technology platform. Businesses should manage customers and their experiences with a technology platform. I said earlier that you didn't need a technology platform to implement CRM, but the reality is that without technology it is impossible to effectively manage and react to customers with all the available online and offline DM tactics.

I say DM tactics because no matter how you slice it putting a message in front of a customer's eyes is a direct message that is there to elicit a behavior whether immediate or in the future. Maybe we should just forget about CRM and go back to DM? Actually, CRM has been a necessary evolution from DM and CRM needs to evolve too.

Customers need to think about customer management, customer experience and the technology platform to plan for necessary evolution in order to stay current with their customer's demands. If businesses are not evolving their CRM capabilities then they are not capturing nor reacting to their VOC. And if they are not planning around VOC then they are missing out on revenue and profits.

More to come on customer management, customer experience and the technology platform.

The Evolution of CRM

The evolution of CRM hasn't been linear but in big leaps and small steps. The philosophy of CRM though hasn't really changed; increase the life-time value of a customer through higher satisfaction. The challenge though is how to continuously to meet and exceed customer satisfaction when customer satisfaction is a moving target.

Customers are becoming more demanding because they have more access to information and products like never before. They cant be fooled, because their ability to research is now at their fingertips, where in the past the only information available was printed. Specifically social media has opened up the flood gates.

The challenge for those who care about their customers is the ability to effectively capture the voice of the customer when voices are coming from every direction at all times of the day. Not only is it about capturing but also about managing and responding to comments. This is not an easy task, especially if a business doesn't have a CRM capability, or a CRM capability mature enough to handle the current VOC environment.

Where businesses stand in their evolution of CRM capabilities is a question that they should be asking often, especially at the current speed of change and growth in the pervasiveness of digital communications. Forget about the exponential growth of computer processing, there is the double exponential growth of the ability to share and receive communications. This growth is through device growth, application growth, and viral awareness of the ability to use cloud tools to share thoughts and opinions.

If businesses are not maturing their CRM capabilities in line with the growth of their customers communication maturity then they are missing huge opportunities to increase their customers satisfaction levels and therefore life-time value.

More to come on the details around how to measure CRM maturity and evolution.

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