The ‘R’ in CRM has been long forgotten - can we save it?
Our digital customer relationships are broken. Here's why...
Every business school in the land will tell you that building a great company is not just about a one-time sale, but about building sustainable customer relationships that deliver long-term growth.
In other words, it’s not just about selling to customers, but 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. If companies do it well, we customers come back again and again. We even help those businesses during the tough times.
But when it comes to digital, things aren’t right.
Even if the business metrics show that ‘engagement’ is going up, we can all feel it. Our digital customer relationships are broken. Today’s customer channels and experiences aren’t fit for purpose.
Real engagement - as perceived by us, consumers, citizens, customers - is in decline.
There are two main reasons why this has happened:
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).
Exciting new company tools that enabled you to record, remember and handle information about customers. Who they are. What they bought. Where they live. What they like.
And as these tools became more and more sophisticated, businesses started using data as a kind of blood supply. Pumped into business muscles like marketing and sales to make them stronger.
In theory, customer operations became super-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 is that customers - and our customer relationships - turned into data.
Yes, in many cases it’s been helpful. But in too many cases customers have become only data.
We’ve lost the human conversation, the intuition, the trust in our relationships. What’s left is a far cry from the real interactions that preceded them. Businesses began treating customers impersonally, as numbers. As digital end-points, not people.
2. Businesses began optimising for transactions
One of the biggest, yet quiet, impacts on business was the introduction of the spreadsheet. Suddenly anyone across the company could do a quick return-on-investment calculation, or a cashflow forecast. The finance function became empowered, and arguably weaponised.
Since then, spreadsheet economics have ruled.
Data has ruled.
The same has happened with CRM (and digital transformation generally). Now that we have turned people into data, businesses can instrument and analyse every interaction with customers. And just like finance became empowered with spreadsheets, ‘customer engagement’ has become the weaponised business function with CRM.
Why? Because the point of engagement is to drive growth. In other words, a transaction. It’s the endpoint, a conclusion. A sale.
And so began the slow descent into digital relationship chaos. For sure, digital channels have improved how we transact online. How we checkout. How we register. And saving all those trips to an office, branch or store to have to do something face-to-face.
But lurking underneath these transactional improvements, are the erosion of the underlying customer relationship.
And all without us really noticing it because it’s been slow and gradual. After two decades of transactional improvement it’s now email and SMS spam. It’s clumsy online forms. It’s one-time passwords. It’s missed notifications. It’s repetitive and painful questions trying to remember the name of our 3rd pet and the middle name of our favourite teacher when we can’t log in.
It’s constant upsells and alerts and checkboxes and offers and new apps and new accounts and… and…
What makes a healthy relationship anyway?
When you meet someone for the first time, you get a sense of how they will be as a friend, partner or colleague longer term.
The same is true with business. You can tell how the relationship with a company is going to turn out 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, greedy and full of friction?
That first moment interacting with a business, that experience, is often an excellent reflection of how the customer will be treated from that point on.
Relationships should mean 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.)
Sadly too often 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
We need a new way to relate. A new way to interact with businesses.
We need digital customer connections that are based on trust. And like human relationships, connections that improve over time. They become more trusted, and more valuable the more they are used.
And critically, new digital connections that respect both sides.
Perhaps 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.
There’s a new breed of digital customer tools emerging that will enable precisely this idea of a new connection. These new digital solutions for people have the potential to completely transform the CRM industry, and arguably be the biggest booster to digital transformation since the arrival of mobile devices and the cloud.
More on that in future posts. But for now it’s time to agree that we need to repair our digital customer relationships.
It’s time to put the ‘R’ back into CRM.
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