What is CRM, anyway?
Ever have a hard time explaining what you do? Recently when a colleague in the same industry asked me my definition of CRM, my jumbled response made me realize it was time to write it down.
Customer Relationship Management is the disciplined management of the customer as an asset throughout their comprehensive relationship with a company or brand. It is a simple mandate that transcends sequential functions like marketing, sales, and service and has deep implications on business profitability through acquisition, retention, and loyalty.
The 3 Elements of CRM:
1. Customer Data: A fundamental premise of Relationship marketing is that you need to capture as much of the interactions with a customer as possible. Think of a sales agent calling you to ask for another order one day after you had a terrible customer service call that is still unresolved. Because of the barriers between function like sales, service, and digital, the need for a system that captures ALL of the customer interactions in one system of record emerged. In this capacity, CRM focuses on ensuring the effective capture, storage, and retrieval of customer interaction and status data to and from a host of interactive channels(web, phone, email, portal, sms,..). CRM platforms like Salesforce & Oracle are major players in this $23Bn + market.
2. Segmentation: Now you have rich customer data from multiple sources, it’s time to understand key data elements that help to define specific customer segments that would benefit from a more targeted approach. For example, an online company selling nuts and snacks may have multiple buyers including family, pet owners, office, bakers, bars, and restaurants. Each of these groups have different purchase needs and behaviors that could be better encouraged as segments. In this capacity, CRM tries to recognize the specific segment behaviors and define the engagement experience best matched to the segment. Most Companies can only focus on 4-6 segments at one time, but the goal is to personalize to an individual.
3. Engagement: in CRM’s action phase, the object is to automate the segment-specific messaging experience through a set of available channels and ensure all customer response (or lack of response) is fed back into the customer data record for future personalized engagement. Sophisticated campaign logic allows an endless combination of steps and outcomes, with more possible with every new data field captured. Below is an example of a choose your own adventure customer journey (click source to see 8 more examples):
CRM as the Customer Advocate
Modern CRM brings incredibly powerful tools to enable companies to connect with their customers on a personal level at fantastic scale and economies. Companies like Google and Facebook have deep visibility into their customers through the combination of data sources. They also have automated access to contact the customer across a number of channels. With this great power comes great responsibility to maintain and nurture the relationship on the customer’s terms. Here, the CRM acts as an advocate to avoid aggressive or creepy behavior to preserve the relationship. In this way, CRM practicioners bring deep empathy for the customer and advocates on behalf of the companies most valuable asset.
