CRM Systems and Services Aren’t Keeping Up. Why Not?

Does this button still work?

Does this button still work?

Are Customer Relationship Management (CRM) systems becoming obsolescent?

Increasingly, CRM implementations are too narrow.  Today’s CRM gives unwary company executives and their marketing teams a false sense of marketing security.  Now, we’re thinking about stakeholders instead of just customers, partnership instead of relationship, and engagement instead of management.  CRMs are adapting too slowly.  Worse, they encourage a robotic kind of outreach automation when we’re looking for personal interaction.  In this first of three articles we’ll explain how business outreach shifted when the CRM developers weren’t looking.

In our second article we’ll introduce an evolution on the CRM-based business model; stakeholder partnership engagement.  We’re not just swapping buzzwords here… we’re working ourselves out of a too-comfortable box in order to rejoin the real world of business.

In our third article we’ll put our new perspective to work in a practical way.  Until the CRM vendors catch on, we’ll do a bootstrap integration and assemble our own suite of tools and services to keep us in cooperative, collaborative conversation with our stakeholders.

Would you like to help?  Since we’re serializing, there’s time for you to give feedback on this article and help steer the second and third articles.  There’s a a short survey at the end of this article.  Tell us what you think.  If you’d like to say more, please leave a comment.  We’ll read them, respond to them, and fold your thoughts (with full attribution; we frown on intellectual theft)  into our next article.

What’s a CRM?  ( A Working Definition)

How would you describe the CRM you’re using now?

We’ll use the business definition:

A computerized system for identifying, targeting, acquiring, and retaining the best mix of customers.

Customer relationship management helps in profiling prospects, understanding their needs, and in building relationships with them by providing the most suitable products and enhanced customer service. It integrates back and front office systems to create a database of customer contacts, purchases, and technical support, among other things. This database helps the company in presenting a unified face to its customers, and improve the quality of the relationship, while enabling customers to manage some information on their own.

CRMs are big business; Gartner estimates the 2013 market at $20.4B.  We can buy one, lease one, or subscribe to a cloud implementation from any on of about 400 CRM vendors.

They should know what they’re doing, right?  We’ll pass by the uncomfortable truth that a third to a half of CRM implementations don’t achieve their goals; that many sales people think CRM is a time waster; and that CRM system is only as good as its data.

Here’s the underlying issue: the business landscape is changing faster than than the way CRMs represent our most important market connections.

The Changing Business Landscape

It’s about more than customers.  In the last few years marketing has come to involve talking to many people, not just customers.  There are the influencers; those who review and recommend our products.  There are our followers on social media via Twitter, LinkedIn, Google+, Facebook… wherever we maintain a presence.  There are our dealers and business partners (now we call them channel connections) who represent us directly or indirectly to our buyers.  All of them have become stakeholders.

We’ve just talked about a few kinds of stakeholders.  Did we miss your most critical group?  Please tell us so that we don’t do it again.

It’s becoming about partnerships.  There’s been a lot said about how we used to sell to consumers, and now we’re selling to customers.  That’s shorthand for saying that we’re now taking a more personal approach.  The same people are now advocating that we think about “life time value” when we calculate the worth of our customer relationship.

Wouldn’t it just be easier to admit that our best customers, our long term customers, have become stakeholders with us in business?  If that’s so, why not call them what they are… partners.

The myth of managing partners.  Back when we communicated with our customers by sending them mailings and newsletters, talking to them by phone and arranging sales calls, the communication was mostly one way.  Perhaps we tried to get to know them better by inviting them in for factory tours or by hosting special events. Please click to read a great story about what happens when the special event works to perfection.   That word “management” is never used in the story. We think there’s a simple reason; how do you “manage” a two-way partnership?  We think that “engagement” is a better word for what should happen.  We should be having close, two-way, continuing communication.  That’s what should flow between partners.

While all this was happening the CRM vendors were focusing on prospects and customers… now just a small subset of the people who can affect our sales revenues.  CRM has come late to the social media party by adding data exchange components with social media tools like Hubspot… not at all the same as nurturing two-way communication with real people.  The CRM focus has stayed on managing and controlling information outflow and gathering business intelligence while business is (re)turning to working within a network of partners.

… And Then There’s the Issue of Scale…

CRM vendors often tell prospective clients that their company “isn’t big enough yet for a CRM solution”.  In plain(er) language, that means that most CRM solutions, even the cloud-based solutions, take time to configure, require training, and also force adjustments in business processes.  Here’s the paradox… small businesses need all the marketing help they can get… but the industry’s most popular CRM solutions don’t scale down to small business needs.

Where Does That Leave Today’s CRM?

If today’s CRM doesn’t work the way business works today, doesn’t support two-way stakeholder engagement, and doesn’t scale down to small business needs… then it’s time to consider what’s next.

Or…. suppose we’re considering the hottest CRM submarket, sales force automation.  How smart is it to spend and work, finally automating critical parts of marketing to excel in a disappearing business environment?  Does it help if the vendor has labeled our new sales force automation as “agile”?

Stay tuned by subscribing to GoodBusiness.  Then you’ll know as soon as we publish our series’ next article, tentatively titled “After Customer Relationship Management: Stakeholder Partner Engagement”.

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  1. You made some very good points there. I used to work for a small but lucrative business where I was pretty close with the owner. My biggest concern was him not wanting to use CRM techniques. He’d say the same things like, “We’re not big enough for that,” or “We don’t have the assets.” But he answered his own questions. The right CRM software is out there and there’s so much more potential for your business to succeed if they get the opportunity to find out what’s in front of them.

    • Chris Chadbourne says:

      Mel, stay tuned. Let’s see how part two reads, and maybe you’ll want to comment on whether the CRM road ahead makes sense based on your in-the-trenches experience.

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