The Shifting Balance of Power: When CRM becomes CMR

Many organisations aspire to be customer-centric, yet few have figured out the recipe for successfully transforming their business. It seems like it was just yesterday that companies were discovering the importance of implementing CRM technologies and strategies aimed at acquiring new customers, managing effectively customer interactions, selling more to current customers, analysing the effectiveness of marketing activities and providing better customer service. All in the name of building stronger, longer lasting business relationships. Well, today is a new day, and the customers now decide who they do business with, as well as how and when they will do so.

"CMR" – or "Customer Managed Relationships" started to be spoken about 2 years ago but still gets little airplay despite Web 2.0 gaining increased traction as a full-fledged platform fostering collaboration, participation and community building.

Companies will only achieve improved results in this “customer managed world” if marketers are quickly understanding and embracing this new concept, and are changing the way they define customer centricity accordingly. Implementing a CMR initiative means that the whole organisation actually understand that the customer is in control and is the one managing the relationship.

CMR is three things:

1. An ability to rethink and reshape your organisation and its knowledge for increased customer engagement,
2. Internet enabled management tools for true customer empowerment,
3. An ability to react to the information being generated and used by customers for an improved management of online reputation.

If executed correctly CMR generates three major benefits over CRM:

1. It is easier to implement since the customer is usually the one doing the complex stuff,
2. It creates lock in since customers having invested their data with your organisation may not move easily,
3. It allows your company to move faster than competition since a trusted relationship is being built with the customer.

Even if the CMR concept is becoming widely talked about and accepted into the business community, it is time to recognize that empowered customers are increasingly interested in making their own choices in how they interact with companies that they do business with. Customers prefer to have a choice over how marketers reach them, what products or services are marketed to them, and who markets to them.

The concept of CMR takes all of this into consideration by allowing companies to engage and involve their customers in order to create a truly collaborative customer experience that makes the customers feel as though they are an essential element in the entire business relationship. This new marketing and customer interaction paradigm truly puts the customer into the driver's seat and marketers should recognise that the customer relationship encompasses information-seeking as well as information-contributing behaviour.

CMR (… or shall I call it “CRM 2.0”?) is indeed about the collaborative customer experience. It is the convergence and integration of multiple data points which leverage customer interactions and Web 2.0 applications & services. It is a philosophy and strategy for collaboration with customers through the provision of tools, technologies, processes, culture, products and services … with a focus on providing enhanced customer experiences that will create appropriate value for all parties involved. That means that not only does the company need to provide the goods and services, but also the tools and culture to make the experience of that customer one of paramount and unparalleled value to that customer and thus to the company in return.

Companies are taking the first steps towards incorporating Web 2.0 applications into their marketing and CRM processes. Smart organisations start leveraging user groups, social networks, message boards, blogs and video sharing. They are engaging the customer via personal pages, RSS, social filters and making it on-demand through mobile web, mobile applications, SMS, podcasting, streaming video and so forth.

The decades-old CRM formulation of “People-Process-Technology to maximize relationships and provide seamless coordination between all customer-facing functions” is quickly being replaced by a strong focus around customer experience and the mapping of customer interactions. As customer marketing becomes more deeply involved in shaping customer experiences across multiple touch points, campaigns inherently become more sophisticated and complex. By implementing appropriate strategies and using best of breed CRM technologies as a foundation, marketers will be able to optimise virtually all these complex processes and interactions, enabling them to focus their resources on sales, understanding their customers, defining strategies, and delivering more creative customer approaches.

The organising foundation of CMR is to build high value relationships via applications and services that promote an ongoing dialogue, both online and offline. These principles create personal relationships that drive advocacy and continuous communication improvement as customers start to take ownership of the relationship. Corporations also achieve continuous improvement by embracing collaboration between all members of its customer ecosystem. The result of doing so is an improvement in the quality of product and service delivery, an upgrade of the customer experience and new classification within the enterprise’s value proposition. By understanding how to craft the collaborative customer experience and better engage the customer, next generation businesses will be able to increase profits while improving their marketing efficiency and customer satisfaction.

Comments

[Amanda]

I absolutely agree and think that this is a positive shift for businesses if web 2.0 technologies are leveraged properly. While there is a danger to customers pulling content and potentially self-diagnosing it's important for customers to feel they're apart of the decision-making, it's basic psychology. It's also a great opportunity to foster dialogues and build rapport. When it comes to the actual "tools" (web 2.0 technologies) businesses should use, I think it's important to look closely at the target audiences and perhaps verticals in question.

[Ro]

This is a great concept. Do you think there are applications out there, CRM or otherwise, that achieve CMR functionality?

It seems to me that it's hard enough for CRM applications to integrate properly with a basic CMS, let alone integrate with blogs, forums, and other usergen content sites.

I think maybe a savvy entrepreneur should start with the widget-friendly web 2.0 app (ie Wordpress) and build the CRM into it, rather than vice-versa, to achieve CMR.

[Marc]

I like your thoughts on "customer-managed relationships." It's true that CRM falls short of the true aim of most businesses, which is to create lasting relationships with customers. We need to remember that the real brand identity does not exist within the company walls, but instead lives in the minds of consumers. What they think of the brand is what it turns out to be; it's not what the corporation says at all.

I'm putting a link to this article on my blog (www.integratedviews.com). It's one of the best descriptions of this topic that I've seen in a while.

I must point out, though, that this concept has a name other than CMR; it's called "integrated marketing communications" (aka IMC). This concept encompasses all the points you've made about customer-managed relationships, and also includes other stakeholders (like investors, business partners, etc.).

I just discovered your blog today, and I wanted to let you know that I will be frequenting it to help keep me up to date on changes in marketing and technology!

[Jeff Doerr]

Development tools, applications, and platforms are available to assist companies with delivering customer-facing technology. Increasingly, marketers and C-level decision-makers alike are embracing that well concieved self service strategies enable their organizations to enhance brand loyalty while introducing organizational efficiencies. Furthermore, it creates sustainable competitive advantage in the marketplace.

Please send a note to: jeff.doerr@flextronics.com if you are interested in exploring proven solutions that expedite such a strategy.