Defining Customer Relationship Management (CRM)

While we barely talked about issues such as customer relationship management (CRM) a decade ago, managing the relationship with our customers and the entire customer experience (i.e., CEM) has moved onto center stage. Managing how our customers consume the organization’s product or service is the central marketing issue in business-to-consumer (B2C) enterprises. Greenberg (2004) quotes Goldman Sachs research that places CRM as the number two strategic issue behind security, but one could argue that all forms of managing the customer relationship are and always have been the number one marketing and strategic issue facing businesses. After having spent over 20 years in marketing and marketing management positions, I thought we were always doing this…!

There is a problem though with this new focus on CRM and CEM. Becoming more nimble and responsive to our customers is often presented to the organization as a software initiative, but it remains an organizational issue that must be envisioned, led, and planned. For example, to build walls we must envision striking the head of the nail with the hammer and approach the problem without confusing the tool (i.e., hammer) with pounding nails in building walls; we want to pound nails not swing hammers. That is so simple it sounds corny. However, CRM-related software initiatives are not usually perceived as implementations of customer-centric processes in the organization; the software is a tool to deal with CRM and not CRM itself.

Most organizations would be best served by learning thoroughly what changes to existing CRM processes could and should occur before implementing CRM software. In fact, I wonder if organizations would be better served if they bought software, implemented the changes that the software implies, and sent the software back to the vendor. A long discovery and planning phase, and the organizational introspection it implies, is the best way to keep CRM initiatives at center stage and the star of the show.

Reference

Greenberg, P. (2004). CRM at the speed of light: Essential strategies for the 21st Century (3rd. Ed.) New York: McGraw Hill.