It’s time to put the ‘R’ back into CRM
It’s time to put the ‘R’ back into CRM
Customers are more than data, and we need a new way to connect
Hi everyone,
Thanks for coming back to Customer Futures. Each week I unpack the fundamental shifts around Empowerment Tech. Digital wallets, Personal AI and new digital customer relationships.
This is a PERSPECTIVE edition, a regular take on the future of digital customer relationships.
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🚨REMINDER🚨
Join us this Tuesday in Berlin for the next Customer Futures meetup.
When: Tuesday 4th June 2024, 7-10pm
It’s on the first day of next week’s EIC conference (at which I’m also speaking).
Where: Rooftop bar, 18th Floor, Motel One, Alexanderplatz, Grunerstraße 11, Berlin (here). Only a 5 min walk away from the EIC conference centre.
I’m also delighted to share that Ping Identity will be joining us and sponsoring drinks. (Do check out their latest research into enterprise adoption of decentralised identity - I wrote the exec summary.)
RSVP: It’s an open event! Feel free to bring friends and colleagues… anyone interested in the future of being a digital customer. See you there!
Today’s post is about our digital connections. Or rather, a lack of them.
About how businesses have lost their way with data, and as a result, have lost their connection with customers.
Trust is in decline. Customer experiences are getting worse. And businesses are in a panic about how to handle the explosion of digital interactions. And it’s getting worse with GenAI.
We’ll look at why this has all happened, what we can do about it, and how we can repair our digital relationships with Empowerment Tech.
Let’s go.
Every business school in the land will teach you this simple truth:
Building a great company is not just about a one-time sale. It’s about building sustainable customer relationships that deliver long-term growth.
In other words, it’s not just about selling to customers.
It’s about keeping them.
‘Customer relationships’ are the point of business. Without them, there’s no growth. It’s how and why businesses thrive. By understanding their customers and solving their needs. Over and over again.
And if companies do it well, we customers come back. Over and over again.
Long-term customers spend more. Recommend the brand more. They even step in to help their favourite businesses during the hard times. When businesses need their customers more than ever.
Yet while today’s business metrics show that ‘engagement’ is going up, we can all feel that when it comes to digital, things don’t feel right. Our digital customer relationships are broken.
Real engagement - as experienced by us, the consumers, the citizens, the customers - is in decline.
Why? Well, we need to look at the root cause. And there are two main things to point to.
1. Businesses took a wrong turn with digital data
It started in the early 1990s. With the explosion of innovative software to help businesses improve sales: Customer Relationship Management (or CRM).
Breakthrough new platforms that enabled businesses to remember millions of customers at a time. To record and handle information about who customers are. What they bought. Where they live. What they like.
And as these tools became more and more sophisticated, businesses started using customer data as a kind of blood supply. Pumped into business muscles like marketing and sales to make them stronger.
In theory, customer operations became more efficient and low-cost. Outbound sales and customer outreach improved. Companies could even predict which customers would leave - and what to offer them to stay.
The result has been that customers - and our customer relationships - have been turned entirely into data.
For many parts of the business, it’s been helpful. Product teams now get broad insights into customer trends. Marketing teams now get smarter ‘targeting’ and predictions.
But we’ve lost the human conversation, the intuition, the trust in our relationships. What’s left is a far cry from the personal interactions we had before.
Digital has in many ways destroyed customer value. Too many businesses now treat customers impersonally. As numbers. As digital end-points. With faceless chatbots and forms. Not people.
The ‘data-fication’ of the customer.
2. Businesses started optimising for the transaction
One of the biggest, yet quiet, impacts on business was the introduction of the spreadsheet.
Suddenly anyone across the company could do a basic return-on-investment (ROI) calculation. Or a cashflow forecast. The finance function became empowered. And ever since then, ‘spreadsheet economics’ have ruled. Teams in every department hunt for the ROI of everything. GenAI is only going to make that worse.
With CRM we turned customers into data (point 1 above). And now the business can inspect and analyse every interaction with those customers. And just like finance ‘weaponised’ spreadsheets, Customer Engagement and marketing teams have now weaponised customer data and engagement platforms.
Where ‘Customer Engagement’ is only of value if it can drive a transaction. A customer conclusion. A sale.
Measured with ROI.
And so began the slow descent into the abandonment of the customer relationship. Into digital chaos.
Of course, digital channels have improved aspects of how we interact. How we checkout. How we register. Saving all those trips to an office, branch or store.
But lurking underneath these transactional improvements is the erosion of the underlying customer relationship. All without us really noticing.
Seamless in now impersonal. Instant is now trustless. Businesses have got so busy removing the Bad Friction that they’ve lost the Good Friction.
Why does that matter? Because the Good Friction IS the customer relationship. It’s the experience.
After two decades of transactional improvement, all we get now is email and SMS spam. Awful online forms. One-time passwords. Missed notifications. Repetitive and painful questions where we try to remember the name of our 3rd pet and the middle name of our favourite teacher.
It’s constant upsells and alerts and checkboxes and offers and new apps and new accounts and on and on and on.
What makes a healthy relationship anyway?
When you meet someone for the first time, you get a sense of how that person will be as a friend, partner or colleague long term.
The same is true with business. You can tell how a relationship with a company will be when you first register for things.
Just think about the last experience you had when registering for or buying a new product, or at the checkout. Was it a pleasant, value-based and respectful one? Or was it transactional and greedy?
That first moment interacting with a business, that experience, is an excellent reflection of how the customer will be treated from that point on.
Relationships should mean balance and mutual respect. Relationships should mean value. Relationships should mean trust. Even for the ‘grudge’ purchases, like insurance, we need trust to be able to interact.
Some argue that there’s no such thing as a ‘customer relationship’, and that we can’t equate them to a ‘personal relationship’. That customers are only interested in transactions.
I disagree.
If you are interacting with others, however briefly or transactionally, there must be a relationship. Because relationships need 3 things:
Connection - the ability to interact
Transaction - an exchange of something
Value - the reason to exchange something
And that’s the rub. As we’ve moved to digital customer interactions, we’ve messed up all three:
Connection - customers don’t get to choose their digital channel. They are forced to use whatever the business needs, not what they want. Emails and SMS; Browsers and (another) Mobile App. From the customer side, it all feels manual, repetitive, clumsy and sometimes creepy.
Transaction - our product interactions are often designed to be as fast and as ‘seamless’ as possible. But how often have you bought something online incredibly quickly - too quickly - and had to check back at the order because you weren’t sure you got it right? Or because they nudged you into the purchase too fast? Or tapped the wrong button by mistake? Fast is good for business. But are we losing trust in the transaction?
Value - when digital product teams focus only on their own needs, they optimise for the business - the sale. They forget about how it feels for the customer. The Customer Jobs To Be Done. They prioritise the path of least resistance (checkout), and not what happens AFTER the sale. How was the returns process? How was the support provided to set things up? What about the customer experience - did it build trust and customer confidence, or did it erode it?
Businesses are too busy trying to ‘acquire us’ and collect information about us - to get to the transaction - that they lose sight of their real purpose.
To create long-term customer value.
A new way to connect
There’s an important thing about human relationships that we too often forget. Personal relationships improve over time. They become more trusted and more valuable, the more we interact.
Our interactions with businesses today don’t do that.
“Would you like to pay with option A, B, C or D…?” → “Well, I only use - and have only EVER used - option A. So why are you asking me again?”
“Have you stayed with us before sir…?” → “Wow that’s embarrassing. I was here only last week”
“People who bought this also bought this…would you like to buy one…? → “Just stop it. I hate the brand and have an open complaint with them”
With digital businesses, we need a new way to relate. A new way to connect, to transact, and to share value.
We need digital customer connections that are based on trust. That improve over time. That become more trusted, more valuable.
In real life, maybe one side wants to ‘mute’ the other for a while. Or even cut them off completely. Or perhaps one side needs something, and can easily ask for a favour that can be returned.
It’s bi-directional, not one-way spam. It’s mutual, not one side controlling.
We need new, digital and respectful connections. And a new breed of digital customer tools that do exactly these things.
It’s where Empowerment Tech can be the game changer.
Digital channels that enable
Personal, private connections - where both sides are in control, with very high levels of digital assurance and trust
Personal transactions - where both sides can interact easily, with data, payments and insights, even share intent (their desired outcome, not just a specific product)
Personal value - where businesses can truly understand the customer context, not just guess. Where they can truly meet the customer’s Jobs To Be Done in a personal and private way (and without being creepy… because it’s done WITH and FOR the customer, not TO them).
It all becomes possible with new Empowerment Tech solutions like Digital Wallets and Verifiable Credentials, like Personal AI and Personal Vaults.
Enabling new peer-to-peer digital connections that are private, secure and direct.
Empowerment Tech has the potential to completely transform the CRM industry. And will arguably be the biggest driver of digital transformation since the arrival of mobile and the cloud.
It’s time to repair our digital customer relationships with a fresh approach. With fresh thinking.
It’s time to put the ‘R’ back into CRM.
OTHER THINGS
Whilst this is a perspective edition, there are some important read-worthy Customer Futures things to point to this week.
Interview: Self-Sovereignty: A Lost Vision or an Evolving Concept? WATCH
Blog: There will soon be ads on PayPal READ
Article: Pocket-Sized AI Models Could Unlock a New Era of Computing READ
News: Australia passes Digital ID Bill READ
Post: How Visa Wants to Reinvent the Card (this one is important) READ
Article: Even if you think AI search could be good, it won’t be good READ
Thanks for reading this week’s edition. Stay tuned for more Customer Futures soon, both here and over at LinkedIn.
And if you want to learn more about the future of Empowerment Tech, digital wallets and customer engagement, then why not sign up: