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As we ring in the New Year, it's time to bid farewell to "CRM." Why? Because after more than a decade it still doesn't have a commonly understood and accepted meaning.
What if you gave an "apple" to a friend, who became annoyed because it didn't look or taste like the orange that was expected? Or you bought a "gallon" of gasoline and received an amount that could fit in a coffee cup?
The meaning of words is so important that lawyers and politicians make their living parsing them. Remember former US President Bill Clinton trying to rationalize why he wasn't lying about his affair with Monica Lewinsky when he said, "There's nothing going on between us."
Of course, there was something going on, but Clinton explained it away like this: "It depends on what the meaning of the word 'is' is. If the--if he--if 'is' means is and never has been, that is not--that is one thing. If it means there is none, that was a completely true statement....Now, if someone had asked me on that day, are you having any kind of sexual relations with Ms. Lewinsky, that is, asked me a question in the present tense, I would have said no. And it would have been completely true."
Huh?
So what does this have to do with CRM? Simple, if we can't all agree on what "CRM" is, we don't have a fighting chance of being successful.
War of Words
In fact, "fighting" is precisely the right word. Consultants and vendors are in warring camps, each with vested interests in defining CRM their way. CRM has become a convenient label to sell stuff.
Consultants say CRM is an approach to business or process improvement. It shouldn't come as a shock to anyone that their "solutions" are packaged as consulting services.
Vendors define CRM as something you can implement via their technology. Sure, some give lip service to "CRM is a strategy," but do vendors propose non-technology solutions to solve a CRM problem? Right. About the same percentage as consultants who propose technology without any of their services.
Industry analysts are hardly independent bystanders. Most use "CRM" to define sets of "front office" applications (marketing, sales and service software). But CRM-as-a-business-strategy could, of course, be enabled with many other technologies classified in other analysis buckets, such as call center, performance management, feedback management or even (gasp) ERP.
It's no wonder that people are confused. Like the famous Indian legend of six blind men trying to "see" an elephant by touch, and each forming a very different impression, "CRM" can mean just about anything to anybody.
And now, Customer Experience Management proponents arrive fully armed and ready to escalate the war of words in a new direction. Is it part of CRM? An extension to CRM? An alternative to CRM? The answer depends on what you think CRM is. (Read my take on CRM and CEM here .)
Collateral Damage
And what of the collateral damage done in this war of words? You know, the companies that are supposed to "implement" CRM. Or the customers of those companies that are supposed to be more satisfied and loyal.
Our research has found that companies have enjoyed modest success with IT-focused CRM projects. About two out three projects are successful, whether measured by ROI or the perceptions of project owners and users. Yet, the vast majority of projects we've studied have not received strategic benefits—such as improved competitive differentiation, customer loyalty or profitability—to the extent expected.
Customers say "customer-centric" means things like "high-quality goods and services," interactions with "empowered employees" and "open and honest communications." (Source: Customers Say What Companies Don't Want To Hear .) Despite billions of dollars spent each year on customer-oriented technologies, there's been little or no improvement in customer-centricity over the past decade, at the industry level. Sometimes industry loyalty leaders use technology extensively (e.g. Tesco) and sometimes they don't (e.g. Southwest Airlines). But technology investments alone are not enough, or we'd all be a lot happier with the service we're getting.
Let's Burn the Great Ship "CRM"
When Spanish explorer Hernando Cortez landed his ships on the eastern shore of Mexico in 1519, it was to fulfill his dreams. But his sailors grew tired of the hardships and talked of returning home to an easier life. To ensure they were totally committed with no option of turning back, he ordered his men to burn the ships.
I've come to the conclusion that, for true success with CRM (the customer-centric business kind of CRM, in case you're wondering), the "ship" that must burn is the term "CRM." It's the only way to get everyone on board with a concept that's obvious: Without customers, there is no business, so let's take care of them. But this ship has sailed with far too few people on board.
My advice is to call CRM whatever makes sense to your organization. Call it customer management, customer experience management, customer managed relationships—or, if you insist, customer relationship management. But spell it out and define what you mean, because CRM doesn't have a commonly accepted meaning, and I'm now convinced it never will.
My definition of Customer Relationship Management, for what it's worth, is quite simple: the development and implementation of a customer-centric business strategy. "Customer-centric" means giving your customers what they want. "Business strategy" means accomplishing the goals of your organization. Accomplish both at the same time, and you've got the win-win that CRM is supposed to be about.
This year, instead of more debates of what CRM is or isn't, focus on developing and implementing a successful customer-centric business strategy.
By Bob Thompson, CustomerThink Corp.
What if you gave an “apple†to a friend, who became annoyed because it didn’t look or taste like the orange that was expected?
What if you bought a “gallon†of gasoline and received an amount that could fit in a coffee cup?
Politicians make their careers parsing words. Remember former US President Bill Clinton trying to rationalize why he wasn’t lying about his affair with Monica Lewinsky when he said, “There’s nothing going on between us.â€
Of course, there was something going on, but Clinton explained it away by clarifying the meaning of “is.†“It depends on what the meaning of the word 'is' is. If the--if he--if 'is' means is and never has been, that is not--that is one thing. If it means there is none, that was a completely true statement....Now, if someone had asked me on that day, are you having any kind of sexual relations with Ms. Lewinsky, that is, asked me a question in the present tense, I would have said no. And it would have been completely true.â€
Huh?
So what does this have to do with CRM? Simple, if we can’t all agree on what “CRM†is, we don’t have a fighting chance of being successful. I’ll assume we can agree on what the word “is†means…
War of Words
In fact, “fighting†is precisely the right word. Consultants and vendors are in warring camps, each with vested interested in defining CRM their way.
Consultants define CRM as an approach to business or process optimization. It shouldn’t come as a shock to anyone that their solutions are conveniently packaged as consulting services.
Technology vendors define CRM as something you can get via their solution. Sure, some say “CRM is a strategy,†but has any vendor ever proposed a non-technology solution to solve a CRM problem? Right. About the same percentage as consultants who propose technology without any services.
Industry analysts are hardly innocent, or independent, bystanders. Most use CRM to define sets of “front office†applications (marketing, sale and service). But CRM-as-a-business-strategy could, of course, be implemented with many other technologies put in other technology analysis buckets, such as call center or ERP solutions.
It’s no wonder that our research finds considerable confusion about the meaning of “CRM.†Much like the famous Indian legend of six blind men trying to “see†an elephant and each forming a very different impression, CRM can mean just about anything to anybody.
And now, just when you thought the CRM factions were running low on ammo, Customer Experience Management proponents arrive fully armed and ready to escalate the war of words in a new direction.
Collateral Damage
And what of the collateral damage done in this war of words? You know, the companies that are supposed to “implement†CRM. Or the customers of those companies that are supposed to be more satisfied and loyal.
Our research has found that companies have enjoyed modest success with IT-focused CRM projects. About two out three projects are successful, whether measured by ROI or the perceptions of project owners and users. Yet, less than ten percent of projects we’ve studied have received expected strategic benefits such as improved competitive differentiation, customer loyalty or profitability.
Customers, when asked what “customer-centric,†means to them, say it means things like “high-quality goods and services,†service by “empowered employees†and “open and honest communications.†(link to Lee/Mangen study) While there are shining lights in every industry, the overall satisfaction and loyalty trend over the past 10 years is no improvement at all.
http://www.theacsi.org/index.php?option=com_content&task=view&id=145&Ite...
It’s ironic that today’s so-called CRM industry was born around the same time as the ACSI was started. Since 1994, the index has fallen then recovered to about the same place we started. After 12 years and a gazillion dollars spent on CRM systems, shouldn’t we have more to show for it?
Resolution No. 1: Burn the Great Ship “CRMâ€
When Spanish explorer Hernando Cortez landed his ships on the eastern shore of Mexico in 1519, it was to fulfill his dreams. But his sailors grew tired of the hardships and talked of returning home to an easier life. To ensure they were totally committed with no option of turning back, he ordered his men to burn the ships.
I’ve come to the conclusion that, for true success with CRM, the “ship†that must burn is the term “CRM.†It’s the only way to get everyone on board with a concept that’s obvious: Without customers, there is no business. So let’s take care of them.
For the CRM purists (and you can put me in this camp), CRM is a business strategy, whereby you give more value to build loyalty and receive more value from customers who tend to buy more, stick around longer, and refer others. In short, it’s a win-win exchange of value, not just an IT-powered way to extract more money from your customers.
But this ship has sailed with too few people on board. And mostly because the term CRM evokes a wide range of emotions, depending on your point of view. For some, CRM is a “good†thing—a successful business approach that includes elements of business strategy, goals and measurement systems, organization alignment, process and experience design and, as a helpful enabler, technology.
But others are afraid because the reports of CRM failure. Although these reports were five years old and built on shaky statistical foundations, the media made this is a “fact†in the minds of many business executives. Perception is reality.
The solution is to call CRM whatever makes sense to your organization. Call it customer management, customer experience management, customer managed relationships—or, if you’re brave enough, customer relationship management.
At CRMGuru.com, we resolve to help you create a more successful customer-centric business. See, no three letter abbreviations required.
But what can you do? Let me suggest the following 2007 resolutions for key leadership positions.
