If CRM can't enable great customer experiences, what can?

On 16th January, a press release dropped from representatives of the ‘Platform of Independents’.

Led by Segment co-founder and CEO Peter Reinhardt, the release was an open letter co-signed by 190 CEO and company bosses from the tech community, declaring that ‘CRM is not enough’.

The letter highlights the need to move away from traditional CRM suites to allow businesses a greater opportunity to build technology platforms that fit their needs, and their customers’ experiences.         

“CRMs were perfect for the Rolodex era,” explains Reinhardt, in the letter. “They are not equipped for today’s digital age, where massive volumes of data flow directly from your websites, mobile apps, emails, kiosks and call centres every single second of every day.

“Your company’s data should be available in your preferred, best-in-class business applications, not just the ones that your CRM suite has chosen for you.”

Among the group of companies to co-sign the letter were Airship, Amplitude, Drift, Iterable, Mixpanel, Outreach, Pendo and Radar.

Valid call to arms?

The question of whether CRM is fit for purpose is not a new one. It’s nearly 15 years since Seth Godin caused a ripple of hysteria among the CRM vendor community for declaring CRM was dead.

Numerous statistics regarding CRM projects failing have ensured a question mark has hung over CRM since its very inception as a strategic technology platform, whilst some of the industry’s biggest vendors have spent recent years shifting their semantics from ‘CRM’ to ‘engagement’ to ‘experience’ to…the list goes on – in a bid to provide more cohesion for their customers.

However, the Platform of Independents’ claims there are three requirements businesses should now be able to fulfill but are unable to, with the current guise of CRM:

• A world of choice – where businesses are free to build a technology stack with the tools that they need, not just the one their CRM suite has chosen for them.
• A world of flexibility – where data can be used across every department to exceed customer expectations, not just in sales and marketing.
• A world of opportunity – where every business can have the technology and ability to be customer-first.

A key point of note is the Platform of Independents’ statement that CRMs don’t fulfill the requirements for ‘modern customer experiences’, and are too often enslaved to single-vendor lock-in.

Jeremy Cox, a principal analyst at Omdia (formally Ovum) covering the CRM market, has sympathy with the ongoing issues of vendor lock-in, but believes that the co-signatories have a narrow view of what constitutes the customer experience.  

“CX is more than just the ability to personalise offers, however timely.  While this limited focus may suit marketers, the real challenge for every business is not just to find customers but also to keep them, and hopefully develop a symbiotic relationship that keeps them coming back for more.  

“CX includes every interaction moment and continues long after a product or service is consumed. It could involve interactions with back-office employees – finance, logistics, third-party delivery partners etc. The list is a long one.”

Platforms of engagement

The challenge of any single technology platform being able to deliver a joined-up system for customer interaction is one that many of the major incumbent CRM vendors have spent recent years trying to overcome, acquiring companies in their droves in a bid to offer a fully-integrated, end-to-end system for engagement.

Among them – Microsoft, Oracle, Salesforce, and SAP; all promising platforms that expand beyond the traditional CRM mandate of sales, service and marketing.

Cox states that it’s for this reason he’s moved away from referring to all-encompassing platforms as CRM, instead preferring the less commonly-used, but more descriptive terminology of customer engagement platform (CEP).

Omdia defines a CEP as ‘a platform that enables an enterprise to coordinate and intelligently orchestrate all customer engagement activities across its value chain in a way that delivers an interlinked set of outcomes: superior experience for customers and profitable growth, improved operational efficiency, and lower costs for businesses’.

The anatomy of a CEP consists of five enabling technology layers, culminating in a sixth orchestration layer:

“There is growing evidence that enterprises are beginning to take a more strategic approach to customers and are actively seeking to build enterprise CEPs, to create a unified environment for their customers,” says Cox.

“Sadly, they are in the minority, partly because for most organisations the mindset is still very much legacy and siloed CRM thinking, attempting to fix the problem one department at a time. The more advanced, however, see the critical importance of developing a unified enterprise CEP, plugged into the back-end systems and feeding off unified data, whether it be transactional or interactional and behavioural, and regardless of what department it traditionally sits with.”           

Data platforms

Alongside the rise of CEPs comes the equally comprehensive customer data platform (CDP).

Acording to Digiday, the layman’s definition of a CDP is a system that “combines all of a company’s customer data together to make everything more efficient”.

As a platform that’s able to plug into and unify customer data across multiple channels, a CDP can bring clarity to the omnichannel journeys a customer takes in a way many CRMs cannot.

Yet crucially, they’re designed with solely marketers in mind.  

Because of this, Cox calls CDPs a component of CRM, rather than a solution: “Most CDPs have been developed for marketers and therefore are of limited use. The most advanced CDPs access data from wherever it resides across the enterprise and real-time interaction data. This is the unified customer data management and dynamic profiling layer, but it’s by no means a valid alternative to CRM.”

Customer-centric culture

In a recent post on ZDNet, author and thought-leader Brian Solis presented the argument that CRMs were often seen as easy scapegoats for much deeper rooted issues that CEPs, CDPs or any other technology type can resolve.

“CRM is still one of the most important keys to customer-centricity. And still, even with strides in innovation, CRM faces some of its most relentless hurdles. It's incredibly difficult to be customer-centric if you're not actually centered around the customer.

“Business and data silos, incomplete or duplicate customer data records, incongruent touchpoints, disconnected apps, and incompatible systems and services -- and, to be honest, a lack of unified leadership driving toward strategic integration -- remain as common issues that require prioritisation and escalation.”

This is also a viewpoint held within the vendor community itself. As Patrick Stokes, executive vice president of platform at Salesforce explains within the aforementioned ZDNet article: "Seeking a single source of truth for each customer isn't a new idea, but it's been difficult to achieve. Buying a car, or even selling a CRM solution, as we do, can involve hundreds of touchpoints across a variety of systems that need to be tracked and managed.

CRM users who are frustrated with the lack of customer insight they can get from their existing systems will likely see the 'CRM is not Enough' campaign as a breath of fresh air.

“Ultimately, you want to have a holistic graph of past and present customer engagement so you can better serve the customer and predict future needs. You can't up-level customer experiences if you can't overcome organisational barriers that prevent deeper integration. When you have a more customer-centric culture, those barriers tend to break down."

It’s also a philosophy the Platform for Independents hold dear, to some extent. As Reinhardt explains in a blog post outlining the rationale behind the CRM is not Enough campaign, much of his concern about CRM’s current failings is wrapped around the breakdown in customer-centricity in companies that were once heralded for it.

“When I was six years old, I was an avid coin collector. I had almost every penny between 1900 and 1995, from every mint, including the steel pennies from WWII. But there were always a few I was missing. To build my collection, every weekend my parents took me to the local Bank of America branch. I exchanged $40 of pennies for $40 of different pennies. Admittedly, this transaction had zero direct value for the bank.

“But when I showed up with my rolls of pennies, the branch manager would know me by name. The “coin kid”, he used to call me. But over the past 20 years, my interactions with Bank of America became more and more impersonal. Despite being a customer for decades, every experience I had with the bank started from a blank slate.

“Sure, they could pull some basic, static identity attributes like my name and pop it into a static email template. But it was as if I’d never interacted with this company before.”

As with most things, it’s evident that there is no single ‘solution’ to delivering great customer experience. Clearly, CRM technology alone is not enough – as the campaign highlights and as leading commentators such as Paul Greenberg and Jeremy Cox have always highlighted – but there’s also huge cultural and innovation requirements that are skewing the effectiveness of many CRM suites currently in operation in big businesses.

“CRM users who are frustrated with the lack of customer insight they can get from their existing systems will likely see the 'CRM is not Enough' campaign as a breath of fresh air,” says Cox. 

“There is no substitute for a holistic customer strategy. But, once that is in place, prospective users should get back up to speed with the art of the possible, recognising that CRM has and is moving on.”