Implementing CRM 2.0

Chances are that if you are working in a company that faces the public in one way or another, you’ve already heard about CRM 2.0 and chances are that you were afraid to ask. In fact, if you belong to the largest percentage of the workforce, you might even have been afraid of asking what CRM is.

Customer Relationship Management (CRM) is a widely used term that defines a set of procedures used in managing a company’s relationships with customers. The term has evolved over the years and nowadays it usually refers to the technology used in aiding to organize customer-related business processes, such as sales, marketing, customer support, etc.

The software used in these processes has also improved over the years and its ease of use has led businesses to lose sight of what really matters in a customer relationship, such as high rates of customer satisfaction that lead to sustainability and profit. Without a loyal customer base no business can exist and that’s why new technology should always be accompanied by careful strategic and operational planning.

Things start to get complicated as more layers of technology are deployed between a business and its customers. Although technological advances have brought the customer close to business representatives in terms of being just a click away, however the average customer today feels more neglected than ever. When efforts are limited to just choosing and deploying software, the best it can be hoped for is to simply automate customer relationship processes, instead of improving them according to best practices.

Customer satisfaction, which can be defined as “the number of customers, or percentage of total customers, whose reported experience with a firm, its products, or its services exceeds specified satisfaction goals”, is seen as a key performance indicator within a competitive marketplace where businesses compete for customers. Consider for example that there are many reasons why “The Customer Is Always Right”  is wrong, but none of them should prevent your company from putting “The Customer” always first. No one ever intended to have that old adagio taken literally, anyway. The idea was to focus employees on the importance of fulfilling customers’ expectations by inculcating the disposition to behave as if customers were always right, even at those times when they weren’t. Old-school CRM thinking, if you wish, but as effective back then as it is now.

Fast-forward to the twenty-first century and enter CRM 2.0 into the equation. CRM 2.0 can be defined as the space where Web 2.0 meets CRM, and in theory it’s a dream come true for marketing people, allowing them to interact with customers directly, without moving away from the workspace where all company information and technological aids are just a few clicks away. However, in practice its implementation is far from seamless. As we detailed in a previous post, enough issues arise when trying to implement a “traditional” CRM system, and if the implementation process is not accompanied by some kind of rationale, that number of issues only get to increase exponentially, specially when trying to hook that CRM system into social media outlets. For a marketing campaign to be successful in the realm of social media arena it needs to make sure response rates and sales conversions are high enough to improve return on investment (ROI), something that can hardly be achieved with just soulless automated database marketing.

CRM 2.0 is not only a philosophy, it’s a business strategy supported by a technology platform designed for customer interaction in order to provide mutually beneficial value. Customers now want to make their own choices about how they interact with companies they do business with. That means that not only does the company need to provide goods and services, but also engage with its customer base using the available social channels. What needs to be understood is that in today’s competitive market, CRM 1.0 is no longer a viable option.

The table below, courtesy of the Social CRM Wiki illustrates the main differences. Getting to acknowledge them is a sure step towards business success. Failing to do so will irremediably see your business overtaken by the competition.

CRM 1.0 v. CRM 2.0: A Comparative Table
CRM 1.0 Features/Functions CRM 2.0 Features/Functions

Definition: CRM is a philosophy & a business strategy, supported by a system and a technology, designed to improve human interactions in a business environment

Definition: CRM 2.0 is a philosophy & a business strategy, supported by a system and a technology, designed to engage the customer in a collaborative interaction that provides mutually beneficial value in a trusted & transparent business environment

Tactical and operational:

Customer strategy is part of corporate strategy

Strategic: Customer strategy IS corporate strategy

Relationship between the company and the customer was seen as enterprise managing customer – parent to child to a large extent

 

Relationship between the company and the customer are seen as a collaborative effort. And yet, the company must still be an enterprise in all other aspects

Focus on Company <> Customer Relationship

 

Focus on all iterations of the relationships (among company, business partners, customers) and specifically focus on identifying, engaging and enabling the “influential” nodes

The company seeks to lead and shape customer opinions about products, services, and the company-customer relationship.

The customer is seen as a partner from the beginning in the development and improvement of products, services, and the company-customer relationship

Business focus on products and services that satisfy customers

 

Business focus on environments & experiences that engage customer

Customer facing features – sales, marketing & support.

 

Customer facing both features and the people who’s in charge of developing and delivering those features

Marketing focused on processes that sent improved, targeted, highly specific corporate messages to customer

Marketing focused on building relationship with customer – engaging customer in activity and discussion, observing and re-directing conversations and activities among customers

 

Intellectual Property protected with all legal might available

Intellectual property created and owned together with the customer, partner, supplier, problem solver

 

Insights and effectiveness were optimally achieved by the single view of the customer (data) across all channels by those who needed to know. Based on “complete” customer record and data integration

Insights are a considerably more dynamic issue and are based on 1) customer data 2) customer personal profiles on the web and the social characteristics associated with them 3) customer participation in the activity acquisition of those insights

Resided in a customer-focused business ecosystem

Resides in a customer ecosystem 

 

Technology focused around operational aspects of sales, marketing, support

Technology focused on both the operational and social aspects of the interaction

Tools are associated with automating functions

Integrates social media tools into apps/services: blogs, wikis, podcasts, social networking tools, content sharing tools, user communities, tools are associated with communicating

Utilitarian, functional, operational style and design also matter
mostly uni-directional always bi-directional
Based on a toolset (software) Based on a strategy (corporate culture)
Consumers are clearly indicating that the option to respond online, appropriate timing and accurate personalisation are very important to them