Most of what passes of as CRM is not CRM

CRM as practiced is not CRM.

CRM is about taking the seed of the initial enquiry, inital order, intial sale and turning this into a mutually beneficial relationship through hard work.  Work that creates value for the customer AND which allows the supplier to take a share of this value and put it into his revenue, profit margin and profit buckets.  This kind of work is best thought of as applied R&D –  an iterative process that requires investment now to create valuable profit streams over the longer term.

CRM requires considerable interaction and dialogue between the supplier and his customers.  It involves closing the physical and emotional distance between the company and the customers.  This is best done by allowing these customers voice  on products, marketing communications, retail stores, website, customer services, billing etc.  And by seeking out customers and getting them to submit ideas and vote on changes that are being considered by the company – a radical extension of this train of thought is the introduction of prediction markets in which customers are invited to participate.  All the listening has to result in changes that create value for customers.

CRM rewards the customers engagement – interaction and dialogue – by intelligently acting on what has been learned from customers.  Action that leads to changes in the way that the company does business.  Changes that address the needs of customers. Changes that create value for the customer – in some way making the life of the customer better.

Most of what passes for CRM are efforts to make the Marketing, Sales and Customer Services functions more effective and efficient – usually through changes enabled or driven by information technology.    In short, CRM as practiced is often about either operational effectiveness or/and operational efficiency.  And efficient and effective operations  may or may not lead to compelling customer experiences that build customer engagement and customer loyalty.  Often they don’t as optimising the parts often degrades the performance of the whole.  And the customer experiences the whole.  This may explain why customer’s satisfaction, engagement, loyalty towards big businesses continues to be less than great despite the money, time and effort spent on CRM projects and programmes

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.

1 thought on “Most of what passes of as CRM is not CRM”

  1. I agree, much of what carries the sticker nowadays isn’t ‘the real thing’. But my agreement with you is only because we share the same (or almost the same) understanding of what CRM actually is.

    The reality is, everyone and his pet iguana have their own definition of CRM – and we may struggle to prove that ours is THE definition, the absolute and indisputable Truth 🙂

    As much as I feel otherwise, I acknowledge certain quarters’ understanding that this is an operational and tactical tool for greater efficiency. For structured (ideally – automated) ‘processing of customers’ at minimised cost.

    Others may see beyond cost efficiency and may even recognise the presence of the ‘R’ letter in the acronym – and seek relationships with customers. And see the ever-elusive Loyalty as the mantra of such relationships. But even that too often translates in those practitioners’ minds as just sustained custom (and market share), and repeat purchasing (and revenues). I have to acknowledge such views despite (ideologically) believing that CRM is a lot more, is a strategic discipline and requires consistent company-wide efforts.

    If we are to draw a taxonomy of the various CRM definitions and ‘schools of thought’ the crux, it seems, is at the very first and fundamental Y-fork:

    – one branch is seeking success as defined in any set of KPI-s (increased sales, reduced churn or extended lifecycles, improved marketing effectiveness, reduced service costs). This is achievable at any level of organisational structure and any stretch of timeline – and the further branches exemplify the various approaches and ‘flavours’ of CRM.

    – the other branch embraces customer centricity as a fundamental business model and philosophy, and seeks best outcomes for all stakeholders in the value chain (shareholders, customers, employees – and more). This requires – and critically depends on – full and genuine leadership commitment at top levels. And the further branches would not be ‘different ways to skin the cat’, but a multitude of things that must be in place for the end result.

    Luckily, this classification tree doesn’t exist – and nobody would expect such profound and honest creed from senior executives. After all, they didn’t climb to the top by being softies. Customer centricity, customer this, customer that, bla-bla-bla (there’s a Corporate Communications department and a PR agency to push this to the masses), but at the end of the day I get my bonus for meeting targets. Does your CRM (or whatever you want to call it) help me there?..

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