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Personal knowledge banks to kill off CRM?

9th May 2005
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CRM will be replaced over time by the emergence of Personal Knowledge Banks, which give access, ownership, management and control of personal data back to the individual, according to personal records management specialists Paoga.

"Consumer organisations use CRM software to 'know you better' so that they can anticipate your needs and target their sales efforts to ensure that you buy from them," said Graham Sadd, CEO of PAOGA. "However, even though these companies are doing their best to focus on you, their customer, you are not solely focused on them. Letting individuals control and manage the access to their own data is the only way large organisations will ever be able to truly target and effectively sell to them."

Sadd argues that corporate disillusionment and high failure rates of CRM projects have led many companies to question their return on investment in expensive data marts and complex CRM software.

But he adds that consumer data can never be captured 100 per cent no matter how extensive the database or how much it is enriched with third party data sources or modelling techniques. This is because the only entity truly capable of delivering a single customer view is the customer himself, which PAOGA believes is the fatal flaw of consumer CRM systems.

Furthermore, less responsible organisations 'sell' their CRM data to all sorts of people who may or may not be discerning with an individual's personal details. Worse, inaccurate and out of date records can pass from hand to hand and result, for example, in an application for a loan being rejected.

"Individuals should have the ability to transact with an organisation and then walk away, effectively ‘slamming the door’ if they no longer wish to buy from them," added Sadd. "Instead of marketing companies distributing an individual’s information to numerous vendors and organizations with no means of tracking and maintaining it, Personal Knowledge Banks provide individuals with their own database where they maintain their current personal details in one place."

Paoga sees Personal Knowledge Banks extending beyond traditional consumer boundaries over time with individuals taking responsibility for their Medical Records, reducing costs for the NHS and joining up all of their different legacy systems. Similarly, third parties can provide independent verification and certification of sensitive data which individuals cannot change.

Replies (5)

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By peteking
05th May 2005 19:50

CRM is a tactical tool, this article shows it up for exactly that.

We all say focus should be on the customer, but this made be realise we focus on the customer for our own ends, not for the ends of the customer. Also the reason CRM fails is because context changes depending on 'mood' and so even if we can capture the customer information in totallity how can we capture the 'mood' and how that modifies contextual shifts.

All the great customer focussed people I ever had the joy to work with, have taken the time to actualyl be a customer and feel what that really means.

As for the death of CRM. Well knowledge systems still does not confer intelligence, but its a step further on.

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By ICStone
06th May 2005 15:16

It seems that Paoga don't really understand the main drivers behind CRM in the corporate world, so they are justifying their comments about Personal Knowledge Banks by confining them to consumer data.

CRM in the comsumer market is about profiling - do they (Paoga) really believe people - all with computer knowledge and access, are seriously going to run their own personal data for a raft of quasi government and commercial users to delve into at will! All 44million of us of buying age. I don't think so.

CRM, however, in the corporate world (B2B) will continue to expand as not only ROI, but also payback and IRR will be better understood by software house salemen to help make their business case. These people will also be made more accountable for their promises by clients, who will be able to monitor more effectively CRM specifics on their bottom line.

It has taken 15 years since we first acknowledged that there was a horizontal market called CRM. In the early days this was merely called "Sales & Marketing Systems" by those of us who had the vision to put the effort into getting the products to market. Since then the big software houses have chased the niche market boys for the large corporates. Microsoft, like IBM in the early days of PCs - joining two years after the smaller innovators at the time, are now in the CRM market with the lower middle corporates, as well as the large ones, as targets. They will, no doubt, sell off their interests in it ( like IBM sold off their PC business), when another flavour of application takes over. Until then be prepared for a major step increase in CRM successes over the next 3 years.

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By AnonymousUser
11th May 2005 12:24

A good knowledge of customers is a key factor in the success of CRM. Surely any improvement on the process of collecting and updating customers' information could only lead to better management of the firm's relationship with its customers!

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By lordram
14th Dec 2005 18:03

The consumer marketplace has historically been architected to concentrate all goods and services in one central place where all consumers will come to buy. Technology has reached a point where it allows this architecture to be turned on its head. It allows each individual to concentrate his/her profile and preferences in one location and control its access by vendors of goods and services. You might call it a marketplace of ONE. An article in CRM Guru "The Future of CRM" a few months ago speaks essentially the same language.
The Intermediary which builds the platform that enables the individual consumer to aggregate her information as well as permits them to control its commercial access to their advantage - and which earns her trust - imagine its position in the marketplace. We are building just such an intermediary. Lets see if it works!

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By pwiscombe
06th May 2005 17:36

CRM is a name for a concept that's been around for a long time and will be around for a long time to come. All CRM does, as have other terms before it, is try to define how business can best relate to customers. So it doesn't matter if 'CRM' dies now or in 50 years because the concept will live on under yet another name. So call it whatever you want!!

But what is the concept?

Man has been doing CRM since he first started trading, because it comes naturally when one human being is sat in front of another and begins paying attention to the needs of the person opposite, e.g. the village butcher and the relationships he creates with his customers.

Our problems came when we replaced the village butcher with an organisation. People can't have a relationship with an 'organisation' because it is a concept, an illusion. In reality it is a collection of people organised (hence the term organisation!) by an agreed set of rules, into trying to behave as a cohesive whole. The problem is that the 'organisation' wants the customer to relate to it ('it' being the range of products and services provided under a banner) but customers can't because people can only relate to something real and so the oganisation has to try and behave like a single person when it relates to a customer. Hence the concept of CRM.

CRM systems support CRM thinking and behaviour. For an organisation to benefit from the type of relationship the local butcher has with his customers, the individuals in that organisation need to think and work as a cohesive whole - they need to become the body components of the butcher. A CRM system is nothing more than that part of the butchers brain that stores and shares information collected by the various parts of the body.

In the same way the butcher will never be able to decide what the customer wants before the customer has himself decided, so a CRM system will be limited in the information it can provide and thus the organisation will forever be one step behind the customer. Fact.

CRM is about managing relationships with customers. Its about respecting your customers. Why? In order to give them what they want as best we are able and with the limitations that will forever be with us. Why? Because we want to be around to do it again tomorrow. No customers = no employees = no company (note that share holders aren't in the equation!). CRM reduces the odds of losing the customer, nothing more.

So the rule is, see CRM for what it is and don't make it more than it is. It is a concept based on emulating simple, balanced, natural human behaviour and values. By definition it cannot replace the butcher. The successful CRM implementations will be those where the organisation gets as close as is organisationally possible to behaving like the butcher, i.e. its people in organisations that make or break CRM projects, not the software.

CRM is dead, long live CRM!

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