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Does the CRM industry have an identity crisis?

15th Nov 2010
Managing editor MyCustomer.com
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MyCustomer.com

The emergence of social CRM has once again stirred up the debate regarding the opacity of 'CRM'. Why is CRM forever growing in breadth and what are the implications for the industry and buyers?

Social CRM has got the business world talking. But while much of it is about opening new channels to the customer, some of it is opening old wounds. In particular, the emergence of social CRM has once again raised the issue of the opaque nature of the CRM sector. In recent months we’ve not only witnessed the CRM credentials of some firms being called into question, but also seen some established CRM vendors distancing themselves from the sector.
Gartner, for instance, put the cat amongst the pigeons recently, when it nominated Jive and Lithium as leaders in its Social CRM Magic Quadrant. CRM’s leading light Paul Greenberg, author of the seminal ‘CRM at the Speed of Light’ admits that he raised his eyebrows at the choice.
"I love Lithium and I love Jive but they are not social CRM companies. They have no operational capacity at all, and when push comes to shove, the word ‘CRM’ is in there, and consequently that means sales, marketing, customer service, operational, transactional and customer databases and all that stuff has to be in it because that’s the foundation of CRM. And social CRM is an extension of that."
Greenberg adds: "As much as I like Gartner, I don’t agree with their social CRM landscape according to the Magic Quadrant. I’m not even sure what even the underlying continuity is between them either, to call it social CRM. That said, Gartner validated it by doing it, so kudos to them from that standpoint."
The CRM guru also believes that some of the fighting over the ‘social CRM’ definition has been for "alpha dog reasons" to "position themselves as the leader", but that this has ultimately only served to "muddy the waters" and cause confusion.
Richard Boardman of Mareeba CRM Consulting, sees uncanny similarities to events a decade ago. "I recall it being a pretty big problem," he says. "CRM was the hot topic, and every software application wanted some of the attention, so everything was badged as some variant of CRM no matter how distant the real relationship. The labeling sorted itself out after a while once the market became a little less frothy, but I think we’ve started to head back there again in recent times with the social CRM tag."
10 years of baggage?
But it’s not all one-way traffic. RightNow has very publicly distanced itself from CRM, instead choosing to deliver products under the banner of CX, which it unveiled at the RightNow User Conference last October as the "big brother of CRM".
In an interview with MyCustomer.com earlier this year, CMO Jason Mittelstaedt explained the move. "It was a big decision for us to go away from CRM to wholly embrace CX," he said. "But what we found in all geographies was that CRM is busting at the seams. There is so much history of CRM being the internal system of your sales, service and marketing, as opposed to a customer interaction enabler, that all of this history was constraining the conversation and even constraining people’s thinking about what systems could do to enable their interactions."
Mark Swenson, director of Teradata’s customer management practice for EMEA certainly sympathises with this viewpoint. "CRM hasn’t become too much of a ‘catch-all’ term – it has always been too much of a ‘catch-all’ term!" he suggests. "Whilst it can be a handy abbreviation to paint a mental picture of customer management, its use always requires the need to stop and define what the speaker means. With 10 years of baggage, the term's use is declining and in many companies is actively discouraged."
The right questions
So hang on. We have a bunch of vendors that aren’t technically CRM all bustling underneath the CRM umbrella, while vendors which have historically been part of CRM are deciding to branch out to a whole new category. This isn’t going to make things any clearer for buyers.
David Beard, Sage CRM evangelist, defends the growing scope of CRM, suggesting: "As CRM becomes much more needs-driven across a business, it stands to reason that increasing numbers of vendors consider themselves offering some CRM-type functionality."
However, he does add that the broad nature of the market means that it is critical that buyers do their homework before they invest. "It has now become more important than ever that an organisation looking to deliver ‘CRM’ has absolute clarity on their core objectives and how this relates to their wider business strategy. Only then will they be able to ask the right questions and interrogate the different offerings that vendors can provide, to ensure they get what they need."
New areas of CRM 
So is it possible that the CRM sector will eventualy settle down and become more cohesive? Having been in a constant state of flux for the past decade, the form guide would certainly suggest things are unlikely to change in the near future.
Furthermore, while there is undoubtedly some confusion as stakeholders play fast and loose with their terminology, there is an argument that the fluidity of the industry is a reflection of the innovation taking place within it.
"There are always newcomers and new areas of CRM," reflects Ed Thompson, VP and distinguished analyst in Gartner Research. "The reason [for this] I think is that sales and marketing will always experiment to win business – and, soon afterwards, vendors learn to encapsulate the new approach in software."
"As technology changes, there will continue to be new and different ways for customers to interact with companies," adds Greg Anderson, global general manager, customer service management and GoldMine at FrontRange Solutions. "Should they be considered part of CRM? If you look at CRM as a business strategy rather than just technology, then yes a company would need to consider them as part of their overall strategy to attract and retain customers. 

"However, can any one vendor provide all capabilities? While there will always be those monolithic solutions that have everything, they most likely remain expensive to implement and to maintain. A more likely scenario are the vendors that have already re-architected their solutions, or will do so over the next few years, for ease of integration with other 'best-of-breed' solutions to be more economical and effective." 

For better or for worse, it would appear that CRM will - for the foreseeable future at the least – be characterised by its breadth. It is operating across more channels than ever before, it is aligning employees across multiple departments and ensuring consistent messages to the customer across a growing number of contact points. Just don’t expect the ‘CRM’ offered by one firm to necessarily be the same as the next.
But, ironically, the term that reignited this debate may not live long enough to have such a colourful history - with Greenberg predicting that it too will be assimilated into CRM in time. "Social CRM will just become CRM, that's the ultimate side of it," he concludes. "Social CRM really is CRM now but transitions happen - and you have to account for the transitions."

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By ConorERS
17th Nov 2010 11:56

Interesting take on Social CRM. We haven't seen it really take off here yet in Ireland, but that may be because Twitter usage is probably not as high as in the U.S. Our Twitter profile is used regularly but our customers don't use it for support or anything. This may evolve in the future however, we'll just have to wait and see http://www.ers.ie/CRM.html

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By meekings
21st Nov 2010 20:13

While I agree with the points made in this article, it's a tad surprising that there are no pointers as to what organisations can do about the issues highlighted.

I would have expected MyCustomer.com to be a bit clearer about 'what good looks like' in this field.

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ND
By Neil Davey
22nd Nov 2010 08:58

Thanks for your message.

The remit of this article was to explore the opaque nature of 'CRM' as portrayed by vendors, the reasons for this opacity, and how buyers must respond to this (specifically to have clarity about what their business requires).

In the context of this article, social CRM was discussed to demonstrate the ever broadening use of the term 'CRM'. For more on the application of social CRM, including 'what good looks like', I'd recommend Paul Greenberg's terrific article from earlier this month, which you can read by clicking here.

I hope this helps!

Many thanks.

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By Intelestream Inc
06th Dec 2010 15:47

Yes, yes, yes! Agreed. Social CRM is cluttering the airwaves from entities not necessarily well versed in the solution or even knowledgeable. The problem with any golden child of technology (today being social CRM) is that everyone wants to jump on the bandwagon. However, as this article quite nicely points out, just because someone says they’re social, doesn’t mean they’re a solid social CRM solution.  While some may be intentionally posing to capture new market share, others just might not be as in tune to the definition and intricacies of sCRM. It’s clear that the ‘social’ in social CRM clearly delineates its leveraging of today’s social networks. However, the internal functionality of sCRM is rarely as loudly touted. Social CRM’s internal means to communicate has never seen such sophistication. The interface allows all employees (from a CEO’s secretary, to everyone in marketing, sales, and customer services, to your executives and managers) to effortlessly communicate with one another. It goes beyond just sales, marketing, and customer service -- the beauty of which allows a company collectively to mindshare instantly, in real-time and from anywhere. A company can leverage all employees’ experience, resources, and expertise as a collective whole.  

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