Now What? The Post CRM World

Posted: November 30, 2005 in CRM

It’s time to start thinking about what comes after CRM.

I am not trying to be alarmist or to set a dire tone, I just think there’s a good amount of evidence that CRM has taken us as far as it’s going to and we need to think about something beyond it.

That’s not to say that CRM is dead — far from it. There’s too much sunk cost in CRM systems to think that anyone would seriously contemplate a wholesale abandonment, and CRM has certainly done some very positive things for most companies. What comes next has to be evolutionary and based on the revolution that CRM brought.

Once a Great Notion

Sometimes we forget, but only about a dozen years ago, companies largely depended on their own resources for front office management. Sometimes that meant in-house developed sales systems and the like, but often it simply meant collecting data on paper or, in spreadsheets or contact managers. ACT! got distributed to millions of people who were tired of broken manual systems but who didn’t have the power or resources to build systems any more pervasive than contact management. And contact managers are still going strong, especially in small companies or departments that handle the rest of CRM differently. And although call centers and their applications are a major part of CRM today, much, but not all of, the software that supports them precedes CRM.

Over the last ten years, CRM has helped companies of all sizes to capture and consolidate data about customers and when analytics are applied, to give companies insight into a customer’s hot buttons and strategy for selling more. But, unfortunately, as happens often with new tools, CRM got over used and rather than simply helping companies do a better job of servicing and suggesting, the tools of CRM became the enablers of annoying phone calls, too much mail and spam, and who knows what else.

In the process of wearing out CRM’s welcome and its effectiveness, many farsighted people discovered the exact things CRM is good for as well as what it’s missing. And by discovering what’s missing, we’re beginning to understand what’s next.

How to Lose a Customer in Ten Minutes

As is frequently true in situations like this, it’s the academics who are pointing out some of the limitations and the next steps. One, for example, is Glen Urban — not exactly a household name but definitely someone with the credentials to point us in the right direction. Since 1966, Urban has been a faculty member and sometimes dean of the Sloan School at MIT. His latest book, Don’t Just Relate – Advocate, hints at a future where vendors spend a lot more time and effort getting into a customer’s head than simply trying to sell fries if the customer selects a burger.

According to Urban: "For some companies CRM is merely a more efficient means of push/pull marketing, targeting customers in the sense of drawing accurate cross-hairs on their chests. Impertinence and aggressive cross-selling can make your customers treat your company as if it were a cheeky acquaintance — making the customer cross the street to avoid contact with you." Ouch! But it rings true doesn’t it?

That last bit about crossing the street is especially worrisome because it implies that customers won’t simply ignore you and your CRM based outreach, they’ll actively avoid you. It has been said before, but the Internet really has leveled the playing field, customers have greater access to information than ever before and they use it to find the best products and prices regardless of how a vendor might try to arbitrage information.

Sharing Information

Another book, Democratizing Innovation, by Eric von Hippel (another MIT professor), shows how customers are today freely sharing information about vendors as well as tips and techniques — some of it intellectual property — that ultimately becomes public domain information shared for the common good. Leading edge companies in this space include eBay, Amazon and Amazon-like companies (such as Salesforce.com) that encourage customers to write reviews and share information about a vendor, product or experience.

It should be no surprise that the Internet is now the first place that nearly two thirds (64 percent) of people go to begin shopping for a car or that used cars are big business on eBay — that’s right people trust eBay because the system has such a strong mechanism for verification and building trust. According to Urban: "On eBay, customers give positive and negative comments on sellers, and even a few negative comments can immobilize the seller’s auction by reducing the number of bidders." Thats the kind of thing that makes a seller raise the level of his or her game and that is ultimately good for everyone.

Most interestingly, von Hippel points out that such free sharing has been going on at least since the invention of the steam engine. It is standard fare in scientific, medical, andacademic circles and it may be an important part of the wave that comes after CRM.

Coming Full Circle

So what comes after CRM is evolutionary. CRM has given us the ability to collect a lot of customer data as well as the means to analyze the daylights out of it. What we need now are systems, techniques, and business attitudes that will enable us to speak more frankly with our customers rather than at them. That’s a tall order but it is also very exciting. To those who think there’s no "new, new thing" out there, just wait a bit. The next wave won’t involve a stampede to some new product category; it will be a rush to what we thought we always knew.

Comments
  1. Bruce McCracken says:

    Often decision makers become too subjective in policies and fail to tie into the other side of themselves…when they are a customer. Much of the sloganeering of being customer centric rings a bit hollow if there is complexity in the issue(s)and the customer has to run through a gauntlet of automation. Beyond resolution, empathy is important as the CSR can put a human face on a company through their voice. Too much automation and technology can erode the image perceived by the customer.
    Retention of existing customers is less expensive than acquiring new ones.

  2. The CRM Blog says:

    Homegrown and Open Source to Get Last Laugh

    As 2005 was drawing to a close, there was a lot of activity surrounding a new twist on a very old idea: the compute utility. Well, to be more precise, utilities are an old idea that were perfected during that industrial revolution for water distributio…

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