Updating the Concept

Corporate boards have been swept away with enthusiasm for CRM because customer relationship management appeared to meet three of business’s fundamental needs:

1. Understanding customers’ buying behavior for better targeting of offers

2. Spreading customer information across the enterprise to allow customer-facing personnel to be more efficient

3. Creating greater operational efficiency to reduce expense

CRM still meets the three fundamental needs listed above, but the model has lost its luster. Companies that have failed to achieve benefits from CRM are beginning to realize their efforts have failed to meet the fundamental needs of the customer. David Bradshaw, an analyst at Ovum, likens CRM to a fashion industry. “Last year it seemed that CRM was all the rage. It was the hottest solution and companies spent millions to get a piece of it. Now, about one year later these same companies have a high-priced outfit that barely fits. But I tend to agree with the analysts, authors, and other industry pundits—CRM is not an outdated leisure suit. It’s merely stumbled on the catwalk and with a little time it will prove to be as essential as the little black dress.”^[10]

Fulfilling Bradshaw’s forecast will require more than just a little time. It will call for a re-examination and re-evaluation of the CRM concept. Finding ways to empower the customer in the adoption cycle of a new CMR suggests a reappraisal of objectives. Companies that started CRM efforts to improve efficiency are now looking for ways to increase effectiveness. They are seeking new ways to do the right thing rather than just doing things right.

^[10] “CRM Stumbles on the Catwalk,” Internet World, April 2002, p. 14.