19 Jul CRM – A model of the past?
Hundreds, thousands or even millions of valuable ‘customer relationships’ all neatly organised and stored in a single centric customer database, just sitting there to be tapped into and used for the benefit of squeezing more money out of customers – and of course, resulting in higher loyalty rates and improved bottom lines. Thanks to technology, a ‘gazillion’ CRM vendors and millions in cash we now can systematically store information, structure processes for data capture, validation, targeting, measuring and follow up. CRM: the golden goose of the past decade has gotten fat and big. And yes, there is (still) some value in CRM – yet the approach is fundamentally flawed.
Firstly, CRM is now heavily commoditised – everyone ‘does it’. Secondly, it has become a cold and clinical science; and thirdly and most importantly, once there, it does not get you enough cut-through any more in an ever more information-cluttered world. The consequence? What used to be a very personal business has taken on ‘mass-character’. If you are in that camp, and if you are really honest on the topic, then the likelihood is that CRM is no longer creating true incremental value for you, or for your customers. Companies small (in particular) and large, struggle to demonstrate a return on their CRM investments. Increasingly sophisticated and even cynical customers and prospects see through your efforts, too, as I am sure you do when you get your next mailer in your inbox or through your door. So what to do?
It’s high time for a big re-think: The power is (and always has been) with the customer. For CRM, the meaning is that he or she will choose with whom they want a relationship, to what depth/degree and when and how they want to be communicated with. It means that we need to re-think backwards from the customer into the business, not the other way around; we must rework our segmentation models and the way we interact with customers. If you want to see where this works well, with a very consistent and high degree of integrity, a real humanistic approach to the ‘relationship’, look at the high end luxury goods industry. A passion and culture for the product, honed over centuries not ‘pushed’ to the customer, but sought out by them. This is a model that has worked over centuries. It is largely unaffected – and if done well perhaps enhanced – by technology. Companies could really do well tostop what they are doing in the CRM space, take a look around and re-think. CRM is a model of the past. CMR – Customer Managed Relationships are the new currency of the future. An exciting and potentially rewarding new journey has just begun.