CRM May Be Hype, but It's No Hoax

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My colleague Loraine Lawson, who writes about enterprise integration issues for IT Business Edge, knows I love a good smackdown. So she sent me a post by Jerome Pineau provocatively titled "CRM is a Hoax." In it he expresses his disgust for CRM vendors, especially those like Salesforce.com that sell software-as-a-service solutions. Pineau writes:

There is no such thing as CRM. It's all smoke and mirrors, and you cannot nurture customer relationships (or any other form of relationship) using a bunch of bits. It's a cop-out.

He goes on to make a number of good points and suggestions. My favorite is when he encourages executives to sample their own products and to ask their customers about their experiences and "listen like you mean it." So I found much to agree with in Pineau's post. But I can't agree with his advice to "take your big honking CRM software and pull the plug."


(That said, stripped-down CRM works well for some companies. Last summer I wrote about travel site Kayak's lean approach to CRM, which involved every employee in the company taking shifts to track and respond to customer feedback collected in an online Intuit database called QuickBase.)


I'm more inclined to use the word "hype" rather than "hoax" when describing CRM. (Though it's certainly not as provocative.) And I think that's what Pineau might really mean. As he points out in his post, many executives "see CRM as a panacea." They assume -- and vendors encourage this assumption -- that if they get the right software, processes will magically improve and customer satisfaction scores will go through the roof. Wrong. If you don't fix the underlying processes, the software will just make it possible to offer lousy service to your customers faster.

(Pineau goes on to say execs "do not have customer service 'genes.' They have Board of Directors genes, profit margin genes, or MBA ones, but they don't know the first thing about worshipping customers." I think the good ones do have customer service "genes." One example is former Southwest CEO Herb Kelleher.)


One of the biggest issues with CRM is too often it's a disjointed mishmash of departmental or divisional activities. CRM touches a number of enterprise systems, including operations, accounting and e-commerce, so companies must make a better effort to integrate their CRM data with these other systems. Gartner has suggested that business process management could help, since BPM is fundamentally about taking a holistic view and figuring out how to streamline and improve end-to-end processes.


(I can practically see Pineau rolling his eyes. Apply more software to the problem? But Gartner research director Isher Kaila suggested companies start by undertaking a seven-step process-improvement plan. The first step: Identify all the business processes that affect your customers. I think Pineau could get on board with that.)


Writing on his Random Thoughts of a Boston-based CTO blog, John Moore notes that CRM software can help companies model relationships with their customers, partners and others and also store the data that can help them improve those relationships. He's right. But he also stresses the importance of using technology to support CRM strategy, rather than letting technology stand in for a weak or non-existent strategy.


Commenting on Moore's post, blogger Wim Rampen relates the experience of a Dutch company called Carglass, winner of a CRM award, which used technology to advance its customer-centric strategy. He wrote:

Of course they connected their systems to other systems to ensure they would only need one number (from the Customer) to identify the Customer and the car (and the type of window they would need, and the insurance company that they would need to send the invoice to, etc). Of course they used their Customer's e-mail addresses to send out feedback forms and confirmation messages. But that's all not unique to a winning company, in the eyes of the Customer. What is unique is that they understand who the Customer is, what their desired outcomes are, and what the company needs to ensure to deliver upon those desired outcomes. They also understand that they need daily feedback from their Customers, on all parts of the experience, to ensure they are not getting sloppy somewhere, somehow. And if they are, they can address it immediately, and not 6 to 12 months after the fact. And that they need all employees (and partners) engaged in the process.

It looks as if Carglass uses at least some Salesforce products. But that's not what made it successful. It's how it uses those products. As Pineau (remember him?) writes:

... customer service is not something you can learn on the fly (although I suspect it is taught in business schools). And it's not something you can acquire via software. Companies, like people, are either born with it or not. It's a nature not a nurture trait. And no amount of software or resources will change the behavior of a company whose culture isn't obsessively centered on the customer. It sounds obvious, and everyone talks about it, but most of the time, it's nothing more than lip service. ...

Carglass obviously had the will. Salesforce (and perhaps some other vendors) helped them with the way.