Redefining Customer Experience: CRM, VRM and “Disruptive Technologies.”

Last Thursday morning, Bruce Kasanoff and I did a webinar for CustomerThink’s Thought Leadership Webinar series titled “Disruptive Technologies vs. Customer Experience: What You Must Do Now to Prepare.”  The impetus for this webinar was a series of ever more engaging conversations Bruce and I have had over the last few months on the future of customer experience.

It’s no secret that the ways customers interact with, and gather information about, companies is changing. Businesses or consumers, they demand more…and get it from more places than ever.

But Bruce and I believe that our world is at the early stages of yet another shift in technology, where innovations and the disruptive forces they unleash are going to affect almost every industry (and most businesses), if they haven’t been affected already.

These disruptive forces and the technologies that drive them are changing the ways customers interact with companies – profoundly affecting customer relationships and experiences, and the way products and services are sold and consumed. In our webinar, we outlined six of these forces, and articulated ways that companies can begin to assess and harness them today.

Yet as significant as these changes are, the real story is how control of the customer relationship is shifting from companies to customers.

Customer Relationship Management (CRM) is about companies trying to manage their prospect and customer relationships.  Even though billions have been spent on CRM over the last 15 years ($9+ billion in 2008 alone), overall customer satisfaction has remained flat. Why? Because CRM primarily benefits companies, not customers. The recent rise of “Social CRM” doesn’t do the job much better. That’s companies saying, “Hey, how can we manage our customers now that they’re using social media to share more information about themselves?”

Vendor Relationship Management (VRM) is the flip side of CRM. First coined in 2006, VRM has the power to give people – individuals who recognize their value as customers, and wish to better define the terms of their relationships – the software, tools and ability to manage their vendor relationships, as well as their interactions and experiences.  Instead of being “managed” by the companies that serve them, customers can become truly empowered in the marketplace. 

In a recent post on his blog titled 1toEverything: innovation through a customer’s eyes, Bruce adapts the IDIC framework (Identify, Differentiate, Interact and Customize) first created by Don Peppers and Martha Rogers of One-to-One fame to frame the customer’s view of this ever more interconnected world. Basically, this is the framework for mapping the customer experience that customers want.

Here’s where it gets really interesting.

His post – and the ideas behind it, including the foundation for our webinar – has clearly struck a chord. As Don Peppers noted in his comment on Bruce’s post, “…applying IDIC to questions that go beyond traditional CRM and 1to1 marketing issues is a great idea, and I immediately got your logic. It makes great sense, and your illustration is perfect.”

Then Doc Searls, co-author of The Cluetrain Manifesto, and creator of Project VRM at the Berkman Center for Internet & Society at Harvard University, picked up this connection in a comment, and ran with it in his post “1 to Every.” In it, he says: “It’s still early. What we have so far is just the beginning of what we expect to be quite huge by the time it becomes established.”

He’s right. It is early. But this is a turning point in the ways companies and customers relate. And those companies that really get this are those that will have a chance to actually “differentiate” from their competition on customer experience.

Which is where these perspectives intersect.

If we look at CRM as the corporate view of customer relationships, and VRM as the customer view of their corporate relationships, the real promise of “customer experience” as a strategic discipline comes into focus: Straddle these two perspectives and embrace the tools they enable to leverage disruptive innovation in ways that benefit everyone.

Today, many companies are working to fix customer experience one touchpoint at a time. And while this is very important – what’s broken today should be fixed – transforming customer experience means going well beyond tactical fixes and incremental process improvements. It means looking at ways to leverage experience to blow the competition away, and truly “wow” customers.

After all, in a world where technology is empowering customers to be smarter about how they interact and deal with companies, companies need to get a lot smarter about how they deal with their customers.

If they don’t, well, they’re just being stupid.