The Myth of CRM Customer Centricity

I just read a piece by Stuart Lauchlan at crm.service@insightexec.com entitled, “We've got CRM - but we don't have decent service.” He began the article:

"’The company should act as one organisation to every single customer, knowing who I am, what I want, whether I'm happy, or not happy,’ declared Siebel's David Schmaier this week. ”Hear hear, say I. Wise words indeed. Unfortunately this holy grail of the CRM industry seems to remain as stubbornly elusive as ever.”

Lauchlan’s holy grail won’t be found in the bits and bytes of data mining platforms. Nor will the mindset that drives CRM lead to its discovery. CRM’s mindset is too product centric to discover that holy grail – despite CRM being regularly touted as customer centric.

CRM is about as customer centric as the stereotypical used car salesman. At base, CRM is merely a high tech way of doing what marketers have always striven to do: get more product into consumers’ hands and more money out of their pockets.

CRM It is more about customer relationship manipulation than customer relationship management. A more honest name for what CRM stands for would be CDM – for customer data management.

Comments

[Mike]

For the most part, I agree with your analysis. Customer data doesn't reveal much about the Customer Value Proposition of the relationship. In my experience, the best value in CRM is in 1) identifying through data analysis where things are working and then going and asking PEOPLE why they are working, and then 2) helping identify through data analysis others whose value proposition may be similar. Beyond that, it IS all about pushing more product faster to more people. But that's what puts food on the table for the people buying Mr. Siebel's product.

[David Wolfe]

Yep, you're right, Mike, about how people who buy Mr. Siebel's product put food on the table. But some companies are doing better by actually being customer centric -- not just in empty claims. I put retailers Chico's, Anthropologie and REI in this category, along with sneaker maker New Balance and biker company Harley-Davidson. Also, I suspect there was a sound customer-centric reason why Wells-Fargo abandoned its CRM program several years ago after spending $38 million.

[Mike]

David,

I must have mis-stated my point. I agree with you completely on the importance of doing things in the following order: 1) understand your CUSTOMER value proposition(s), 2) define and deliver products/services/experiences to fit those CVPs, 3) repeat with more customers, and 4) back to 1).

CRM can help in 3 and in identifying who to talk to for 1. CRM is an accelerator for people who can do 1 and 2 well, but lots of companies throw money at CRM as a substitute for doing the hard work. That doesn't work, and it's an expensive lesson to learn. The total cost of failed CRM implementations is probably in the billions of dollars; not something most companies want to trumpet to shareholders.

[David Wolfe]

Mike,

Nice construct, and absolutely properly begun with understanding the customer's value proposition. But there's a rub here. What does it take to learn about CVPs? For various reasons that I go into in my new book, traditional research by many accounts has declined in trustworthiness. That was something General Foods, for example, was focused on in shifting 60% of its research to the Internet -- not that the Internet is any silver bullet for tagging CVPs.