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The Evolution of CRM

evolution – a process in which something passes by degrees to a different stage, often to a more complex form. (various sources)

In looking at different definitions with different perspectives and a business lens, the one above made the most sense to me.  After 16 months, it was time to revisit a diagram created for “A Guide to Understanding Social CRM”. I will not go so far as to call my earlier work wrong, naïve is a better descriptor.  The evolution diagram contained my thought process at that time. Without over using the concept, my own thinking has evolved.

For starters, the term ‘Social’ has become a blocker of progress. The attempted isolation of the social components from CRM do both concepts a disservice. The Social CRM discussion has pushed CRM into a bit of corner. How can a relationship exist without social elements? The constant discussions of definitions are nothing more than a distraction. We simply need to focus on achieving business results; so let’s get moving. CRM needs to incorporate the social elements (time, place and context) – call it what you want, define it how you will.

Both the technology and the strategy of CRM need to evolve, and then need to do so in lock step with each other.  The fabric of any organization is the people, so who better to shepherd the change and embrace the technology? It cannot be people from just one part of the organization either, it needs to be a team effort. You may believe that CRM needs to evolve into a different ‘something’, possibly needing a different name; to each their own.  I am not saying I will not use the term Social CRM, as I am perfectly willing to be a non-conformist, as long as I fit in. I do not believe that it is just about ‘Social’ + ‘CRM’ either.

Here is my quick $.02 on version 1.0 of the diagram:

  • We do not need to evolve to SCRM, we simply need to evolve CRM
  • To say that Social CRM means everyone is a bit over simplistic
  • While we would like to believe it is all about customer defined processes, it is not that simple
  • To believe that customers can set their own hours is great in theory, but let’s be real.
  • It is not simply about the number of channels, rather when and how people use the channels
  • The transaction will never go away, it needs to become a stop along the journey, somewhere near the middle.
  • CRM does need to become outside in, but it does not need to become Social CRM in order to get there.

There are some other points to be made, but I would rather talk about the new and improved diagram; so we can see what I will trash in another 16 months. A I little self-deprecation is good for the soul!

For a diagram called evolution, it seemed more natural to represent the transition as a timeline, via past and future, as opposed to trying to definitely state this is X and that is Y. This is not a binary state diagram; it is a continuum of progress. If you are a practitioner within a company, or have clients, they are somewhere along this path. The “Past” might be 5 years ago, or it could last week. The future could be as close as tomorrow, or 5 years out. The segments outlined in the diagram are certainly not the only ones, this is not a complete list, nor is it meant to be one.  Finally, while it might seem like a good idea to move everything at the same pace, it is not always possible. Should you ‘wait for stragglers?’; adopting certain parts ahead of others? Not a question I can answer, it depends.

‘Who’ is about Access to data and systems

Front line Employees and their Managers were the only ones to have access to the technological components of CRM. Looking forward, giving access to information and insights to as many people as reasonable needs to be considered.  Depending upon where you on along the journey, the type of industry you are in and other factors will determine the specifics of who needs access to the system and data.

‘What’ is all about the end-to-end process

End-to-end processes, specifically in the modern ear, have traditionally been linear and inflexible. The lack of flexibility in process leads to inefficiencies. What CRM needs to do, in order to keep up is to help organizations adapt to the needs of the customer and coordinate internally and across channels of communication

‘When’ is about the duration and durability of relationships

It is time to increase the duration and durability of your relationship with your customers. We need to move beyond short term, tactical myopic focus of ‘a Sale, an Issue or a Complaint’. If the lifetime value and long term engagement are considered, the CRM will have really progressed.

‘Where’ is about the location and context of interactions 

Customers can and will communicate with you any which way they can. Customers were taught to use the phone, instructed on the finer points of an IVR and coerced into using email and web forms.  Now it is their turn! They not only want to add more channels to the mix, they expect you to be aware of all the other channels and are quite tired of typing in their 14 digit code on a touch tone phone, only to repeat to the agent!

‘Why’ – Because (sorry, could not resist)!

This should be the easiest to make clear. In one version of the diagram I simply left the past blank, because people were never clear why CRM was implemented and in the future I simply put “Because”. Maybe that is a better fit? It is really about changing the focus of the initiative from people and roles inside the organization to delivering value to people outside the organization. Is this customer centric? It can be, but that buzzword compliant phrase comes with its own baggage.

‘How’ should we communicate?

The hardest part is the how. There is no secret sauce; it takes hard work and planning. There is no infomercial, which promises nirvana for no effort expended. The fundamental do start with how and when you communicate outside of your organization. Communications need to move beyond broadcast, fractured and reactive. It is time to focus on listening, learning, engaging, and talking with your customers – being collaborative with a specific end-point. This is not easy, and requires the largest mind shift of the whole lot!

This is how my thinking has evolved, what about yours? This does not answer many questions, which I will be addressing in the coming weeks and months. Topics such as; how does this evolution impact specific departments or roles within the organization? Does this impact how the contact center of the future works?  To end back from where I started; the future of CRM is certainly not simpler. CRM in the future is certainly going to need to evolve to a more complex form.

  1. grahamrhill
    September 12, 2011 at 11:45 am

    Hi Mitch

    An interesting post. It reminds us that we should all revisit our old posts to see whether they still make sense with the benefit of hindsight!

    I understand the logic of your post. It all makes perfect sense. Up to a point, then it goes all pear-shaped. The point is quite literally the $64,000 (cashflow) question. All the things you suggest look mighty expensive to implement: open access to information with expensive data quality costs, dynamic processes with expensive meta management costs, lifetime engagement with expensive… and so on.

    Where is the incremental cashflow going to come from to pay for all of this? Customers are not going to pay for this unless the product, service and experience are significantly improved. And I mean SIGNIFICANTLY improved. You are not going to pay for it out of cost reductions. All these things cost a packet to implement. And all of these things increase the organisational risk through the added layers of complexity that they bring. So where IS the incremental cashflow going to come from to pay for all of this? And will there be any left for shareholders?

    Just a little niggle I know. But an important niggle nevertheless.

    Graham Hill
    Customer-centric Innovator

  2. Mitch Lieberman
    September 12, 2011 at 3:12 pm


    Thanks for comment and stopping by to share your thoughts.

    For large companies, I can certainly see a large price tag for what I suggest, no question. I am not only talking about technology or buying something. This is about people, training and learning as well. I also believe that this should not be sugarcoated either, it is not easy, it is getting more complex and there is a cost of not paying attention to these issues as well. I am not going to hide behind ‘what is the cost of not doing it’ either.

    There are certain activities which are already taking place, people performing functions, with a just little bit of fine tuning can move towards what I suggest, without breaking the bank. As I have heard you state, ‘people already hire social tools to do social jobs’ – well, companies do the same – just not in a truly social way. Companies are using the tools improperly, and need to engage, listen and adapt. The tools are already in place. I do not believe there is a massive additional cost to being proactive, when often the end result is loyalty and repeat business.

    The drive for the use of additional channels of communication is being driven by customers. I do not actually believe it is the companies who are in the driver seat here. I have a Facebook account and I am not afraid to use it! I am bored and my mobile is in my pocket…hmmm.

    Your point is well taken though. These are not kids toys and larger companies will need to take time and spend money to do these things right. Is the payback in loyalty enough? What about Customer satisfaction?

    Not sure – I will certainly look forward to beating myself up in about a year and a half!


  3. grahamrhill
    September 12, 2011 at 4:29 pm

    Hi Mitch

    Thanks for responding to my comments. I agree completely with your response too.

    My experience from working with large multinational coroprations over the past 25 years is that most of the value is gained from, and thus, most of the investment should be made in developing operating capabilities, not on purchasing new capital equipment.

    The best way to do this is to build out the foundation of operating capabilities in overlapping 100-day tranches of activities. These should be specifically designed to develop priority capabilities, get them into the market where they can create value and learn what you need to know to plan the next 100-day tranche of activities in more detail.

    This not only maximises early value from increased cashflow, increased knowledge and improved relationships, it also minimises any unnecessary investment in capital equipment before the underlying capabilities to use it are in place, Research by Maklan et al suggests this lack of ‘capabilties-technology fit’ is probably the No 1 cause of failure of CRM, CExM and now SocCRM projects.

    Graham Hill
    Customer-centric Innovator

    Further Reading:

    Maklan et al, ‘The Missing Link of CRM Profitability: Building New Marketing Capabilities’, (2010), Cranfield Working Paper

    Click to access The%20missing%20link%20of%20CRM%20profitability.pdf

  1. September 13, 2011 at 11:04 am
  2. September 14, 2011 at 2:15 pm
  3. September 27, 2011 at 2:42 am

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