Why CRM Is Not Dead

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A common question appeared to be running through this year's CRM Evolution conference: Is CRM dead?

The impetus for this came from three facts (in my mind):

1. There has been no evolution in CRM solutions or technology for two to three years.

2. More and more CRM "vendors" (as measured by CRM Idol) that come into the market focus on one small function within the larger CRM disciplines of sales, marketing, and customer service.

3. Virtually no organizations are implementing CRM suites or complete CRM solutions—and those that do implement them do it via a piecemeal approach.

Further, CRM is no longer a stand-alone, independent implementation but rather part of a larger solution, where there is an emphasis on end-to-end experiences versus simple CRM interactions. Transactions-wise, CRM is part of a larger world now—so it would be understandable if you thought it was dead. As many people do.

Then again, many people are wrong.

Following the basic principles of conservation of mass (a body of matter cannot disappear completely; it only changes its form and turns into a different matter), we can see where CRM is going.

I wrote before in this column about outcome-driven CRM (where we focus more on the end goal than on the way to get there), and that is also part of this discussion. As businesses move to focus on what they want to achieve from working with customers, the interactions and transactions are quickly left behind, becoming commoditized elements that contribute to an end goal.

When you start thinking of CRM in these terms, you quickly realize that there is no spoon—you are bending reality to fit the spoon. (Anyone? Matrix reference? Anyone?) Or, in CRM terms, there is no CRM. There is a goal and specific business functions that help achieve that goal (sales, marketing, and customer service are top-level collections of those functions). You are then left bending the CRM reality to achieve your outcome.

This means that instead of creating marketing campaigns to bring in new prospects, for example, you will focus on an end-to-end experience of finding, attracting, onboarding, delivering, supporting, retaining, and even expanding wallet share for those same customers. You will do this using some CRM functions, but you will also use traditional back-office functions, such as price quoting, inventory management, and maybe even HR and accounting pieces as part of the end-to-end experience. And even though you are working with customers, the goal should not be to manage those customers.

Of course, this brings us to the question of how an organization can adapt its CRM implementation or plans and strategies to accommodate this new reality.

I have been putting a few ideas together in the past months as I worked with customers on how to do this. There are four lessons we learned that you need to know:

1. It's the outcomes that matter. It is not about collecting data, selling, or moving customers along funnels or life cycles—it is about reaching outcomes of engagement, value cocreation, mass personalization at scale, and delivering to customers' needs and wants.

2. You don't need new technology. Although we have been saying this forever, apparently it is still an issue—CRM is not about technology, and this new model is even less about it. Leverage your existing implementation to achieve those outcomes, and use what you have learned to do right over the past one to two decades doing CRM.

3. Review processes. In the wake of the digital transformation taking over businesses, it is a good time to review your customer-centric, customer-focused, and customer-destined processes and make sure they fulfill the outcomes-first mentality. Find new ways to do things that accomplish that if you don't currently have them in place.

4. Find new ideas. Once you reset your processes, your outcomes, and your expectations (both internally and externally) and are cocreating value with your customers, you will find new things (products, services, interactions) you can do that will deliver more value to both. Focus on incorporating those new processes and functions to evolve your existing CRM efforts.

Are you ready to do this?

Esteban Kolsky is the principal and founder of ThinkJar, an advisory and research think tank focused on customer strategies. He has more than 25 years of experience in customer service and CRM consulting, research, and advisory services. He spent eight years at Gartner and has assisted Fortune 500 companies and Global 2000 organizations in all aspects of their CRM deployments.

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