One of the most important things I’ve learned in my CRM career is that innovation is the biggest driver of long term success for any business. By long term, I mean well beyond the lifetime of a product or service. I’ve worked with many companies that have owners that seem to be riding into the sunset, with products that are slowly being disrupted, not necessarily by new business models, maybe just competitive innovations along technology dimensions. But eventually, where the technology allows for a more cost efficient business model, the demise of the incumbent is swift and decisive.
We’ve always used the term innovation to describe the cool new companies coming online with products we never really knew we needed. Clearly, these people are just smarter than everyone else because we never thought to tell them we needed this product, right? In fact, they may not be smarter, but simply view the world differently than many of us. Understanding this difference is critical if you wish to continually create value (customer value, shareholder value, whatever). To identify better features, to design better service delivery, to enhance the customer experience well into the consumption chain of product usage, to market from a pull perspective, and/or to identify new markets requiring new business models requires a consistent, repeatable framework for understanding one thing…
What Customers Need
And if there was ever anything important to concepts of CRM and customer-centricity, the customer need is it. Unfortunately, piecing the entire puzzle together requires much more effort than simply focusing on some of the latest buzz-careers, like customer experience management. It’s not that simple, except that the need is central to everything you do. There are many disciplines, and tools, revolving around this concept that may seem daunting. But you don’t need to master them all yourself. You do, however, need to understand how they work together to achieve the goals of long term value creation as you oversee this change in organizational DNA. There are capabilities your business will need to develop in order to follow this path of continual learning and innovation. You can’t simply rely on software, it’s just a lever. These capabilities are your competitive difference and will change the way you create value around the true needs of your customer beyond the foreseeable future.
In the CRM space, we have historically accepted that customers wanted CRM software; each for their own reasons. We’ve differentiated ourselves with a combination of the features our chosen software package brought to the table and our own creative skills that make functionality requests happen. Do we ever ask how that functionality creates value?
Goods dominant logic, prevalent in marketing today, reflects our need to sell what we’ve got, and not ask the questions that could disrupt that process. At best, lip service has been paid to the concept of delivering what the customer needs. But ask those on the front end of CRM implementations what their customers need and all you’ll hear is features, benefits, processes, forms, buttons – and amazingly, only the ones that their technology can deliver! If you’re lucky, you’ll hear terms like efficiency and cost effectiveness – things that are valuable, but can only take you so far.
What Is Your Market?
To many, the market is their product and the competing brands. That’s certainly appears to be the case with CRM software, and it’s also the case with many customers I’ve worked with over the years. It’s fair to say that the vast majority of all companies tend to think this way. And when you think this way, the only thing you can possibly do is push information and promotions (about your product) to the customer. Maybe you’ll get lucky for awhile. But, wouldn’t it be better if you had a complete understanding of what a customer needed to hear, and when they needed to hear it – instead of what you wanted to say, every Tuesday at 8:30 AM? It doesn’t matter if you push it, or if they seek it. It’s about need. Their need. But how do you know what they need? Do we just sit back and listen?
Products and services are hired to help get jobs done – people’s jobs. Each job has steps, and the outcome of each step (the level of success with which it gets done) is defined by a set of needs. When you begin analyzing these needs, you will find clusters that begin to slice cross traditional market segments. The story of the Milkshake is a great example. While many in the retail fast food industry tried to find ways to make their milkshake better than the others in their industry, they didn’t realize that the milkshake was being hired to get a job done, and the competition was not other milkshakes at all. Once the market was defined around the job it was being hired to do, a much clearer path to gaining market share presented itself. It involved changes to the milkshake, but more importantly the entire experience – from obtaining it right on through it’s consumption.
What job, or jobs, is CRM software being hired to help companies do (or do better)? This sounds like such a simple question. In fact, it’s far more complicated than you might think. “We hire it to help us sell more”, I hear you saying. True. But, why do you need to sell more (on one hand) and what drivers should you be managing that will guarantee continuing growth (on the other hand)? I said guarantee!
Have we really looked at the dozens/scores/hundreds of CRM related jobs real people do to contribute to that outcome? Can you name them all? Do we know the needs required by each of them? Back to the milkshakes – I’m sure they thought they would sell more milkshakes if they just made it thicker, creamier and chocolaty-er just like their customers told them to do (when they asked the wrong people the wrong questions). But they didn’t sell more. In fact, they found that milkshakes, while a simple product, were actually being hired to do more than one job.
Everything is Driven by Need
Innovation can really sum up all the things you need to do better than the other guy. Marketing certainly needs to be innovative and simply cannot be until they understand customer needs (not there own). Service delivery cannot be innovative until you understand the customers need at each touch point. Products (productized services) create value during the lifetime of use – and why would it be used if it does not fulfill a need better than the alternative? Everything is focused around needs and if you define them properly, they become a central pillar of your business…everyone on the same page, customer-centered, agile, value-creating, continually learning and adapting. Yes, adapting, which takes me back to so many companies I’ve seen sailing into the sunset…and thinking that the easy thing to do is to buy some CRM software to placate the new sales manager, or marketing manager.
What is your CRM software competing with? The easy answer is other CRM software. But are they competing with broad but shallow CRM suites, deep but targeted functional tools, or are they really competing with something else all together? Do we look to the self-described disruptors in the cloud? Do they have a clue beyond a basic grasp of innovation along the dimensions of convenience, price and just good enough? Are they targeting the true non-consumers, not just the non-consumers of software? Does the tool, all by itself, create the lion share of the value sought by companies? Is the tool really even the market, as so many marketers & analysts will have you believe? Can you just turn it on and fire everyone? If not, what else can we be doing to help companies get CRM-related jobs done better than they can today? Perhaps we can teach them how to understand their customers’ needs and see where that goes. But first, let’s learn how to do it ourselves. Maybe then, we can begin to help our customers do the same. Maybe this service will become an integral part of the next evolution of CRM products.
