Evolving beneficiaries of Customer Relationship Management in 2022
I’m a long-time advocate for Customer Relationship Management, both the business strategy and the supporting software. And each year I perform an industry assessment on how CRM is evolving.
It’s not a scientific examination. Instead, it’s based on anecdotal experience from my 32 years of CRM implementation experience and communication with peers and thought leaders who I’m fortunate to have relationships with.
There are a lot ways Customer Relationship Management has evolved. But from my vantage point I find the most telling evidence of market maturity is based on who benefits. And over three decades I have observed a clear pattern of evolving beneficiaries.
Here is the CRM evolution as I see it.
Phase 1: Managers Benefit
The maturity cycle begins with CRM used as a software tool to aid management. We’ve all seen this.
For example, sales managers need a sales pipeline report so they can forecast revenues. Many times, they want to provide staff oversight by tracking sales tasks and activities. This makes CRM software more of a system of surveillance and contributes to the poor user adoption and lack of technology utilization that is prevalent. This level of CRM is really about customer data management. The “R” in CRM is nowhere to be found.
This phase may be reasonable if it is just the first steppingstone in your CRM journey and is quickly expanded upon to benefit other constituents. Otherwise, if you consider your CRM software implementation a one and done, the technology will deteriorate until it eventually and predictably fails.
Phase 2: Users Benefit
To advance CRM software from sluggish acceptance whereby users perform the bare minimum and data quality is inconsistent at best, you need to make users a beneficiary. The simple truth is that users will not endorse CRM software unless and until the technology delivers benefits that exceed the effort.
My experience has been that when you define the users WIFFMs (what’s in it for me) and configure CRM software to deliver the professional, productivity and personal goals most important to them, they come just about around every time.
As of 2022, about half of organizations have advanced to this level. That may sound less than impressive, but it’s a big step up from prior years and many signs point to continued progress.
Phase 3: Customers Benefit
Customers become a CRM beneficiary at this stage.
Designing CRM to deliver customer benefits starts with knowing what customers want. Don’t be tempted to think you know what your customers want. While you are partially correct, your inaccuracy creates a blind spot that delays progress and results. And because customers are not homogenous you need to develop customer segments before you apply Voice of the Customer or other analysis.
This phase advances from CRM as a technology to CRM as a business strategy supported with technology. The strategy first identifies the most important company and customer goals and then works backward to configure CRM software to achieve them.
Starting with strategy may seem like common sense but for IT and other leaders unsure of what a CRM strategy should look like, how it should accelerate execution and what measurable benefits it should deliver, it’s not commonplace.
This phase advances CRM operation from efficiency (achieving short-term cost savings) to effectiveness (sustained revenue growth). Metrics shift from lagging to leading and expand to include things like customer lifetime value and customer retention. Information reporting shifts form hindsight to foresight. Predictive analytics become common so management reporting advances from information visibility to predictability.
Getting to this phase delivers more payback and ROI than the prior two phases combined.
Only about 25% of companies make it this far.
Phase 4: Community Benefits
At this phase CRM strategy and technology evolve form departmental responsibilities to an enterprise-wide mission. CRM ownership and evolution advance from IT shouldering most of the responsibility to a business led cross-functional team.
For example, sales and marketing alignment merge standalone departments into an integrated partnership which pursues shared goals such as improved lead conversions, sales conversions, and revenue growth.
Customer service has an active partnership with R&D. Instead of just resolving the same customer cases on a continuous basis, the contact center forwards case defects to their origination. They help provide diagnosis and drill down to root cause analysis to fix flaws at their source. This partnership significantly decreases future case volumes and increase customer satisfaction.
All departments collaborate on how to solve for the customer.
Only at this level is the company growing customer relationships at scale. And only about 15 percent of all companies reach this level. These are your world-class CRM operators.
Source: The Customer Relationship Management Evolution in 2022 | CustomerThink
Eelco Krikke