CRM is not about “managing” customers (anymore…)

CRM 2.0 is the move away from the transaction based “management” of customers (one way pushing marketing information) towards a real two way dialogue that is based on trust on both sides. To discover the full benefits of a changing customer behavior that is arising with new technologies, it is necessary for companies to open up, share information and start listening to customers instead of just pushing marketing messages out into the market. Engaging in such a meaningful conversation will help to discover new ideas and align products and services with the customer demand. It further leverages the willingness of users to contribute to the development and enhancement of products, services or ideas.

It has to be kept in mind that CRM 2.0 is not just a technology or software tool but consists of several components that all need to be considered and eventually implemented.

The underlying technology is only a minor matter but has to support the shown elements. Open Source software and Software as a Service (SaaS) can help to reduce the cost for the IT infrastructure in order to set the clear focus on the strategically more important parts like the required change in corporate culture.

Technorati Tags: CRM 2.0,Social CRM

What is a “Conversation” ?

When it comes to Social CRM or CRM 2.0, we often talk about establishing a conversation with customers. I think we all agree that pushing marketing data to a (static) Corporate Website or waiting for customers to call in when they have problems with the products is far away from having a conversation with them. But how can we define and establish such a conversation?

Creating a group on XING / LinkedIn, signing up as a corporation to Facebook or having an ‘official’ MySpace page does not automatically create efficient conversations with customers or prospects.

First step to get into a meaningful conversation with customers is a tough one, as it requires a company to share information that might normally be treated as confidential. This insight and the possibility to allow feedback from customers and prospects (using Web 2.0 tools) is the starting point of a real two-way conversation.

Of course the feedback has to be read and analyzed by someone in order to answer and get further feedback. This leads to a dialogue (and true collaboration) that allows to take action to improve a product or create new products and services.
To close the loop, the information about the new or improved products have to be shared again to allow new feedback and so on…

The Enterprise 2.0 paradigm can help creating the mindset within the corporation and will allow to create a relationship with customers that is worth being called so!

Technorati Tags: CRM 2.0,Meaningful Conversation,Two-way CRM

CRM 1.0 vs. CRM 2.0

• Starts with a (ready developed) product
  
• Strong Focus on SFA
  
• Gathers information about the customer
  
• Where is the Customer Relation?
  
• Where is the value (+experience) for customers?
  
• Process focused (Inside-Out view)

• Provide content to engage consumers in a conversation
  
• Collaborate on products and services
  
• Listen to users and customers
  
• The consumer engagement will lead to loyal customers
  
• This will create a Meaningful Customer Relationship that brings value to both sides!

Technorati Tags: CRM 2.0, process flow, loyal customers, meaningful customer relationship

The Customer changes... so do companies?

I know this youtube video is pretty old, but it still perfectly visualizes what happens if companies do not change and adopt the new Web 2.0 world...

Technorati Tags: CRM 2.0, CRM 2.0 Strategy, Customer, Change

War of the Worlds...

Tomas Kohl has outlined a somewhat hostile view on the composition of CRM 2.0 :)


He is probably right that there is nothing like harmony in the interaction of these components. And as Paul Greenberg stated, VRM is a kind of opposition to CRM, which means the customer will follow nothing but his own interests in such a context.

BUT, from a company perspective, wouldn't it be possible to leverage VRM to build a CRM 2.0 strategy?

Could this be the differentiator for a business if it deals with VRM (and all the other Web 2.0 inventions) rather than fighting it (or seeing it as a threat)?

I am sure that there is a lot of tension and potential conflicts associated in this interaction, but I think the company that can deal with it the best will win. And even if the driving forces for a business are always profits (and that's how it should be), a proper CRM 2.0 strategy has to place the customer much more centric as this is the case currently.

After reading Tomas' view on things and spending more thoughts on it, I think I will need to revise my simple diagram a little. It does not reflect the reality as it should. Thanks for the feedback here!

Technorati Tags: CRM 2.0, CRM, SCM, PRM, VRM

Advisory Relationship

Charles' comment about the differences in the business - customer relationship made me think about the changes that CRM 2.0 will imply in this area:
"CRM 1.0 assumes a “transaction relationship” with the customers. Trust is not necessarily important, just ”feeds and speeds,” so to speak. Does this not imply an advisory relationship? What kind of relationship does CRM 2.0 imply? Is this just a little change or is it a qualitative shift in relationships? Is trust important? In other words, there are a lot of subtitles involved in this 1.0 to 2.0 shift. What are they?"

If I follow the idea of an active customer that is willing to provide data and information about himself and takes part in what I called a 'two way CRM', it is absolutely necessary to create a high level of trust between both parties. Otherwise the customer will not be willing to provide all that data - he will see no value in doing so.
In the past (actually this is still the standard for 95% of the market) CRM was always a one way - or advisory - relationship, meaning that the businesses tried to gather as much data as they could of their customers and made them available wherever they could. That's what they called a 360° view of the customer and the goal was providing this information with some intelligence (e.g. what product can I up/cross sell to this customer) in real time on all available channels.
Although this still desirable, it will not be enough in the future to differentiate from competition and create a unique customer experience - which will lead to loyal customers.

CRM 2.0 really requires a much stronger relationship to customers, allowing them to take an active part in decisions and get more influence. A good example is the internet community that grouped together and bought Ebbsfleet Utd., a football club that is now actively managed by the members which take part in all decisions (even the formation during a game or player changes). How loyal would you be to a product where you are involved this deep?

CRM 2.0 should really be called "Customer Relationship Model 2.0" as the term Management suggests that the business 'manages' customers, which is not the case anymore...