CRM in the Age of Customer Engagement
If I were to ask for your definition of customer engagement, what would you tell me? If I were to ask what the sales technology (software) market sells, how would you answer? If I were to ask what the difference between CRM and customer experience management (aka CXM) is, what could you possibly say?
Welcome to the current world of CRM, where definitions are changing and markets are roiling, morphing, and begging for new definitions, since buyers are trying mightily to figure out what it is that they should be buying.
Want proof? Let's look at a few cases that make my point.
Case 1: Dropping the "S" from SCRM
In December 2011, I did an informal research "study" (I'm stretching it to call it that) that involved either reading or having conversations with more than 300 CRM practitioners. What was fascinating was that the younger practitioners, those who have been in the business for five years or less, did not know there was a CRM that didn't include social channel communications.
While this is anecdotal, it points out a much bigger trend, which is that "social" is now part of the mainstream discussion and doesn't stand on its own as an initiative. If you are a business, you have to do something that involves social channels—customer service and marketing are the first things that come to mind. You use the channels in the same way you use email, face-to-face discussions, phone conversations, and text messaging to communicate with customers. Also in 2011, EConsultancy did a study that indicated that more than 60 percent of the all the companies involved with social initiatives were beyond the experimental stages. And that was three years ago.
These are strong (though in a short column, limited) indicators of the transformation of CRM back to just CRM. CRM will never be just the traditional functions we all know and maybe love again. The communication and information revolution of the past decade has transformed how and what customers demand and want and thus what technology companies have to provide to their buyers to help them engage those customers without breaking the bank.
Providing this technology isn't a trivial matter. With IDC predicting a CRM market around $18 billion this year and Gartner Group forecasting a doubling of that market to $36 billion by 2017, what the market is and how it is represented becomes very important to the companies providing the products and services and to companies buying them. Having a poor definition of what something is and does can lead to a bad purchase, which can take down a company expecting one thing and getting another.
Here's my new definition of CRM as it now stands: CRM is a business science with a defined philosophy and a set of strategies and programs, supported by systems and technologies, designed to improve human interactions in a business environment. Its purpose and its value are to make the customer's experience with the company good enough to provide a mutually beneficial outcome over time, even as expectations change.
Case 2: The sales market is changing
Another case in point is the sales market. For many years, when it came to CRM, sales technology was defined by salesforce automation (SFA), which had certain seemingly ironclad functions it provided. Among them were account, opportunity, pipeline, and contact management, and, in some that were more advanced, quoting systems. That is changing as more sales professionals are put in a position of being not just sales closers but also service representatives and subject matter experts—all because customer expectations have changed so dramatically in the past 10 years. In addition, because the nature of competition has also changed, with ecommerce and courier services somewhat leveling the playing field between the larger and smaller companies, companies are forced to know a lot more about their consumers or, in the case of B2B, their buyers and competitors, than ever before. The operational nature of traditional SFA is no longer sufficient to enable what salespeople have to do. The market is evolving to become considerably more complex and interesting. SFA is going horizontal, and technology companies are supporting the alignment of marketing and sales. There is an increasing interest among buyers to support a wide range of new sales activities, from collaborative sales to defining practices, to optimize the possible success of open opportunities.
Companies such as InsideView have moved from being the market makers in sales intelligence to providing marketing intelligence, but that's marketing intelligence aligned with sales outcomes as well as with what has traditionally passed for competitive information. That is more "CRM intelligence" than pure sales. Lattice Engines has moved strongly into predictive sales and marketing next best actions so it can optimize the outcomes of not just sales opportunities, but marketing campaigns as well. Clearslide gets into the realm of what it calls sales engagement management, making sales opportunities more likely to close because of active and real-time intelligence based on interactions and activities focused around the presentations that sales teams make to their prospects. I could go on, but you get the picture. Traditional sales functionality no longer defines the SFA market, as the sales process morphs and sales get increasingly competitive and difficult and the role of the salesperson changes.
Case 3: Customer engagement is the order of the day
The 21st century has redefined CRM's heart. That heart is now customer engagement—and strategies, programs, and technologies built around customer engagement. More than ever, companies are trying to get close to customers and understand them better so they can figure out what to do with each of the customers in a personalized—but not necessarily personal—way. As far back as 2010, the IBM Institute for Business Value in its CEO study found that 88 percent of the 1,700-plus CEOs surveyed thought that getting closer to their customers and knowing more about them was their top five-year strategy, which in theory, at least, puts us in year four of that.
As a result, there is now a customer engagement technology marketplace, with companies such as Thunderhead, Oracle, SAP, Microsoft, Salesforce.com, NICE, SAS, and Clarabridge, among dozens of others. In fact, as mentioned above, Clearslide considers itself sales engagement management, straddling both markets.
What makes this simultaneously fascinating and confusing is that, when it comes down to it, most of the companies in this market may call themselves customer engagement companies but don't compete with each other because their products are so different. Thunderhead's focus is customer journey management, NICE's is customer engagement analytics, SAP's is more Web-based marketing, Clarabridge is focused on sentiment and text analytics, and Oracle is oriented toward marketing, sales, and customer service tied to order management and ecommerce. All in all, entirely different approaches to customer engagement.
None of the players are wrong per se. There is no definition to this emerging market yet, and all of them have decided to play in it. Actually, this is an opportunity for them to define the market, and the first one or two to put a stake in the ground and provide some thought leadership can potentially own this one.
Just for the record, my definition of customer engagement is "the ongoing interactions between customer and the company, offered by the company, chosen by the customer."
What it all means
These are just three examples of dramatic changes in the world of customer-facing strategies, programs, technologies, and systems. There is a lack of definition, a transformation of the marketplace itself that the vendors have to get their arms around if they want to meet the dramatically altered demands of customers who have a wider array of competitive offerings to choose from. The buyers need to get their arms around these roiling changes because if they don't and thus they make a bad decision, well, jobs are harder to come by. But good decisions and staying on top of the confusing but still explainable transformation of the customer-facing marketplace can yield the kinds of results that make businesses successful and careers satisfying. Just be smart. Read and think. It will all work itself out in time. It's really up to you to figure out how much of that you want to be involved with.
Paul Greenberg (@greenbe on Twitter) is president of consultancy The 56 Group (the56group.typepad.com), cofounder of training company BPT Partners, and director of research for The Bullpen Group. The fourth edition of his book, CRM at the Speed of Light, is available in bookstores and online.