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Top 3 reasons why CRM fails to earn my loyalty (and Social CRM won't, either)
Posted on December 12th 2011
At a recent conference I had an interesting discussion with an executive for a large non-profit organization, originally hired lead the organization's "CRM" activities. Shortly after starting, she changed her job title to include "customer experience."
Why? Because with a "CRM" title, her boss expected that one of the first things to be decided was which CRM system to implement.
The "customer experience" angle allowed her to focus the organization on learning how constituents perceived their experiences—like giving donations, interacting with people, and web visits too.
That took a year.
Now they're driving systems changes with an outside-in approach. Start with what the experience should look/feel like, then figure out what systems and data are required to deliver experiences that will make constituents happy and loyal.
Now, some may say this is what CRM is, or what CRM was supposed to be. Fine, then why did this leader feel compelled to change her title, if "CRM" meant focus on customer experience/loyalty?
Treat me as a person!
Which brings me to the point of this post: Why does CRM fail to drive loyalty? Speaking as a customer, I believe it comes down to three reasons.
- I am not a "lead," I’m a person
There are tons of marketing automation systems designed to separate the wheat (qualified leads) from the chaff (time wasters). While it's true that marketing organizations need such systems, they are not designed to provide a loyalty-building experience. Especially if you don't end up as a prospect worth "nurturing."
- I am not a "deal," I’m a person
Once a "lead" is passed to a sales automation system (SFA), the job is to manage these opportunities to close as many as possible. I can see why reps need (or at least tolerate) such systems, but it doesn't do anything for me. You see, I'm only concerned about whether my needs are met, not whether I'm a good "deal" for the rep. Sadly, Sales 2.0 hasn't changed this internal orientation.
- I am not an incident, I’m a person
When something doesn't work, getting it fixed quickly is of course important. Service/support systems can certainly help. But I don't want to feel like I'm just another number in the system. A little empathy and personal caring goes a long way. Putting agents on Twitter won't make them more social.
Will "Social CRM" be any different?
Years ago we did an ROI study on CRM projects and concluded that about two-thirds were "successful." But successful at what?
Turns out that most managers bought the idea that CRM would increase loyalty (it was the No. 1 expected benefit). In practice, however, CRM delivered tactical benefits that were mainly valuable to the company: efficiency, cost reduction and improved decision-making. Few reported that CRM had anything to do with increasingly loyalty, and this I feel is one key reason for the dissatisfaction with CRM performance over the years.
Said another way, CRM has been mainly about systems, data, and how the company can extract value from customers. I think IBM gave one of the most straightforward definitions in a recent Social CRM white paper:
"CRM strategy, enabled by processes and technologies, is architected to manage customer relationships as a means for extracting the greatest value from customers over the lifetime of the relationship."
Social CRM proponents tout it as "CRM 2.0"—a strategic makeover that is all about customer collaboration and mutual value. My recent study found that expectations are sky high that Social CRM (broadly speaking, meaning the use of social business applications to support customers, partners and other other external relationships) will improve the customer experience and increase loyalty.
Personally, I'm skeptical. Not because social technologies can't help, but because business people are slow to change. It's far too easy to apply new tools to old thinking.
Most of Altimeter's 18 Use Cases of Social CRM are a social update to marketing, sales and service automation. Which is mainly intended to drive leads, manage deals, and handle service incidents.
Which brings us full circle. If you treat your Social Customers like leads, deals or incidents, Social CRM won't help build customer loyalty, either.