Intrigued by the discussion in Customer Think about the definition of CRM, I went to take a look, and found it, well…. “so yesterday”.
So I’ve jumped in an started working my way down the text, revising.
Here’s what I’ve changed so far. Your thoughts ?
“Customer relationship management (CRM) is a customer-centric business strategy with the goal of maximizing profitability, revenue, and customer satisfaction. [1] Technologies that support this business purpose include the capture, storage and analysis of customer, vendor, partner, and internal process information. Functions that support this business purpose include Sales, Marketing and Customer Service, Training, Professional Development, Performance Management, Human Resource Development and Compensation. Technology to support CRM initiatives must be integrated as part of an overall customer-centric strategy. Many CRM initiatives have failed because implementation was limited to software installation without alignment to a customer-centric strategy.[2]
Aspects
There are many aspects of CRM which were mistakenly thought to be possible to be implemented in isolation from each other. [3]
From the outside of the organization, a customer experiences the business as one entity operating over extended periods of time. Thus piecemeal CRM implementation can come across to the customer audience like a rock band whose members are playing independently of one another, yet standing on the same stage at the same time.
CRM is the coordinating glue that gets the band members playing the same tune, in the same tempo, to create the overall desired effect for the customer.
Who is in the CRM Band?
Vocals = Customer facing Operations – The people and the technology support of processes that affect a customer’s experience at the frontline interface between the customer and the organization. This can include face to face, phone, IM, chat, email, web and combinations of all medium. Self-service kiosk and web self-service are doing the job of vocals and they belong here.
Lead Guitar = Internal Collaborative Functions – The people and technology support of processes at the policy and back office which ultimately affect the activiites of the Customer Facing Operations concerning the building and maintaining of customer relationships.
Bass Guitar = External Collaboration functions – The people and technology support of processes supporting an organization and its cultivation of customer relationships that are affected by the organization’s own relationship with suppliers/vendors and retail outlets/distributors. Some would also include industry cooperative networks, e.g. lobbying groups, trade associations. This is the unmistakable foundation and beat to which the Vocals and Lead Guitar play against.
Back up Vocals = Customer Advocates and Experiene Designers – Creative designers of customer experience that meet customer relationship goals. They write the music and lyrics for the CRM Band.
Percussion = Performance Management and Marketing Analysis – Design and collect metrics and data so as to design marketing campaigns, call campaigns, Web strategy, and determine if CRM strategy is working in delivering ultimate outcomes: market share, customers, revenue, profitability, intellectual property concerning customers preferences.
Recording studio technicians and producers = Customer and Employee Surveys and Analysis to see how the customer would hear it
Technology considerations
The technology requirements of a CRM strategy must be guided by an overall view of who is the customer and what value they are to get from engaging with the organization.
The basic building blocks: (continuing the Band analogy)
Power = *A database for customer lifecycle (time series) information
Music = Translating customer needs and profitability projection into game plans for different segments of customers, captured by customer interactions (Human, automated or combinations of both) into software that tracks whether that game plan is followed or not,and whether the desired outcomes are obtained.
Lyrics = Numbers and description of whether goals were met and models of customer segments and game plans worked as hypothesized.
Practice, Practice, Practice = Training and improving processes and technology to get closer to desired results. Its a complex system. Practice is required. No one gets it right first time, and a band has to find its rhythm before it rocks.
Playback = Analytical and quality monitoring CRM using voice recognition, video pattern matching, statistical analysis, activity-based costing to ultimately determine profitability of customer relationship policies and activities over the lifecycle of each customer segment.
Each of these can be implemented in a basic manner or fully orchestrated.”
CRM definition in Wikipedia continues, and I will work my way down in the next few months.
References
1 Bligh, Philip and Douglas Turk. 2004. CRM unplugged – releasing CRM’s strategic value. Hoboken: John Wiley & Sons.
2 Rigby, Darrell K., Frederick F. Reichheld, and Phil Schefter. 2002. Avoid the four perils of CRM. Harvard Business Review 80 (2):101-109.
3 Searls, Doc 2006, http://www.linuxjournal.com/node/1000137
“I will know the silo system has been replace(d) by a free market when vendors realize that they can learn far more, sell far more, and improve their offerings far more, if they actually relate to their customers, rather than lock them in CRM silos that remain instruments of global indifference to what customers might actually want.”
http://en.wikipedia.org/wiki/Customer_relationship_management
The revised definition is way too complicated. Let’s review the blog initiated by Graham What Exactly is CRM?, and develop a more user-friendly version so that everyone can understand.
Appreciate your efforts though.
Daryl Choy, the founder of Touchpoint eXperience Management, helps firms make a difference at every touchpoint. Choy can be reached at wisdomboom.blogspot.com.
Dear Daryl
I am so glad you commented, and I will look at Graham’s blog.
Thank you for responding.
About the re-inventing the wheel – we probably approach this from different perspectives. What is the wheel in this case?
Well – it is the practical definition of CRM for use by organizations.
And from my perspective this wheel is broken and needs work.
Here’s my view:
the definition of CRM is important because what we define it as, will drive future initiatives in scope and content, at the executive, middle management and customer-facing staff level.
Too many CRM definitions in the past have been manipulated into implying that CRM technology was CRM. As in “we already have CRM, we installed Siebel” – a direct quote from banking IT executive.
This made for a short snappy definition, but in practice, we have ended up with CRM systems that have taken human judgement out of customer service and we are finding out that flexible adaptive response is a vital ingredient for assuring good customer experience.
I agree with you, we need a more user friendly version of the definition of CRM and I will continue the quest, this is just the first step on the journey towards mutually rewarding business-customer relationships. I appreciate your encouagement.
Mei Lin Fung
Blog: Professionals Earn Customer Trust
I have to admit I have mixed feelings about the rock band analogy. I like analogies, but wonder if an online encyclopedia is the place for it.
Still, it’s easy to criticize, isn’t it? Those who think they have “better” CRM definition should get involved with Wikipedia and help improve it. I congratulate Mei Lin on giving the CRM definition and interesting and creative update. It’s certainly more cohesive than the muddled mess that was there before, IMO.
However, my fundamental issue with an everyone-can-edit wiki, and the excuse, I mean reason, that I don’t want to invest my time on Wikipedia specifically, is that it really doesn’t matter how good the CRM definition is. Come back in a few weeks, and it will be chopped to bits again by other editors with a different point of view or a vested interest. And we’ll be back to a mess that’s of no use to anyone.
Bob Thompson, CustomerThink Corp.
Blog: Unconventional Wisdom
Bob,
Thanks for supportive words – there is nothing like getting in the ring and seeing if you can keep standing is there?
So the editor at wikipedia threatened to delete it because it was too “un-encyclopedic” to refer to a rock band. I removed the rock band metaphor to see if that would do the trick.
Latest rev below:
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There are many aspects of CRM which were mistakenly thought to be possible to be implemented in isolation from each other. [3]
From the outside of the organization, a customer experiences the business as one entity operating over extended periods of time. Thus piecemeal CRM implementation can come across to the customer as unsynchronized where employees are acting independently of one another, yet representing a common entity.
CRM is the coordinating glue that gets the different players within an organization to coordinate their efforts in creating an overall valuable series of experiences, products and services for the customer.
The different players within the organization are in identifiable groups:
Customer facing Operations – The people and the technology support of processes that affect a customer’s experience at the frontline interface between the customer and the organization. This can include face to face, phone, IM, chat, email, web and combinations of all medium. Self-service kiosk and web self-service are customer facing for the organization and they belong here.
Internal Collaborative Functional Operations – The people and technology support of processes at the policy and back office which ultimately affect the activites of the Customer Facing Operations concerning the building and maintaining of customer relationships. This can include IT, billing, invoicing, maintenance, planning, marketing, advertising, finance, services planning and manufacturing.
External Collaboration functions – The people and technology support of processes supporting an organization and its cultivation of customer relationships that are affected by the organization’s own relationship with suppliers/vendors and retail outlets/distributors. Some would also include industry cooperative networks, e.g. lobbying groups, trade associations. This is the external network foundation which supports the internal Operations and Customer facing Operations.
Customer Advocates and Experiene Designers – Creative designers of customer experience that meet customer relationship goals of delivering value to the customer and profit to the organization (or desired outcomes and achievement of goals for non-profit and government organizations)
Performance Managers and Marketing Analysts – Designers of Key Performance Indicators and collectors of metrics and data so as to execute/implement marketing campaigns, call campaigns, Web strategy and keep the customer relationship activities on track. This would be the milestones and data that allow activities to be coordinated, that determine if the CRM strategy is working in delivering ultimate outcomes of CRM activities: market share, numbers and types of customers, revenue, profitability, intellectual property concerning customers preferences.
Customer and Employee Surveyers and Analysts – Customer Relationships are both fact driven and impression driven – the quality of an interaction is as important as the information and outcome achieved, in determining whether the relationship is growing or shrinking in value to the participants.
Technology considerations
The technology requirements of a CRM strategy must be guided by an overall view of who is the customer and what value they are to get from engaging with the organization.
The basic building blocks:
A database for customer lifecycle (time series) information about each customer and prospect and their interactions with the organization, including order information, support information, requests, complaints, interviews and survey responses.
Customer Intelligence – Translating customer needs and profitability projection into game plans for different segments or groups of customers, captured by customer interactions (Human, automated or combinations of both) into software that tracks whether that game plan is followed or not,and whether the desired outcomes are obtained.
Business Modeling – Customer Relationship Strategy, Goals and outcomes: Numbers and description of whether goals were met and models of customer segments and game plans worked as hypothesized.
Learning and Competency Management Systems – Customer Capacity and Competency Development – Training and improving processes and technology to get closer to desired results. Its a complex system. Practice is required. No one gets it right first time, iteration is key to refining, improving and innovating to stay ahead of the competition in Customer Relationship Management. Successful practices will be copied by the competition as soon as they are proven successful.
Analytics and quality monitoring – Voice recognition, video pattern matching, statistical analysis, activity-based costing to ultimately determine profitability of customer relationship policies and activities over the lifecycle of each customer segment.
Each of these can be implemented in a basic manner or fully coordinated. The ongoing alignment of the basic building blocks distinguishes an elegant seamless CRM implementation which successfully builds mutually valuable customer relationships.
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Not quite so fun, when we can’t copy the Madonna hit with “Like a Rock Band” but at least as you say, Bob, the separation of aspects of CRM are better than what was there before.
We’ll see what happens next. I’m next going to check out Graham’s blog as suggested by Daryl. I had gone to Paul Greenberg’s PB wiki definition of CRM 2.0 to get inspired before I wrote the latest version.
If you’re interested, the definition of CRM 2.0 discussion is now hosted at MyCRMCareer
Mei Lin Fung
Blog: Professionals Earn Customer Trust
Hi all, great work on this, it is not an easy thing to define. The one thing I’ve come to understand in my time in this industry is that CRM is no single thing – it is a STRATEGY. Exactly what goes into that strategy is really what this discussion is about. One of the sites I review has provided a very good definition of CRM, what is and what it isn’t, and why it is needed. Actually, it is more of a description than a definition, but take a look, I’m sure the wordsmiths among you will be able to use it when carving their definition.
(the site in question belongs to Continuity Programs Australia (CPA) and is mentioned here with their permission. They have also encouraged us to make use of any material on the abovementioned page if it will help foster greater awareness of CRM).
CPA Website home page: http://www.continuityprograms.com.au/
CPA Definition of CRM: http://www.continuityprograms.com.au/loyalty_programs.php
Regards,
JR