Customer Relationship Management is technology with a great promise that remains largely unfulfilled; understanding why and drawing parallels with our use of the web can help us use both better.
My initial feeling about CRM was that its results remained limited because of the difference between its business applications and its implementation by IT departments; this is part of the problem but the biggest one can be seen as yet another case of putting the cart before the horse: we need to first define what we mean by CRM and how we can use it, and only then look for CRM technology.
In the words of Maklan, Knox and Peppard in “Why CRM fails – and how to fix it“, we need to think of the marketing capabilities we need first, and only then look at the investment in CRM technology that can support them; it has usually been the reverse, installing the technology and then somehow hoping that our customers will appreciate the effort and reward us with more loyalty. We have been guilty of thinking of CRM as an end in itself, instead of as a tool that supports our actual relationship with customers.
The same idea applies to the web: if we don’t establish first how it affects us and how we want to use it we will fall on its defaults, be it popularity for its own sake, the latest fashion (Twitter, Instagram, Chatroulette, etc), pretty websites no one uses, or annoying our customers with ads.
To generate the marketing capabilities we need the authors in “Why CRM fails” suggest a framework based on four capabilities and three forms of marketing relationships, as illustrated in the following table (this is my interpretation):
|Capabilities:||Marketing relationship: Transactional.||Marketing relationship: "One on One", long term relationship.||Marketing relationship: Networks.|
|"Demand Management": |
Generating revenue for products and services.
|Creating marketing knowledge: generate and disseminate insights about customers.|
|Relationship to customers: CRM|
Maklan, Knox and Peppard exemplify marketing capabilities with a company that discovered a few of its customers had an effect on many others (their “followers”), so taking them from “transactional marketing” to “one on one marketing” would have a positive effect on sales, and this is a specific goal for CRM which requires a specific investment.
The approach I suggest for the web complements this framework by looking for specific customer insights according to the biggest opportunities to improve our customer’s experience with our product, as part of their “quest”, first in general according to our brand’s promise, and then at each step, from when they look for our product, to when they purchase it, to when they use it.
As with the marketing capabilities framework there is no magic bullet, we need to generate these customer insights ourselves, they can help us establish specific opportunities and solutions on the web, as well as specific CRM opportunities and the tools we need to support them; we cannot ask our web vendors or our CRM vendors to generate them for us, even when they follow “best practices”.
The ability to learn and experiment to generate these insights will surely be a clear competitive advantage. The good news is this investment in customer insights now has at least two forms of payoff, on the web and with CRM.