CRM 2.0 … Is It Really Now?

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Hey, so if you looked at what I just said in the last entry, I said, “style is sexy” and “style is important” and “style matters” to how a customer acts. So style becomes part of customer strategy. Is what you’re doing utilitarian enough and cool enough to make the experience of the customer with you worth it to them—and you?

Good question—as good as trying to define what CRM has become. CRM 2.0 in fact is the term du jour in this discussion and there has been a second, though I’m sure they think they were the first, attempt at defining it in an article that appeared in one of my favorite contemporary online presences (who the hell knows WHAT to call media activity on the web any more? I sure as hell don’t).—The Wise Marketer on December 7 called “CRM 2.0: a loyalty marketing benefit of Web 2.0? (this hyperlink is http://www.thewisemarketer.com/news/read.asp?lc=t28436ix2063zx). The article was someone at Prism Consulting and thus serves Prism well by quoting Vladimir Dimitroff of Prism a lot. But Vlad has some serious stuff to say and not only can’t I argue with him (though I’m sure, being a New Yorker, I’d LIKE to argue with him), but I have to, for the most part applaud him. He’s setting some further parameters to a debate that has been waged rather tepidly to date by CRMers and the experience design and management crowd—and with outright arrogance I might add.

See, here’s the thing. CRM and the experience design and execution crew (I REFUSE to legitimize CEM even though I may have to use it sometimes, because it flies in the spirit and ideals of CRM 2.0 or CME—customer managed experiences)—need each other. Yet the CRM jefes endlessly debate how the customer experience management “stuff” fits into CRM—relentlessly ignoring the fact that the experiential folks have existed in business for as long or longer than CRM folks.

On the other hand, the experience design folks arrogantly dismiss the CRM folks as not of any value or use at all because they are SOOOOO concerned with technology and they “just don’t get it” as one experience guru told me. But all THAT proves is that experience mavens don’t seem to get it either.

See, we need each other here. Ultimately, we’ll dealing with a new brand of customer strategy that requires us to truly understand the behaviors of our customers and involve those customers in our business life and decisions because they are demanding that we do so that they derive some value from the experience they have with our businesses. That means they know there is more to a company than just a purchase decision and they are not only aware of that but ardently engaged in demanding some acreage on the corporate estates. Or else they’ll walk and take those “not only purchases” with them.

Once we figure this out, we have to create the institutional processes that are necessary to propagate and promulgate the customer’s great experiences. So being cool isn’t a thing of the moment but an institutionalized method of engagement with customers. That means, when our awesome dudes and dudesses quit, we can replace them without much loss because we are institutionally cool and collaborative.

That’s why the Wise Marketer article is so interesting. Even though it pre-supposes (as do I being an CRM guru type) that the current transformation of business should be called CRM 2.0 and that isn’t necessarily the case, the folks at Wise Marketer and Prism get the fact that there does need to be a new business model that’s defined by an exchange of value and communities and a collaboration with customers that reaches deep into the pores of the company—up to and including investments being made by the company.

For those of you who have been reading my blog for the last 18 months and my book CRM at the Speed of Light (especially the 3rd Edition) you’ll recognize a fair amount of these concepts because I’ve been a shrill, shrieking harpy when it comes to pushing them into the thought bubble of the many. For better or for worse. And for a long time.

But its good to have both allies and people who don’t know me from a hole in the ground recognizing that the new customers demand a new model. And that new model is going to demand that the CRM gurus and the experiential gurus sheath their swords when it comes to each other and focus instead on working together to make customer strategy the whole brained endeavor that I and my colleagues hope it can become.

Or else, you’re all being silly.

Paul Greenberg
The 56 Group, LLC
Paul Greenberg, the president of the 56 Group, LLC, is the author of the best-selling CRM at the Speed of Light: Essential Customer Strategies for the 21st Century, 3rd edition. Greenberg is co-chairman of Rutgers University's CRM Research Center and executive vice president of the CRM Association. His blog PGreenblog won both of the only two awards ever given to CRM blogs.

2 COMMENTS

  1. I found this posting rather late, and totally by accident. While I can’t help feeling flattered by the comments-on-comments (thanks, Paul) I found yet another reason to turn this article into a debate: CEM.

    Not a huge advocate of the CEM movement (like the author, I tend to be sceptical about it being ‘the next Big Thing, or the solution to all things Customer), I acknowledge the need for customer experience to be studied and adequately managed. Which doesn’t make it the raison d’etre of a company. I can’t remember Adam Smith writing about experience, and I happen to believe that economic fundamentals still rule every single aspect of business management.

    A business only exists to satisfy needs, period. Value is only created or increased in the process of satisfying needs. The person who has the needs just happens to be called ‘customer’. Customer experience may be their perspective on the process of satisfying needs, or it may be a need in itself (let’s not go Maslow, not tonight). Either way, it is on a different semantic plane, an attribute rather than a fundamental.

    One reason the CEM concept is back in force is that it was suddenly embraced by a lot of marketers, including very senior ones. You see, CRM was getting into an advanced stage (1.666 🙂 ) where the segmented view of a customer base (by Value and Needs) started to allow differentiated business planning, resource allocation and results measurement. This is exactly what those ‘marketers’ hate – results measurement. Having a Customer Plan? Or a Value Map (or any other name given by gurus in order to claim IP ownership)? Having a KPI for value growth or (God forbid!) for return on marketing budget?

    In the early days, when relationship was the keyword they took it literally, in its Holywood meaning of love affair and rushed like lemmings into the (then fuzzy) CRM 0.1. Then came hard-pushing super salesman Tom Siebel and persuaded the world that CRM is, in fact, about Sales and about software that helps in managing Sales. Marketers rapidly lost interest, but there were enough techies (and even some Sales managers) who got excited by this form of CRM to keep it going for about a decade. The ‘fuzzy’ marketers turned, in the meantime, to other sexy concepts like Loyalty – which often was their idea of the ‘essence’ of CRM. Under competitive pressures they embarked on ‘CRM’ initiatives (and even massive programmes) with retention pormises… But retention (unlike Loyalty) happens to be measurable. As is customer lifetime and, of course, value. As soon as CRM started to become quantitative and even evangelists like Peppers & Rogers abandoned their fuzzy one-to-one-ness and brought no-nonsence, ‘show me the money’ ideas like ROC, the ever hungry for new things marketers jumped the ‘CRM’ ship and embraced Experience.

    For, can anything be more fuzzy, fluffy, elusive and slippery? Can you put KPI-s for Experience? (Yes, you can – ‘statistical’ answers to stupid questions in fuzzy surveys). For the time being they are safe, not threatened by anyone potentially asking uncomfortable questions like how does your latest marketing spree impact our financials?…

    I am far for saying that all marketers share this thinking, there are enough, thank God, rationally intelligent* and deeply aware people who keep building capabilities and aligning anything Customer with the fundamentals. But couple the enthusiasm of the fuzzy community with the cunning tactics of ‘gurus’ that claim to have ‘invented’ the Next Big Thing, and the CEM revolution starts making more sense…
    * I had to use this oxymoron because the fuzzy brigade is clinging to the similarly fashionable ’emotional’ variety for lack of evidence of other intelligence

    Along with great viral campaigns, Google Adwords, successful whispering – we see a countertrend of even louder shouting. Unprecedented in size billboards and painted facades, record-beating ‘impressively creative’ TV commercials (with blockbuster budgets), touchpoint initiatives that have little to do with customer needs but are designed to ‘impress’ with some ‘experience’ – all this is less and less paid for by the customers (who vote with their wallets for cost-effectiveness), and increasingly – by the shareholders. I call the actions of our popular brigade (you know who you are!) a concerted, massive destruction of shareholder value. Which should be declared a crime and practicing executives treated like those of Enron and Worldcom. And, if lawmakers don’t bring this, the investomer* will.

    *The concept of converging stakeholder entities is central in CRM 2.0 – but that’s from another movie…

  2. Vlad

    Whilst I share your cycnicism about the role of technology firms and consultants in promoting CEM, I do not share your conclusions.

    Back in 2002, I took a 6-month sabbatical to research how people perceive, evaluate and respond to, what at the time was the nascent area of Customer Experience Management. The customer experience was an obvious next evolutionary stage of customer management after the largely one-sided application of CRM by business. It represented a subtle rebalancing of the dynamic relationship between business and customers, in recognition of the gradually increasing power of customers, increasing competition in business and the obvious success of some particularly experience-oriented companies.

    But the concept of the customer experience isn’t new; its roots go back to the pioneering work of the Swedish and American schools of service management in the 1980s. And to Jan Carlson’s ‘Moment of Truth’ book that described how SAS was remade, one touchpoint at a time, into a customer experience company. Today CEM is as obvious to those in customer management as CRM was 10 years ago.

    Customer Experience Management is clearly work in progress; like much else in business. And as customers have grown accustomed to at least being considered by business, it is here to stay. Our work over the next five years is in improving its its accountability, effectiveness and its application. By then it will no longer be at the cutting edge of customer management. But that as they say, is another story.

    You know what you have to do.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

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