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Three Perspectives on “CRM” Reveal Limited Win-Win Thinking 

Bob Thompson | Jul 31, 2007 1,682 views 1 Comment

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Earlier this year we invited CustomerThink members to take a short survey on their perceptions about CRM.

One of the key questions was simply to ask for a definition of “CRM” without providing any options to select, or even giving a definition of what the three letters stood for.

Now, a few people did define “CRM” as “Customer Relationship Management.” Sheesh. Technically correct, but not exactly what I was looking for.

But most of the 175 survey takers took the time to provide a sentence or two. Respondents were primarily from North America and Western Europe, generally mid- to upper-level business managers from a diverse set of enterprises of varying sizes and industries.

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.

Of course, this simple survey is not all that precise. Others might look at the same responses and categorize a bit differently.

Still, I think the good news is that, in our community at least, we don’t find a dominant “CRM=IT” mentality. I believe in the broader market CRM would be defined more often as primarily a collection of IT systems. That’s certainly the impression most people would get looking at CRM definitions via Google.



It’s also encouraging that about 40% defined CRM as about delivering value to customers. For this group, CRM = Customers Really Matter.

However, for CRM to reach its full potential, we need more than 20% to see CRM as a win for both the enterprise and its customers too. This lack of holistic thinking may help explain why CRM projects have struggled to deliver strategic benefits, since enduring relationships are built on mutual value.

In the early days of this site, we spent a lot of time debating the definition of CRM. These days, I’m not sure we can change market perceptions of CRM any more, but it is interesting to see the different of view. Over all, I’d say it’s progress. What do you think?

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One Response to Three Perspectives on “CRM” Reveal Limited Win-Win Thinking

  1. Graham Hill August 1, 2007 at 1:17 am (992 comments) #

    Bob

    Perhaps this is an example of what James Surowiecki calls the Wisdom of Crowds. Individually, most members only see a part of the CRM picture. But together, the combined view of all members delivers a much more complete and accurate picture of what CRM really is.

    CRM is clearly about creating value for business. But for it to be sustainable it also needs to create value for customers. This almost certainly needs insights about customers to be generated through customer analytics and provided to IT-enabled front-line touchpoints so that value can be created during interactions with customers. This dynamic, systemic view of CRM is a good example of a value network. It is at the heart of the C3EB framework that I use in my own customer business consulting and interim work.

    Perhaps we can find more ways to use our members’ wisdom to help other members create value through CustomerThink.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

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