I was on a Sales 2.0 panel last week and underneath much of the discussion between a couple of analysts and the CEO of Sales Pipeline was the reality that CRM (customer relationship management) tools suck.
In fact, the entire segment, including sales force automation, often is defined by frustrated customers who have bought the promise of higher sales performance from a variety of vendors only to find they can't seem to get to the results that they were promised. Reasons range from sales people who won't use the tools, issues with integrating the tools with existing systems and inside an existing sales process, and what appears to be a vast gap between what the folks building the tools think the market needs and what sales and finance managers actually want.
Let's focus on CRM this week and why it sucks.
Putting the 'R' back in CRM
CRM tools were created largely to sell more product. Many do capture customer buying behavior and they typically report back sales processes, which can assist in forecasting. If we were talking dating from a male perspective the tool would measure to varying degrees how far the guy had proceeded in the physical relationship and only from the perspective of the guy. In short, it would have limited utility in assuring a marriage and if your goal is, as it generally should be, a long-term relationship, these tools are pretty limited.
That's because they tend to be long on sales and short on actual relationships. Relationships have two aspects to them and two viewpoints. A tool created to optimize a relationship would need strong metrics on both sides of the relationship so "needs" problems that could cause a breakup could be identified early. Current tools tend to lack this capability even at a company level, let alone at a buyer/customer level.
Firms using the tools are often blindsided by failed relationships and customers shifting vendors because their relationship management tool isn't managing the relationship, it is simply assisting in the management of the sales process and that isn't deep enough.
Even Sales Pipeline manager, which provides a substantial enhancement over Salesforce.com to better manage sales processes, is still focused like a laser on closing the deal. A more interesting product called Badgeville drops into game theory in order to motivate reporting, which could enhance both CRM and SFA offerings as well as any aspect of a process that is currently being avoided. But at Sales 2.0, there was little in the way of truly focusing on both sides of the relationship and one-sided CRM is mostly an SFA tool.
CRM is about finding and retaining customers and this latter, to be successful, isn't just about generic metrics; it should be about instrumenting the customers so you intimately know their needs. The best sales people do this naturally. CRM systems should, but largely do not do this much at all.
EMC and Natural CRM
I've been watching EMC's efforts with regard to customer advocacy for some time. It is my impression that, currently, EMC goes further than any other company I monitor towards instrumenting the customer side of the relationship. It has developed, and in some cases patented, technology that allows it to report on just how strong each customer relationship is, shift resources from customers who aren't interested in a long-term relationship (will always use the lowest bidder) and shift them towards customers who are loyal.
Over time, according to Jim Bampos, VP of customer loyalty, this intimacy has significantly increased the company's bottom line and changed dramatically the firm's product roadmap. In addition, resource allocation decisions have been increasingly made on this customer information, which is tying EMC and its customer base ever closer over time. While not called CRM, this is what CRM should become because it factors in the customer side of the equation. You see, much like a marriage, where neither party is very aware of the other's needs, most CRM products fail to take into account the unique aspects of the buyer and thus can't now protect the relationship, which is part of their mission but currently not part of their feature set.
Wrapping Up: CRM of the Future
All this suggests that the CRM of the future might have two aspects: a side implemented by the vendor, which would increasingly have a customer loyalty component, and a side implemented by the customer, which would allow them to better manage vendor loyalty.
In an ideal future world, both products would talk to each other and point out early problems in the relationship so that both sides could address them in a timely fashion. The reality is that losing a critical vendor can be as traumatic as losing a critical customer because while you may lose some problems you know about, you may get a whole bunch of new ones that are worse.
If you can prevent either side from becoming a problem to be solved catastrophically, revenue and cost savings can be optimized and the relationship immortalized, which should be, but isn't yet, a primary function of CRM products today.