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What Exactly Is CRM?

Blog post by on November 21, 2007 30 Comments

I looking at an entry on Communities of Practice in Wikipedia today. Out of interest, I typed “CRM” into the search box. It produced a long list of entries starting with C, R and M. Clicking on the entry for Customer Relationship Management, the first thing I saw was a disclaimer from Wikipedia saying:

! This article is in need of attention from an expert on the subject

The entry itself was a mind-numbing mish-mash of CRM mumbo-jumbo, written with CRM as technology in mind. There was precious little in the entry about how we at CustomerThink, dare I say it, how you as CRM practitioners think about CRM today.

  • About the primacy of understanding what customers really value.
  • About understanding your company’s capabilities to deliver value to customers.
  • About developing a strategy to deliver value, through the company’s capabilities, at a profit.
  • About integrating the whole organisation, delivery partners, even customers into the delivery process.
  • About stitching value delivery touchoints together into an end-to-end customer experience.
  • And about how delivering value through the customer experience creates real brands for customers.

What I call the C4EB model of CRM, as in Customers, Capabilities, Cashflow, Collaboration, Experiences and Brands.

In short, IMHO the Wikipedia article is a very poor description of CRM.

So here’s a challenge to all of CustomerThink’s many readers.

What do you think CRM really is?

Post a response and get the conversation going.

Graham hill
Independent CRM Consultant
Interim CRM Manager

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30 Responses to What Exactly Is CRM?

  1. John Todor November 21, 2007 at 10:02 am #

    Graham,

    Unfortunately, my observation is that most CRM does fall into the technology first camp. On the other hand, many who write and evangelize CEM want to avoid the stick but important issues of data. The chasm means there is limited meaningful discussion of what CRM is and could be today.

    I would encourage you to spell out your C4EB of CRM as a ways to bridge the chasm.

    John

    John I. Todor, Ph.D.
    Author of Addicted Customers: How to Get Them Hooked on Your Company.

  2. Elana Anderson November 21, 2007 at 12:17 pm #

    My favorite definition of CRM comes from a previous employer, Tessera Enterprise Systems. Back in the mid-90s, we defined CRM as a comprehensive process. A process in which companies fundamentally improve the quality of every interaction with customers and prospects THROUGH the use of relevant, timely, and actionable information RESULTING IN improved profitability.

    From my perspective, however, the term/acronym lost its value way back in 1998 when it was hijacked by software companies. Based on my interactions with business execs, most people today think of CRM as a technology. Now, of course, the hot term is CEM (I like to joke about how easy it was to dust off all of the CRM marketing materials and just replace the R with an E). However, I don’t believe the two terms really have the same meaning. CEM is a part of CRM, but it does not incorporate the business aspect of CRM — specifically the focus on profitability.

    ELANA ANDERSON
    Marketing Strategy Consultant
    NxtERA Marketing
    eranderson@nxteramarketing.com

    http://www.nxteramarketing.com

  3. John Todor November 21, 2007 at 1:42 pm #

    Elana,

    I was with you until you made the statement that CEM is not about profits. The focus on the customer experience is motivated by a desire for customer engagement, loyalty and advocacy, because they all lead to sustainable profits.

    What some evidence? Check out the popularity of the Netpromoter score. While there is a heated debate about the best measurement of advocacy, there is little debate about its impact on profits. In addition, word-of-mouth is a hot topic. Word of mouth comes from a focus on the experience. The Kumar and associates article in the latest issue of Harvard Business Review lays out just how profitable word-of-mouth is.

    CRM and CEM, what we need is a framework that helps companies embrace and integrate both approaches.

    John I. Todor, Ph.D.
    Author of Addicted Customers: How to Get Them Hooked on Your Company.

  4. Elana Anderson November 21, 2007 at 4:31 pm #

    John –
    Let me redirect because I don’t think we disagree. I certainly agree that WOM can have a positive (or negative) impact on profits and a focus on customer experience can impact positive WOM. I have also long promoted incorporating WOM into customer lifetime value measures. However, I’ve also been privvy to many CEM initiatives that had wishy washy mission statements like, “our goal is to provide world class customer experience” with little thought as to how to measure the business impact.

    An example: I was working with a major financial institution that was looking for cool new technologies that would “improve the online customer experience.” This same institution did not provide key download capabilities into desktop financial tools. My feedback to the company was that it should focus on solving that problem rather than focus on features like site personalization, co-browsing, and click-to-call. They weren’t too happy with my advice. What do you think?

    Focus on customer experience is great, but it must be bound within the realities of the business and business profitability. From my perspective CEM is a crucial compoenent of CRM (as I defined CRM in my previous comment). The problem with the industry is that once we abuse one acronym to the point where it has completely lost its meaning, we move on to another one. CEM will share the same fate as CRM and we’ll come up with something new that means the same thing. That’s what keeps us consultants in business afterall isn’t it;-) (so cynical…)

    ELANA ANDERSON
    Marketing Strategy Consultant
    NxtERA Marketing
    eranderson@nxteramarketing.com

    http://www.nxteramarketing.com

  5. Bob Thompson November 21, 2007 at 5:37 pm #

    Acronyms are like brands for ideas. Sure, CRM stands for Customer Relationship Management and CEM for Customer Experience Management.

    But what do they really mean? Like brands for companies or products, the meaning of buzzwords is whatever is in the mind of the person hearing or thinking about that buzzword. And that person is influenced by marketing messages, what their friends and colleagues say, media reports and, of course, their own experience.

    After more than a decade of life as a “brand” of sorts, CRM means many different things, but has a largely company-oriented, process automation and technology slant. Is that what is should mean? I don’t think so, but does it matter what I think? The CRM brand has been established. So, despite my feeling that “CRM” Must Die for Customer-Centric Business To Thrive, the term will probably stick around for a long time, meaning how-to-make-money-from-customers-with-IT.

    Now, what about CEM? Well, it’s a younger brand by far, but based on our research, it generally means a customer-oriented view of a relationship, and is concerned more about the emotional element.

    I agree with Elana that CEM should be part of CRM, but we’ve found that most think of them independently. CRM is about the company making money through IT (left brain) and CEM is about the customer getting a great experience that builds loyalty (right brain).

    Of course, CEM ultimately should be about money, too, because loyalty leads to profitability. But the connection is a bit more tenuous for some business people than CRM, where it’s easier to see how automating a process can save money or increase revenue.

    Acronyms won’t die because we need them, just like brand names, to simplify our lives. In the field of customer management, however, you’d better define what you mean because CRM and CEM don’t have clear definitions, and probably never will.

    Oh, and if you think putting a definition on this site will help, we can certainly do that. But, then, who is going to correct the mess that Wikipedia has made of CRM? Because that’s the first place people go now to learn what CRM means.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  6. Bob Thompson November 24, 2007 at 2:02 pm #

    I’ve created a short online survey about this topic.

    Please share your point of view here.

    Deadline is Dec. 1, 2007.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  7. Daryl Choy November 25, 2007 at 7:33 am #

    Graham

    To me, CRM is simply about managing customer relationship. Again, it’s not about “what is,” but “how to?”

    I like your C4EB model of CRM. Can you please elaborate more?

    Daryl Choy, the founder of WisdomBoom and Touchpoint eXperience Management, helps firms make a difference at every touchpoint. Choy can be reached at wisdomboom.blogspot.com.

  8. Graham Hill November 26, 2007 at 2:59 am #

    Bob

    I like the idea of the survey.

    I tried to complete the survey but it wouldn’t let me past the customer-centric business factor weighting page (all values must add up to 100%). It wouldn’t accept the five different values I typed in (which added up to 100%), nor putting all five values to 20% (which again added up to 100%).

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  9. Asit Lal November 26, 2007 at 7:51 am #

    Graham,

    We are apt when we say CRM is a method or a process for peeping into the mind of customer at the same time allowign them to be more aware of the product/ company. but in todays technology driven business world, it would not be very wrong when we attribute CRM with technology.As they both go hand in hand.

  10. Graham Hill November 26, 2007 at 8:55 am #

    Asit

    Thanks for your comment.

    You raise an interesting point. Rightly or wrongly, CRM is associated with technology. But the association is wrapped up in complicated and complex customer-facing capabilities that deliver mutual value to customers and to business.

    The wrong-headed Wikipedia entry almost defines CRM as if technology was the dominant force behind CRM. In reality, although technology is an important enabler, it is no more dominant than reengineered processes, improved information flows, responsive work routines or a customer-centric workforce.

    Sadly, if you are a vendor with CRM applications to sell, the old saying applies: “If the only tool you have is a hammer, everything starts to look like a nail!”.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  11. Phil Olivieri December 6, 2007 at 8:21 pm #

    I choose to define CRM as a business philosophy, discipline and practice that’s enabled by technology. Below is my complete definition:

    CRM is a corporate philosophy, discipline and practice enabled by people, process and technology that strives to engender a profitable relationship between a company and its customers based on a mutual exchange in value delivering increased customer loyalty, company profitability and shareholder value.

    Phil Olivieri
    Director, CRM Strategy, Insights & Analytics
    Retail Industry

  12. akshay December 8, 2007 at 1:34 pm #

    well even i feel that most CRM does fall into the technology first camp. On the other hand, many who write and evangelize CEM want to avoid the stick but important issues of data. The chasm means there is limited meaningful discussion of what CRM is and could be today.

    Akshay

    HugeH.com

  13. Phil Olivieri December 9, 2007 at 1:01 pm #

    I respectfully disagree with your and John’s ascertain that CRM falls into the technology first camp. Back in the early to mid ’90′s, when CRM was emerging, the technology vendors saw an opportunity to take advantage of an uninitiated business market and flogged CRM as a technology solution – a panacea. The unfortunate outcome was that many companies implemented CRM technology at the cost of hundreds of millions of dollars only see these initiatives fail which gave rise to the familiar industry statistic that ~70% of all CRM implementations failed. They failed because these companies did not understand that CRM is a business philosophy, discipline and strategy first, enabled by technology (actually enabled by people, process and technology).

    As far as a framework to integrate CRM and CEM is concerned, I agree with John that this is required; however, I would also argue that what we have here is the classic “chicken and egg” conundrum. I maintain that a relationship will not develop, if a customer does not have a great experience. That said, I think that CEM supercedes CRM from the perspective of a logical flow of customer interaction with a company – from engagement and positive experiences to loyalty and advocacy.

    The debate continues.

  14. Bob Thompson December 9, 2007 at 2:11 pm #

    [quote]…CRM is a business philosophy, discipline and strategy first, enabled by technology (actually enabled by people, process and technology).[/quote]

    I agree with you 100%, although I’d elaborate to say CRM should be about delivering a differentiated experience with that strategy, too.

    But when I put the question “What is CRM?” to our community a few months ago, it confirmed what I’ve been seeing in the market for the past decade. Here is an excerpt from my blog post Three Perspectives on “CRM” Reveal Limited Win-Win Thinking, summarizing results of a CustomerThink survey:

    >>
    Based on an analysis of write-in text, I classified each response into one of three overlapping groups of roughly equal size (40% of respondents).

    • One group defined CRM as a way to derive business benefits from customers, such as increased revenue or profitability.
    • Another described CRM as an approach to deliver customer benefits, such as improved customer experience or higher customer satisfaction.
    • The third group tended to define “CRM” as a method to manage customer information, through analytics or process automation.

    While respondents defined CRM using different words and phrases, only about 20% defined CRM as about delivering value to both the company and its customers. And, 28% of respondents primarily defined CRM as only an IT approach, without any mention of expected value to either company or customers. In other words, a process without any stated purpose.
    >>

    So, I agree that CRM should not be about technology first. But in the real world, many consider it to be so. And when people search on “CRM” in Google, or visit Wikipedia, most of what they find reinforces the technology slant that CRM has in the market today.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  15. Phil Olivieri December 11, 2007 at 8:59 pm #

    I completely agree with your statement that “CRM should be about delivering a differentiated experience with that strategy, too.” This is one of the core tenants of CRM – that not all customers are equal. This component as well as improving customer experiences, customer satisfaction, managing customer information, etc., are all important; however, adding them to a definition would make for a rather lenghty and unwieldly run-on sentance. Differentiation is key; however, in my 20+ years experience working in telecom and retail, many companies struggle to understand this simple but important concept. “One size fits all” is an antiquated business strategy which has resulted in undifferentiated treatment and experiences that have contributed to customer fatigue and malaise. Analytical CRM does the heavy lifting in terms of identifying customers by segment (purchase behaviour, spend, profit, etc.), which enables differentiated treatment across customer touchpoints (both push and pull) provided the right CRM enabling front and back office applications and data infrastructure is in place.

    If your survey to the CRM community confirmed what you (and others including myself) have been seeing and hearing for the past decade as being reality, then I would say that we need to do a better job educating and changing the reality. The fact you stated, that “when people search on ‘CRM’ in Google, or visit Wikipedia, most of what they find reinforces the technology slant that CRM has in the market today” suggests that the legacy created by CRM technology vendors back in the 90′s is still pervasive and needs to change.

  16. Bob Thompson December 11, 2007 at 11:17 pm #

    And “none” just left town.

    Brands are incredibly difficult to change. The “CRM” brand is a jumbled mess due to the competing interests of vendors, consultants and business people. But over all, the tech label has mostly stuck, and is continued to be amplified by sites like Wikipedia, and vendor marketing.

    I founded this site as CRMGuru.com in January 2000. We have always focused on CRM as a business strategy, yet eventually I “threw in the towel” and concluded that it would be best to change the name to CustomerThink early this year, to avoid the misconceptions that come along with “CRM.”

    We’ve chosen to focus this site on “customer-centric business strategy,” which is what I’ve said CRM is about all along. Yet a recent survey (full results to be released in January) finds that the vast majority to believe that “Customer-Centric Business Strategy includes CRM,” and very few consider them to be the same thing. Previous surveys have found that most consider CRM and CEM to be different concepts.

    My advice is not to use the term CRM. Use “Customer Management” or some other more generic phrase and define it within your business. Unless you have a lot of time to waste updating Wikipedia or millions of dollars of marketing money, you can’t make a dent in the CRM brand. For more on this, read:
    http://www.customerthink.com/blog/why_crm_must_die .

  17. Graham Hill December 12, 2007 at 9:12 am #

    This has been an interesting discussion. It supports the point made by Bob in his earlier response that CRM and CEM mean many things to many people.

    But I think we are all in danger of missing the customer wood for the CRM & CEM trees. CRM & CEM are largely under the control of the companies purporting to offer them. Customers just pay for the privilege.

    But as I suggested in a recent post, what if customers managed access to their own data, aggregated the offers they wanted to receive, and put up a big firewall between them and all the marketers out there looking to spam them with unsolicited offers. All of these things are rapidly becoming possible both on-line and more importantly for the future, on-mobile.

    What if the customer really was in charge? Are you prepared? Or is this your worst nightmare scenario?

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  18. Phil Olivieri December 12, 2007 at 1:48 pm #

    Bob, there’s no simple answer or “silver bullet” where defining CRM is concerned. I have fought countless battles within the same war and quite frankly, I too am getting tired of all the rhetoric, but there’s still enough fight left in me not to throw in the towel quite yet. Divesting in the “CRM Brand”, a contentious label with a troubled past and misconceived definition, may help to distance oneself from the fray; however, beyond that is the issue of “customer-centric business strategy”, which, in my professional opinion, is still not making traction in most large corporate organizations. I’m dumbfounded at the number of companies and business people that still just don’t get it. One would think it to be a a rather simple, common sense premise; however, as I always say, “Common sense in business isn’t commom”.

    Graham, the reverse-marketing model you wrote about in your post, “What Comes After CRM and CEM?”, is rather though provoking, but quite radical. I’m always open minded to new and different approaches, afterall, I embraced CRM back in ’95, but I’m a bit skeptical with this concept, at least based on my limited understanding. We, as experienced and astute customer-centric business people, have faced countless issues, challenges and engaged in debates ad naseum with “others” in our quest for “one CRM”. Can you imagine what would ensue introducing a collaborative consumer buying concept to businesses and consumers at large? Is “CCB” the next big business concept destined to displace CRM and CEM? Rather than introduce a new business concept, like CCB (if this ever materializes and the acronym is used, then just remember who coined it), we should focus our time and effort on getting better traction with “customer-centric business strategy”.

  19. Graham Hill December 13, 2007 at 4:47 am #

    Retail CRM Exec

    I agree with you in large measure.

    I too have been in business for over 20 years, was an early adopter of the Customer Relationship Management concept and spend 95% of my time either consulting to telcos, banks, automakers, airlines and government, or more recently as an interim Head of CRM at a bank, actually implementing what I talk about.

    The discussions we are starting about Buyer Centric Commerce now are no different in principal from the discussions I had six or seven years ago as a Principal in PwC’s CRM Practice about Customer Experience Management. At that time, my fellow CRM consultants and my clients were struggling to make big-iron CRM implementations deliver value and didn’t want to think about the radical concept of designing end-to-end experiences with customers in mind. But a few pioneering companies like Disney, Harley Davidson, Virgin Group and Orange didn’t wait and started experimenting with CEM anyway. Now everybody is talking about CEM and the (on-line) vendors have moved in.

    Just as in the case of CEM, some companies are already experimenting with the customer-co-creation flavour of buyer centric commerce. For example, 3M has for some time worked with lead customers through user toolkit’s to push the boundaries of customer-driven innovation. Customer-driven new products are far more successful in market than traditional inside-out ones for 3M. And other companies like P&G, GM, Mastercard, Lego, etc, are swelling the ranks of those looking to gain advantage from bringing customers inside their companies as co-creators of new innovations, and of marketing, sales and self-service.

    And on a different buyer centric commerce track, most mobile telcos are already experimenting with social network analysis of their customers’ calling communities to identify the ‘alphas’ who sit at the centre of the communities. For example, working with Finnish social network analysis consultancy Xtract, Swisscom increased its uptake of new products in the market by over 90%, and that in a market with a relatively weak record of new product introductions. And other mobile telcos are already looking to incorporate insights from social network analysis of calling communities into their real-time customer lifecycle management programmes.

    The key thing is not knowing with certainty what the future will bring (most companies struggle to know what is happening around them today!), but continuously experimenting with new ideas to see what works. Some companies are experimenting with various flavours of Buyer Centric Commerce already to see whether it generates incremental cashflows and a temporary competitive advantage. And what works experimentally today often becomes daily business tomorrow, just like CEM now and CRM before that.

    Implementing a customer-centric business strategy has to be done, but it requires difficult-cross-functional collaboration and is thus a long term programme of work. I do not think it is enough by itself to keep a company at the competitive edge in today’s fast moving business environment.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  20. Chux Gervase Iwu December 14, 2007 at 3:42 am #

    Graham Hill, an Independent CRM Consultant has asked a very serious question that should genuinely engage those of us who lay claims to appreciating customers and their (?) concerns. And that question is ‘what exactly is CRM? I trust that you’d get as many differing answers as you probe. CRM would variously stand for CUSTOMER RELATIONS MANAGEMENT, CUSTOMER RELATIONSHIP MARKETING, CUSTOMER RELATIONSHIP MANAGEMENT, CUSTOMER RETENTION MANAGEMENT. These sorts of unpacking of the acronym would certainly come from those in the fields of marketing and communications, customer service/contact center as well as possibly change management. A friends wife would immediately call it CENTRAL RECOURSE MAINSTREAM, referring to a mechanism in medical sociology or is it anthropolgy that enables a practitioner to track the onset of a malaise. However let me pretend that only those in the earlier fields that I listed would read this and then try to stick to an attempt to define (is it what I should actually do?) CRM.

    CRM is a concept that gained grounds in the mid 90′s when IT firms thought they had found the best way to integrate all the business units of an organisation. Their concept was for every organisation to have an almost central source of information about customers, products, services, inventory, et al, with the major objective of serving the customer better. This central source would also be accessible to authorised users anyway. At the time, the likes of Goldmine sent salespeople around the world to spread this message. Of course this sounded quite robust and made sense at the same time. But the question on everyones lips these days is has this ‘magic’ worked? Aren’t organisations still battling the ever present dissatisfied customer?

    This concept actually followed the thinking of IT architects who considered appropriate networks – VPN’s, intranets – as enhancers of the objectives of organisations to extend a customer’s beautiful experience. While it may seem as though I have somewhat deviated from the topic, I am also of the opinion that to do justice to Graham’s call, readers need to understand how this concept emerged. Alright so let me get into possibly providing some joy for Graham.

    CRM is about maintaining relationships with every member of an organisations public. The public of every organisation comprise external customers (those who buy goods and or services), and internal customers – employees and shareholders. This relationship is maintained through a number of ways such as regular meetings between management and staff and constant networking between an organisation and those who buy their goods and or services. Many other means are there for keeping this relationship going. If you agree with me that CRM is about maintaining these relationships and subsequently elevating every public’s experience – increase shareholder return, better pay for workers, quicker service to the customer, etc then please permit me say that CRM is a form of customer satisfaction program that has been in existence for millions of years. And I will illustrate with the following instances.
    1. The early traders knew who their markets were and they made serious efforts to keep their regular buyers through coupons, and a number of other traditional marketing strategies.
    2. Early traders usually inquired from their markets what they’d be interested in and the early trader took time to source the product that the market wanted.

    I can honestly go on to enumerate several other instances but I doubt if that will delight Graham and many of us who critically battle to find a true meaning to this concept. Bottom line is that CRM should, let me reiterate, elevate every public’s experience – increase shareholder return, increase the wellbeing of workers and provide quicker service to the customer. CRM is a construct of the 90′s. Its moral was around for a very long time before the 90′s. The objective of CRM should be to delight every customer. And perhaps I should add that we can, in an attempt to delight an organisations public, ask ourselves the million dollar question: how do we delight the customer? Is it through CRM (the way it is practised today; with electronic gadgets and all) or is there another route to a public’s heart? Essentially, CRM should be about providing joy to a public. Period!

  21. Scott Santucci December 14, 2007 at 4:45 pm #

    Bob –

    I love your quote “Acronyms are like brands for ideas. Sure, CRM stands for Customer Relationship Management and CEM for Customer Experience Management.”

    Dead on right.

    I think that CRM is one of those things that is dependant upon your environment.

    C – Who your customer is and what role you play in adding value to them certainly is going to be different from industry to industry, and to a lesser extent, from company to company.

    R – What your desired relationship with the customer is going to depend on what your goals are and the value you bring. As much as a vendor may want to, there is no way the guys who sell water to businesses can afford a sales force whose goal is to develop strategic relationships with CEO’s at major corporations. Even if they could afford it, could you imagine Jeff Imlat taking time out of his day to meet with the Culligan people?

    M – A companies business goals will shape what its customer management strategies are. In some cases, a company may wish to sell off some of its customers, or terminate them completely. In others, growth and acquisition may be a bigger priority than managing its current customers.

    My point here is that I view CRM as framework for thinking about holistic go-to-market models, and not some “thing” that has generic best practices. The idea that McDonald’s has ways they manage customers that Oracle could leverage is an absurd thought to me. However, there are business patterns where CRM best practices can be identified and shared among a set of business who have similar customer types and relationship objectives.

    I think CEM is abstract enough to warrant its own entry, Graham – since you started us off on this one, do you want to start a dialog about CEM too?

    Scott Santucci

  22. Mei Lin Fung December 15, 2007 at 7:04 pm #

    Graham and Bob and others on this discussion thread

    A gauntlet is thrown down: a New Year’s challenge:

    Why stay in our own community reinforcing our own ideas when we could be out there updating the Wikipedia definition as part of the global community? Let the ideas flow and let’s find the one that prevails on Wikipedia. That CRM definition is begging for an update by the business side, why not take up the offer? I will offer my view in Wikipedia before the end of 2007 and I invite each of you to do so too.

    Mei Lin Fung
    Blog: Professionals Earn Customer Trust

  23. hamodah January 2, 2008 at 11:14 am #

    Most people understand CRM being a technology that manages customers, not a strategy that will use technology to make them happier and more profitable and that is where everybody gets it wrong.

    Let’s ask ourselves, when did CRM first appear?

    Most will say in the 1990s when Siebel introduced it’s CRM solutions, and many will date it back to the invention of Personal Information Managers (PIM) in the late 1970s, again wrong.

    The first time CRM struck the minds of business people was in Mesopotamia, thousands of years ago! When farmers first learned to farm their lands and produce vegetables and fruits more than their family needed to consume, they thought of selling the rest, and precisely, that is when CRM first appeared. Merchants used Clay Tablets to keep track of what products where sold to which customers, by what quantities and when.

    In a nutshell, CRM is a company’s attitude towards it’s customers. If a company’s intention is to serve and keep happy customers, then it must use all the tools and strategies it could to do so. The collection of attitudes, intentions, strategies and tools that position your business to become customer-centric are what we call CRM.

    If your company uses a CRM system such as Salesforce.com, Netsuite or Salesboom.com and your managers are not rallied to understand the make-customers-happy strategy, you will fail and miserably at that.

    Finally, CustomerThink is a much better brand name.

  24. Daryl Choy January 4, 2008 at 10:23 pm #

    We’ve been talking about whatever next lately. Whatever next really?

    CRM? What exactly is CRM? Graham briefly talked about it recently. But why we need to define what CRM is? Does it really matter? We do not know how to manage if we cannot define what relationship is? Even if we can define what CRM exactly is, what’s next? Knowing what CRM is won’t help any firm achieve relationship excellence if the firm itself is not customer-centric. Managing customer relationship is the minimum requirement nowadays. Managing well won’t guarantee success. The question is always how to. How do we make little things count?

    We then talked about the power of technology, or the relationship between technology and relationship. Is CRM a technology, or is it a business philosophy? Let’s ask ourselves one simple question. Back in the old days, when technology wasn’t as advanced as now, was customer relationship management not important? Relationship has always been important. Do we naively believe that relationship won’t get improved if there is no technology? How and what are we going to deliver without relationship? Relationship has always been here. Why relationship becomes important in the past 10 years? In China, guanxi is a 2,000-year old concept. It’s really nothing new.

    Customer relationship has to be supported by employee relationship. That’s the idea of service-profit chain advocated by James L Heskett. Hal Rosenbluth and Diane Mcferrin Peters also talk about the importance of harmony within an organization in their book The Customer Comes Second.

    What exactly is relationship? As discussed before, relationship is made up of touchpoints. Positive relationship is made up of touchpoints with positive experience, and vice versa.

    Daryl Choy, the founder of Touchpoint eXperience Management, helps firms make a difference at every touchpoint. Choy can be reached at wisdomboom.blogspot.com.

  25. Francis Buttle January 27, 2008 at 8:09 pm #

    When I was writing my MBA-level textbook on CRM, this was a big issue for me. Students, perhaps more than the rest of us want some clarity when it comes to definitions. I identified 3 types of CRM which I collapsed into one definition. The three types of CRM are strategic, operational and analytical (some prefer the term analytic), and I described them as follows.

    Strategic CRM is a core customer-centric business strategy that aims at winning and keeping profitable customers.

    Operational CRM focuses on the automation of customer-facing processes such as selling, marketing and customer service.

    Analytical CRM focuses on the intelligent mining of customer-related data for strategic or tactical purposes.

    My definition? CRM is the core business strategy that integrates internal processes and functions, and external networks, to create and deliver value to targeted customers at a profit. It is grounded on high quality customer-related data and enabled by information technology.

    If you want to get hold of a copy of the book, use the words Buttle CRM and search in the books category on Amazon.

    Francis Buttle

  26. Mei Lin Fung February 5, 2008 at 4:05 am #

    Francis

    Please go to the Wikipedia entry for CRM and update it – I can sense you will do a good job. They need folks like you to jump in.

    http://en.wikipedia.org/wiki/Customer_relationship_management

    Mei Lin Fung
    Blog: Professionals Earn Customer Trust

  27. Phil Olivieri February 15, 2008 at 6:54 am #

    I certainly don’t disagree with Francis’ definition as posted above; however, as everyone knows, there are countless interpretations how CRM should be defined based on an individual’s perception, orientation, affiliation and experience. My definition below is not that much different from the version that Francis posted.

    “CRM is a corporate philosophy, discipline and strategic practice enabled by people, process and technology that strives to engender a profitable relationship between a company and its customers based on a mutual exchange in value delivering increased customer loyalty, company profitability and shareholder value.”

    I did not include the 3 generally accepted types of CRM in my definition – Analytical, Operational and Collaborative – for the reason that it would further confuse the reader.

    I, too, have been been involved in CRM since its inception and have made contributions to the discipline by authoring white papers, teaching P.CRM certification courses and putting it into practice, both strategically and tactically, at large business-to-consumer corporations.

    I also looked at the Wikipedia entry for CRM and would also concur that it needs considerable work and attention.

    Phil Olivieri

  28. jim.r February 17, 2008 at 9:05 am #

    Hi all,

    I’ve just come from another thread which is discussing this very thing: what to put in the wikipedia definition of CRM.

    I think one big problem with defining this term is that we are creating an esoteric definition, that anyone outside this industry will either fail to understand, or lose interest while reading. It’s a tricky thing to define when you consider your main audience.

    I posted a comment on that thread, but at the risk of repetition, would like to share the same information with you.

    It is basically a site I review that has a good explanation of CRM, in easy-to-understand terms. The site owners (Continuity Programs Australia) have given us permission to use material from this page to help to foster greater awareness of CRM.

    Link: Definition of CRM

    Regards
    JR

  29. Francis Buttle February 18, 2008 at 11:38 pm #

    Mei Lin Fung kindly suggests that I rewrite Wikipedia’s entry for CRM. To be candid, I don’t think I want to spend a lot of time on that project just to see some other contributor wreck my handiwork :) However, Mei Lin has prompted me to search for other abuses at Wikipedia. I found the entry on SERVQUAL was pretty poor, and that I had been misquoted and my published opinions misrepresented. I fixed that!
    Francis Buttle

  30. Sama March 23, 2010 at 4:04 pm #

    I appreciate your insight and experience. I am currently being interviewed for a contract position and they asked me exactly what CRM packages i worked with like microsoft etc.. I was confused and felt like..is it me that doesnt know what im talking about or them? CRM is not a program .. why do they think it is?

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