Most of what passes of as CRM is not CRM

CRM as practiced is not CRM.

CRM is about taking the seed of the initial enquiry, inital order, intial sale and turning this into a mutually beneficial relationship through hard work.  Work that creates value for the customer AND which allows the supplier to take a share of this value and put it into his revenue, profit margin and profit buckets.  This kind of work is best thought of as applied R&D –  an iterative process that requires investment now to create valuable profit streams over the longer term.

CRM requires considerable interaction and dialogue between the supplier and his customers.  It involves closing the physical and emotional distance between the company and the customers.  This is best done by allowing these customers voice  on products, marketing communications, retail stores, website, customer services, billing etc.  And by seeking out customers and getting them to submit ideas and vote on changes that are being considered by the company – a radical extension of this train of thought is the introduction of prediction markets in which customers are invited to participate.  All the listening has to result in changes that create value for customers.

CRM rewards the customers engagement – interaction and dialogue – by intelligently acting on what has been learned from customers.  Action that leads to changes in the way that the company does business.  Changes that address the needs of customers. Changes that create value for the customer – in some way making the life of the customer better.

Most of what passes for CRM are efforts to make the Marketing, Sales and Customer Services functions more effective and efficient – usually through changes enabled or driven by information technology.    In short, CRM as practiced is often about either operational effectiveness or/and operational efficiency.  And efficient and effective operations  may or may not lead to compelling customer experiences that build customer engagement and customer loyalty.  Often they don’t as optimising the parts often degrades the performance of the whole.  And the customer experiences the whole.  This may explain why customer’s satisfaction, engagement, loyalty towards big businesses continues to be less than great despite the money, time and effort spent on CRM projects and programmes.