I’m not sure if I should admit this, but I was one of the early thought leaders in the area of customer relationship management (CRM). I was an analyst at Gartner back in 1997 when we wrote and introduced one of the foundational definitions of CRM. In a column that I published in 2001, I wrote that “CRM is an enterprise business strategy for using customer information to maximize the long-term value and profitability of its relationship with its customers.” Industry experts can and do argue about the exact definition of CRM, but we all agree that it’s about increasing profitability.
CRM, like many popular buzz words (or acronyms), has its merits. It helped business and IT leaders justify and obtain the investment dollars needed to enhance service, sales and marketing functions. And for vendors, it’s created a market place that has attracted investment expenditures.
To give credit where it is due, Tom Siebel was the founding father of CRM. His company invested hundreds of millions of dollars in popularizing CRM, even going so far as to run ads during a Super Bowl. The problem was that Siebel sold a solution that was based on a faulty premise – the idea that a single business solution could address all enterprise sales, marketing and customer service application needs. Siebel caught on to CRM’s limits in later years, and the company tried to distance itself from the market that they had created, but by then it was too late.
Many buzz words/terms have come and gone since CRM was first introduced: customer managed relationships (CMR), enterprise relationship management (ERM), and customer experience management (CEM), just to mention a few. Yet, CRM still hangs in there, and business leaders sheepishly return to this phrase, as it seems to encompass the essence of what they need to do.
The concepts upon which CRM is based are very much alive and always will be. The issue is that vendors took the phrase and turned it into an application that was impossible to build and utilize effectively. In the contact center alone, there can be over 40 different applications, and new ones emerge all the time. It’s hard enough to get different departments within the same company to agree to use the same phone or email system, let alone to find consensus for a “servicing” solution that makes or breaks their department’s performance (and bonuses).
CRM has served its purpose. It fought a great war, and won more battles than it lost. It woke the market to the necessity of investing in customer-facing activities and applications to improve customer profitability. It fueled a new generation of systems and applications to meet these needs, although it never succeeded in convincing sales, marketing and customer service groups to work together to achieve corporate goals. CRM did begin the process of focusing organizations on the importance of putting their customers first, even if each department within a company had a different understanding of what this meant.
The downfall of the original CRM strategy was that it was too internally focused and led managers to believe that customers were happy to be managed. And from a systems perspective, it convinced business managers that one solution, like a CRM suite, could meet the needs of all customer-facing groups – departments that do not share the same goals.
It’s time to say good bye to CRM. It can be honorably retired to the buzz word hall of fame, but it is no longer viable as a leading business or even systems strategy. At this point, we know that its faults are greater than its benefits. However, CRM is going to continue to hang around as a concept until a new strategy emerges to better address enterprise goals.