CRM is Not Software

Yeah, I know, you've heard it before. Probably more than 90% of the sales and marketing people reading this post already know what I'm going to say — my concern is for the 10% who, at any given point in time, lose sight of what CRM is… and isn't.

Blame it on aggressive marketing by certain CRM solutions vendors, but there is always a percentage of sales and marketing people (especially the "noobs") who fall for the misconception that CRM is something that was created by software developers to address a specific set of business challenges. It's a dangerous misconception — and one which is easy to slip into — because it can potentially have the effect of stifling innovation in marketing and sales.

I am a firm believer that the more we automate business processes, it weakens our resolve to try new approaches and innovate new business models. That is to say, the more processes we automate, the less need there is to employ critical problem solving skills and out of the box thinking. If every core process of your customer relations is automated and never second-guessed… well, I think we can all agree that there are dangers in that approach. Yet so many organizations today are depending on software and systems to provide them with solutions to complex, "people-centric" problems.

I profess that as soon as an organization starts allowing its CRM system to serve as the roadmap for its sales and marketing strategy, it has already lost its edge. As any sales or marketing professional will tell you, the goal is to continuously develop and refine your CRM strategy, and let the software manage the processes for you.

This is why so many CRM software vendors offer flexible "one-size-fits-all" platforms delivering every possible feature and capability. While they each have their "niches," some go to great lengths to demonstrate how their solutions are anything but "cookie cutter," and are designed to meet the needs of organizations operating in a wide range of industries and verticals, and with a vast array of different sales and marketing models. They eschew that their systems give organizations the freedom to pursue just about any sales strategy and/or channel mix imaginable — but more importantly that the system can expand and evolve as the company does.

At the same time CRM software is — without question — essential for facilitating the implementation of a CRM strategy, especially today, so I would never be so naive as to say a sales organization can do without it. The problem is that CRM systems have become so "mission critical" that organizations are sometimes under the illusion that they could never, EVER organize or synchronize the sales and marketing functions without them.

I bring this up not to bore you with the self-evident, but because I was at a local bar last week where I overheard two young people talking about the new sales positions they just landed. They were comparing the CRM systems of their respective organizations — I believe one said his firm is using Microsoft Dynamics CRM while the other said his firm is using Salesforce — but what was surprising was hearing how they were referring to the software — not the processes — as "CRM." As if CRM was something that could not exist without software. They were completely engrossed in a discussion about the complexity of the strategies for customer emails and newsletters, social media, automated lead generation and analytics.

I introduced myself to these two "20-somethings" and chatted with them for a bit — but I couldn't help but admonish them for referring to CRM as "software." I then offered my "Grog" anecdote, which serves to illustrate the simplicity of the concept: "Grog," you see, lived in a pre-modern society and was one of the early innovators of Customer Relationship Management. He and his family harvested, processed and sold bushels of grain to the local community.

"Grog" and Co. had a great thing going — residents of the community loved his product — in fact, it practically sold itself. But it wasn't long before his neighbor, "Crog," launched his own grain business, which soon came to compete against Grog's.

Soon Grog found himself losing customers to Crog, even though he had a product that was superior to Crog's. What was the deal?

One day, Grog was doing business the open air market when saw one of his former customers leaving Crog's stand with two bushels of grain. So he asked the customer why he took his business elsewhere. "Because Crog separates my order into two bushels, making it easier to carry," was his reply, pointing to his bad foot.

That was when Grog had his "Eureka!" moment. He had a ledger which he kept on the stone tablet in his mud hut showing which customers had paid him and which had not. What if he used that same stone tablet to keep track of each of his customer's wants and needs? Then he would be able to deliver better (dare I say personalized?) customer service.

Grog told Crog that he, too, would be willing to divide the order of grain into two bushels, to make it easier to carry — to which Crog said "great, I'll stop by your stand the next week."

Grog went back to his mud hut and immediately made a notation that Crog likes his grain divided into two bushels. The following week, Crog returned to purchase some grain, and was thrilled that Grog was willing to accommodate him.

Being the smart businessman that he was, Grog started asking ALL his customers if there was anything he could be doing to serve them better. Each time a customer had a problem, complaint — or even a compliment — Grog added it to the ledger.

In fairness, the two "20-somethings" at the bar knew what I was talking about before I even finished the story (and yes, they actually hung around for it, which surprised me) — one of them interjected that he learned the same thing during his business classes at an Ivy League school. The other guy seemed genuinely grateful for the perspective. "I never really thought of it being that simple," he said.

"Of course not," I replied. "That's because CRM in today's world is ANYTHING but simple — especially with the advent of social media and Web 2.0."

I also emphasized that the definition of CRM is wide open to interpretation — that there is no single "industry standard" — that it is really a philosophy and corresponding set of best practices for how an organization interacts with its customers.

What I found interesting was that both of these sales reps had been through training at their respective organizations. Did management just toss them access to the CRM system, tell them what to do, but fail to explain what CRM really is? I think both probably could've benefitted from a little "CRM Basics Refresher Course."

And it made me wonder… when it comes to CRM, how many others out there are not seeing the forest for the trees?

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