• August 1, 2005
  • By Denis Pombriant, founder and managing principal, Beagle Research Group

Three Trends to Watch

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There are three emerging trends affecting CRM. In no particular order they are business process management (BPM), the move to make hosted systems more flexible to modify and integrate, and an emerging drive to focus on the return on each customer relationship, rather than simply focusing on individual transactions. For years we have heard various gurus explain that capturing a new customer is much more expensive than making an additional sale to an existing customer. And though most of us acknowledge this logic, we have done little from a systems-and-methodology standpoint to take advantage of this insight. Peppers and Rogers recently published Return on Customer: Creating Maximum Value from Your Scarcest Resource. They've introduced ideas and metrics that should make it easier for the rest of us to not only get it, but also change the way we set up our businesses and work with customers to achieve better results for all parties. Of course, being better about how we deal with customers is not a quick or simple fix. Today's customer is wealthier, better educated, and more time starved than any in history. Moreover, they--we--have been educated to believe in our uniqueness and the uniqueness of our needs. That's why dealing with customers can be so challenging, and why business processes must be flexible. Perhaps the only certainty about our business processes is that at some point in the near future they will need to change to better handle the changing needs of customers. And it is that potential for change that drives our attention on integration and customization, mediated by things like Web services, SOAP, and other advanced protocols. Over the past year organizations like NetSuite, Oracle, Salesforce.com, SAP, Siebel, and others have announced or delivered products that begin to address the process issue in earnest and make integration and development easier, faster, and less expensive. But all approaches are not the same, even though they might rely on the same underlying standards. The great divide on this issue centers on how integration and new development are accomplished. Traditional approaches have been data-centric, the logic being that if we can simply describe the data model for everything that happens in a business, then we can build the screens and reports that we need to run the business. But that does not adequately take into account the one real variable in business--the changing customer. In a world that increasingly focuses on process, especially processes that evolve, defining the uberdata model begins to look like a fool's errand or a Monty Python skit. We hear increasingly about customer centricity, but the path to customer centricity and all the good things that it implies for both our businesses and our customers goes directly through BPM and our ability to adapt our systems when customers change their minds. There may not be any ultimate solutions to the issue of the customer on the horizon. But, we're beginning to ask some important questions about our customers and how we can better deal with them. The summer now ending may prove to have been the point at which we finally turned from a data and transaction orientation for CRM, which has been so beneficial for vendors, to something that more closely addresses the customer. Denis Pombriant is the founder and managing principal of Beagle Research Group, a CRM market research firm and consultancy. He can be reached at denis.pombriant@beagleresearch.com
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