Why CRM Is the Wrong Answer to the Wrong Question

Are You Investing in the Right Stuff?

July 12, 2007

CRM applications do a lousy job of addressing the most strategic customer issues that every organization faces. If your organization is in the process of yet another round of CRM improvements, perhaps it’s time to take a fresh look at what your technology strategy really should be.


Customer relationship management applications are invariably designed from the inside out. They answer questions like:

  • How can we optimize our sales pipeline?
  • How can we sell more products to each customer?
  • How can we track customer support incidents to be sure that each one is resolved in a timely fashion?
  • How can we all get a complete (360-degree) picture of each customer' s past and present relationship with us?

Yet CRM applications actually do a lousy job of addressing the most strategic customer issues that every organization faces:

  • How can we make it easier for our customers to do business with us?
  • How can we help our customers achieve their objectives?
  • How can we make it easy for our partners to help our mutual customers achieve their objectives?

If your organization is in the process of yet another round of CRM improvements, perhaps it' s time to take a fresh look at what your technology strategy really should be. Instead of automating your internal processes, streamline your customers' activities. Start by making it easy for prospects and customers to do business with you by enabling them to self-serve across touch points (Web/phone/ATM-kiosk-POS). Grant customers access to your back-end applications using a services-oriented architecture with easy-to-navigate rich user interfaces that are appropriate to each channel and optimized for each customer scenario.

The Customer Lifecycle
 The Customer Lifecycle
Illustration 1. Customer portals should support customers through all the stages in their entire lifecycle for each product or service they buy and use. Think of customer portals as "outside in" CRM, or customer-managed relationships (CMR).

Partner Support for the Customer Lifecycle
 Partner Support for the Customer Lifecycle
Illustration 2. Partner portals should make it easy for partners to support customers throughout their lifecycles. Partner portals should include the ability for value-adding partners to support customers throughout their lifecycles. Some customers will want to control what information their partners can access.


Your prospects and customers are the first and most important end-users of any "customer" application. What do they care about? What do they want to be able to do? Here' s a sample list of "customer scenarios" that your applications should be designed to enable:


  • I want to understand what solutions will help me reach my goal.
  • I want to learn what' s possible, where the pitfalls are, and what trade-offs I' ll need to make.

Select & Evaluate:

  • I want to select the right product/service for my situation.
  • I want to try/evaluate it in my circumstances.
  • I want to know what other customers think. In fact, I want to know if there are others in my organization, family, or circle of friends/peers who are already using this product/service and if so, which one(s) they have and what they think about them.


  • I want to procure it at the best price available for my situation and know that I am paying fair market prices and receive the terms and conditions that are right for me/my company.
  • I want everything that I need to be successful in using/consuming this product to be available where and when we need it.


  • I want to consume/use this product/service in my context to meet my objectives.
  • I want to be alerted about similar or complementary products and services that are right for me.
  • I want to optimize my use/consumption of this product/service; so let me know what I could be doing differently or what others are doing that I might want to emulate.
  • I want to enhance or extend this product or service to do something more.
  • I want to share my accomplishments/knowledge with others.

Manage My Account and Our Relationship:

  • I want to see everything I' ve bought from you in the past as well as the status of everything I currently own or am eligible to receive. I want to see all of my contracts and service agreements.
  • I want to see all my bills, payments, and account information and I want to be able to categorize and organize that information in the ways that I need to do so.

Get Help (Pre-Sales & Post-Sales) re: Product or Business Issues:

  • If I run into trouble at any stage (pre-sales or post-sales), I want proactive help from someone who is knowledgeable about my context, my objectives and about the service/product I' m considering or using.
  • I want to see the status of all of my open and closed issues, know whom I spoke with and what we discussed.


  • I want to renew or replenish based on my timeline and needs.
  • I want to upgrade, move onto something better.
  • I want to discontinue my use, discard, recycle.
  • I want to trade-in, exchange or return and/or get credit.


Just imagine if every prospective or current customer could do all of these things themselves, via self-service. Imagine that any time they prefer to have someone assist them in accomplishing any of these scenarios, your personnel (employees or partners) have all the information and context they need to handle any of these scenarios on behalf of your customers.

The Outside In Approach to CRM

Imagine that everyone in your organization can see the same information that each prospect or customer sees about his/her account, transaction and interaction history. Wouldn' t that give you the much-vaunted 360-degree view? You' d have access to all the information about each client' s account because they have all the information they care about vis à vis their past and current relationships with your brand, your products, and your organization.

Finally, imagine that you could easily analyze and mine all of this rich customer and prospect data to spot patterns (behavior, usage, consumption), to diagnose and prevent issues, to predict and prevent defections, to make offers, to analyze profitability, and to find and attract more profitable customers.

Design and Implement an "Outside In" CMR Solution

Now, are you sure that what you need is a better CRM solution? Why not implement a solution that lets your customers manage their relationships with your firm and its products? You may think of it as a customer portal—I think of it as an "outside in" CMR solution—a transparent, easy to use environment for C ustomer- M anaged R elationships.

Here' s how to get there:

  1. Give customers self-service access to their accounts, histories, transactions, products, entitlements and projects.
  2. Empower customers to manage and streamline their own scenarios.
  3. Give stakeholders access to the same information that customers have (plus access to internal policies, tools and cross-customer analytics).

The Bottom Line

Surround your customers with a seamless 360-degree view of their relationships with you. Start by streamlining customer' s scenarios. Your authorized stakeholders can gain access to customers' info (with customer consent) so they can help them get things done. Remember, you (or your channel partners) don' t own your customers' information and relationships. Your customers do!

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