The customer relationship management (CRM) industry is approaching a ten year anniversary. Despite its longevity, there continues to be a pervasive sense of dissatisfaction within the end user community relative to CRM's perceived delivered value. There are three fundamental factors contributing to this:
1. The industry fails to articulate a clear picture of the value it provides outside of the feature/function attributes of the technology.
2. Senior management (user organizations) view CRM in terms of infrastructure deployment instead of in operational and strategic terms.
3. Because the user community fails to approach CRM as an operational strategy, its perceived value is limited to technology efficiency. User organizations must move beyond technology and process productivity to properly assess the system's potential. Only then, can the vendor and user communities establish meaningful discussion about value.
The industry does itself a gross disfavor by using tired and essentially empty terms when discussing the application of CRM. The rate of technology development has largely outpaced the development of management techniques to effectively use the technology. Vendors base their pricing on the level of sophistication their product has, but end users balk because they are unable to leverage a solution's capabilities. As a result, users do not assess the added value highly.
It is time for the CRM industry to more accurately articulate the implied value proposition of their solutions and for senior management to take a leadership position and articulate a true CRM operational strategy. Without these two forces coming together, CRM will be forever relegated to a position of infrastructure and will become one more footnote in the history of failed management concepts.
The Issue
The motivation to write this article was spawned by two recent articles. The first article was based on a survey of CRM experts who explained why they believe CRM initiatives fail. Although some of their comments were refreshingly accurate, there were a number of references to tired old phrases that do little to improve understanding of the real issues and opportunities associated with CRM. The second article was based on a survey of chief executive officers (CIO) about their satisfaction with CRM applications. The survey reported a rather low level of approval and cited various technology and productivity deficiencies. These two articles are representative of the disconnect between galloping technology and the inertia of many organizations to change their operating paradigm. The continued use of empty phrases and the emphasis on implementation as opposed to strategy is not going to help narrow this gap.
The Genesis of CRM: The Perfect Storm
CRM, as a technology, started as a software marketing strategy. The concept was to create a common database between customer service and sales force automation (SFA). The SFA industry picked up on this idea and soon there was massive consolidation among SFA, customer service, and field service software providers. Each vendor (left standing) claimed to have an integrated set of capabilities and the phrase customer relationship management became a bi-word in the world of technology.
On a separate path, Peppers and Rogers (currently a strategic division of Carlson Marketing) popularized "one to one marketing" which established a marketing component in CRM. At the same time, the dot-com era was born and the idea of tracking consumer behaviors at the click level materialized, giving rise to real time marketing. The rush for customer data was soon followed by the realization that there was an ocean of data with few tools to ferret out actionable information.
Since the beginning of this "perfect storm", there has been a quantum leap in CRM tools, but there has been a distinct lag in the management rationale to keep pace. This new set of tools provides the means to integrate the actions of sales, marketing, customer service, helpdesk, field service, and web site design; and it is a way to interface with partners. However, part of the problem is that this spans an enormous amount of resources and responsibility. Since most organizations are structured by function and basically compete for limited resources, each function has a different view of performance, and of CRM for that matter. Therefore, CRM installs have historically involved functional deployments and there has been some success in this approach. The advantage of limited deployment is that it is more manageable in terms of scope and accountability. However, the real leverage for CRM is at the enterprise level.
Key Terms and Phrases
The following terms and phrases are not necessarily inclusive or exhaustive; rather, they illustrate the need to be more precise in our language. From an industry standpoint, there is a need to use terms in a general way, but when it comes to the end user community, the lack of definition generates missed expectations and leads to failure. This discussion is presented to help organizations to better understand these needs and, in some cases, as an admonition to the industry to refrain from using terminology that does not add value to the user community, and as a result, is destructive to the long-term health of the industry.
Customer Relationship Management (CRM)
From the moment of inception, CRM has been defined in a hundred different ways. Since the industry is technology based, definitions tend to revolve around the capabilities of the technology. Gartner was among the first research organizations to effectively argue that CRM is a business strategy and that technology is an enabler. This is where the industry is stuck today: how to describe this management strategy? Some practitioners describe the focus as one of competitive advantage (a state), whereas more common terminology is customer centric (an organizational value).
Being Customer Centric/Customer Driven
"Customer centric" and "customer driven" represent terminology that is a politically correct way of suggesting that perhaps the organization should pay attention to the customer as opposed to itself. It infers that the organization should
* Not take customers for granted
* Ensure that they are satisfied
* Monitor their behavior
* Consider internal actions in the context of how they will be perceived by the customer
* Recognize that customers have options
All of these inferences are reasonable as value statements, but success will never be generated by senior management adopting a strategy to become more customer centric. What does this mean operationally? The rank and file are all too aware of the contention between functions, and policies designed to mitigate risk, but really drive customers "up the wall". For example, return product procedures can be ponderous to customers and cause them to alter their purchasing patterns in a manner that reduces total net revenue. Creating a unified and cohesive customer experience requires organizational change and the mantra of "customer centricity" is not going to unify or create a sense of urgency that will impact the inertia of the status quo.
SOURCE:-
http://www.technologyevaluation.com/research/articles/a-lexicon-for-customer-relationship-management-success-19396/
1. The industry fails to articulate a clear picture of the value it provides outside of the feature/function attributes of the technology.
2. Senior management (user organizations) view CRM in terms of infrastructure deployment instead of in operational and strategic terms.
3. Because the user community fails to approach CRM as an operational strategy, its perceived value is limited to technology efficiency. User organizations must move beyond technology and process productivity to properly assess the system's potential. Only then, can the vendor and user communities establish meaningful discussion about value.
The industry does itself a gross disfavor by using tired and essentially empty terms when discussing the application of CRM. The rate of technology development has largely outpaced the development of management techniques to effectively use the technology. Vendors base their pricing on the level of sophistication their product has, but end users balk because they are unable to leverage a solution's capabilities. As a result, users do not assess the added value highly.
It is time for the CRM industry to more accurately articulate the implied value proposition of their solutions and for senior management to take a leadership position and articulate a true CRM operational strategy. Without these two forces coming together, CRM will be forever relegated to a position of infrastructure and will become one more footnote in the history of failed management concepts.
The Issue
The motivation to write this article was spawned by two recent articles. The first article was based on a survey of CRM experts who explained why they believe CRM initiatives fail. Although some of their comments were refreshingly accurate, there were a number of references to tired old phrases that do little to improve understanding of the real issues and opportunities associated with CRM. The second article was based on a survey of chief executive officers (CIO) about their satisfaction with CRM applications. The survey reported a rather low level of approval and cited various technology and productivity deficiencies. These two articles are representative of the disconnect between galloping technology and the inertia of many organizations to change their operating paradigm. The continued use of empty phrases and the emphasis on implementation as opposed to strategy is not going to help narrow this gap.
The Genesis of CRM: The Perfect Storm
CRM, as a technology, started as a software marketing strategy. The concept was to create a common database between customer service and sales force automation (SFA). The SFA industry picked up on this idea and soon there was massive consolidation among SFA, customer service, and field service software providers. Each vendor (left standing) claimed to have an integrated set of capabilities and the phrase customer relationship management became a bi-word in the world of technology.
On a separate path, Peppers and Rogers (currently a strategic division of Carlson Marketing) popularized "one to one marketing" which established a marketing component in CRM. At the same time, the dot-com era was born and the idea of tracking consumer behaviors at the click level materialized, giving rise to real time marketing. The rush for customer data was soon followed by the realization that there was an ocean of data with few tools to ferret out actionable information.
Since the beginning of this "perfect storm", there has been a quantum leap in CRM tools, but there has been a distinct lag in the management rationale to keep pace. This new set of tools provides the means to integrate the actions of sales, marketing, customer service, helpdesk, field service, and web site design; and it is a way to interface with partners. However, part of the problem is that this spans an enormous amount of resources and responsibility. Since most organizations are structured by function and basically compete for limited resources, each function has a different view of performance, and of CRM for that matter. Therefore, CRM installs have historically involved functional deployments and there has been some success in this approach. The advantage of limited deployment is that it is more manageable in terms of scope and accountability. However, the real leverage for CRM is at the enterprise level.
Key Terms and Phrases
The following terms and phrases are not necessarily inclusive or exhaustive; rather, they illustrate the need to be more precise in our language. From an industry standpoint, there is a need to use terms in a general way, but when it comes to the end user community, the lack of definition generates missed expectations and leads to failure. This discussion is presented to help organizations to better understand these needs and, in some cases, as an admonition to the industry to refrain from using terminology that does not add value to the user community, and as a result, is destructive to the long-term health of the industry.
Customer Relationship Management (CRM)
From the moment of inception, CRM has been defined in a hundred different ways. Since the industry is technology based, definitions tend to revolve around the capabilities of the technology. Gartner was among the first research organizations to effectively argue that CRM is a business strategy and that technology is an enabler. This is where the industry is stuck today: how to describe this management strategy? Some practitioners describe the focus as one of competitive advantage (a state), whereas more common terminology is customer centric (an organizational value).
Being Customer Centric/Customer Driven
"Customer centric" and "customer driven" represent terminology that is a politically correct way of suggesting that perhaps the organization should pay attention to the customer as opposed to itself. It infers that the organization should
* Not take customers for granted
* Ensure that they are satisfied
* Monitor their behavior
* Consider internal actions in the context of how they will be perceived by the customer
* Recognize that customers have options
All of these inferences are reasonable as value statements, but success will never be generated by senior management adopting a strategy to become more customer centric. What does this mean operationally? The rank and file are all too aware of the contention between functions, and policies designed to mitigate risk, but really drive customers "up the wall". For example, return product procedures can be ponderous to customers and cause them to alter their purchasing patterns in a manner that reduces total net revenue. Creating a unified and cohesive customer experience requires organizational change and the mantra of "customer centricity" is not going to unify or create a sense of urgency that will impact the inertia of the status quo.
SOURCE:-
http://www.technologyevaluation.com/research/articles/a-lexicon-for-customer-relationship-management-success-19396/
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