CRM has certainly been a hot topic in the last several years. Ask ten peo- ple what CRM means and it’s likely you’ll get ten different answers, if not more. I first heard the term at Texas Instruments, and it was defined by McKinsey (the company’s consultant at the time) as “customer relation- ship marketing.” This definition never caught hold, but in retrospect,
maybe it should have, as what customer of yours wants to be “managed”?
In my brief life on this planet, my experience has been that customers manage you—they call the tune, and you dance. OK, I’ll get over it.
While I think that some of the concepts of CRM are great, I’ve always had a hard time understanding how this was different from advanced data- base marketing. Sure, the term was sexier, but in the end, it didn’t seem any different to me or, I might add, to many of my colleagues, from what we’d been striving to achieve with database marketing. Unfortunately for the CRM software vendors, the proponents got off to a horrible start.
First, it was all about technology: buy this or that software and you had CRM. What a bunch of baloney, as no marketing or sales software ever made a sale, to my knowledge. Then it was about the process of manag- ing your customers, and that sounded a little better, but here again, they missed the boat—a different boat.
In late 2000 I attended a three-day conference on B2B CRM in Orlando, and since I felt behind the curve in this area, I went to as many sessions as possible to learn at the feet of experts. I did learn, but not what I was expecting. The speakers, all self-proclaimed experts in CRM, talked as though they had never met a real customer face-to-face, as their theories as to what would work were based on sending only E-mail com- munications! Shall we agree now that this view is a bit stilted? Maybe this explains why my E-mail inbox is overflowing each day. Another odd thing happened on my way to CRM heaven: not one person during the three-day event said the words inquiry, lead, or qualified lead. It was as though customers magically appeared with little or no effort. The really odd part of this is that we all know that first impressions are the strongest.
This is particularly true in B2B, since the process of acquiring a customer can be quite involved for both the seller and buyer. There is no doubt that this process will create a substantial impression, if not a relationship, with the individuals who are making the buying decision—before a customer is created. Well, if CRM is all about managing customers, do we have a separate process to get them? In fact, I have recently begun to hear the term prospect relationship management, or PRM, as the precursor to CRM. I’ve not heard it from the CRM software companies but rather from smart marketers on the agency and client side.
I believe the view of CRM is now clear. It’s the combination of tech- nology (software and databases), the marketing and selling process, and
the people charged with this responsibility. Almost all failures have revolved around process and people, as companies installed CRM soft- ware but didn’t change either their marketing or selling processes or train the people charged with these responsibilities. In B2B, another key factor in CRM failure is the “dirty” data that underlies the system. No matter how good the technology, process, and people, if inaccurate information exists the results will not meet expectations. I take up the subject of
“dirty” data later in this book, as in B2B the data accuracy and decay rate is so much worse than in the consumer realm that it completely changes the odds of CRM working at all.
It’s no wonder that in 2002, The Gartner Group has reported that more than 65 percent of all CRM initiatives have failed (this includes both consumer and B2B). The primary reasons were that they cost way too much and they didn’t produce sales results or improve customer satisfac- tion. Isn’t it ironic that in the face of billions of dollars being spent on CRM in the last five years, national surveys show that customer satisfac- tion levels have trended downward and not up? I guess this proves Gart- ner’s point.
I do support the premise that all customer contacts and interfaces should be recorded on a database and that this knowledge should be used to drive more relevant communications to these individuals. That will work and is the underlying technology needed to execute the new sales coverage model. What I do not support is the notion that all the com- munications be E-mail, which is what most CRM systems and strategies promote. Somehow we got sidetracked into thinking that everyone wants to be communicated to on the Internet. I strongly disagree. In B2B the variety and type of communications between a supplier and customer must be more robust to truly forge the relationships desired by both parties.
There is some value in thinking along the lines of CRM, but in B2B it will not meet the “sell more” and “spend less” goals. It is a part of the overall solution, not the entire solution.
Of all the marketing and sales issues of the last several years, CRM has been the most written and talked about of all. As CRM has been so beaten to death, this book is not a rehash of CRM principles. Rather, it presents a new way to look at this process: namely, a new way to look at your go-to-market strategy or, in other words, your new sales coverage model.