Customer Managed Relationships (CMR) Hype or is it Hype?by
Before I get into the body of my newsletter I have been asked by a number of individuals to give a brief definition of what constitutes a Customer Knowledge Infrastructure (CKI). After extensive web based research I found very little in the way of definitions so here is my attempt:
The customer knowledge infrastructure (CKI) is the foundation that enables an organisation to understand and serve its customers more effectively. Often considered as a technological architecture to capture transform and make available the relevant customer information for an organisation to carry out customer relationship management across/through all touch-points and business channels. Often a CKI is founded on a data warehouse (centralised), data marts as required (fed by the DW) plus OLAP, data mining and database marketing tools coupled with solid processes, knowledgeable people and a decent business strategy to make use of all the capability available. This is often coupled to a holistic vision and realistic business strategies focused on the customer at the pivotal point of all business.
Failure to plan a or even stumble into building a CKI contributes to all the stories and anecdotes about organisations failing to get the hoped for ROI's from their investment in technology based CRM. The basic premise is that without knowledge of your customer or potential customers how can you expect to install robust and useful call/contact centres or offer web based support services. This also goes to the heart of the CURARE vision of CRM. A robust form of CKI is a must for the success of CRM initiatives.
The customer knowledge infrastructure is the foundation of any CRM initiative. The CKI forms the basis upon which all other mechanisms from critical event driven marketing, personalisation and call/contact centre activity can be driven. Yet there is a still a belief that CRM began with call centre automation without regard for the huge investments made in the early 90's in technology to understand the customer and to build relationships. It is as if history is being rewritten to serve the purpose of the countless consultants and technology vendors who have recently discovered the acronym CRM.
And now a new arrangement of those three letters (CRM) is meant to herald the beginning of a new wave of technologies focused on giving the customers what they have always wanted "control of their relationship" with suppliers of services and goods. That term is CMR (Customer Managed Relationships).
Now the term was coined about 2 years ago and has been taken up by a number of vendors and consultants in pursuit of the next wave of fad surfing in the boardroom. The hype is based on the idea that by enabling the customer to have access to the web and be able to carry out various transactions or gain much needed support that benefits the customer a new world has opened up.
An example of the hype: "People talk about Customer Relationship Management, but as we go forward we're going to need to talk about customer-managed relationships." Phil Tamminga, Partner CRM Service Line, Accenture
The days of a large company dictating to its customers and prospects the time, manner, and channels through which they can interact with the business are over. The customer is in charge, the Internet is more pervasive with every passing day, mobile devices are providing a new level of customer convenience, and 24x7 access is a must. And so - hype or what!?
This new world now presupposes that the customer can actually manage his relationship with the service/product supplier.
To enable this to happen we are told their needs to be new ways of managing customer information on the web. Services are needed to manage customer information in a secure manner such as Microsoft's .NET and Passport. These offerings lead some pundits to believe that the customer now has real choice. This service allows customers to specify various permissions for access to and update of particular types of information in standard formats that are stored in a Microsoft-controlled online data-base. Some envisage that these services will also capture customer preferences and potentially become a source of income for the customer that wants to sell his data profile to researchers. Some refer to these secure data repositories as ‘Electronic Vaults' (D J Kelly).
The customer now can make the choice of allowing or disallowing company's access to their information. They also get the benefit of not having to re-key the data so reducing the opportunity for error and the customers tiring their fingers. The companies that subscribe to these services know that they will get reliable customer information that they can input to their various customer modeling suites to enable them to offer the customer exactly what they want. They can now spend their time enabling the customer to be in 'charge of the relationship'. I don't think so!
All the benefits remain with the companies that provide the various services on offer. A portal where you can gather all your bank accounts together in one place - yes but how many banks do customers really deal with and really how important is this service? And is this really something that would induce a customer to provide one source with all his financial connections, passwords and life history - I doubt this! That the customer can buy things more easily or administer a set of accounts with his bank, mobile phone provider or book shop is not CMR but merely self service. We might even say self–serving self service at that. This self-service actually reduces the cost to serve for those that choose offer this service. Where does the customer control come in? The vendor provides all the access routines, the web facilities, the administration routines and the mode of presentation. Where does the customer actually manage the relationship? The customers' choice is either to use the service provided or not! They could always go back to using the telephone or maybe they might even venture back into a real shop where they can touch and see the merchandise for real.
The benefits to the customer of the new web based self-service offerings enables the customer to do things when he or she wants in, it is hoped, an easy to understand and easy to use manner. It has nothing to do with relationship management but about convenience. That convenience works to the benefit of the customer and more to the point the business provider. This is not the dawn of a new wave of services but merely the extension of the old channel dilemma/opportunity (terrestrial and ether: retail site, branch, kiosk, call/contact centre, direct and or web) that many organisation's have faced for years.
The choice of what channels to offer must be based on the customer knowledge that they have captured in their CKI and will include basic demographic data, customers preferences (similar to what it is hoped the passport type repositories will include) and potential customer value by channel preference. From this information the organisation s can identify those customers that would benefit and in some cases be early adopters of any innovative approach to offering a more customer friendly self-service. Is this CRM or CMR - does it actually matter?
What matters is that through the use of customer knowledge organisations and customers can benefit from the customer using innovative web based self service. The cost to serve is lowered for the company and the customer can carry out activities that are to their benefit and when it suits them. There is a win-win for both parties to what may actually be a relationship with a potential one-to one emphasis. The CKI wins again.
To review a paper on CKI see: Getting started building a Customer Knowledge Infrastructure
CURARE: More here...
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