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August 2, 1999

Customer-Relationship Management:
Stick With The Fundamentals

Bob Evans ustomer-relationship management died last month. It was two years old. The cause of death is still being investigated, but sources close to the coroner's office say a report from Forrester Research is the most likely suspect. Investigators, speaking on the condition of anonymity, have unearthed a strong motive: In the very same Forrester report that deep-sixes CRM, the research firm also announces its very own replacement category called "eRM," or "eRelationship Management." (No, I'm not making this up--I don't have enough E-magination for that.)

Lord knows, the world is rushing to change everything to fit the new E-conomy model, and while some of those efforts are highly credible and valuable, others are merely, well, E-xcessive. And at the same time, I speculated several weeks ago in this space about whether the specific term "customer-relationship management"--the term itself, not the concept--would last because in the new world of E-business, customers are the ones doing the managing rather than the ones who are being managed or whose relationships are being managed.

But I didn't think that CRM would actually go the disappearing route of "network computers" so quickly and precipitously. (Anybody remember the Net PC?)

I mean, look at this CRM thing. It came to prominence as an externally focused concept expected to bring some market meaning and clarity to the internal orientation of "sales-force automation." Really now, is the point to automate the sales team or to help team members give customers more knowledge, choice, and opportunity? So CRM offered the promise of a customer-centric view into an extremely important area--but now, barely a couple of years later, we're told it's dead.

So says the Forrester report, called The Demise Of CRM, in which the firm goes on to posit that its new model--eRM--will move to the fore because it "synchronizes relationships." Now, I have a lot of respect for the people at Forrester. But on this one, I don't know. I mean, while we're all undeniably caught up in some massive changes that are reshaping business relationships in many ways, I think one element that will endure is that there will always be people and companies who buy stuff, and they will be called "customers." And the sellers of that stuff will want to keep those customers happy and satisfied and coming back, and so they'll want to have a "relationship" with those buyers. And since one of the turmoil-making, ground-shaking changes going on right now is the shift from "customer satisfaction" to "customer loyalty" and since the latter requires that companies know more about those customers and actively seek to be ever-ready to anticipate the needs and desires of those customers, then a certain degree of "management" of those valuable relationships is not just desirable but essential. But the managing of that relationship must be predicated on the needs and desires of the customer and not on the self-centered--and ultimately self-defeating--idea of what the seller happens to have in stock.

Those fundamentals, I think, will transcend even the craziest flips and gyrations of today's turbulent world of IT-driven business. And that's why I think Forrester has missed the mark with its new theory and its new model, which, by the way, is so cute it's almost annoying. So for people who manage technology in business, where do we draw the line between vigorous new ideas that will help us not just survive but indeed thrive in the new world of E-business and going overboard with New Age terms and concepts that sparkle and shine but don't necessarily pack much weight? In the rush to transform our companies, our thinking, and even our relationships, are we getting so caught up in hype that we're overlooking fundamental business concepts--chief among them being a customer-centric focus--while chasing elusive and ephemeral notions?

When confronting questions like this, it's often good to go back to the classics to find some underlying truths by which to set a course. And in that spirit, I return to the classic episode of The Three Stooges wherein the knuckleheads decide to get rich by inventing something brand new and dazzling, and then corner the market for it. So far, so good. But their brainstorm was a fountain pen that could write under whipped cream--to be sure, something unique, distinctive, and without competition, but also something without much value to anybody. And today, as we devote enormous attention to building loyalty among customers by giving them what they want and need in the manner they want it and on the schedule they desire, it's our challenge to sift through the puffery, blather, and FUD, and bear in mind that not everything invented before 1999 is obsolete--and that putting an "E-" in front of something doesn't make it right.

And as for CRM, don't believe the obituaries--reports of its demise are indeed greatly exaggerated.

Bob Evans
Editor-in-Chief
bevans@cmp.com

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