CRM is not software!

Every day, the definition of CRM expands. Type 'CRM' into a search engine, and you will see a laundry list of vendors all claiming to offer 'CRM solutions.' Providers of software - whether it is to support sales force automation, e-commerce,...

Every day, the definition of CRM expands. Type ‘CRM’ into a search engine, and you will see a laundry list of vendors all claiming to offer ‘CRM solutions.’ Providers of software – whether it is to support sales force automation, e-commerce, marketing automation, data mining, Web-based personalization, OLAP, contact management, customer support, campaign management, data warehousing or even GIS – are all ‘in CRM.’ All of these tools can help to facilitate CRM. None of them are CRM. CRM is the buzzword of the last few years – and, like all fads, it is overused and losing the meaning it once had.

Last year, the Peppers and Rogers Group asked business leaders to define CRM. Fifty-one per cent of respondents, whose companies have formal CRM programs, say CRM means using IT tools that achieve incremental business improvements, 65% define CRM as moving from being product centric to customer centric and 41% say it’s making integrated customer-contact information available in near real time to all customer-contact personnel. Peppers and Rogers also found that these companies were spending an average of $9 million annually on their CRM initiatives, predominantly on tools, customer interaction centers and databases.

While more than half of those surveyed by Peppers and Rogers felt CRM was about technology and tools, I disagree. Huge investments in technology do not guarantee CRM success and, in fact, may not be necessary at all.

CRM is a business strategy, not a software solution. The basic principles involve:

• aligning the organization around customers (rather than products or channels)

• sharing information across all arms of the business

• leveraging data from disparate sources to better understand the customer and anticipate his or her needs

• maximizing customer profitability.

Depending on the complexity of your business, your required investment in tools may range from huge to relatively minor. For my business, for example, the only tools I’ve invested in are a PDA and Outlook. Synching my PDA ensures all my customer data and correspondence are available to me at all customer touch points. This includes billing and time tracking applications to ensure that I focus on my most profitable clients.

Obviously, the needs of my one-person consulting business have little in common with those of large financial services providers; many of these companies are grappling with diverse product systems, multiple client identifiers, disparate touch points and vast sales forces. In order to achieve the principles of CRM, these organizations require technology – and lots of it.

However, no matter how complex your business is, software will not define your success. It will be defined by how well you craft and articulate your business strategy. CRM initiatives fail when IT departments, which are easily seduced by technology, lead them. However, they also fail when they are lead by marketing, sales management or customer service. CRM can only be truly achieved by knocking down silos and creating a multidisciplinary vision. Once that is done, then you can talk about technology.

Don’t misunderstand me. Technology has a critical role to play in enabling CRM. However, I do think many vendors may wish to rethink their positioning in this space. Technology is not CRM, and the technology is so varied that it is ludicrous to put it all under the same banner.

Technology has another important connection with CRM. In many ways, it is technology itself that has created the need for customer relationship management. The advent of the Internet has significantly increased customer expectations. The e-customer is much more demanding than his or her predecessor, and technology has exposed many of our flaws. This customer notices when our systems don’t talk well and is disappointed if our response is not immediate. It is these expectations that power the need for complete customer real-time information across all channels, including the Web.

So I’m taking the word CRM off my business card. In this cluttered marketplace, it does nothing to identify what I do, and only creates confusion. Does anyone else agree?

Emma Warrillow is not ‘in CRM’ – she helps her clients assess and gather data, tools and resources to get the most out of their customer relationships. She can be reached at emmawarrillow@home.com.