Since CRM systems entered the world of marketing in the mid ’90s, much has changed; so why hasn’t CRM? In a CX-focused world, CRM’s utility is fading, writes Chris Sperandio.

In case you haven’t already heard, the mantra ‘customer is king’ is back with a vengeance. Thanks in part to information mobility and the new channels offered by social media, consumers have taken charge of their relationships with business, rewarding companies that display an almost obsessive commitment to delivering an exceptional customer experience. 

What you know about customers is more important than ever before. As companies seek to extract greater value from their data in a highly competitive business environment, a technology shake-out – at the expense of customer relationship management (CRM) systems – looks increasingly likely.

In short, CRM has lost its relevance to the customer conversation. 

The CRM-centred approach no longer works

CRM has its roots in the mid-90s as a way of centralising and keeping track of all your interactions with a customer. It helped companies to engage with existing customers better by knowing a bit more about them. Companies could theoretically draw on this centralised knowledge the next time an interaction with that customer occurred.

Much has changed since then. Companies still have the same – if not an even stronger – desire to engage with current and future customers. But two and a half decades on, it’s no longer clear if CRM is the path to achieve that. 

In today’s digital age, the number of customer channels has proliferated to the point where our old technology approaches can’t really keep up. Data collection is now much more challenging. Just keeping the records associated with a single customer relationship up to date – let alone ensuring they’re available consistently across the whole organisation – is becoming more challenging each year.

A recent survey by Gartner, of which a quarter of respondents came from Australia and New Zealand, pointed to just how complicated it is now to understand customers. Gartner found that 64% of respondents want better metrics, 50% want to hear the voice of the customer (VoC) more clearly, 45% want better personalisation and 44% want to automate more parts of the customer journey.

The CRM approach – where each business function enters data manually to create a ‘single view’ of the customer – is no longer enough. Partly because of scale and velocity, and partly because it’s not just about creating a single view of the customer anymore.

Infrastructure for first-party data

Knowing this, increasing numbers of organisations are revising the methods used to collect customer data. Many are also choosing to make use of a customer data infrastructure to help centralise all the first-party data that’s collected. First-party data is data about your own interactions with your customers. This can come from input forms – like CRM collects – or from your customers using your products and services.

Once put to work, a centralised data infrastructure becomes a valuable platform for the entire organisation. It helps to overcome the limitations of siloed data stores and allows all staff to clearly understand the journey each customer has taken. Sales and marketing will no longer operate with different data sets, and customers will reap the benefits with personalised, connected experiences. 

Entering the post-CRM era

Being customer-first today means becoming more proactive than reactive. It’s no longer about pulling up what you think you know about a customer when they call in, based on past interactions. Instead, it’s more about anticipating their immediate future needs, tailoring offers, removing points of friction that would prevent them from taking those offers up, and maintaining a two-way conversation.

CRM has been a powerful aid for many years, however it was designed for less fragmented times. In today’s multi-channel, digital world, it’s clear CRM and their associated suites cannot meet this task. With customer interactions now conducted across a broad range of channels, the time has come for a comprehensive overhaul of the methods used to gather and use first-party data.

In the words of Ovum principal analyst Jeremy Cox, “CRM is dead and needs to be laid to rest. 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.”

Chris Sperandio is product manager at Segment

Further Reading:

• How the data ethics discussion is impacting Australia’s largest analytics business »
• The forest through the trees – how to find your future-proof CRM »

Image credit: LYCS Architecture