CRM – Why it works, or why it doesn’t

I’ve recently been wrestling with the the whole idea of CRM implementation and usefulness.  Fundamentally, I feel that the concept of a Customer Relationship Management process is sound.  It allows for co-ordination of data pools into a single centre which can be interrogated as required.  This seems a logical and sensible step for any business – a cleansed, centralised dataset of all customer touch points.   However, I feel that from this point in, the idea of CRM starts to become tarnished.

CRM doesn’t work because it ascribes a set of values to a customer.  It doesn’t work if it fails to work for customer.  Once data is mined, then the customer can be spammed with tenuously-linked offers, potentially placing their business at risk.  Even if automated buffers or triggers are in place, then the likelihood is that unnecessary contact is minimised.  At this point, businesses lose faith in CRM, and CRM doesn’t work.

CRM does work if it isn’t treated as “fire and forget”.  Automation doesn’t mean that the requirement to think is removed.  Too often, the implementation of a CRM system is seen to suggest that there is now less requirement to work with customer data.  The opposite is true.  Successful implementation of a useable, and (and this is incredibly crucial) regularly maintained and updated CRM system means that much more work is now required. 

The establishment of a centralised base should be planned not to simply amalgamate as much data together as possible, but built with a clear purpose in mind.  Data should be structured so that access to data is not compromised (a user should be able to “roll up” and “roll down”).   Most importantly, the base should be built so it lends itself to strategic thinking.  It isn’t enough to identify customers who spend the most; you need to know what their story is, and be able to tell this story with the data.  This is the central premise of the “R” in CRM.  Empathise with your customer, provide them with information; help them use their account history, for example – neatly implemented recently by Tesco (external link).  Irrespective of near-Orwellian approach to grocery shopping that the ClubCard has provided, the tying up of offline and online that Tesco constantly works towards would be impossible without a fully functioning centralised database and a huge amount of thought.

Ultimately, I believe that CRMs do work.  But they don’t work by themselves, and they certainly don’t work in just one direction.  They work for the business, but for the customer too.  They should be scalable, and built with the companies current and future aims in mind; as such simply lumping all data together and then using it as a contact / mailing list is a certain route to failure.  Use it to create discussion, generate true customer insight and improve planning and communications, and it will eventually become indispensible.