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It’s Time to Return Meaning to CRM

Over the summer, I was trying to maintain a list of companies in the “CRM space.” As the list grew, so did the crushing realization that CRM has developed into such a buzzword that it has migrated into meaninglessness.

CRM stands for customer relationship management. Last I knew, this is the basic task of marketing. It’s what we do. We manage customers and prospects, for mutual fun and profit. Who among us does not want to form good relationships with our customers? Customers are so fickle. A better price, a better product or a better experience will turn their heads in a nanosecond. Clearly, holding on to a relationship with them requires careful management.

Just because CRM has been co-opted does not mean we should not keep the principles of CRM top of mind. But if we don’t agree on a definition, its meaning will get flattened into dust. So I will go out on a limb and propose that we put a fence around it.

What’s abundantly clear is that everyone today means something different by CRM. Some people mean customer service and call center integration into a Web-based marketing program. Some people mean a business philosophy that reorganizes the company around its customers. Some mean nothing more than mere personalization. Some mean marketing automation, others mean sales force automation, and yet others mean current customer marketing.

In years gone by, the prevailing meaning was current customer marketing. It was a focus on optimizing relationships with our inquirers and buyers, persuading them to buy more, stay longer, refer a friend and otherwise become more profitable to us. It involved segmentation, so that unprofitable customers could be identified and sloughed off — preferably referred to the competition for them to lose money on. And it involved customer service, the engine of classic relationship management, where problems are resolved and valuable customer feedback is gathered.

In short, it was retention marketing, supported by database analysis and involving a series of communications, offers and transactions, with tracking, measurement, ongoing testing and excellent customer service. It required a single customer view, an appreciation of the central role of a customer in an organization’s life and a dogged focus on constant improvement and making that relationship as good as possible.

I think we got off track when new technologies arrived to help us automate these processes. Again, automation is a very good thing. But somehow we got sidetracked, confusing the technology horse with the marketing cart. Suddenly, everyone wanted a piece of the action, and the CRM bandwagon expanded to include just about every conceivable function in the marketing tool kit — even sales force automation, browse-to-buy conversion software and Web-based market research tools. It seems that anything Web-based with some connection to sales and marketing is slapped with the CRM label. It’s getting ridiculous.

It is time to pull back and get some clarity around CRM. It can’t be all things to all people. Let’s applaud the wonderful new tools available to enable it, but recognize that not every marketing automation tool is necessarily in the “CRM space.” I propose that CRM be defined, once and for all, as a combination of retention marketing and customer service.

As CRM has taken on buzzword status, it also has captured the imagination of some corporate big shots. Like its predecessors, excellence and total quality management, CRM is being talked about in companies at the highest levels. This is good, because the job of focusing on the customer does not come naturally to legacy systems, product/function organizations and political fiefdoms. To make the changes that allow customer relationship management to flourish, support is needed from the very top. So long live CRM. As long as it means something.

• Ruth P. Stevens consults with companies about customer acquisition and retention and teaches at New York University’s graduate program in direct marketing. Reach her at [email protected].

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