By: Robin Meyerhoff
Can traditional Customer Relationship Management (CRM) address the biggest customer-facing challenges? According to Jeremy Cox, a principal analyst at Ovum, a UK-headquartered research firm, the answer is a resounding “no.”
Even though Cox has been helping companies create effective CRM strategies for over 20 years, he believes CRM is dead and a new category has taken its place: the customer engagement platform, which helps companies ensure positive customer experiences across multiple channels.
“CRM is dead and needs to be laid to rest,” said Cox. “It’s not about recording customer interactions, it’s about engaging in relevant ways throughout every customer interaction journey, wherever it starts and wherever it finishes. That requires a customer engagement platform, not transactional CRM systems.”
I sat down with Cox to discuss the future at a recent SAP Customer Experience event. Here are four takeaways from our conversation.
Make Way For The Customer Engagement Platform
The primary challenge facing companies today is how to deliver a consistent customer experience across all customer interactions and channels. This should not be just a front office concern. Fulfillment is as important as the initial promise of providing a product or service, so companies also need to address the supply-side of the equation.
“Traditional CRM won’t cut it,” said Cox. “Today’s story is around customer experience in its totality and the ability of the enterprise to support customers in a way they will want to come back – and that market is up for grabs.”
The main players include those who fought previous CRM battles, but it’s a far more complex challenge.
While many organizations are still stitching together point solutions to address specific customer-facing functions, that’s not an effective approach. The most important thing for companies is to break down silos and make sure that every customer interaction triggers a contextually relevant response.
“Complete traceability is important and to do that you need a platform that can unify, manage and secure the underlying interaction data,” said Cox.
This should initiate the appropriate activity whether serving up personalized content or providing suitable guidance for customers. Rules-based approaches don’t scale and are too static and myopic. That’s where vendors like SAP come in as an intelligence and automation layer can prod people to do the right thing at the right time, in sync with customers.
Cox believes the old ‘cobble-it-together-yourself’ method fails and is magnified in B2C environments that are high volume. Because there are potentially millions of interactions, companies need a platform that can connect the data dots from multiple systems and address the complete customer experience.
The new direction? Put customers in the center and ensure that anyone who interacts with customers —sales, service or commerce professionals—has relevant information and insight to help customers achieve their goals. The system should also provide a horizontal layer allowing the company to dynamically orchestrate the entire customer experience.
“That’s the direction but the real-life examples are as rare as hen’s teeth,” said Cox.
Breaking Down Data Silos
To achieve a 360-degree-view of customers, data needs to flow seamlessly across the companies’ front and back end. Siloed data won’t work, according to Cox.
“If you think about omni-channel commerce, it has to involve the back end,” Cox explains. “It’s easy to buy something but it’s another thing to receive it.”
For example, if there’s a flood that might impact delivery, a response should be triggered, and the customer informed. That’s what customers expect. Making this a reality means everything needs to be connected and work in real time. Quality and veracity of data is critical.
A connected environment enables companies to become intelligent enterprises and respond quickly to customers. If there’s a customer event, that will initiate change that ripples across all enterprise applications.
Tactical Approaches Don’t Work
As companies mature, Cox believes they need to move beyond tactical CRM plans that focus on one line of business. Instead, executives need to consider customer experience as part of the company’s overall growth strategy.
“Companies depend on customers for growth, so they need to treat them in a way that keeps them coming back,” said Cox. “This means maintaining relevance and adding value throughout the engagement.”
Cox described said there are two growth engines to make this happen. The first is todeliver relevant and rewarding customer experiences. The second is continuous innovation, which renews the value customers receive, either by creating in new products or services or augmenting the customer experience to create a stronger emotional attachment.
Machine Learning Is Hot, But It’s Still Early Days
Cox believes machine learning has potential to help transform CRM but it’s still very early to determine its true impact. The starting point has been very tactical with localized use cases including helping sales people determine which leads to follow or helping marketers evaluate the effectiveness of particular campaign activities.
But in the more chaotic B2C environments — with millions of interactions — rules-based technologies and localized machine learning won’t cut it, according to Cox.
“You need a network of machine learning algorithms that span the value chain and all customer touch points, to trigger contextually relevant responses in real-time, and that is a much more complex challenge,” said Cox.
This story also appears on Medium: Innovation Spotlight.