Reimagining CRM, Part One

And one more thing: Companies had to demonstrate to individual customers that they were valued—meaning that communication and information were tailored. That is what everyone (including me) now rather coldly but accurately calls personalization. This had to be a two-way street. Customers had to get the information they needed to be able to choose how to deal with companies, and companies needed to, of course, get value in return, which is an ongoing relationship that ends in a transaction, or five.

To hold up their end of the relationship, companies had to be smart and prove their worth to customers since, with the rise of e-commerce and social channels and the vastly increased availability of information, control of the conversation and transactions had passed into the hands of customers. A company could no longer just sell products and associated services; it had to provide the tools and even consumable experiences to be different enough, and personalize the customer’s experience enough, to keep the customer on board. In other words, customer engagement was the order of the day. The data was there. In its CEO study in 2010, the IBM Institute for Business Value revealed that the No. 1 five-year priority of CEOs was to understand their customer better and to stay closer to the customer. In 2014, McKinsey found in its Digital Innovation study that the No. 1 reason companies were innovating (69 percent) was to engage their customers better.

So what did the rise of customer engagement mean for CRM? After all, they are not the same. CRM is focused on helping to manage the business operations of customer-facing departments and automating those processes and procedures so that when humans are needed to interact with customers, they are available. A CRM system is also the primary data repository for customer records—a system of record. Customer engagement technology (not the broader side of strategy and program) is designed to foster the bidirectional communication of company and customer—a system of engagement. They are two different systems. They work well together—systems of engagement provide the communication means that, as they are used, create (unstructured) data that can become part of the customer record; that, in turn, can be analyzed and interpreted and provide organized information that can be used to garner insights about that particular customer. Hamburgers and fries are divine together but are still separate things—if you know what I'm getting at here. Think about it.

So what does all this mean? CRM is changing again. Alone, it is sufficient to run business operations for sales, marketing, and customer service and to provide the vehicle for the data that is needed to analyze who a customer is and what he is doing. But alone, it doesn't foster engagement; that's accomplished by the strategies and programs designed to make customers feel valued—and feel that the company they're involved with is worth the involvement. There's a lot of technology—some 18 to 20 components—that goes into a customer engagement ecosystem (which my next article will describe). CRM is one of them.

There's one big thing CRM can do and will continue to do. In the bigger-picture world of customer engagement, CRM is the operational heart. That means for sales, marketing, and customer service, CRM continues to be necessary, whether you are focused in the smaller world of operations per se, or the larger engagement world.

There needs to be a reimagination of CRM in this new context—of customer engagement, against the backdrop of the communications revolution. The technology functions that CRM provides—from account management to pipeline management to campaign management to identifying the best next action based on the customer profile and data that the record holds—all require a new device-agnostic approach. Whatever I'm doing—developing a quote, communicating with a disgruntled customer on Twitter, executing a mobile campaign—and whatever device I'm using—a phone, tablet, smart device, desktop—I need consistent information and the ability to easily navigate to where I need to be. That takes imagination and execution that we're just starting to see with user interfaces and workflows.

In the next part I'll go over this reimagination in more detail, but for now, reimagine it yourself. CRM is still here, but it's no longer the only necessary piece. It's vital to the ecosystem forming around customer engagement—and it requires some rethinking to make it continually effective. Your homework is to start figuring that out before my next column.

Paul Greenberg is the managing principal of The 56 Group, a customer strategy company. He is also the author of CRM at the Speed of Light, which is in nine languages and is currently in its fourth edition. He is the author of the upcoming Commonwealth of Self Interest, to be published in 2016.