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CRM is not about data

I am seeing many people talking about the virtues of big data and what this will do from a customer relationship management point of view. While I agree that the opportunity to dig deeper into your customer and their habits will be greatly enhanced, I fundamentally disagree with the idea that CRM is about the data.
It's about relationship and planning

The sooner organisations realise this, the better. I hear all of the pundits out there rising in unison saying that the data will give you the relationship. This is simply not true. Your organisation can only build relationship through active engagement. This does not have to be a one to one approach, it does however have to be an engaged approach.

As with your basic product life-cycle process, your customer relationship management must consider the life-stages in which your customer is. Beyond the data facts that I am in the 40-49 bracket, have two kids, two cars, three dogs (your data does not tell you this), where exactly am I in my life stages. Statistically you could lump me with many other people in similar places based on this data, and spam me with offers you think I may like, or you could actually try to form a relationship with me.

People are not One's and Zero's

The biggest issue facing customer facing businesses is the threat of reducing their consumers to one's and zero's. Data, big or otherwise, is simply a combination of ones and zeros and this fact should never be overlooked. If you treat me as a statistic, then I can and never will, become engaged with your brand. I will always operate within your statistical limitations. This means, I will take from you those items that mean something to me, as opposed to you advising how I can develop based on what you have to offer.

People buy from people

Many organisations are currently overlooking this fact. I am not sure whether this is because of the cost of employing people to sell, or whether it is because they feel their sales resource does not deliver. The truth though is that as you remove people from the equation, you only enhance the commoditisation process. We all know the dangers of commoditisation, or do we?

Final thought

Data certainly can provide insight on how you could interact with your customer, but should never be exclusively relied to decide on how you should engage. You need to find ways to engage actively with your consumers to ensure that your business is relevant and what you have to offer is worthwhile. You may just drop an offering because it is not making money, when in fact you could be charging more but only be selling to a select few.

Do you have a properly defined CRM approach or are your data mining your consumers and products to a pure commodity state?

Posted on 25 Feb 2013 15:02

About Mike Taberner

Mike Taberner is a Partner and Director at Brandesign, a brand development company. He consults on brand development and marketing channels to be used by clients. He is responsible for the strategy as well as the media portfolios. Contact details: Twitter @MikeTaberner
Brad Hodson
You had me worried there for a second when I read that title. I was gearing up to write a nice rebuttal, but after reading your opening lines, I realized that you're right on the money and a title like this is indeed necessary in this CRM landscape.

CRM is almost lost right now. We've forgotten why we needed it other than "this guy says I should get a CRM... so I did." I chalk this up completely to the CRM developers and vendors. If they understood the real purpose better and were able to better convey that to their customers, we would have a much more efficient work place and much higher CRM adoption rate.

But we don't. All we have is confusion, and only a few vendors (like JobNimbus - stick out amongst all the noise as understanding that CRM is about making the relationship with the customer the focal point of any transaction.

You're totally right and we need to hear more of it to turn things around for the better.
Posted on 28 Feb 2013 05:49
Mike Taberner
I may have been a little guilty of "link baiting" with the title, but the intent was to get people thinking. Commissioning a data cleansing process does not equal CRM. Mining your data does not CRM. CRM can use data as a tool, but it is not possible the other way around.
Posted on 28 Feb 2013 14:01
Andrew Heriot
The author is quite right to point out that CRM is not just about data. It cannot exist without it, but it really relies on how you use it rather than whether you have it. I like to think of CRM as an activity – it is an ongoing process that involves listening to and engaging with your customers. Knowledge base software, for example, allows for a two-way relationship between a business and its customers, with information added by customer service representatives that takes previous interactions into account. This means that, crucially, you can show your customers that you have learnt from past experiences and that you are using your data wisely to inform and enhance your relationships with them.

Andrew Heriot, Head of Services, EMEA, Maximizer Software
Posted on 27 Feb 2013 14:44
Mike Taberner
I think that the "conversation" is the key and whatever tool you use to accomplish this, then that it fine. Organisations must though actively engage. This may "cost" a little more in the short term, but the long run benefit will be felt in the bottom-line
Posted on 28 Feb 2013 13:58
Mike Taberner
Thanks for the comment. And yes I do think that the data is important. My frustration simply stems from companies who think that they can tick off the CRM box, because they have commissioned a data company to provide data.
Posted on 27 Feb 2013 14:12
Dr. Antony Michail

You raise various excellent points in your article! CRM, as you mention, is about relationships! SA companies must realise that CRM is not about giving something to a customer - but must give something specific to the customer. Something that has value to their customers and not them.

Yet, from my own experience, a company to reach that stage to build such relationships need to have an up-to-date database with all relevant times. I think you will agree with me, the numerous times that companies have not thought fully the whole CRM process & strategy and end up after few months attempting to add more data to existing customer databases. A good database with all relevant data and variables can help companies shape their existing but also future CRM strategy that will add value to both companies and consumers.

Thanks again for your useful article.

Posted on 26 Feb 2013 14:08
Dr. Antony Michail
Please note the following correction:

2nd paragraph, 3rd line please replace the word "times" with "data" (before the dot)
Posted on 26 Feb 2013 14:10