Four digital challenges that CRM could solve this year

Back in August 2015, long-time CRM evangelist, Paul Greenberg wrote a very frank article detailing what he saw as a new and definitive interpretation of CRM:

"CRM's role is to manage not the customer relationship - the constant wrong-headed misstatement about it from its naysayers - but to manage the business operations related to the customer. It also is required to capture, keep, and analyse the data about the customer so that insights can lead to a better engagement leading to a great experience, which enhances those ongoing interactions."

This idea – that CRM should not be seen as the actual act of managing customer relationships, but the vehicle for managing the data related to customers – is crucial, and is one that incumbent CRM vendor, SAP is trying to encapsulate with its new strapline for 2016: “Beyond CRM”.

But why is now the time to move away from the more traditional view of CRM?

Kevin Kimber, SAP’s managing director for cloud UKI, says the answer lies with the speed at which businesses now have to innovate, to match the digital requirements of their customers.

Gone are the days when vendors might position CRM as a panacea for coping with a business-wide digital transition. Instead, CRM needs to be realigned with a number of key, digital innovation challenges:   

1. The role it plays in your digital evolution   

“CRM is only one piece of the puzzle,” says Kimber. “Whereas historically, CRM was the be-all and end-all in Customer Relationship Management, today everything is mobile and putting mobile first is very much the strategy, both from the consumer and also in terms of the organisations looking to interact with those consumers.

“CRM has become only one pillar and if you continue to focus on CRM in the historic context, then you are actually looking at a very siloed approach to your customers.

“Customers, I believe, are ahead of organisations in terms of the technology they’re using, and therefore their expectations are way beyond the level of service that many organisations are offering. Yet, even with the ‘digitisation of everything’ ideal we currently reside, many CEOs and CFOs still don't have a digital strategy. This is one very key area and probably the key area we are talking to our customers about. How do you digitise the front-end and drive genuine customer engagement coupled while adhering to all the traditional things that we've been doing with CRM? The reality is, the marketplace is still largely talking about CRM through a lens of the market say, 5 or 10 years ago.

“The world has moved on, the customer base has moved on, technology has moved on and now we have to move CRM on, too.”

2. The role it plays as part of an omnichannel strategy

“Offering omnichannel experiences is a fairly straight-forward discussion when you are talking to a retailer, because it’s a must,” Kimber adds. “But what about when you’re a manufacturer or an engineering company? Historically, the talk around omnichannel has been less prevalent outside of retail and ecommerce, because, in terms of a customers' perspective, there has always been a vast supply chain between those customers and the ‘retailer’.

“What if, as a manufacturer, you want to start offering a more direct consumer-type model? What channels of the market should you leverage? What does omnichannel mean in that context? Do you start with one channel or do you start with many? What is your mobile strategy, what is your social strategy, what is the current reach to market you offer your customers? How is your supply chain at the back-end architected to support those channels to market?

The reality is that there's so much data out there now about individuals, whether it be in the social media context, whether it be in terms of products and services we interact with, that we’ll all have to harness it to some degree.

“There are so many facets to the conversation. It’s important to ask specifically where you think you are today. To a degree it's not a good starting point, but where do you start, where are you trying to get to, what is it that your customer is demanding from you? Where are the gaps? And therefor start ticking them off from there.”     

3. Responding to and facilitating disruption    

As Kimber states: “The key question here is, how do we make sure the business models that we have in place are the business models our customers want to take advantage of? A great example here is the big shift towards subscriptions. The big shift from acquiring a physical product to moving to a subscription model backed by scalable infrastructure. This is a question every sector should be asking – you only have to look at Dollar Shave Club as proof of this.  

“This type of disruption is completely changing the way in which the consumers acquire the product and services that they are looking for. In addition, because of the advanced technology and the digitisation that now exists, often largely being driven by cloud, many small companies are able to enter new industries and quickly grow boundaries.

“The utility companies, for example, are becoming ‘technology’ companies by virtue of smart metering and smart home solutions. Manufacturers becoming retailers because of the direct consumer models. New entries are opening up, because of the cost perspective of technology being largely reduced.

“We are talking to our customers about how they digitise they entire bandwidth. Digitise the workforce, digitise the supply chain, digitise their customer engagements. How do they make very fast decisions with data both inside and outside of their firewall? And actually if you connect those things together; if you digitize your supply chain, and digitise the customer engagement and the workforce piece, it's such a rich level of data available to you and the company upon which you make decisions that there’s no way you’ll cope using siloed processes in the terms of legacy CRM.

4. Collecting data outside the firewall

“85 or 90% of customer data sits outside the firewall,” says Kimber. “How much of this data is being harnessed by your organisation?

“We talk about turning dark data into light data. Either data that you never had access to because either it sat outside the firewall or indeed, inside the firewall but because of the file approach you perhaps didn’t even know it existed.

“But even the idea that you shine a light on that, and from there you’re able to drive fast and real-time decision-making means taking a much bolder approach to data management. You need to take a different approach to core data. It will enable you to make decisions as quickly, if not quicker than your customers are. Because as quickly as they'll turn on, they'll turn off.

“The reality is that there's so much data out there now about individuals, whether it be in the social media context, whether it be in terms of products and services we interact with, that we’ll all have to harness it to some degree.

“For example, if you’re a retailer and your customer is walking past a competitor store, what kind of social listening have you conducted beforehand? Can you make them a special offer to ensure they want to buy a particular product from you instead? And if they come into your store, how do you guarantee that that particular product is in stock?

“It’s this sort of thing this highlights exactly why we’re talking ‘beyond CRM’. It’s not a CRM conversation, and to some degree it’s not even a customer engagement conversation. It’s about future-gazing but at the same time acknowledging that you have access to all of this data today, you have access to the financial information, the supply chain information. Couple it together with the customer engagement piece and then you’re talking about providing an incredibly rich environment for your customers to do business with you.”