The 'R' in CRM

Here are five business scenarios that might benefit from a software solution:

1. A local Government office or council wants to treat each citizen contact (complaints, applications, suggestions) as a case so that any council employee can see the whole case history;
2. A freelance Graphic Designer wants to keep a record of client work, then create and send end-of-month invoices depending on the number of hours worked per-client;
3. A multinational Pharmaceutical company has thousands of customers, distributors and resellers and millions of transactions with them. It needs to keep records for regulatory purposes of every contact and interaction with that contact;
4. A busy VP of Worldwide Sales needs to be able to provide a swift and accurate answer to the question: what is our sales revenue-to-date and sales forecast for the month/quarter/year?
5. A not-for-profit enterprise wants to keep a record of interaction with every donor, every would-be donor, and every other organisation that they work with, in order to aid their ongoing fundraising.

To every scenario above a common answer is: use a CRM system.

Many companies are heeding that advice. CRM software revenue (according to Gartner) was approximately $18 billion worldwide in 2012 and grew 12.5% compared to the previous year. The market leaders are Saleforce.com, Microsoft Dynamics, Oracle Siebel, SugarCRM, NetSuite and SAP. But directory-style lists of CRM systems contain many alternatives. There are 451 products listed at Capterra, for example. The list at FindTheBest contains 175 results. And Business Software lists 327 products.

The simple reason why there are so many CRM systems is because the CRM use-cases above are so divergent. There are many nuances that will make a CRM that's perfect for one company useless for another.

Most agree that the "C" stands for customer, but it could also be company, contact, constituent, case or citizen given the variety of uses. The "R" isn't too well defined either. Many now argue it's not just a relationship, but the whole experience people have with your company and its products. That's why they prefer the term "CXM". Others call it "social CRM".

One of the reasons for the widening scope is because traditional CRM hasn't delivered value for its users. Historically, CRM systems have a very poor implementation success rate: failure is common.There are a few ways it can go wrong:

1. If you use the CRM just as a repository for data (customer details, opportunity size, trouble tickets) then it probably won't reward you as well as you'd hoped. And that's assuming that the end-users diligently enter their data in the first place. As my colleague Mark says on his recent blog-post, a CRM can "often turn the user into a data-entry clerk, tediously entering information about prospects, customers and opportunities."
2. If the CRM is used in only one business unit silo (usually Sales) it becomes a challenge to get the content that's needed from other business units. Poor quality or missing content leads to low adoption and abandonment of software tools.
3. The CRM tool may become a substitute for contact. If you are engaged in customer development, talking to actual people and using simple tools like pen and paper is better than any amount of web research, no matter how well you document the results of the latter. But once you have the "R" established with your customers, then a critical aspect of B2B is transferring knowledge and key to that is managing content entitlement.
4. If the tool is selected by people (e.g. by IT) other than the business users then it's likely the focus will be on the wrong features.

The problem I have with just extending the scope into CXM is that you can end up with something like an "enterprise suite" software system. Just because there's a box in a block diagram for HR or Help-desk doesn't mean it's adequate for either. The answer isn't to abandon your customer database totally in favour of some tool that does sentiment analysis on every mention of your company on Facebook or Twitter. Social media has added to the list of things you need to do, not replaced them.

Traditionally, advocating three or four (or more) software systems instead of one was seen as a bad idea. But that was before open standards and APIs that enable data integration. When I approach this now I look for the tools that are best at what they do, and then check that they are not closed to the point where it's only data-in. It's not a maxim, but it is often the case that open source tools support open data better than others.

So, we still use a 'traditional' CRM - in our case it's SugarCRM community edition. But we connect it into CogniDox to manage the customer entitlement process (who can download what documents). We have a separate ticket tracking system (OTRS Help Desk) for our support site but we can also see at a glance how many open tickets a customer has from within CogniDox. Tickets serve a purpose but people also like to find answers in a self-service manner: for that there's an excellent open source project called Q2A which provides a Stack Exchange style question-and-answer, user community website.

The licensing cost for those three tools is $0, $0 and $0. It's true you require knowledge to install them properly, but that doesn't negate the licensing cost benefit.

What about CXM? Maybe because we're in B2B or maybe because we're still a small company I have to say that monitoring social mentions isn't all that difficult or time-consuming. Automated alerts and an occasional use of Social Mention serves our purpose very well. When the scale justifies it, I could envisage using Crimson Hexagon. It would probably be more useful for us to build a user feedback website, where our customers could share, discuss and vote on ideas. Whether the insanely-busy people we work with would find the time to do this is an open question, but it would be an experiment worth running.