What do customer relationship management (CRM) systems fail to measure?
SHOW ME THE DATA
With a nod to the now-infamous one liner, “Show me the money!” today’s mandate for greater accountability boils down to data—good, clean, accessible data.
The figure below depicts an important but limited role of customer relationship management (CRM) systems in providing process accountability of marketing.
CRM systems do a great job collecting data from sales people and call centers.
Advanced CRM system screen and summarize interaction with outbound newsletters, inbound customer emails, Website registrations, and some point-of-sale systems.
All CRM systems fail, however, to provide meaningful insight beyond the basic facts of who’s a customer, what that customer bought, and how to bombard them with newsletters, catalogs, and direct mail.
The combination of compiled databases, business intelligence applications, and CRM begin to provide more comprehensive insights customers, profitability, and under-served needs.
However, CRM systems do not have the capabilities to gather data from potential customers early in the brand value creation process. This includes data about a consumer’s interaction with the brand, consumption criteria and motivations, efficiency and effectiveness in how a firm facilitates the buying process, or the influence and role of intermediaries and brand advocates in consumer satisfaction and loyalty.
In short, CRM provides a useful but limited view into the customer development process.
BRAND VALUE CREATION PROCESS
The figure above also depicts a holistic view of the customer development process, calling attention to the importance of four critical transition areas—touchpoints and data sources that can add a new dimension to CRM data.
A preemptive positioning suggests that a new offering should strive to change the rules of the market.
An optimized buying process emerges from how customers buy. Often this means an innovation at point of sale and may include a new packaging or pricing model.
Best-practice techniques and solution partners call attention to the application of what successful customers have learned about how best to use a product. In some cases, this represents how satisfied customers share what they have learned from other customers
Customer communities represent groups of people with the same worldview. Consumer electronics, automobiles, chat, and text messaging mobile phones all have user groups that constitute a community of practice and a source of advocacy. Luxury goods, exotic fashion, and collectors of all kinds form peerages, groups that use aesthetic criteria to determine membership and “coolness.”
BRAND INTERACTION DATA (BID)
Engagement expands the scope of data collection into the most valuable creation process of all, the collection of what we call brand interaction data (BID).
Engagement systems collect and analyze brand interaction data produced by consumers as they interact with the brand as various touchpoints, starting with prelaunch activities and extending through loyalty and advocacy. NOTE: Many of the initial brand interactions will occur in Facebook and blogs.
Standard statistical and data modeling can easily transform brand interaction data into powerful insights about what element or practice of a brand value creation process worked as intended.
Engagement systems add a new dimension to CRM. They transform consumer activities and interactions into truthful information—analytic insights into product and brand storytelling lifecycles.
Lacking brand interaction data, CRM can only provide a narrow view into market dynamics.