I had dinner last month with a long-time client—someone whose customer-centric work I have followed and respected for many years. She's moving on to a new career and it was great to have an opportunity to get a synopsis of some of her lessons learned over the 10 years that I've been following her work. I was taken aback when she, a long-time reader of our weekly advisory service, said: "You never told us that CRM wouldn't work!"
I must say that stopped me in my tracks. She then went on to explain that in her job, as head of customer experience and later, as P&L manager for a multibillion-dollar division of a well-known company, she had had three different opportunities to implement CRM systems. "The first two times were less than satisfactory," she said. "We didn't really improve customer experience all that much, although we did manage to clean up our customer data." The third time, she said, "I got smart. I refused to go the CRM route. I left the customer information where it was—scattered in disparate systems all over the world. I just connected the dots." On the way home, I called Mitch Kramer, who covers CRM, Customer Self-Service, Customer Portals, and Customer Intelligence, for us, and reported my conversation. We were both bemused. "We've never said that a CRM system will make it easy for customers to do business with you," Mitch said. In fact, we've often stated the opposite—that CRM solutions are designed to solve the sales force/opportunity management problem, which is not something that customers care about. Sales force management is an internal process, designed to help you close sales; not an outside-in process, designed to help customers interact with you. Instead, we focus on customer self-service, customer portals, and on customer experience management. When we evaluate CRM applications, per se, we tend to evaluate them architecturally—what kind of customer data models do they support? How easy are they to integrate? We don't evaluate their sales opportunity management functionality at all. Obviously, in the 10+ years that we've been covering this space, we haven't been explicit enough. So let's say it now:
Having a Customer Relationship Management (CRM) system will not make it easier for customers to do business with you. In fact, it often gets in the way—adding yet another source of incomplete customer information.
But wait, I hear you saying—isn't that the point of a CRM system: to provide a 360-degree view of our customer information? No, actually not. We've rarely seen a CRM system implemented that actually provided any company with a complete view of its customers' information. And, we've never seen a CRM system that provided customers with a complete and accurate view of their information. If your goal is truly to make it easy for customers to do business with you, you need to enable customers—and the people who serve them—by providing them with accurate, up-to-date information about all of the customers' transactions and interactions with your firm, with their up-to-date profiles and preferences, and with an accurate view of their entitlements, their current products and services, with the offers and promotions they've received from you or your partners, and the action they have or haven't taken as a result of those promotions, with the information about the products and services that would be most appropriate for that client, given what they already have, what you know about them, and what it is they're trying to do. In other words, you also need to provide this information in the context of the particular scenarios the customer is engaged in at any point in time. What we've just described is way beyond the scope of just about any CRM system we've ever encountered.
Of course, there are many smart people in leading organizations that have implemented customer information approaches that pull together all the customer information that we've just described. Occasionally, those customer information solutions are centered around an actual CRM application that serves as the focal point for operational customer data and/or they contain a customer data warehouse for the purpose of segmenting, analyzing, and marketing to customers, and/or they include an operational customer data store that updates customer transactional information in near real time and provides that information to contact center reps, to ecommerce applications, and to customer portals. But, in general, and increasingly, we've found that the solution to the insoluble "360-degree" problem lies in providing a federated approach to customer information—the approach our long-time client and friend found herself taking the third time around.
If you want to solve the customer data silo problem, once and for all, you need to design a federated customer information architecture. It's an approach that presumes: 1) that you will always have many different sources of customer information, 2) that you will be adding new types of customer information all the time, 3) that many applications generate and use customer information. It's probably not a CRM system.
Please see Mitch Kramer’s report, “Federated Customer Information: A Practical Approach to Breaking through Customer Information Silos”.