CRM as we know it and what it has evolved into

Marketing differs from selling from the standpoint of customer orientation. The former keeps customer, whereas the latter keeps sales of product/service at the centre of decision making. This difference has been the underpinning principle for the evolution of CRM systems. CRM ideology considers “Relationship” elementary for any business transaction.

Times have changed and it’s a connected world today. However, given the information asymmetry within and among industries, marketplaces and customers that existed before today’s information-rich social media era, CRM systems were designed to help companies manage interactions with past, present and future customers. Such interactions were mere business transactions and did not address relationships, an obtuse approach to CRM that never recognized that in reality buyer is in charge of the decision and is the one who triggers a business transaction.

In my opinion, a typical CRM deployed in most of the companies addresses

• Lead generation and management
• Sales pitch and RFP response management
• Monitoring customer interactions and progress
• Negotiation of sale terms and conditions
• Closing the deal
• Aggregating transactions for management dashboards

Overall, it envisages Create-Read-Update-Delete (C.R.U.D) business transactions during a customer’s engagement with the company that will be used for future decision making in the company.

On the contrary, I think that a typical CRM system does not address ground realities such as

• Customers do an extensive research during the need recognition phase and understanding this researching behaviour is of paramount importance to a company
• The digital footprints of companies and customers are much more widespread than we can imagine. It’s an integrated world where information is available across platforms and accessible to all. An overview of these footprints is just missing, which according to me is blatant error
• Business processes of a company need not necessarily match the thought process of a customer. This difference is never understood or captured and is responsible for poor customer satisfaction
• Customers create their own Body of Knowledge (BOK) and then enter the buying cycle. This paradigm shift in consumer behaviour is the bedrock of successful business transactions which needs attention
• Post-purchase behaviour can be heard in the voice of the customer across various social platforms. Such critical information is often not mined or mined intermittently, often after the damage to a company’s reputation has been done.

Thus, to prove their utility to companies, modern-day CRM systems are bound to help companies understand the buyer’s context better instead of just helping understand the customer’s sales cycle and repeat business. Customers are seeking information and this information-seeking behaviour is the basis of today’s customer relationship management.

Today technology allows for meaningful mining of customer behaviour through tools such as text mining, video mining (millions of product reviews and opinion videos are posted online every day), in-store behaviour analytics, cohort analysis (tracking the ageing customer across life stages) etc. Integrating such technologies with the CRM systems will help companies realize the true potential of a relationship with the customer.

The customer is evolving and so is the potential to do business, it’s just a question of how soon the information can be captured and be used to do business with today’s highly informed customer.

Originally published at https://www.linkedin.com.