I am often asked and have often read about this question. I felt it about time to come up with my perspective.
CRM (Customer Relationship Management) is a term coined by the Software Industry in the mid-late 1990’s. Since then, there have been attempts to modify the term, usually to introduce a new variety of software. There has been eCRM, CIM, Citizen Relationship Management and CRM 2.0 (of course!) to name but a few. However, CRM has stuck and many of those now becoming aware of this previously unexplored part of the universe are guilty of equating CRM to a tool. I find that view very limiting and narrow. Usually it comes from one’s own perspective. For example, if you are a Salesperson and use CRM software to manage your sales opportunities, customers, leads and forecasts then CRM is a Sales tool in that context.
Let me first of all explain how I view organisational decision making. This applies to any organisation from the largest multinational to the “one man band”. Everyone has a slightly different take on this and there are other steps I have omitted e.g Values that are also important but have less impact upon CRM than some of the other steps.
GOAL – VISION – OBJECTIVE – STRATEGY – ACTIVITY – TASK
Everything starts with a motive. What is your reason for existing and doing what you do? For many private organisations, the goal could be to maximise shareholder wealth. For the one man band, it could be to not have to work for another person. Irrespective, it all starts with an overarching goal.
Therefore the next step is the vision. Where do you want to be to realise that goal? A corporate vision is a hugely important statement and is often confused with Mission Statements. To me, a Vision is inspirational, stretching, future. A Mission Statement should define what the organisation will be (note: not ‘do’) to deliver that vision.
From the Vision, we need corporate objectives. These objectives should be S.M.A.R.T.
Next, we need a Strategy. A strategy tells us what we need to do to reach these objectives.
The Strategy will then break down into a series of actions and sub-tasks that should enable realisation of the strategy.
So where does CRM fit in? To many people, CRM is a class of software that can help organisations better manage their customer relationships. This is correct. However, to me it is like saying that Space Exploration is all about Rockets. Sure, you need a rocket but what about Astronauts, Scientists, Engineers? What about the leveraging of knowledge? What about the planning? Is that not equally important?
My definition of CRM uses the space analogy to suggest that CRM is the entire universe containing many galaxies. I will start my explanation with a look at the decision making hierarchy many organisations use:
“CRM” should start at the vision stage. What importance does an organisation put upon the type, nature and interaction with its customers? To some organisations, it isn’t important. They focus on price competitiveness or other competitive differentiators that allow them to be successful even with mediocre customer satisfaction. Just look at your mobile phone provider for evidence of that. How many of those providers are truly customer focussed or offer outstanding customer service?
Assuming the Customer is central to an organisational vision e.g “Our Customers loyalty to our products and services will be the envy of all of our competitors”, then we now need to come up with a way of realising that. The objective will help define timeframes, measurements etc but will not tell us HOW. For that, a CRM Strategy is required. What do we need to do to achieve the objective to help realise our vision? It usually starts with a blunt appraisal of where you are today: (“How do you know where you are heading if you don’t know where you are?”)
The Strategy should define a series of initiatives that impact upon the entire organisation. It might affect the Corporate Culture, Organisational Design, R&D, Sales Strategies etc. Nevertheless, the CRM Strategy will be the focal point for all subsequent tasks and activities that are required to help realise the vision. It is likely the CRM Strategy will cut across functions which leads to another key question: Who is accountable for CRM. I will address that in a subsequent post.
The activities required to reach the objective can take many forms.
- One of these activities might be to analyse and redesign the Customer experience.
- Another may be to develop systems and tools to better capture, understand and monitor inbound and outbound customer facing initiatives. In other words, CRM Technology.
- Another might be to train the workforce on customer communications and customer service.
- Another might be to change the hiring strategy to evaluate potential recruits against a templated “customer focus” criteria.
There are many, many more things that could be done but nearly all activities will impact upon and/or involve People, Process and Technology.
Therefore CRM to me is the entire universe of customer orientation. This universe contains many galaxies of activities which contains many solar systems of tasks.
Customer Centricity is a journey through the universe without a real destination. Why? Because the goal (destination) keeps changing. Customers have different expectations and needs today than even a year ago. Even as recently as five years ago, how many organisations had a Digital Marketing or Social Media Strategy?
As the world evolves, so must our vision and enabling strategies to ensure that if customers are important to our overall vision, then we never lose sight of the need to evolve in alignment to the changing world.