| Steve Prentice. |
A new era of ‘customer managed relationships’ is set to replace traditional customer relationship management (CRM), which is in deep trouble, delegates at the Gartner CRM Summit in London heard this week.
Vice-president Steve Prentice told delegates that issues relating to data, reputation, trust and customer empowerment are all undermining traditional CRM systems. He warned that CRM’s days may be numbered if it fails to adapt to the new realities of the marketplace.
‘When we asked CEOs (chief executive officers) of all of the things that IT might deliver to you, what is the most important, the number one technology that CEOs see as adding strategic value is advanced CRM. This should be good news. So why would I take the view that CRM is actually in big trouble? If the business wants it, customers are important and the purpose of business is to create a customer how can anything be wrong with CRM? But it can. And the answer is that it is probably a lot worse than we think it is,’ Prentice declared.
Shift in power balance
Prentice highlighted a dramatic shift in the balance of power to the consumer. He said: ‘Organisations used to think they were in control of products and services and the way they were priced and the communications channels and channel strategy was under your control – get over it. You are no longer in control.’
He continued: ‘Individuals are in control. Individuals are making the choices. That means that the push economy that we have built our businesses around – that we can push products out to consumers – is now changing towards a pull. People go out and decide what it is they want to buy, they then approach the suppliers and say “Are you willing to supply it on my terms?”. That is a complete reversal. The idea of customer relationship management that we grew up with has changed. It is no longer about customer relationship management, it is much more about customer managed relationships.’
Key drivers
Prentice identified a number of key factors driving the changes:
- Data proliferation – We are producing approximately 15 petabytes of data every day and in 2009 alone we produced more than existed in the entire history of mankind up to that date. Analytics is going to be increasingly important to deal with data on this scale. Organisations need it so that they can see more clearly. We can understand what has been done and what needs to be done and when, and what is needed and where, and what is being wasted and where, and what needs to be achieved.
- Choice – The power of consumers to choose is at the root of the problem for today’s CRM.
- Online reputation – A company’s online reputation is incredibly important but organisation’s can’t control their online reputation because it is controlled by the ‘collective’ – all the groups and communities (YouTube, Facebooks, Twitters). And it has a big impact on what people think
- Lack of trust in large enterprises – ‘Trust is a long-term problem. The story of the financial crisis was not the collapse of the economy; the real story was the collapse in trust. In the US, Edelman recorded the largest single drop in trust between individuals and enterprises that they have ever seen. Keeping trust levels high is critical because an Edelman survey demonstrated that 7/10 people say they are more likely to buy products and services from companies they trust. And they are just as likely to stop buying from companies they don’t trust. If you want to get more customers and retain existing customers and find new ones you have to have trust.’
- Social computing – the ‘consumerisation’ of IT means that computers are almost universal and the important factor is the way people use them. The balance of power has shifted away from the technology to relationships. ‘This is about the way people communicate and talk – and they are talking about you and your products.’
| Michael Maoz. |
Technology trends
Analyst Michael Maoz outlined the technologiy trends that would be emerging to deal with the new pressures.
‘More and more it is going to be customers who manage their own relationships and for a business this is pretty difficult. Social CRM is out there. But how do we get to a point where we allow the customer to take more responsibility for the organisation?’ he asked.
‘If you find your firm does not foster, encourage and manage participation with customers you’ll probably be out of business.’
Sales, marketing and service will remain
He acknowledged that the operational elements of sales, marketing and service would still be there – ‘we’re not going to chuck it out of the window’ – but these will in future be accompanied by social CRM and analytical CRM/CEM. Technologies must allow businesses to focus on personalising marketing, engage customer communities and deliver insight into the hands of customer-facing employees. Operational CRM will overlap with social CRM to support collaboration tools; analytical CRM will overlap with social CRM to support real-time advice; and analytical CRM will work with operational CRM to support real-time agent decisions.
Cloud
Maoz predicted that CRM investments would focus on three areas – collaboration and social CRM; customer-enabling self-service technologies; and analytics integrated with applications for sales and customer service. He also forecast that the dominant delivery model for these applications would be software as a service rather than on-premise.
Maoz also flagged up a variety of technologies that should be on organisations’ radar including social networks for sales.
Advantage
He acknowledged that customer trust in suppliers is low, but suggested this was an advantage, saying: ‘The level of trust is very low – but the bar is very low. People look at that as a negative. I look at the upside. All I can do is succeed! They don’t’ trust me anyway. Let’s show them why they should trust me. I can show them I’m working on their behalf. It is a great time to be in the customer area.’
Questions & Comments
CRM fails to deliver for some!
Why because those who implemented CRM expected because they had a CRM solution that they where doing "customer relationship management" and they didn't need to do anymore. You still need to build personal relationships with your prospects and customers if they you going to build trust and solid long term relationship whether you did this email, phone or in person.
Posted by Andy Hamer on
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