The Trouble with CRM: Tomorrow’s forecast – Sunny with some early fog.

When CRM began to evolve in the mid-90’s every software vendor who had an application that had anything to do with managing customer or prospect data began pitching itself as a “CRM System.” Many of these systems were built to address one particular aspect of CRM, such as Sales Force Automation (contact management, Campaign Management, or Customer Analytics, and could not possibly deliver the value promised as “CRM System”. It was a case of “over-promise and under-deliver.”

Unfortunately, there were no end-to-end technology solutions for CRM at the time, and today, there still aren’t (although we’re getting closer). As much as vendors collaborate with one-another to provide an “integrated solution,” the results have been less than stellar. One only needs to read the Wall Street Journal or any number of business and trade
publications to learn about the failures of CRM System implementation where multi-system integration is involved. It’s no wonder that Pragmatists don’t believe that CRM Systems are worth the investment. However, this may be about to change.

While there are undoubtedly a few CRM System vendors who are trying to monopolize the market with an end-to-end solution, there is a somewhat conscious move by most CRM System vendors to segment themselves into specific vertical segments. At this writing, these vertical segments seem to be:

  • Sales(Sales Force Automation, Contact Management, and Telemarketing)
  • Marketing(Campaign Management, Online/E-mail Interaction Management and Marketing Management)
  • Data Management and Analysis( Business Intelligence, Customer Segmentation and Data Transformation)
  • Customer Service(Order Management, Supply Chain Management, Call Center Management and Interactive Customer Contact

By self-segmenting into these categories, CRM System vendors will ultimately force segment standards, against which all vendors within the segment will be measured. This is the first step to vertical segment consolidation, which will force the smaller, less well-funded players into merging, or failure. In the end, there will likely be 5-7 major players in each of these segments.

So, what does this mean for marketers and how can we benefit from coming change? Here are my Top 3 predictions, with a few thoughts on how we, as marketers, will benefit:

  • CRM System vendors will concentrate on delivering value within...

The Trouble with CRM: It’s always darkest before the dawn

In the last four years, billions of dollars have been spent on CRM technology that doesn’t live up to its promise. A recent Gartner study suggests that nearly 60% of managers will view their CRM initiatives as failures. Organizations are wise to be skeptical of CRM system capabilities, but they are as much to blame as the system vendors. Many of the organizations that have failed with CRM did so because they did not conduct appropriate cost-benefit-analyses, reevaluate processes, procedures, and organizational structure, or fully develop CRM as a business strategy. Instead, they invested only in the technology, because as one manager said to me, “This software will solve all of our problems.” It didn’t, and it won’t. At least not without addressing all of the other issues.

Not surprisingly, some of my friends in the CRM system business tell me that closing sales so far this year has been unusually slow. While undoubtedly, the cause of some of this slow-down is due to reduced Marketing and IT budgets, there is a growing realization among most organizations that CRM is a business strategy supported by technology and not a technology in-and-of-itself. It is likely this realization is playing a significant role in causing the current CRM system space to stumble. So badly, perhaps, that the rash of closures, layoff announcements and revised earnings projections announced daily by the major CRM system vendors, may leave many to wonder if spells doom for the CRM systems space. I would disagree with the doomsayers, as I believe this fall-out is necessary for the space to evolve.

Consider this. Some years ago, Geoffrey Moore (www.thechasmgroup.com) wrote a book called, Crossing the Chasm. In it, he discussed his theories on technology adoption, and how innovators and early adopters (called “Visionaries”) drive the early market acceptance of technology, while the early majority (called “Pragmatists) help drive mainstream acceptance of the technology. The Chasm occurs when the Visionaries don’t see enough of a head-start advantage to adopting the technology, and the Pragmatists don’t see any compelling reason to jump on the bandwagon. This is what I...

Reaching the Right Person at the Right Time

One of the golden rules of successful marketing, as you well know, is the ability to deliver the “right” message to the “right” customer (or potential customer) at the “right” time. The CRM movement has managed a credible job helping us all to pull together the “right” message for the “right” customer, but we yet to be able to deliver that message at the “right” time. In other words, we still have difficulty in getting a message to the customer when s/he is predisposed to buying.

I was thinking about this other day, when I read a blurb about a company call BlueLinx (www.bluelinx.com) in Charlotte, NC. BlueLinx has developed a product called “Q-Zone,” which allows people and organizations to control environmental disruptions of cell phones, pagers, and other types of noise-making portable electronic devices. Q-Zone uses the emerging Bluetooth (www.bluetooth.com) wireless technology to create “quiet zones” within churches, concert halls, conference centers, restaurants, hospitals, movie theaters, and other public places. Essentially, the technology turns the devices “off” when entering a quiet zone and “on” upon leaving. When I finished reading about BlueLinx, it occurred to me that this same or similar technology could be used bridge the delivery gap and get the message to the customer pretty close to the “right” time.

Let’s consider how this could work. I’m in the market for new shoes, so I decide to go the local mall to shop. Once there, I turn on my web-enabled phone (PDA or another device) and let the shoe sellers in the mall know that I’m interested in buying a pair of size 12, black wing-tips. Within seconds I’m made aware of the stores that have size 12 black wing tips in stock, and the pricing. I may even be offered discounts or other freebies for the purchasing the shoes with a particular merchant. I can then visit each retailer, examine the quality and comfort of the shoe, and determine the most appropriate fit for me.

This same concept could be applied to hotel rooms, restaurants, gas stations, and a host of other merchants. Best of...