Strong Opinions @marksbirch

Random thoughts from a NYC entrepreneur and investor about start-ups, technology and the people that make it all happen. Also find time for good tunes and good food.
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This is Part One of a three part series. View Part Two and Part Three to read more on this series.

The market for CRM tech has become hot again.  If you are not familiar with the acronym, it stands for customer relationship management which encompasses a set of business strategies, processes, and technologies to manage sales, service and marketing to customers.  CRM has been around for quite some time, but it truly gained traction in corporate America in the late 90’s.  Leading the current spike in popularity are social CRM products that are looking to tap into the mountain of data across social networks to better reach and service their customers.

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CRM has gone by a number of names over the years.  It began with Sales Force Automation, then in quick succession Customer Service Systems, Marketing Automation Systems, Customer Interaction Software, Customer Master Data Management, Customer Data Warehouses, Customer Experience Management, Lead Management Systems, Real-time Customer Analytics, Loyalty Management, and ad infinitum.  The analysts would go three-letter acronym crazy with SFA, CIS, CEM, CIF, MDM, and onwards inventing new combinations every quarter.  Invariably they did this to sell more research reports to cuckold CIO’s, who in turn, bought more software to occupy the shelf.

I certainly hope this resurgence in CRM comes of something, but I am decidedly negative on the space.  We have been through so many of these hype cycles and bursts of “innovation” before, that it is difficult to get excited for yet another wave.  In full disclosure, I have been involved in the CRM industry for a number of years building CRM systems, selling packaged solutions, and providing strategic consulting.  While my outlook may be colored by the scars of living and breathing the market for so long, it is only through those battles that you begin to understand what works and why.  While all of the features, acronyms, and offshoots seem promising, the only thing that truly matters in the CRM world is the human element and user behavior.

The coming disillusionment and failure of the Social CRM category will come down to yet another missed opportunity to address the gap between human needs and the technology.  You cannot simply plug in Facebook, Twitter, and other social networks and expect a surge in customer intelligence.  You may have more information, but that does not mean you have any more insight than you had previously.  You might foster more team “collaboration” by having real-time timelines in your application, but it does not work if putting in data is still a chore.  You might get greater customer “engagement” by creating automated rules and processing, but you also come across as a lot less authentic.

People will come to find that social CRM to be no more useful than the old CRM tools of yore.  What CRM has become is a glorified customer database, generally out of date and poorly integrated to business processes.  Social CRM will become yet another collection pool of data that sits idly in a data warehouse or some cloud-based application.  And while various vendors and analysts will cite a number of success stories, they will be sorely few and far between.  If CRM is to have any hope of providing discernible and tangible value to the companies that employ such solutions, providers will need to stop adding features, and become a lot more connected with how people work and how they use data.