Managing customer relationships and experiences in the digital age is more complex and challenging than ever before – and also more vital.
“The vast amount of engagement channels, the billions of smart devices and changing customer demands urge the need for companies to make the customer the centre of their strategy,” notes Brian Manusama, research director for CRM at Gartner, ahead of this year’s Customer Strategies & Technologies Summit in London.
Certainly there has been some progress in this regard over the last two decades. Back in the late 1990s, customer relationship management (CRM) was principally a technology project with, ironically, little benefit to the customer. But that has begun to change and in recent years a growing number of organisations have appointed customer experience leaders and chief customer officers (CCOs) to take drive customer-centric strategies forward.
However, even with an executive level figure taking ownership of customer strategies, many organisations are hitting stumbling blocks when it comes to developing the strategy across the entire enterprise. This is a problem that needs to be addressed, because with today’s customer being increasingly channel-agnostic, companies need to look beyond departmental projects in sales, marketing, customer service and digital, to develop enterprise-wide CRM and customer experience initiatives. Those that can achieve this coordinated, seamless approach will drive up customer engagement and differentiate their business.
Yet this is proving particularly difficult. Partly this is because businesses are hamstrung by historic challenges such as siloed structures and the inherent difficulties of organisational change, as well as difficulties in obtaining a 360 degree customer view. But Manusama believes that a growing problem is the difficulty of balancing time and resources between the ongoing enterprise-wide CRM programme and more reactive, innovative departmental projects.
“Companies can't afford to let their CRM projects ‘run on autopilot’ or operate in silos,” he explains. “Too much is changing, too fast. Companies need to balance enterprise-wide needs with departmental needs for innovation.
“On the one hand, IT needs to leverage technologies across multiple departments to avoid cost duplication; the organisation cannot afford to support and sustain 100 different CRM applications, because the costs of keeping them running effectively will limit its ability to respond rapidly to the new opportunities. On the other hand, IT is being asked to innovate, and each department can't be expected to move at the pace of the slowest.”
Indeed, organisations are already wrestling with the likes of mobile applications and social media, while the Internet of Things (IoT) is expected to demand significant attention in the coming years.
Manusama continues: “Digital is a sharp poke in the ribs for all organisations, demanding a strategic and transformational response. Digital remains dynamic as business models emerge, technology evolves and markets begin to establish winners and losers. These changes create chaos and uncertainty for those designing and operating the business and striving to balance business stability with imminent innovation. Those responsible for sales, marketing, product/service management, manufacturing and customer service must prepare to incorporate digital innovations into the way they operate.”
So how can businesses successfully juggle the demands of digital innovation with the need to develop enterprise-wide CRM? According to Manusama, bimodal CRM strategies could hold the key.
Bimodal strategies marry more predictable evolutions of products/technologies with the new and innovative. As the name suggests, bimodal strategies consist of two elements:
- Mode 1 focuses on predictability and has a goal of stability. It is best used where requirements are well-understood in advance, and can be identified by a process of analysis. It includes the necessary investment in renovating and opening up the legacy environment.
- Mode 2, meanwhile, is exploratory. In this case, the requirements are not well-understood in advance. Mode 2 is best-suited for areas where an organisation cannot make an accurate, detailed, predefined plan because not enough is known about the area. Mode 2 efforts don't presume to predict the future, but allow the future to reveal itself in small pieces. This work often begins with a hypothesis that is proven, disproven or evolves during a process typically involving short iterations/projects.
“Bimodal is a collection of principles, capabilities, methods, behaviors and approaches that enable an organisation to differentiate the normal from the abnormal; the evolution from the revolution; the continual improvement from the disruptive innovation — and manage them differently but coherently,” adds Manusama. “It's about the business, not IT, even if in some cases bimodal starts within IT.”
Indeed, a CRM bimodal capability can emerge from any part of the organisation. But the key thing is that regardless of where it starts, it will eventually affect the entire organisation.
So how can businesses embed CRM bimodal capability?
Manusama explains that although it can start in any part of the business, as it scales up, it must be led as an integrated effort in order for it to gain traction and momentum.
“The leadership team in most enterprises wants to identify, understand and explore the most compelling technology-enabled opportunities from mobile through analytics, smart machines to the Internet of Things,” he says. “This exploration requires a willingness to take on new risks, and manage those risks and associated uncertainties in ways that differ from the traditional approach. The leadership team must invest in a capability that allows it to continue to evolve what it is doing, while innovating new products, services and business models.
“The CIO and the IT organisation are often at the front of this wave of investment and exploration in technology-enabled business innovation, since technology is part of nearly every growth and innovation-led transformation project underway. They must provide capabilities and services to support this massive change. If they don't or are slow to do so, the business stakeholders will do it anyway. Indeed, the spiraling growth of ‘shadow IT’ being experienced by most enterprises is testament to that. IT organisations must adapt to this reality. They must do it quickly, and bimodal is a significant part of the answer.”
Manusama is keen to emphasise that bimodal is distinct from agile CRM software development, though agile can be the ideal platform for bimodal capability.
“Agile is a great place to start (along with similar iterative methods for software development). It is an essential capability for any bimodal organisation,” he explains. “Agile's principles pervade the whole bimodal approach.
“Organisations will rightly apply agile to Mode 1 initiatives as well. Any organisation that suffers project failures that are due to ‘bad requirements’, or where stakeholders don't appear to know what they want, should be considering iterative approaches to developing solutions, whether in Mode 1 or Mode 2. What makes Mode 2 distinctive is its focus on innovating, exploring and managing uncertainties.
“Bimodal is much more than agile and much more than enterprise agile. It includes a range of capabilities all focused on exploring the future in small chunks and reacting to what is discovered. Capabilities developed in Mode 2 include, but are not limited to, agile, DevOps, adaptive sourcing, lean startup practices, a focus on minimum viable product, employee and team empowerment, differentiated funding, and performance management and customer experience. For leadership teams familiar with lean, bimodal will feel more comfortable, because many of the capabilities and principles that underpin bimodal have their roots there.”
Bimodal CRM strategies will be examined in detail at Gartner’s Customer Strategies & Technologies Summit on May 25/26 in London.
About Neil Davey
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 15 years, including Internet Works, CXO magazine and Business Management. He joined Sift Media in 2007.