In a recent keynote speech, Tom Siebel, founder and CEO of customer relationship management (CRM) software behemoth Siebel Systems, proclaimed that "CRM is dead." This came as quite a shock to the assembled press, analysts, vendors and the more than 5,000 attendees. It seemed that CRM's greatest champion, and the person who arguably had built the largest CRM kingdom and made the most money in the market segment, was declaring the party over, CRM passé, and leaving it all behind to step into new and exciting things such as enterprise performance management (EPM).
The conference buzzed for days about the declaration of death, with many proclaiming that the patient was most decidedly not dead yet and still had many years of healthy life remaining. Others jumped on the bandwagon, citing the miserably low success rate of CRM implementations, the inability to excite business leaders about pumping millions more into technology to solve their customer challenges and the inevitable march of hype-driven progress. Some even cynically suggested that Mr. Siebel was merely trying to take the focus off of the blemishes of CRM and shine the spotlight on a new segment where he hoped to duplicate his success.
Whatever the motivation, it doesn't seem his call to drop the defibrillator paddles and declare the death of CRM. Were there grains of wisdom beneath the layers of marketing strategy in his declaration of death? How much has CRM really changed things for the typical organization? Have businesses really been able to achieve a 360-degree view of their customers? Let's look at a few real-life examples of leading companies and their implementations.
AT&T. Between business and personal accounts, we have dozens of accounts with AT&T. We use them for wireless, intrastate and interstate long distance, conference calls, ISP accounts, etc. We've been loyal, high-profit customers for many years. Unfortunately, AT&T doesn't have a clue about this. Interaction with the company consistently demonstrates that they do not have a unified view of us as a customer or an understanding of what our value is to them across all accounts. From the CRM perspective, it is really a shame to see the many offerings of AT&T broken up. I believe that given time, AT&T would have been the largest, most successful example of a CRM-driven business strategy. Unfortunately, it became collateral damage of the fraud and greed that destroyed its competitors.
Best Buy. One of America's largest, fastest growing retailers, Best Buy has come to represent all that is possible in a retail "big box" format. Best Buy has tremendous capabilities in capturing transactional data; unfortunately, they don't leverage this at the primary point of customer service contact in their stores. One customer who steps up and needs help at the customer-service counter is processed just like any other. As a business intelligence professional, it is heartbreaking to witness this one-size-fits-all approach in action. I know that the customer service rep is inches away from a terminal that could quickly display the customers' entire purchase histories, their number of high profit-margin service contracts, their projected lifetime value, etc. This is another case where portions of the power of CRM are being leveraged, such as marketing automation; however, the major payoff in terms of customer relationships and resulting profitability and loyalty is being missed.
American Express. Another corporate icon, Amex, as it is usually referred to, has scores of potential ways to be involved with their customers. For instance, between credit cards, travel accounts, insurance, retirement accounts, brokerage accounts, etc., we have dozens of relationship entry points with Amex. The historical, current and potential lifetime value of these accounts is the primary evaluation point that drives successful, profitable, long-term relationships. Although Amex has every bit of data it takes to calculate these metrics and the operational systems and processes potential to ensure that critical customer relationship decisions could be made in their context, they have been unable to manifest this capability in key areas of their business. The lack of informed decision making leads to unfortunate consequences in the area of loyalty and resulting customer churn among discerning customers who represent the highest possible profit margins and lifetime values.
Is CRM dead? I don't think it's dead; I just think it takes a lot longer and requires a lot more tough work than fast-moving software executives could ever imagine or tolerate. In each of the three cases I cite, the challenges of integrating customer data across the multiple customer touchpoints are daunting. Nonetheless, progress continues to be made. The key lesson to learn is that there are no magic technological bullets that will quickly and easily solve critical, complex, challenging business issues such as customer relationship management. It takes long, hard work to integrate the data necessary to support CRM processes. The upside is that once it is integrated, tremendous power can be unleashed. You just need to get the integrated information in front of empowered people who can make a difference for your customers.
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