Why CRM Struggles To Improve The Customer Experience

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When I started my professional career as a frontline technical support analyst for a large software company, our call tracking system was essentially a glorified ticketing system. Though it was customized to fit our needs, still it did little more than associate a customer with their issue. Since that time, how customer issues are tracked and addressed has evolved dramatically.

Customer Relationship Management (CRM) came onto the scene in the late 1980’s and became the new standard. It promised one place for storing and maintaining all customer information. Customer-facing teams–sales, service, and marketing–would no longer struggle with incorrect, out-of-sync data in siloed systems and would instead have one unified view of the customer sales and service interaction history, which in turn could drive marketing insights and actions.

That sounds great, but the problem with CRM is that it does little beyond providing a myopic, individual view to sales, service, and marketing. It is not focused on solving customers’ problems, and as a result does very little to improve the customer’s overall experience. And customer experience is the new battleground for business.

It’s time for a new approach to customer service. Enter service management, the next evolution of customer service. Offering many of the same benefits of traditional CRM, it goes further by creating an environment to:

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  • Engage the entire company in customer service
  • Take customer issues to the teams who can resolve them
  • Drive permanent and proactive solutions

Organization-Wide Customer Service

CRM creates a single repository for customer information to benefit the teams working with customers. While there are some advantages this brings, one could argue those benefits are more to the company than to the customer. The result is great visibility into customers, but not better service to them.

With service management, solving customer problems is the priority. Just as with CRM, customer service is still on the front lines, identifying and collecting customer problems. Problems are triaged and classified, again like how CRM works. But where service management breaks from CRM is to make it possible for customer service to easily take those collected issues and engage with departments beyond their walls. After all, customer service didn’t cause a customer’s billing error, it was a result of a problem in finance. By connecting the customer and their issue to the rest of the company with a common service management platform, those departments outside customer service not only work more cooperatively with customer service, but they have a greater awareness of customer issues and the role they play in the customer experience.

Assign Work And Keep Teams Accountable

Using that common service management platform, all departments are united–not just sales, service, and marketing but the entire company. Customer service can use the platform to assign problems to other departments and collaborate with them as they are further investigated and ultimately solved. Workflow makes this possible and also ensures the problem is never lost. Progress (as well as any delays or detours) can be tracked through to resolution.

While CRM doesn’t limit the ability of customer service to engage with other parts of the organization to solve customer problems, it doesn’t making it as easy as service management. Remember, CRM’s primary purpose is to record and consolidate customer information. When customer issues come up that must be resolved by other departments, those issues can be shared, but that’s typically a manual process: create a report from the CRM system, send it over email to the department responsible, and hope for the best. There is significantly less visibility, collaboration, and accountability, making the resolution more time-consuming. Meanwhile, the customer suffers from lack of a solution.

Deliver Permanent And Proactive Solutions

Service management offers an additional benefit beyond the limitations of CRM. Unlike CRM’s one-off approach to servicing customers, service management has a greater goal in mind: to permanently solve issues by quickly identifying and resolving the root cause. It does this by identifying patterns in customer issues, assigning that issue to the department responsible for validation and providing a permanent fix, and following the progress through to delivery of that fix.

With the core problem addressed, service management also simplifies the delivery of solutions to the customers experiencing it. Automated self-service solutions, knowledge base articles, or email communications can be offered to customers. And not only is the issue solved for all the customers currently encountering it, but future customers will never face it. In this way, service management short circuits the CRM approach of answering questions and problems in a one-off manner.

Driving A Better Customer Experience

Customer service is more than just taking down the customer’s details. The customer service department exists to respond to and resolve customer problems. With that in mind, it’s clear CRM and service management take very different paths in terms of how they tackle this.

With service management, customer service takes the lead on issues and engages the entire organization in solving customer problems. Connected in this way, customer service can assign problems directly to the departments and work with them cooperatively to effect a permanent solution for customers, which in turn prevents future customers from encountering that same issue–a process of continual improvement.

Given the choice between CRM and service management, which approach do you think will drive higher customer satisfaction and take the customer experience the higher levels?

7 COMMENTS

  1. Paul, very interesting view. I wholeheartedly agree that we didn’t manage to bring CRM to where it should have been – hence evolutions like social CRM, customer engagement management or customer experience management (big yuck for the last term, though). However, one could argue that service management also is only part of the equation. While the concept sets the stage for solving customer issues by breaking silos the fact remains that there are corporate functions that need to kick in before there is any customer problem.

    My point of view would be that, while important, there need to be issue-independent processes addressing customer needs – unless you want to go the road that after all everything around a company revolves around solving issues, starting with the issue that there is a demand. This now, appears to be to me as too one-size-fits-it-all.

    2 ct from Down Under
    Thomas
    @twieberneit

  2. @Thomas, interesting comment, could you elaborate more on how does a company address customer needs through an issue independent process?

  3. Paul, you raise several valid issues. I always felt after Sales Force Automation (SFA) was deemed a failure that the term Customer Relationship Management was a stretch. Mostly companies implementing CRM did so with a self-serving approach as evidenced by a study that found in creating milestones fewer than 10% integrated how buyers bought into the process. This meant it was more about selling and little about buying.

    I applaud your point that CRM should be used at organization levels. Sales has always been an island unto itself. It’s only in the last 20 years that Sales and Marketing started sharing responsibility for the top the company’s funnels (a reactive step fueled by buyers understanding how to level the playing field with sellers by using the internet and social networking).

    My perspective is that individual sellers’ behaviors go a long way in determining the customer buying experience. In order to be customer-centric vendors must create offerings that meet buyer needs. This requires organizational change as the silos of Product Development, Product Marketing, Marketing and Sales will require a common vocabulary and some rules of the road. Part of this would mean customer-facing staff needs a way to articulate customer and market needs to Product Development.

    Enterprise Revenue Generation means all 4 silos play roles in how offerings are created and sold so that customer buying experiences can be improved.

  4. Hi Rohan, that was sort of the point … service management is only a part of improving customer experience – unless you are able to apply service management principles through all departments of the company, which is unlikely to be. Customers have needs that need to get identified. Service management does not address this, so it is (only) a part of the solution.

    Thanks for asking!
    Rgds
    Thomas
    @twieberneit

  5. Hi Paul: You have aptly described the difference between CRM and a service management systems. Today’s CRM has inherited its database and workflow architecture from its original purpose: allowing businesses to manage client relationships. In my experience, the emphasis is on the manage piece of the acronym. Command and control. That makes CRM less capable for delivering loftier pursuits of problem solving, delivering outstanding CX, and ensuring high customer satisfaction or delight. Similarly, one knock on ERP systems is that they do a poor job of fostering employee engagement, or preparing predictive statistical models for sales and marketing. But that’s not why ERP systems were developed in the first place. They were built because companies needed infrastructure.

    Your last question compares somewhat to asking which tool is better: a hammer, or a screwdriver? The answer depends on what you need the tool to do. For creating a multi-departmental, single-version-of-the-truth database of customer information with fundamental workflows, I like CRM. For more advanced functions that are ancillary to vanilla CRM, I like service management systems – and the plethora of “bolt-on” tools that give companies competitive advantages through their unique customer experiences.

  6. I’d suggest that this is a ‘forest for the trees’ issue. CX effectiveness isn’t just about service and CRM, which is typically a technology play. Further, it is not about minimizing effort and/or generating high recommendation. It’s an enterprise-wide understanding of customer needs and behavior, coupled with cultural and operational relentless focus on emotional and functional value delivery. Most companies miss that. The top performers do not.

  7. After reading the article, the term CRM seemed to suggest the term referred to the technology. There are two aspects of CRM, the first is a business idea about how company take customer transactions as relationship formation and management. The second is the technology used to support this business approach. Without making clear this point, it is hard to have clarity on our discussion about the effectiveness of CRM both as a business idea and as technology to effect customer experience.

    CRM technology or any technology for that matter can only be as good as the idea or concept is. This means we must first conceptualise the customer experience journey which is about relationship building and perpetuating then decide how technology is going to support or enhance this journey. Judgment cannot happen without objectivity and not having a clear objective in the concepts can lead to further confusion during execution and measurement.

    Nothing is static in this world. Everything will evolve and change therefore concepts have validity period. To maximise the implementation of concepts we have to take into consideration time. This is when things gets truly difficult since change is rapid and unpredictable. The solution is the agile method. Don’t wait for a perfect concept nor a perfect implementation. Create a concept in an altruistic sense and start executing it as soon as you can. Go-to-market as soon as the product of service fulfills it core deliverables and make the adjustments along the way. It is an unnerving approach but you will learn and improve far more quickly and will have the opportunity to embrace change in more practical ways. Eventually you will gain traction and make the impact.

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