Monday, January 5, 2009

CRM 2.0 - The end of the Transaction-Model?

While 'traditional' CRM heavily counts on fixed processes and transactions, CRM 2.0 takes the discussion one level higher and makes the customer relationship a strategy rather an IT (or business~) process. But what about the transactions? What happens to the way money flows from consumers to producers?

962544_business_woman Obviously there will still be transactions in the future and customers will pay for products and services (otherwise we need to watch out for an alternative to money...) BUT the whole system will not be based on a transaction model anymore.

There is still the need to automate business processes (like Ordering, Fulfillment, etc.) but these processes need to become more flexible and companies need to understand that the customer relationship does not end after they bought something or paid for it. CRM 2.0 is a strategy and as such part of a companies vision, not their execution. Many corporations still struggle to automate their business processes in our days and I am afraid that CRM 2.0 (being a strategy) cannot help here a lot. A proper architecture like SOA (Web Services, ESB, etc.) will make the IT agile and stable enough to cope with the high demands of the new world. On that end, CRM 2.0 extends traditional CRM and requires the basic infrastructure to run smoothly - which is currently not always the case, unfortunately.

The tough part will be the ROI measurement of a CRM 2.0 strategy. There will be no associated revenue stream(s) with each single investment anymore. Advocate customers can influence many others and create a large number of leads just by spreading the word. The identification of these individuals (to adapt their customer value) will be a tricky thing as the information will be outside the CRM database and probably no easy Google search. The metrics to calculate ROI will need to change to include the fact that people can contribute in various different ways to promote products or build/enhance them.

Not investing in such customers will not only blot out the revenue and new leads, but might have the opposite effect (kind of the inverse Streisand-Effect - if there is something like this). Negative publicity can be really costly to fight against.


  1. Indeed crm is an important tool to every organization.

    There is a interesting open source CRM on the market, i believed is called SugarCRM. At least is what is written in this site:


    keep up the good work :)

  2. No mention of SaaS as a CRM delivery mechanism...

  3. SaaS (and Cloud Computing in the future) is indeed a very important development, but irrelevant for CRM 2.0 - although this sounds ignorant in the first place...

    SaaS is revolutionizing the way software is sold, but it does not help creating a good CRM (Customer Relationship Model). And BTW, SaaS has its limitations and issues - even if SFDC does not like to hear that ;)
    What about security and integration to existing (e.g. host~) applications? What about quality of service and performance?

    SaaS will allow smaller companies and startups to deliver extraordinary customer serice, though! Helps 'em compete against the big ones and differentiate...

    BTW, we are using SFDC here at Progress Software and I tend to like it. Much better than the tool we both used (and sold) before :-D