Understanding the R in CRM | Marketing Technology Blog

I was just reading a good post on CRM and I think there’s one huge, massive, gaping hole in most CRM implementations… the Relationship.

What is a Relationship?

Relationship requires a two-way connection, something that’s normally missing from any CRM. All of the major CRMs out on the market do a fantastic job for incoming data capture – but they do nothing to complete the loop. I believe this is the key why the majority of CRM implementations fail. And I believe it’s the weakest link in most CRM platforms.

CRM Defined

One look at a Google search of Customer Relationship Management and you’ll find that each vendor defines CRM strictly in regard to the strengths of their software. For instance, here’s Salesforce’s definition:

The simplest, broadest definition can be found in the name: CRM is a comprehensive way to manage the relationship with your customers ? including potential customers ? for long-lasting and mutual benefit. More specifically, modern CRM systems enable you to capture information surrounding customer interactions and integrate it with every customer-related function and data point.

Hmmm… I suppose it’s not a coincidence that the Salesforce platform is totally centered around data capture and the back-end has a robust integration capability. I still think it’s only half of a CRM solution.

The other half of the solution lies in how YOU connect with YOUR customer. Your CRM should be centered around trigger points to predict, as best you can, the times when you should act on your relationship with your customer. How are you advancing your customers through the customer lifecycle?

Examples of Useful CRM Implementations

If it’s a prospect, what products or services interested them in your communications or on your website (analytics integration)? When are they expecting that you’ll contact them again? Do you have alerts set up to notify you when to contact them or topical emails scheduled?
If it’s a prospect or customer, does your website content dynamically cater to the products or services they have provided interest in or that you have sold them?
I think Amazon.com does a great job at suggesting books to me – but they ignore the fact that I shop at Barnes and Noble, too. If they integrated Shelfari or GoodReads into my account, they’d know what I’ve already purchased and wouldn’t show it to me again.
Have you established a value to your customer that you can then act on? If I spend thousands of dollars with you, how are you treating me different than the folks that don’t? I go to a great coffee shop locally that rings me up for a small a lot of the time when I get a medium. They know me by name and recognize that I’m worth more to them than a customer that shows up once a month.
Have you identified when the trigger is for people to stay or leave you? If the average reader of your email newsletter opens 5, never clicks, and then unsubscribes, what are you doing different on newsletter number 5 for the reader who’s never clicked?
When is the last time you thanked them or requested their feedback on your service? Do you have spending thresholds or activity thresholds set up to communicate with customers that spend $X or shop every X amount of days, weeks or months?

Scheduling, triggered emails, rewards, and dynamic content are key factors in YOU maintaining a relationship with your customer and assisting them through the customer lifecycle. Take a look at your CRM application again… how is it helping you to do that? It shouldn’t be left to you to develop all of these interactions with your CRM. If it is, you don’t have a CRM system, you just have a customer database.

Analytics, Shopping Carts, Email Marketing and Website Content Management systems must all be integrated for you to have a CRM implementation that’s going to fully benefit from the initial cost and effort required in building out a CRM implementation. If you don’t connect the dots, you don’t have a CRM solution.

NOTE: When I did a search for CRM resources and a good diagram on the web, I found a great resource, the Marketing Teacher.

http://www.ychange.com Small Business Marketing

I honestly think that most CRM systems should be better called PRM systems because they are not about Customer Relationship Management but rather about Prospect Relationship Management especially where we are not concerned about a continuing RELATIONSHIP with anyone. Most of these systems were developed for the hunters as opposed to the gatherers and really are not appropriate even for a ‘land and expand’ strategy which indeed calls for building a long lasting relationship.

CRM systems were made for handling large numbers of “customers” and building relationships can only be done well when we consider concentrated efforts on small numbers of customers.

You are right and the reason is that these CRM systems were not built for the purposes they are being used for.

http://www.mikeschinkel.com/blogs/ Mike Schinkel

Maybe you’d be more accurate calling them “Prospect Management Systems“, or “PMS” for short. Kinda has an ironic ring to it, no? ‘-)

http://www.ychange.com Small Business Marketing

“Funny”
U said it, not I.

http://www.flatworldstudent.blogspot.com Jess

Great points. With so many easy options for companies to start interacting with customers on a one on one level, there should be no excuse not to do so (facebook, blogs, email).

Every company uses CRM, using it more effectively can be the value proposition offered by your company, and its all at your finger tips.

great post.
http://www.dolakblog.com/2006/06/crm-systems-and-your-brand.html Dave

As I blogged about a while back, too many use CRM to ‘stalk’ their prospects rather than create relationships with them.
http://www.greenhouse-bbc.com Gregor

Don’t these CRM experts remember what it was like when they were dating?
Isn’t the whole idea behind CRM building long lasting relationships? So, when has stalking ever resulted in a relationship? How do I react to companies that show off how much they ‘know’ about me? Exactly, bye-bye.

What’s the solution? Ask me, involve me, fascinate and intrigue me, surprise me and make me feel special. Wow, that was difficult.
How come companies just don’t get it? Are they afraid to ask? Fear of rejection?

Food for thought: if I’m not interested, wouldn’t you rather want to find out sooner than later? So you can focus on those who are interested?

What is a Relationship?

CRM Defined

Examples of Useful CRM Implementations

About Douglas Karr