According to the latest Bain & Company study of management tools reported in the current Harvard Business Review, CRM is pretty much a mainstream tool in business today. And judging by the extensive writings about Customer Experience Management (CEM), it is well on the way to becoming a mainstream tool as well.
If we take much of CRM to be in effect managing customers for the benefit of the company, and CEM to be managing customers for the mutual benefit of both, we see that both are under the direct or indirect control of the company. The customer may be getting a better deal out of CEM, but it is only because the company allows him to do so (on the assumption that it is good for long-term business). But what if the customer were in control rather than the company?
Two projects are exploring what happen when customers are in the driving seat. The first of these, The Buyer Centric Commerce Forum in the UK, is the brain-child of visionary marketing journalist Alan Mitchell. Writing in Marketing Week, other marketing periodicals and his excellent book, ‘Right Side-Up’, over the past 10 years, Alan has staked out the ground for a vision of customer business where customers collaborate with the help of aggregation tools to buy through a reverse-marketing model. Based on multi-sided market principles, the aggregation tools allow customers to aggregate their requirements together and then use the buying power this brings to get better deals out of suppliers. More recently, the second of these, Project VRM, has been set up by Doc Searls at the Berkman Centre for Internet & Society at Harvard University. It covers much of the same ground with a strong emphasis on the importance of customers owning their own data and being free to use it for their own purposes, rather than companies owning their data.
There have already been spontaneous examples of buyer centric commerce through mobile-phone coordinated flash mobs appearing suddenly en masse at shops and demanding significant discounts in return for a great deal of immediate sales.
Maybe customers collaborating together through aggregation tools is the way forward for customers, once the honeymoon with CEM is over.
What do you think? Is CRM & CEM doing just fine? Or is it time that customers were in control?
Post a comment and get the conversation going.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Lao Zi, a philosopher of anicent China, writes in Dao De Jing, that the optimal state is “Wu Wei.”
Wu is simply “does not exist.” Wei means “purpose.”
Wu Wei means no purposive action, or natural action – as planets revolve around the sun, they “do” this revolving, but without “doing” it.
When firms learn not to perform those intentional actions taken to benefit themselves or actions taken to change how customers think, that’s the next step.
Daryl Choy, the founder of Touchpoint eXperience Management, helps firms make a difference at every touchpoint. Choy can be reached at wisdomboom.blogspot.com.
Hello Graham,
Thanks for you article, it is certainly an interesting question to pose. There is a lots of organisations and individuals that have a keen interest in what is next after CRM and CEM. Certainly the process of developing these capabilities in an entire industry in itself, so no doubt the many consulting groups, IT vendors and the swathe of analysts and project managers are keenly looking to explore where they should invest their time over the next 5 years.
One would have to assume that the rise of ‘what’s next’ wil occur in a pattern not dissimilar to the advent of CRM and CEM. Like “Personnel to HRM” or similiar movements relating to suppliers, the next customer centric/oriented philosophy would be due in 2008/9 (for early adopters) and 2010/11 for mainstream/industry based adoption (i.e. large scale investment in processes, people, technologies)
You have suggested a candidate, which is a logical extension for the current state. It is one that involves a degree of recursive thinking. Specifically, organisations enabling(!) customers to be part of the organisational process of managing themselves.
Of course, there are the notions of relinquishing a degree of control to customers, a ‘leap of faith’ to a greater possible profitability. The concept of partially or wholly self managing, empowered customers being more profitable, would be a challenging one for many CFOs, Sales Directors and others, who have to date, staked their careers on their ability to (sort of) control revenue streams through the managing internal processes and people.
To me, the most likely candidates to pursue this avenue would be public sector organisations, perhaps those in the public health area. The value sets of both parties (the organisations and clients) may be more conducive to “customers in the driving seat” where the concept of profitability is not a strong influence.
Saying that I would also like to see other candidates explored for a world after CRM and CEM, and what influence factors that are currently at play would shape TNBT (the next big thing).
The candidates might be:
1. As you have put forward. Customer’s organised individually or as groups and equipped with tools equivalent to or better than existing organisationally based ones, where the group or community dynamics is the market driver for a given product, service etc
2. Organisations further develop analytical models and informational systems to more precisely know the treatment strategy for a given customer or group, on-the-fly. This is what I would see as “living the CRM dream”, which is an extension of the current model to a more homogeneous, globally consistent one, i.e. futher optimisation of CRM and CEM
3. A regression from the current intrusiveness that is curbed by state or citizens. For example there is currently a position that have been taken by the European Union through the parliament to review potentially excessive TV advertising in Italy. The basis of this is that this is causing an adverse social effect. The outcome could be that the E.U. enforces the set of advertising rules that government marketing campaigns on publicly accessible television. Recently of course in the US, the ability to opt out of telemarketing is another example.
4. That the current state of the global economics is such that the system(s) of marketing, sales and service have grown so substantially in the last 15 years, and with the likely further introduction of seriously large markets (China, India, Africa) capable of purchasing mainstream products with thier middle class incomes will drive further growth (expansion) of CRM. This will result in a system of marketing/sales and service that is too large to possible change to any significant degree. (Think of the current global investment/dependency on oil and all it’s peripheral infrastructures (ships, pipelines, gas stations, cars, industry, etc) as a comparison.
Some of the interesting factors to consider might be.
1. The stratification of wealth in what we have previously thought of as poor countries, and how this wealth will be spent on consumables
2. Climate change and the movement, politics and regulations that will ensue (Australia, the only other main country (apart for the US) has agreed to ratify Kyoto). Experts generally agree that there would be at least a short term impact on the global economy
3. Oil production peak. The point at which the consumption of oil (or at least the rate extraction) declines relative to the projection of how much is left. This leads of course, to price fluctuation that affects manufacturing, and distribution costs of products pretty quickly, leaving left in the coffers to spend on marketing, sales and service(apologies for the gross over simplification!)
4. Sub Prime mortgage crisis. I guess we will find out first Qtr 2008 when the banks disclose more. The recent investment by the European central bank in the propping up loans in european, and moves buy the Congress in the US are attempts to curb the potential collapse of middle and lower income mortgage holders. We’ll see how successful they were in early 2008, but this will be a cash drain on organisations who have invested BIG in CRM/CEM to date. JP Morgan Chase, Bank of America, CitiBank, ING, Abm AMro etc. All this affects construction, house prices, bank’s liabilities, pension funds.
Apologies if I have painted a less-than-optimistic picture! I am actually quite positive and excited about what is next specifically because it is going ot have to be so compelling, have such cut through, so as to overcome some of these challenges. Going back to my opening remark, I think that those administering the implementation of TNBT (the next big thing), which have the characteristics of being “super” consultants, analysts, IT vendors. With that in mind it is an exciting time for all involved!
regards
Daragh Henchy