From the CRM Trenches: A 30-Year Perspective
For the past 30 years, I have been deeply honored to actively participate in our ever-changing CRM industry. What follows is part one of a two-part 30th-anniversary special (part two will be published in the August 2015 issue of CRM). Part one focuses on how customer engagement has changed over the years and how these changes have affected both the critical CRM people, process, and technology mix and CRM user adoption. Part two looks forward five years and focuses on emerging technologies and techniques—including mobility, social CRM, and the Internet of Things—that strive to support the new customer engagement model.
WE'VE COME A LONG WAY!
Think for a moment about technology's progress during the past 30 years. In 1985, there was no Internet; today more than 3 billion people worldwide (40 percent of the global population) have access to the Internet. There was no Facebook; today 1.4 billion people are active Facebook users (20 percent of the global population), of whom 890 million are on it daily. There were barely any mobile phones, and certainly no such thing as smartphones; in 2014, 1.2 billion smartphones were sold worldwide (17 percent of the global population). Business analytics was in its infancy; today, only the unwise executive would deviate from data-driven decision making that leverages the abundance of available customer, market, and competitive data. The concept of "omnichannel"—selling products and services across multiple channels—was in its infancy; today, customers expect products and services to be available in all of their preferred channels.
The impact of these and related technologies has been mind-boggling, and has forever changed the perception of what makes an exceptional customer experience. Consider the following:
• the influence that Amazon's "product pairing" based on smart analysis has had on bundled product offerings;
• how Zappos's revolutionary customer return policy has raised the bar on customer service and complaint resolution;
• how Disney's "magic" experience has changed forever the customer's expectation of brilliant service;
• the impact of FedEx's decision to offer online package tracking; and
• the arrival of Twitter, Yelp, and related technologies to usher in the era of instant customer satisfaction ratings and the "now" customer.
These new technologies and their effect on customer expectation have also forever altered the customer engagement model. In a nutshell, the customer relationship pendulum has swung away from the organization and toward the customer. The old one-way, company-to-customer dialogue has been replaced with a two-way dialogue via the customer's channel(s) of preference. All organizations—private, public, and not-for-profit—now face the same issue: How do we change our go-to-market strategy to ensure we're selling the right product or service to the right customer at the right time?
HOW WELL HAS THE CRM INDUSTRY RESPONDED TO THIS PARADIGM SHIFT?
I'd give our industry a B minus for the reasons noted below, but first a reminder of the importance of the CRM people, process, and technology mix. At the core of every successful CRM implementation is this critical mix, in which 50 percent of the success of an initiative depends on people, 30 percent on process, and 20 percent on technology. Said differently, 80 percent of an implementation's success depends on getting the people and process components right; CRM is not a technology game.
But that's the rub—too often, organizations have failed to get the mix right, resulting in low user adoption and suboptimal CRM performance. The consequence: Most of these organizations are currently not in a position to leverage these new technologies to meaningfully adapt to the new customer engagement model.
Technology (20 percent of a CRM initiative’s success): Technology has gone through several significant shifts. Aurum and Siebel software meaningfully changed the landscape in the 1990s; both offered robust CRM software suites as well as enhanced technology. Salesforce.com and MS-CRM did the same in the 2000s; both offered cloud-based computing and Web-friendly, easier-to-use software. CRM software vendors today offer more and better technology integration, with back-office ERP systems, social media sites, and third-party software point solutions (e.g., customer engagement software). They also increasingly address the need for mobility, multiple access platforms (e.g., laptops, tablets, smartphones), and social media integration. These are all positive developments that address customer expectation and deliver enhanced customer engagement options.
But the big technology issue hasn't gone away: Despite CRM software vendors having become increasingly sensitive to the people, process, and technology mix—especially since the dot-com bust of the early 2000s—many vendors still sell technology rather than technology solutions. And CRM users still hope and believe that CRM software will be the magic bullet that increases revenue, delivers better customer service, and so on, overlooking that software accounts for that mere 20 percent of success.