Using CRM Software to Put Customers at the Center of Business

My recent post about making customers the "fourth pillar" of CRM systems generated some interesting mail in my inbox. A commenter voiced their opinion that effective CRM systems put the customer at the center of a hub. Does viewing the customer as a spoke in the wheel of a process that is already supposed to revolve around them make the customer redundant?

Graham Hill explores that idea this week in an essay for CustomerThink. Hill asserts that too much focus on meeting a customer's needs can distract from an organization's true mission: to assist customers in reaching their intended outcomes. Instead of using CRM systems to track customer requests and company responses, Hill challenges business leaders to organize efforts around the net result.

Customers hire products to help them get jobs done more effectively. Think of Ted Levitt’s famous example of the job of drilling a hole in a wall. As Clayton Christensen writes, the customer doesn’t actually want a drill at all, he wants a hole in a wall.

Using Hill's methodology, and combining it with insight from the Lance Bettencourt article he references, prospective CRM software buyers can get a better sense of their own desired outcome. When selecting CRM systems, marketers often ask themselves one of three questions:

• How will this CRM software improve my company's ability to reach its own strategic outcomes?
• How will this CRM software allow us to meet our customers' needs more effectively, and more often?
• How will this CRM software help us become a customer's primary resource to reach their intended outcomes?

It's no surprise, then, that companies asking themselves the third question enjoy the biggest successes when rolling out new CRM systems.

Use CRM Software to "Get Back to Selling"

Software designers railed this month over Intuit's acquisition of personal finance startup Mint. Functionally, Mint fills some gaps in Intuit's product lineup. The maker of Quicken and Quickbooks paid $170 million to acquire both the budget management software and the team that brought it to light. While this might not seem relevant right now to the world of CRM software, the potential impact of Mint's design team taking over Quicken's online services could ripple out to users of hosted CRM tools.

To understand why requires a quick lesson in the challenges of designing effective hosted CRM systems. A few months ago, at the CRM Evolution 2009 conference, Accenture's Kevin Bandy identified five tasks that pull sales professionals away from interacting with customers:

• opportunity management
• pricing/quote management;
• order management;
• contract management; and
• incentive compensation management.

All five of these tasks are crucial, and can be thoroughly automated using CRM systems. However, many professionals find themselves spending more time struggling with these tasks instead of calling on accounts. Truly effective CRM software puts usability on the same plane as task requirements, allowing even novice computer users to get back to the business of developing relationships and closing deals.

Critics of Intuit's current software lineup note that Quickbooks' dominant position in small business CRM and accounting software gives the company little reason to innovate, leaving users few options to increase productivity. In fact, some vocal opponents of the "Mintuit" mashup worry that Intuit bought Mint simply to sideline it. However, as more details emerge about the deal and its implications for Intuit's overall product strategy, some analysts see a window of opportunity for the Mint design team to "infect" Intuit with fresh sensibilities. A hosted CRM platform with the feature set of Quickbooks and the ease of use of Mint.com could be a game changer for small business.

Making Customers the "Fourth Pillar" of CRM Systems

CRM software insiders have been buzzing for a few days about a recent blog post by Bob Warfield from SmoothSpan. Warfield summzrizes some conversations he's had with leaders in the CRM software field about the role that social media can play in the development of new applications and of entirely new ways to approach customer relationship management in the first place.

In some circles, CRM software experts like to talk about the "Three Pillars of CRM," specifically:

• Marketing
• Sales
• Customer Service

Warfield cites a recent post by Esteban Kolsky, in which he posits that "feedback" should become recognized as the "fourth pillar" of customer relationship management. Warfield challenges CRM software experts to go even further, by viewing customers themselves as that fourth pillar. Using that strategy puts customers on the same level as other stakeholders in the enterprise, and it doesn't divorce the customers themselves from their comments.

It's important to ensure that we see customers as human beings, Warfield suggests, because we would otherwise run the risk of settling for crisis management outcomes to "social media emergencies" instead of using CRM systems as sources of accountability. For instance:

• Warfield cites a case in which social CRM software picked up a complaint on Twitter about VistaPrint. A customer's lost order was comped by a helpful representative after a blogger tweeted her frustration.
• Heather Armstrong took Maytag representatives to task on Twitter about a washing machine that failed about a week after delivery. After exhausting normal customer service avenues, she posted notes on Twitter. Not only did Maytag provide a replacement unit, other manufacturers provided the influential blogger with equipment to donate to local shelters.
• I had my own frustrating experience with Sears recently. Problems with the company's CRM software prevented me from getting prompt service or attention with a faulty dishwasher. Once I Tweeted and blogged about my problems, Sears representatives rushed to the rescue.

Warfield's position is that solid CRM systems would prevent these kinds of episodes from happening by measuring negative customer feedback before it goes public. Marketing proponents might note that all three stories involve companies that make things good at the end, but Warfield notes that these are still "bad stories." As social CRM systems evolve, look for opportunities to engage customers in follow-up conversations more closely, rather than waiting for negative tweets and blog posts to hit the web.

"Architects" Help Construct CRM Software Solutions

You're not seeing things.

Those ads in the trade publications looking for CRM software experts really do say "architect." It's a term that's been bubbling up in the CRM software space for a few years now, and consultant Richard Boardman made it the focus of a recent blog post about the role of the architect in the CRM software planning process.

Boardman, and others, believe that large corporations will increasingly turn to CRM architects who can help envision the right combination of features, training, and usability for a successful customer relationship management technology rollout. After all, if you take the metaphor to its logical conclusion, very few companies would attempt to design their own headquarters buildings in-house. Therefore, it makes sense for companies to bring in a professional who can make informed decisions about:

• connecting CRM software to the social media firehose,
• rolling out CRM systems in stages, and
• ensuring that teams get trained in advance of CRM software roll-outs so they don't lock up on launch day.

Unfortunately, even an experienced CRM architect can't solve the root problems that cause some roll-outs to fail. If anything, some CRM architects already report being bossed around by clients, just like the episodes of "Flipping Out" when Jeff Lewis has to work on someone else's house instead of his own.

If the client requests a set of features you can't possibly deliver on time or on budget, do you suck up and take it? Do you try to educate your clients? Or do you walk away from the project altogether? Those are the questions third-party CRM software experts must prepare themselves to face, no matter what their job title.

CRM software experts and architects at different stages of their careers will likely give different answers, but the question highlights an ongoing challenge in the CRM field. Clients don't always know exactly what they're looking for, and they sometimes don't even know that they don't know. CRM architects who succeed in their roles are the professionals with the strength of conviction to do what is in the best interests of teams, shareholders, and especially customers, even when confronted with managers and stakeholders that make uninformed requests.

CRM Software Helps Companies Navigate the Expectation Economy

For the past year or so, marketers have buzzed about a phenomenon that the editors of Trendwatching have dubbed "The Expectation Economy." According to their description of the trend, easy access to the Internet has accelerated consumers' expectations of companies, regardless of the size of their purchases or the depth of their relationship. Until recently, CRM software thrived mainly in offices where sales professionals relied on relationship marketing to land "big fish." In the Expectation Economy, CRM software has become essential—even for mom and pop operations.

Consumers are better connected to each other than ever before, and purchasing decisions no longer hinge on the quality of a product alone. The story behind the product and the story about purchasing and using a product have become essential to a consumer's overall experience. Well-informed consumers use magazines, blogs, and bulletin boards to learn as much as possible about what to expect from a vendor before making a purchase. Likewise, the same consumers use blogs, e-mail, and social media to share their experiences with others, helping to set expectations for other prospective customers. Companies that plug their CRM software into this firehose of information can learn how to reshape their offerings to fit the enhanced expectations of informed, highly critical audiences.

Using CRM software to reset expectations goes beyond responding to the kind of product failure that sends customers into an online rampage. Effectively managing customer expectations requires companies to know:

• where they get their information about purchasing decisions,
• how advertising and marketing shape their opinions,
• how past experiences with products and services shape future expectations,
• how likely customers are to share both positive and negative experiences with their social network.

Loyalty programs, feedback surveys, and social media monitoring are just the beginning for companies that commit CRM software and other resources to matching consumers' expectations. While "having conversations with customers" might sound too simplistic, many of today's most successful companies share the ultimate goal of using CRM software to recreate the intimate relationships between buyers and sellers from a century ago.