What's wrong with CRM as we know it?

For anyone familiar with the Web2.0 paradigm and its impact on user behavior, it should come as no surprise that CRM is also going through a major change. This change is primarily driven by two factors.

- the emerging social, collaborative web user

- the rapid technical advances such as web access ubiquity, broadband connections enabling rich media distribution, as well as new web technologies enabling a more user-friendly and interactive web user experience.

The result is a quickly emerging base of web users, knowledgeable and familiar with generating and sharing content on the web (blogs, wikis), leveraging social network capabilities and communities of interest, and expecting intuitive and user friendly web interfaces. This is a quickly growing audience with both expectations and willingness to share and collaborate over the web.

So how has CRM kept up with the shift to the social web? Not so good. The truth is that a majority of all existing and on-going CRM efforts have been heavily focused on operational CRM aspect, ie making customer-facing processes more efficient.

- Sales Force Automation, e.g. increasing the lead to sales ratio or the forecast accuracy

- Customer Service & Support, e.g. reducing average call time in a call center

- Marketing, e.g. closed loop marketing or better profitability metrics on marketing campaigns

Do customers care about these metrics? Not much. The operational CRM focus is based on an Enterprise-centric approach to managing customers. Key objective has been to manage, as efficiently as possible, the 2-way relationship between enterprise and customer. That relationship has been primarily one-to-one and transactional in its nature. The situation is made worse by the fact that most of the existing CRM product vendors have rigid technical platforms and long-term release schedules that makes it impossible for them to keep up with web innovation.

All of a sudden, companies are challenged to not only pursue operational CRM excellence ("how do we best deal with the customer?"), but also manage the simultaneous, collaborative needs of the social, collaborative customer ("how does the customer / partner want do deal with us and how can we engage them?"), considering the relationships that customers / partners / competitors have among themselves. And they don't find a lot of help in this transformation from their existing product vendors.

We've had a number of discussions with clients lately on the future direction of their CRM initiatives. We also did an executive event on "Next Generation CRM" in Zürich a few weeks ago. I'll be posting some of our thinking on this blog in the coming weeks, and I'm looking forward to comments on this.