CRM is dead. Its slow death began the day software vendors claimed the term as their own, and essentially productized a phrase (and acronym) without bothering to provide any outcomes. That’s right, software vendors can only lay claim to a small portion of any positive outcomes that have been achieved by those select few companies that have actually achieved them. However, they can lay claim to nearly all of the negative outcomes; and there are many. Will anyone challenge this simple list of possible outcomes that customers of CRM value, but rarely achieve simply by implementing a software application?
- A sustained rate of growth – most companies have implemented some form of (yuck) “a” CRM within the past 10-15 years. That’s a fair time horizon for looking at sustained rates of growth. Have you beaten the rate of growth of the economy every year?
- A sustained level of cash flow – as an ex-banker, I’ve seen many companies point to their rapid growth while I was looking at their rapidly growing cash deficit. Rapid growth isn’t all it’s cracked up to be.
- Sustained stabilization of improved margins – don’t we often hear how your costs will go down by simply implementing (yuck!) “a” CRM? Explain to me exactly how you get anything other than a possible one-time bump as you onboard to what has become table-stakes. What does the software do next to aid in continuous improvement here?
Frankly, I’m not sure what else to measure success on. If my customers are happy it could be that I’m selling at a loss; which isn’t good for me. Business is a two-way street, no matter how you slice it; just as it was in the days of barter. Both companies and customers need to get something positive out of it, no matter how hard the misguided customer advocates scream about customer-centricity. That’s not customer-centricity. A business cannot serve customers unless it’s sustainable. There’s a popular word these days; why not apply it here?
How Do You Measure A Relationship?
What is a relationship really; do we all define it the same way? I suspect that we don’t, based on research, tweets, blogs and other outputs from experts and marketers over the years. As I mentioned in What is a Business Process, Really?, CRM can be viewed as a process area (within a company); which makes it impossible to measure as it does not have a discrete output. How many relationships did you manage last year? I believe more and more it’s simply the wrong choice of words.
If you can’t locate a consistent definition and you can’t find a consistent means to measure the results, it’s simply the wrong unit of analysis. Look back to the 3 outcomes I highlighted earlier. Are these the outcomes you are seeking, or do you just want better relationships? Can we all agree that no matter how you measure them, a better relationship does not guarantee a sustainable business that can serve customers adequately, long into the future? In fact, the use of Relationship is the part of game designed to make you feel you have a path to success – through 5 step plans and catchy headlines that the current generation of marketers seem to embrace (the comments are just as funny). You should challenge anyone who espouses building relationships to show me the money! These are often the people that use the word engagement a lot as well (usually means spam-like company-centric engagement).
Don’t listen to people who recite “Not everything that matters can be measured, and not everything that is measured matters.” We’re not talking about art here. If they point to a success, it’s likely that they can’t prove how they will reproduce it, since it can’t be measured, and often it likely depends upon an unreliable selection of transient personalities.
Is Customer Experience the New Customer Relationship?
I’ve decided to begin using the term Customer Experience Management (CEM) instead of Customer Relationship Management (CRM). I’m tired of battling the lazy marketing approach of “5 Ways to Have a Better Relationship Using <insert product here>.” There is no product that can improve a relationship, and boiling organizational capabilities into 5 bullet points is not just misleading, it’s value destroying. For every company that buys into this, they will waste precious resources in the quest of the 5 Ways at the expense of those very relationships they are seeking; not to mention the opportunity cost of betting their financial resources on the Easy Button.
There is nothing easy about building competitive capabilities, and you simply cannot purchase them in a box (or download them). To get around that, you will hear that there are best practices (in lists of 5) which somehow became the proxy for competitive capabilities. Certainly, I see a day when capabilities that were once hard to achieve will be productized; but at that point, they will be a service or a utility that can be subscribed to, and everyone will have access. Then the next level of capabilities will be built upon this platform and they will look so hard to do that only 5% of the most competitive companies will embrace them…just like today.
Customer Experience can be measured. The key is to design it from the bottom up with a systematic means of understanding it and defining it. If that doesn’t sound touchy feely, you’re right. Touchy feely cannot be measured, and no matter how many Customer Journey Maps you create to describe it, the foundation must have much more substance and actionable data that is clear to all who view it.
How Do You Measure Customer Experience?
There needs to be a standard upon which we can build a foundation. You’ve heard me harp on the job the customer is trying to get done; but I haven’t really talked much about the job the company is trying to get done. Worse, I haven’t talked much about how the steps within these jobs must align between company and customer. Even worse yet, we tend to talk either about marketing, or about a service in-use; but not the entire set of jobs that each entity plays a part in from need awareness (please don’t say category awareness!), through whatever transaction takes place, and then on to the disposal of the product or service. In addition to disposal, we might also want to talk about end of a cycle, and the setup for the next cycle. These jobs involve multiple entities in a value chain, and multiple actors in each entity. If you know what to look for, and what questions to ask, each step/actor along the way has a bountiful set of needs that can be measured.
Customer Experience is not intangible. You can certainly measure it as the cumulative value created across all touchpoints. However, in order to understand how you get that value (measured in terms of a bottom-up customer lifetime value, let’s say) you need to understand if you have all the correct touchpoints (sans solution); that the right actors participate; that the correct resources are available; and that functional, emotional and social elements are understood. And of course, you will need to understand your customer’s needs, all of their needs, at each and every step along the journey.
Customers don’t want a relationship with us; they want to get a job done. Those who help them get one or more jobs done, and do so with the best experience, will win. To get there, we need to break these jobs down and discard our current solutions (or for those that have already done this, monitor the change in what customers value over time and adapt). We need data, not just pictures. So now I have upset sales people, marketers and customer experience consultants who draw pictures. Who else can I upset?
Next, some pretty chalkboard visualizations and more detail that I will undoubtedly use to debate myself! Stay tuned.
This post was written as part of the IBM for Midsize Business program, which provides midsize businesses with the tools, expertise and solutions they need to become engines of a smarter planet. I’ve been compensated to contribute to this program, but the opinions expressed in this post are my own and don’t necessarily represent IBM’s positions, strategies or opinions.