• September 14, 2010
  • By Denis Pombriant, founder and managing principal, Beagle Research Group

The Greening of CRM

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I’ve been writing about sustainability as a natural outgrowth of CRM for a couple of years now. I know it takes time to refine a message—and, since the message of sustainability represents a major market turn, it has to be done right. But there’s been scant progress thus far, and certainly not enough.  

By “sustainability” I mean using CRM to help organizations reduce the cost of business processes and increase revenues along three specific dimensions:

• Long-term customer relationships that result in multiple sales. We’ve talked a lot about this, but the results are uneven. Interestingly, social media can play a much larger role here than simply as a megaphone. Social media as a stethoscope is more like it.

• Product and message development. Again, social media plays a role here. To be effective, we need to engage more with products that enable listening to customers through techniques such as crowdsourcing and capturing the wisdom of crowds (two very different concepts). Many industries are in a mature market phase, and in many instances incremental product improvements have to be carefully synchronized with specific needs or new products will flop. That’s social CRM’s greatest opportunity.

• The carbon footprint of business processes. CRM and allied technologies can do quite a bit to help us reduce our carbon footprints and save money. I am not writing as a tree-hugger but as someone interested in the economics of business processes. You can’t look at the massive investment involved in finding and delivering energy to market and not be moved. The costs of energy development are built into the cost of the fuel and as those costs increase our business processes become more expensive. Consequently, we need to leverage CRM to take these costs out of our business processes to the greatest extent possible.

We initiated the industry’s first sustainability award (http://sn.im/thinkfwd10) earlier this year and issued a report that discusses these points and some of the companies that are providing technology that supports more sustainable business processes. You don’t need to be an environmentalist to like the idea of taking carbon—and its costs—out of your business activities.

A recent carbon-footprint study by ICF International showed that viewing a presentation online dramatically reduces an organization’s greenhouse-gas emissions and overall carbon impact: a 99.9 percent reduction compared to flying or driving, 97 percent less than mailing a CD-ROM, and nearly 50 percent less than participating in a Web-based conference.

If you say “So what?” consider this: According to data from the National Business Travel Association, last year travel costs for United States businesses exceeded $234 billion. That includes direct transportation costs as well as hotels, meals, and incidentals. I don’t know what part of that is directly attributed to energy but you can imagine a nice cascade effect developing. Reduced dependence on travel leads to fewer hotel bills and fewer overall expenses. (Not included in the estimate? The indirect costs of being stuck in an airplane. You can’t be as productive on the tarmac as you can be at your desk.)

Sustainability, in all its forms, may be the next big thing in CRM. It gives us a smarter context for social media and opens the door to increased use of technologies already on our doorstep. Content management, video development, social media, portals, and other affiliated tools suddenly have greater validity in the CRM suite in the context of sustainability.

As usual in a situation like this, early movers will reap the greatest benefits as they streamline their business processes. More important, they will look like thought leaders to customers and prospects who will want to see this sustainability thing done—and done well. 

Denis Pombriant, founder and managing principal of CRM market research firm and consultancy Beagle Research Group, has been writing about CRM since January 2000, and was the first analyst to specialize in on-demand computing. His 2004 white paper, “The New Garage,” laid out the blueprint for cloud computing. He can be reached via email (denis@beagleresearch.com) or on Twitter (@denispombriant).

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