Avoiding Anti-Social CRM
We’re seeing the rise of the 2.0 era – Web 2.0, Mobile 2.0 and now there’s talk of CRM 2.0. But what does that mean for companies that want to get closer to their customers?
Article by Duncan Wood, Product manager, Sage CRM, UK
It’s important to remember that CRM is a business strategy – not a technology. It is about putting your customers at the centre of what you do. This has translated itself into a number of technology systems that facilitate that approach. CRM – the technology – has had a long genesis, with the introduction of sales force automation in the late ‘80s, combined with the development of call centre and automated field service operations in the ‘90s. The technology requirements now range from database management and business modelling, to analytics and monitoring tools.
Wikipedia has now added to that list with:“Collaboration and Social networks – Profiling and interactive technology that allows the customers to interact with the business and their fellow customers and others: prospective customers, strategic partners.”
It’s that interactive element that has led to the term CRM 2.0 being talked about for a while. But is it a radically different technology? Or is it about applying the CRM we know and love in a 2.0 world? Businesses today are certainly operating in a different time, a different economy, and with different technology in use by consumers and within organisations than the late ‘80s. But twenty years on, are we at risk of losing touch with customers altogether – at a time when the opportunity is there to do more with CRM than ever before?
Today, it’s probably true to say that most CRM projects are still primarily sales force automation, which connect sales and customer services departments but overlook the marketing team. This only scratches the surface of what CRM is really all about. With the marketing department cut out of the loop, the best they can do is produce broad campaigns based on limited customer intelligence. The result is a disappointing ROI from marketing spend, and a CRM project that management and investors perceive to have failed.
Added to this, marketing has grown in importance and complexity as new Internet-based tools have opened up new opportunities to customers, giving sales and marketing a new way to identify and visualise relationships that they didn’t even realise existed – and develop leads or build campaigns based on that intelligence. With that interactive element, marketing is also much more of a conversation with the customer now than it ever has been before, as people don’t want to be marketed at. It needs to be a genuine collaboration between the company and customer at peer level.
For all of the processes, services and products involved, CRM still often only goes one way – company to consumer. To a large extent companies provide the same services as they did twenty years ago, sell the same products, and in some cases use the same advertising slogans. However, there is a huge change happening on the other side of the counter.
Customers today are growing up in a totally different market. They have less time, but more money, and they are better educated, with higher expectations. School children have their own MySpace or Bebo page, creating a generation growing up with a strong sense of individuality – and buying power. Think mass marketing and mass communications? Think failure.
In a competitive economy customers want cheaper goods with more add-ons, more value, and more innovation, which can also be in the way companies actually talk to customers. Companies have always wanted to ‘get closer to their customers’ – that’s what CRM is all about, remember? But while the principle is not new, there are new mechanisms for achieving it.
Marketers look to leap onto every Web2.0 bandwagon there is: blogs, podcasts, user communities, social networks. These were all designed for consumers to have their say, but are still one-dimensional to a large extent. More people listen to podcasts than record them; more people write blogs than contribute to those by other people. These are still powerful tools to showcase employee ambassadors and customer advocates. But as many large corporations have already discovered to their expense, the customer isn’t always right, and isn’t always happy. User generated content, for all its trendy, 2.0 street cred, can still be wrong, misdirected and damaging.
The hype around social networking (good and bad) has been mainly consumer to consumer – sharing musical tastes, swapping friends, finding common interest groups, showing your loyalties, joining a fan base. However, many companies rely on customer feedback for product or service development. Engaging with customers is about more than giving them what they want, it’s about getting to know what they want first.
Some technology vendors are looking at a more practical version of social networking and the concept of connecting different entities. Using software, companies will have the ability to build relationships between opportunities or different companies, for example. Being able to relate a person or product to absolutely anything will open up a myriad of intelligence and sales opportunities.
However, in order to make the most of new tools, businesses first need to ask themselves whether it is a case of needing new technology, or simply the case that they are still not putting enough of the right detail in their CRM system. There are a few easy steps to making current CRM technology work for you in a 2.0 capacity, reaping the benefits without any additional investment.
Use what you have
Businesses should make more of what they already know about their customers. CRM products today can record, track and analyse data about previous spends, what products customers buy, preferred contact methods and so on. Integration with marketing departments should exist to enable building lists against the database, doing targeted marketing campaigns, whether by email, telephone, notes.
Let the customer come to you
Increasing the ways that your customers can give you information, such as self-service, will create better relationships in the long run. Web interfaces can be built to let customers log a query, update opportunities, track the progress of these interactions with their supplier. By putting the power in the hands of the customer, you can also learn their preferences, what they want from you, how they like to receive information, and what not to do!
Use the Web-based functionality to your benefit
CRM systems can be integrated with most business applications, and an online environment brings new potential. An Intranet-CRM mash-up, for example, would mean that sales or marketing could see reporting dashboards from product development or accounts payable. Alternatively, where an application in another part of the business contains valuable customer information, that application can be launched within the CRM system as if it was all in one.
What’s the return if you do this right?
• More targeted marketing – don’t spend tens of thousands of pounds, when 90% of your efforts go to the wrong person
• High value intelligence – Knowing who your high volume customers (buying 3,000 widgets) and high value customers (buying £3,000 widgets) means you can utilise the most effective channel – web for the former, personalised phone service for the latter
• Self-service satisfaction – if customers can log on and track their own cases, rather than ring up and queue in an automated phone system, they’ll get a better experience
• Streamlined customer service – with self-service you can see calls drop, meaning call centre staff can pick up the high value opportunities and spend more time on outbound calling, but targeting the right customers, rather than a blanket target call list
• Identifying issues – With a more intelligent system of self-service, analytics can report back on who has accessed the Web, how often, and if there is an increase in contact, someone can cement that relationship by proactively calling to check in
• Managing SLAs – Keeping track of your service level agreements is a legal and financial imperative. Being able to build in alerts and notification of deadlines or where a particular criteria is hit for a customer, can save paying fines, as well as avoid damage to your reputation
There is an additional cultural element that companies need to address with a new approach to CRM. You need to ensure that customers know what self-service means and what they will get from it in order for them to take up the option and for you to see results, rather than just give a web page in an automated voicemail server with no rhyme or reason.
In addition, within the organisation, different business units need to agree to share the information they hold, and must understand the common goal in order to break down some of the barriers that exist.
The barrier between customer relations and technology is another hurdle. CRM products are built by and for sales, marketing and support people – not Web 2.0 gurus. Forward looking companies will be ensuring that the digital designers, who would not naturally be bedfellows with those departments, bring their knowledge and understanding of new online features and networking tools into the forum.
From a technology perspective, we’re not talking a massive shift, new infrastructure, huge integration issues. The fact is, many vendors already offer the kinds of tools discussed here, and as everything moves online, these can be easily integrated into marketing applications and wider business applications. CRM 2.0 is a classic buzz word, but all of the tools are there to do it right now, it’s just about using what you’ve got better. CRM 2.0 is not a new generation of technology that requires investment, but using customer-focused processes and working smarter within the Web 2.0 environment.
Some might say CRM 1.0 was software and CRM 2.0 is a collaborative process – but let’s not abandon the principles of the original CRM yet. It’s about geography: for all its good intentions, the one-directional CRM of old put the company in the middle of outbound communications. Now the customer is in the middle of a rapidly expanding ecosystem, consisting of constantly evolving mechanisms to contact people.
CRM 2.0 cannot just be about a new definition or a new term. Who needs a new word that still doesn’t have an agreed meaning or a proven model? It’s about a second chance to get CRM right. People didn’t become ‘individualized’ over night – but the industry doesn’t have much longer to get CRM right.