CRM or customer relationship management is often the system we use, but we need a strategy behind it. Often called strategic CRM, the customer strategy is often based on the premise that we can manage customer relationships, however today the customer is in charge.
Customer relationship management is a misnomer. The idea that businesses can manage customer relationships is false. Today we are in a customer managed environment.
Development of CRM
CRM has been around for quite some time and the history is fairly well known. Technology triggered in the early 1990’s, heightened expectations followed, the trough of unfulfilled expectations and benefits followed. Today we have seemingly lower costs of implementation. But in this post-ecstatic-CRM state, caution is still warranted as the alluring value and benefits exist but can be elusive. And execution is still the challenge.
For example, research by Gartner and Forrester still says that the failure rate of CRM is high. What’s required is a clear understanding of what CRM is and having a strategy behind it.
“That which we call a rose by any other name would smell as sweet”. From Romeo and Juliet by William Shakespeare (1597). Meaning that a thing is what it is, not what it is called. A rose will still be a rose (its appearance, fragrance, and touch) even if it was called something else. So what about CRM – customer relationship management – what is it, is it still CRM even if we call it something else…?
CRM a Misnomer
Let’s accept that CRM is a misnomer. CRM is something that is called by the wrong name. As a customer, I don’t wake up in the morning wondering about how I can improve my relationship with my Bank or my local coffee shop. Similarly then, for an organisation to think that it can ‘manage’ the relationship with its customers is a bit of a stretch.
A lot have things have changed in recent years, particularly how customers behave. Today we are in an environment where our customers are in the driver’s seat. We are in an environment where customers manage the relationship. Customers have access to more information than ever before, to more choices and the ability to act on these choices.
So let’s not think that we can ‘manage’ customer relationships. The best an organisation can do is influence the experience and outcome at each stage of the customer journey and customer lifecycle. The goal is to develop true relationships that are based on a mutual exchange of value.
Therefore, Customer Relationship Management by its own name is misleading us. CRM is a misnomer. This inside-out idea that we can ‘manage’ customer relationships is the concept that misleads us in thinking that we can manage a customer, rather than influence. The reality is that customers manage the relationships, not organisations. The control is with the customer.
Customers and Relationships
The customer constantly evaluates the value they receive from businesses. They continually hold organisations accountable to the delivery of their value propositions. So whilst customers may not consider the relationship with their providers and products and services, they do constantly evaluate the value equation, “is this value for money, could I get better value somewhere else..?”
Therefore, even though we may use this piece of technology, let’s not think we can actually manage the customer. Instead, let’s put in the effort to understanding the value our customers are looking for and then let’s design experiences and engagement approaches that deliver value. And therefore maybe we can influence the lifecycle of our customers and therefore the value exchanged.
We need a Customer Strategy that is about developing the value of our customer portfolio. This customer strategy then will guide our efforts with CRM systems and give them the context to be meaningful and useful.
See more here on my CRM page; or download the whitepaper on how to Get Your Business Ready for CRM.