Organisations interacting with today’s consumers face a rare combination of circumstances. Sky-high expectations, unlimited options and the sweeping consumer empowerment driven by social networking have created a force unlike any of us have experienced before.

After decades of being managed and forced to adapt to companies internal business processes, consumers have had enough. We are unleashing our power on the social web and it is rapidly gaining momentum.

A new generation of social consumers

I believe that consumers have always had expectations but never before have they expected a great experience to accompany every interaction. In 2009, 62% of consumers quit doing business with a company due to a bad customer experience with 37% of these saying they would never reinstate their business; 83% of consumers that had a bad experience told others about it. With social media tools at their disposal, the repercussions of this can be enormous.

Consumers are beginning to understand that they are in control and that they can set the tone for every interaction they have with you. An example that sticks in my mind is that of musician Dave Carroll, a U.S. traveller whose guitar was broken while he was flying with United Airlines. Carroll aired his compliant in the form of a very funny song accompanied by a pointed video which he then placed on YouTube. It created a whirlwind of negative publicity and by early 2010, the video had been viewed by almost seven and a half million people – all of whom no doubt have the phrase “United breaks guitars” well and truly implanted in their memories.

Another well-known example I remember is Vincent Ferrari who recorded a conversation with an AOL representative as he tried to cancel his AOL account. The AOL representative resisted Ferraris request. Ferrari then posted the audio file on his blog, it became instantly popular— the conversation aired on CNBC and NBC, and YouTube recorded more than 62,827 hits two days after it was released.

The lesson from both these examples is that companies can no longer manage the customer relationship. One can however control the customer experience you deliver.

CRM missed the customer

To meet todays consumer expectations, organisations must look beyond internally-focused customer management systems and create externally focused customer experience solutions that deliver competitive advantage and drive bottom-line results.

CRM (customer relationship management) originated as a way of helping organisations manage the internal business processes related to customers. More specifically, it offered sales automation processes for field sales organisations. CRM helped companies create operational efficiencies by coordinating sales and customer data. However, the internal focus of CRM often left the consumer out in the cold.

Many organisations also failed to achieve the business outcomes they desired with CRM. AMR Research reported in the 2006 report Ending CRM Failures that 31% of CRM implementations failed. More pessimistically, Paul Greenberg, author of CRM at the Speed of Light, has been quoted saying 70% of CRM projects fail. And, in 2009 Forrester Research estimated a CRM project failure rate of 47%.

As consumers, the reasons why CRM has left us unfulfilled are clear. First, we don’t want to be managed, we want to be engaged in an experience that works for us as individuals. Second, CRM amplified the complexity of internal systems, processes and procedures, crippling an organisation’s ability to rapidly adapt to the dynamic needs of consumers.

With CRM focused on the wrong priorities, being highly complex and rarely meeting expectations, it is easy to see why a new approach is necessary.

Dawn of a new era

Whats needed is acknowledgement that our own individual customer experience is critical and a determination to make it the focus at every touch point. This means ensuring that our interactions via the web, social media or contact centre all deliver – if not exceed – our expectations. It is these three experiences, when executed well, which will drive revenue and deliver sustainable competitive differentiation.

To effect this approach, companies need to rethink the way they manage their current customer contact systems. It is no longer feasible to run social media activities separate to the contact centre or the web CRM system. All touch points need to be integrated and capable of sharing information with other critical business systems. It is going to require a common underlying platform, consistent business rules and a reliable knowledge base that supports customer support staff across the entire business.

Our radical empowerment as consumers, driven by the social web, is creating changes in business unlike any we’ve experienced before. To capitalise on this change, companies must engage with customers in a fundamentally different fashion. After decades of being managed we are rebelling. Today companies must listen to customers, engage with them proactively – wherever that might be – and do whatever it takes to ensure every interaction is a positive experience. Its time to focus on the complete customer experience.