CRM: A Mode or Real Strategy?

Eric Pontoizeau
Member

Posted 16-Sep-2004 03:39 PM
I'm student in a business school and I face a big challenge to answer:

- CRM is a mode or a real strategy?
- CRM is it likely to modify the great marketing principles?

I have graduated with a master degree in e-business, and I'm now doing a thesis about CRM.

I would like to know views on this subject.

Eric.P

Edwin Setzpfand
Member Council
Member

Posted 29-Apr-2005 06:04 AM

quote:
I have graduated with a master degree in e-business, and I'm now doing a thesis about CRM. ..

Eric,

You surprise me .. with such qualifications ... shouldn't then you tell us about CRM strategy rather than asking .. or? Confused

(But you are at least right in one thing, to many these issues are a challenge!)

Edwin

Jeremy Cox
Member

Posted 15-May-2005 12:58 PM
Eric, some clarifications is needed before I can give you a sensible answer:
What do you mean by 'mode'?
Which great marketing principles do you mean?'

I certainly got the impression at the turn of the last century, that CRM was seen as the great silver bullet for business and that therefore Marketing was dead. I believe this was incredibly naive and ill-informed.

A friend of mine runs a small textile company in Britain. However well he looks after his customers, he knows that sooner or later they will desert him for lower cost goods from India and Indonesia. He is moving into an entirely different business outside textiles, in order to survive. CRM won't help him as much as good marketing i.e. working out where he can make a sustainable profit. He may well have to develop a new customer portfolio. Once this gets going CRM will be of use to him.

Both Strategic Market Management and CRM are required. The former helps you figure out longer term business direction and strategy; the latter
keeps you on the ball once you've won those customers.

Jeremy Cox MA DipM
Managing Director
The Wisdom Network Ltd,
www.thewisdomnetwork.com

Edwin Setzpfand
Member Council
Member

Posted 17-May-2005 03:30 AM
Hi Jeremy,

(I'm afraid that Eric maybe is not participating in this discussion anymore.)

You have an interesting point here..

It's true that CRM won't help you when you have no customers or when your customers are deserting you for reasons beyond your control. But what wonders me is whether your friend instead of becoming a victim of the India/indonesia "boom" has tried to use it ..

Has he tried to outsource the manufacturing of the textile goods to India/Indonesia and market the new variety? By moving to an entirely different line of business his expertise in the textile business more or less is thrown out of the window.

Or to rephrase my question: Why has your friend concluded/decided that his expertise in "CRM for textile produced locally" would not help him enough to survive after being transferred into "CRM for textile produced elsewhere"?

This brings us to an interesting new strategy discussion:

If CRM a/o aims to conduct your business in a customer-centric way and if your customers want a big change in your products (they want it to be produced and sold at a much lower price as is the case here) then what should you do? Should you go with them (for instance by outsourcing the manufacturing to keep the costs low), aim at another segment (customers who prefer high quality and are prepared to pay the higher price) or end the business (and maybe start another one like your friend did)? Or?

To what extend is this still a CRM issue?

Edwin

Jeremy Cox
Member

Posted 19-May-2005 12:39 AM
Hi Edwin. i asked the same question more or less, and his answer was that it woould mean competing with his existing customers, which he was loathe to do and also they had a head start in having their own customers.

I think it is important to recognise that CRM is not all encompassing. Strategic Market Management looks out into the future—near term, long term and assesses these kind of changes. Firms can then develop new strategies, value propositions and new business models.

both disciplines are needed for survival and rapid adaptation. I've submitted a paper to Qwynne on the subject—which hopefully will be published.

Jeremy Cox MA DipM
Managing Director
The Wisdom Network Ltd,
www.thewisdomnetwork.com

Graham Hill
Guru
Member

Posted 19-May-2005 06:46 AM
Jeremy

It would be interesting to find out if your friend had looked long and hard at what his customers needs, wants & expectations are, at what his real business capabilities are and whether they could be matched in a way that would remain profitable for him.

When I say look long and hard, I don't mean assume that he already knows what his customers require, I mean sit down with current potential and ex-customers and go through a process of thinking about these things from first principles, and then do the maths to see if they add up to a new but still profitable business. There are a variety of tools & techniques that can help go through this in a structured way.

In my experience, businesses of all sizes tend to assume that customers want what they or their competitors are already providing, at current price points or lower (of course). Many of these same businesses find that a significant proportion of customers actually want something quite different to what they are currently offered when they sit down and go through it with them in this way. This can lead to some very profitable business innovation that builds upon the existing customer base or existing capabilities.

Knowing you as I do, I am sure that you are the exactly the right person to help your friend go through this process.

Graham Hill
Independent CRM Consultant

Helmar
Member

Posted 20-May-2005 09:23 AM
Jeremy wrote:

I think it is important to recognise that CRM failed (or performed sub-optimally) simply because it hasn't been treated as all-encompassing. It's been treated as a tactical, quick-fix that was supposed to lead companies to the Promised Land—an illusion, if there ever was one.

Strategic Market Management, in my opinion, is an integral part of CRM, because how on earth do you want to implement customer-centric strategies if market management operates outside of it? Doesn't make sense to me, never has, never will.

As long as people view CRM from this narrow-minded perspective, nothing will change the performance record of CRM. However, it's just this narrow-minded view that is still peddled even on this site. Time for a change.

Those who continue to refuse to acknowledge the real face and truth behind CRM will still discuss its definition (and failures) in 10 years time, I'm afraid, IF they are still around by then.

Helmar

--
Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org

Edwin Setzpfand
Member Council
Member

Posted 24-May-2005 04:40 PM
Helmar,

The "failure" and "sub-optimal performance" of CRM has been addressed on these CRMGuru pages many times already and that will continue. This does not say anything about the real "failure" of CRM.

But I don't agree with this "CRM failed". Simply because it is an endeavour which is the result of the serious intentions from 1000s of, well, colleagues. Intentions which may aim at the same target, but will fail to do so due to the undirectedness of it.

It is not like implementing SOX or Basel II compliance, which can be verified in a quite straightforward way.

The work on these pages is nothing less than a serious attempt to give direction and guidance to the development of CRM, SMM, and related concepts.

Even "narrow-minded" views, in my opinion, can be valuable contributions to these discussions.

Your observation regarding the position of Strategic Marketing Management (SMM) vs. CRM is right, but I don't see how a different view on SMM vs. CRM can be the (single) cause of the bad performance record of CRM. If I understood you correctly, that is.

The interesting thing when looking at "failed" CRM (and other) projects is, that in many such cases one didn't have a consistent view at the project startup about what should qualify as a "success".

I am convinced that -even when SOX and Basel VII will be long forgotten artefacts- people still will be discussing the definitions of CRM or its successors. Not because of narrowmindedness, not because of failure, but because the concept of "CRM" is one of these things that cannot be framed in a mathematical sense, as it is based on notions like brand, image, promise, trust and perception.

Therefore, I certainly hope these definition "wars" will continue, because when we would reach a stage that no one has a new view on how to better tailor a business & its ICT towards customer satisfaction, then no longer shop owners will have customers asking for a new model, no longer call centres will be called for an upgrade... and no one remembers CRMGuru and its discussions.

Just as it is in the nature of Man to always ask for newer, other or better, it is in the relationship between these concepts that we must continue to seek new ways to meet those demands.

We will never reach the end.

Edwin Setzpfand

Helmar
Member

Posted 27-May-2005 06:10 AM
Edwin wrote:

The term "flogging a dead horse" comes to mind here. If people really understood CRM, they would have had their questions answered already on CRMGuru and beyond. So either they don't really get it, or CRM is practically unachievable. Perhaps it's even been designed and promoted that way by vendors and consultants.

Undirectedness is one way of putting it. Isolation or narrow-mindedness are other ways, especially if CRM is driven into the market from an IT angle.

Actually, the real CRM can be implemented and verified in a very straightforward way. It's just that it would happen outside of what normally (as opposed to naturally) falls within the realm of CRM.

Of course do narrow-minded views contribute to the discussions, even if only to verify how little progress CRM has made over the years, and how "locked" people are in their traditional and non-lateral thinking. Those views also help in defining oneself, least of all because one doesn't really want to repeat other people's failures or waste of time and resources.

You did understand correctly. Smile Let me put it in more simple terms by use of an analogy: if you drag your better half to rugby and cricket matches although she prefers movies and theatre, you mustn't be surprised if she leaves you. IOW: bad performance due to analysis and interpretation errors. If you misunderstand and subsequently mal-define CRM, how do you expect it to yield the desired results. If you constantly look at and work on 20% of what CRM is all about, how do you expect to yield results if the 80% are intrinsically linked to the 20%. (As a frame of reference, 20% only have meaning if they relate to 100%. Thus, disregarding the 80% by definition means voiding the 20%—hope this is not too metaphorically speaking. It merely says: all is connected, even -or especially- in CRM).

Exactly, but one must understand that "success" means different things to different people in different departments. This is why the real CRM is the result of having worked successfully on making those "departmental successes" reality.

Oh... now we're talking. This is what I have been saying for years. As a result, you achieve "CRM success" by not directly aiming at it, but by working on the periphery, by removing the bottlenecks inside the organisation, which enables it to satisfy customer demands, which in turn allow further organisational growth and adaptation. Ichak Adizes has been writing on this for many years: the constant inside-outside process of organisational development.

That said, whereas in your view "CRM" lacks the ability to be mathematically framed, all those small things inside the organisation that lead to proper Customer Relationship Management can be mathematically framed. And as those small things make up the large thing we call CRM, those small things are automatically part of CRM.

Going back to the beginning, if you only look and deal with 20% of the complete picture, don't expect any more than 20% of the success.

Very poetic. :-) In this case, however, the inappropriate definition of CRM and its subsequent substandard implementation has not only lead to higher prices, but also to endless waste of organisational effort and talents. At the same time it hasn't really benefited the customer; it has only led to a further exploitation of "the market", rather than to cooperation and collaboration. These two elements are characteristic not only of a successful CRM implementation at company level, but a functioning and sustainable society. Remember, business reflects society, just on a different level. Looking at this, I doubt we've made much progress in the past, because at least on my side I cannot name one single company that is doing business with me in a different way than it was 13 years ago.

Very true and laudable, if the ultimate goal is the betterment of society rather than the enrichment of increasingly psychopathic organisations whose only goal is to maximise shareholder value at all costs. Posting record profits while at the same time shedding labour that in most cases will find it increasingly difficult to regain employment.

The reevaluation of what CRM is has a direct lik to the reevaluation of how companies do business, and subsequently how they define their role in society. As it's individuals who make up these organisations, it's eventually up to us to reshape them, thus reshaping -if not redefining- society. The real CRM is an integral part of that process and, not quite coincidentally, the first time organisations are given the methodological means to effect the changes that result not only in organisational, but also personal and societal success. Stuff up CRM at organisational level and you'll see its waves negatively affect both individuals and society. This is what has happened so far. It's time for a change, and this change begins with the people who claim to be CRM experts.

Helmar

--
Helmar Rudolph helps companies succeed with their CRM-related business transformation process by utilising his unique "Diamond CRM" framework.

http://www.helmar.org