Beyond CRM

Once a buzzword becomes really hot, and people actually start implementing a solution based on the buzzword, the old buzzword becomes passe.

That’s the problem with Customer Relationship Management, or CRM, sometimes called one-to-one marketing.

The idea is that any person or machine dealing with any customer has all available data on that customer so they can do the best possible job. Among the companies making software for this market are Siebel Systems, Vantive Corp., which announced yesterday it’s being bought by Peoplesoft, and Clarify Corp., which announced last month it’s being bought by Nortel.

In addition to the merger activity, the major trends roiling the CRM software market are a move toward lower-cost, lighter CRM programs like Commence 2000 and attempts to put this capability on the web, where it can be rented instead of bought.

The trends are all related, because the fact is the “low-hanging” fruit in this area has already been picked. Most of the big companies that could benefit from CRM solutions, like Best Buys and REI, already have them.

So what lies beyond CRM? Forrester Research senior analyst Lisa Allen says it’s “elastic retailing,” as done by REI, combining all physical and virtual channels into a seamless whole. Others say it’s live customer service, which humanizes the use of the web with operators standing by.

In fact, I think the answer to this question is much simpler. Beyond buying and installing CRM software lies the task of actually using it. The fact is, as consultants Don Peppers and Martha Rogers have grown fond of telling everyone, one-to-one marketing is a process, not a destination. Once you have a feedback loop in place, you actually have to respond to the feedback.

This is harder than it sounds. If you’re used to making decisions on what to build and how to act around a table in a boardroom, it’s hard to give a bigger role to customers (and line employees) who may know nothing (and care less) about your larger strategy. But that’s the way the world is moving.

Customizing products and service offerings requires, not just CRM software, but completely different manufacturing processes. Most companies, including many with CRM packages, haven’t been able to cross this hurdle.

One great example from Pepper and Rogers’ latest opus is Levi Strauss & Co.. They praise it to the skies for creating mass customization under banners like Personal Pair and Original Spin; but in fact, the company has pulled back from selling directly online due to channel conflicts. It recently fired its marketing chief and cut back its web site.

Other companies cited as positive examples by the consultants, including First Union Corp., 1-800-Flowers, and Xerox, have also suffered business reverses.

The point is that no buzzword is a panacea, and there are no simple strategic solutions that will solve all your problems. You have to focus on what you know and do your best, you have to use all you can know about your customer, but the world beyond CRM is not an easy road. It never is.

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