Top 3 reasons why CRM fails to earn my loyalty ( and Social CRM won't, either) - c3centricity | c3centricity

+41 79 93 39 789 info@c3centricity.com

Top 3 reasons why CRM fails to earn my loyalty ( and Social CRM won’t, either)

Bob Thompson, CEO CustomerThink

At a recent conference I had an interesting discussion with an executive for a large non-profit organization, originally hired to lead the organization’s “CRM” activities.

Shortly after starting, she changed her job title to include “customer experience.”

Why? Because with a “CRM” title, her boss expected that one of the first things to be decided was which CRM system to implement.

The “customer experience” angle allowed her to focus the organization on learning how constituents perceived their experiences—like giving donations, interacting with people, and web visits too.

That took a year.

Now they’re driving systems changes with an outside-in approach. Start with what the experience should look/feel like, then figure out what systems and data are required to deliver experiences that will make constituents happy and loyal.

Now, some may say this is what CRM is, or what CRM was supposed to be. Fine, then why did this leader feel compelled to change her title, if “CRM” meant focus on customer experience/loyalty?

 

Treat me as a person!

Which brings me to the point of this post: Why does CRM fail to drive loyalty? Speaking as a customer, I believe it comes down to three reasons.

  1. I am not a “lead,” I’m a person There are tons of marketing automation systems designed to separate the wheat (qualified leads) from the chaff (time wasters). While it’s true that marketing organizations need such systems, they are not designed to provide a loyalty-building experience. Especially if you don’t end up as a prospect worth “nurturing.”
  2. I am not a “deal,” I’m a person Once a “lead” is passed to a sales automation system (SFA), the job is to manage these opportunities to close as many as possible. I can see why reps need (or at least tolerate) such systems, but it doesn’t do anything for me. You see, I’m only concerned about whether my needs are met, not whether I’m a good “deal” for the rep. Sadly, Sales 2.0 hasn’t changed this internal orientation.
  3. I am not an “incident,” I’m a person When something doesn’t work, getting it fixed quickly is of course important. Service/support systems can certainly help. But I don’t want to feel like I’m just another number in the system. A little empathy and personal caring goes a long way. Putting agents on Twitter won’t make them more social.

 

Will “Social CRM” be any different?

Years ago we did an ROI study on CRM projects and concluded that about two-thirds were “successful.” But successful at what?

Turns out that most managers bought the idea that CRM would increase loyalty (it was the No. 1 expected benefit). In practice, however, CRM delivered tactical benefits that were mainly valuable to the company: efficiency, cost reduction and improved decision-making. Few reported that CRM had anything to do with increasingly loyalty, and this I feel is one key reason for the dissatisfaction with CRM performance over the years.

Said another way, CRM has been mainly about systems, data, and how the company can extract value from customers. I think IBM gave one of the most straightforward definitions in a recent  Social CRM white paper:

“CRM strategy, enabled by processes and technologies, is architected to manage customer relationships as a means for extracting the greatest value from customers over the lifetime of the relationship.”

Social CRM proponents tout it as “CRM 2.0″—a strategic makeover that is all about customer collaboration and mutual value. My recent study found that expectations are sky high that Social CRM (broadly speaking, meaning the use of social business applications to support customers, partners and other external relationships) will improve the customer experience and increase loyalty.

Personally, I’m skeptical. Not because social technologies can’t help, but because business people are slow to change. It’s far too easy to apply new tools to old thinking.

Most of Altimeter’s  18 Use Cases of Social CRM are a social update to marketing, sales and service automation. Which is mainly intended to drive leads, manage deals, and h andle service incidents.

Which brings us full circle. If you treat your Social Customers like leads, deals or incidents, Social CRM won’t help build customer loyalty, either.

This post first appeared on CustomerThink on December 10, 2011

For more on customer connection check out our website: https://www.c3centricity.com/home/engage/

3 thoughts on “Top 3 reasons why CRM fails to earn my loyalty ( and Social CRM won’t, either)

  1. Excellent move from the exec who removed CRM from her job title. It can often be perceived as a 3-letter word for system.

    On the “I’m a person” points though, I would qualify things by putting on my vendor hat (with a strong B2B angle, though also generally applicable to B2C):

    1. You are both a lead AND a person. The two are not mutually incompatible. Until I have adequately qualified your purchase probability and potential profitability, I cannot overinvest in you and risk ignoring my customer acquisition costs (CAC), upon which my business model is based. But I should also treat you as a person – to the extent that I can cost-justify it. It can therefore be a well-grounded business decision to not nurture you as a prospect.

    2 You are a deal AND a person. Ditto as above, but at the next phase. You are still a person whose needs I have to meet. But you are also an opportunity with an associated cost that needs to be later offset by revenue. So, to deliberately caricature things, if treating you as a person requires 5 on-site visits plus 2 reference visits as a pre-requisite for a decision, then I probably wouldn’t be able to cost-justify treating you that much as a person – unless you’re a very big account.

    3.You are an incident AND a person. Same reasoning as above, but replacing customer acquisition costs by customer operational/service costs. To drive the point home, if some software vendors have FAQs and community websites for support instead of real people manning the phones, it’s not because they don’t see their customers as people, but because their business model doesn’t support it in terms of customer operational/service costs.

    OK, so I was deliberately being provocative to make a point. At the end of the day, the challenge is being able to combine the internal, vendor-facing cost aspects that are part of the business model for marketing, sales and operations/service with the need to treat the customer as a person. So I don’t see the two as mutually incompatible, but they do heavily influence each other.

    1. Hi Michael,
      Thanks for your provocative thoughts on this guest post. I am sure Bob will have his own perspective to add.
      From my customer-centric view point I can only agree that any action or reaction needs to make business sense as well. However, many companies forget to also consider the cost of NOT treating a person as an individual, what their lifetime value is and not just the short-term return, and lastly the impact on image if interaction occurs online in public. 
      When taken into account they can make many of your examples cost-effective.
      I much appreciate your sharing your ideas here.

    2. Thanks for your comment.

      Yes, the best businesses treat their customers and prospects like people AND they also run a good internal operation.

      The CRM mentality is to optimize internally and only treat the “worthy” prospects well if they are likely to buy. But even poor prospects can speak about their experiences and damage or build the companies reputation. For more on this, see my post “B2B Marketers, Analyze This: How Do Prospects Score YOU on Their Experience?” http://bit.ly/feuwAQ

      Treating someone as a person doesn’t mean rolling out the red carpet. And for those that need a bit of help justifying a modest investment, consider the impact of even one disgruntled prospect if they talk up their experience with friends and colleagues or on the Social Web.

      Remember, the point of my post was about loyalty. CRM advocates say that was a top priority but it hasn’t worked out that way. The reason is simple: too much emphasis on what is good for the company and not enough on what is valuable to the customer.

      One solution: CRM can stop expecting it to increase loyalty and accept that it’s most about extracting value from customers. Use CEM (Customer Experience Management) for loyalty building.

Leave a Reply

Join Global Customer First Strategists!

Get our latest posts before everyone else, and exclusive content just for you.

* indicates required

FREE DOWNLOAD “Secrets to Brand Building”

Everything You Need To Know To Improve Your Marketing & Brand Building

* indicates required