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CRM: A Three-Legged Stool

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Posted July 20, 2001 By Alexis Gutzman     Feedback

When it comes to CRM, it seems as if everybody wants to get into the act. But be wary -- not all CRM solution providers are what they claim to be.

CRM is the new, cool kid on the block. I've even heard that CRM is now the number one 3-letter search term, surpassing that other word. So, if you want to be found by lots of people, make sure you say CRM (CRM, CRM, CRM) on your pages a lot (CRM). Well, I may be exaggerating just a bit.

It does seem, though, that everyone is suddenly offering CRM solutions. How is one to know whether a solution is, in fact, true CRM? As I've mentioned, I conduct a lot of interviews for this column. Lately I've been doing interviews with "CRM" companies for my upcoming book on CRM (tentatively entitled, CRM for the Above Average: How to Compete Successfully for the Hearts and Minds of Increasingly Demanding and Finicky Customers (Like You and Me)). What I've noticed is that most companies that call their solutions CRM aren't really doing CRM at all. I have the luxury of talking to CEOs (not sales executives) at dozens of companies on the same topic - something that probably isn't in your job description - and I can grill them, rather than sit through their dog-and-pony shows, and I have found that many, many people are confused as to what CRM really is - including some of these executives.

The Three Legs
CRM is a three-legged stool consisting of:

  • Intelligence-driven marketing
  • Customer service with customer history that's consistent across all touch points
  • Sales-force automation (SFA)

Any solution that does not include components to address all three of these areas is not CRM, and is destined to fall flat (pun intended). Typically, companies that have long been providing solutions for one of the three legs will now call themselves CRM, even though they make no effort to address the other two areas. In some cases, companies that have been providing services in one area have either built up or partnered with providers whose strength is in a different area to offer a true CRM package.

CRM Is Not Technology (But Requires Technology)
CRM is not about technology, but if you're looking to implement technology to help you convert your product-centered organization into a customer-centered organization, then your CRM solution (which ultimately comes down to software) must provide all three of the services that make up CRM.

Real-time Chat Is Not CRM
What is not CRM? Real-time chat. I'm amazed that companies that were billed as real-time chat providers only a year ago are now in the CRM business. According to eMarketer's CRM Report, "spending on Customer Relationship Management (CRM) will grow to $10.4 billion by the end of this year, a 167% increase from the $3.9 billion spent in 2000." It's no wonder everyone wants to be on this bandwagon.

I call the same companies that I interviewed a year ago for The E-Commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena (when I was writing about real-time chat) to ask what they've added to provide SFA and intelligence-driven marketing, and they tell me their solutions haven't changed. How is it that they're now in CRM? That's where the hype is today.

Making CRM from Multiple Vendors Work
If you're investigating CRM for your company, you need to know the degree to which any "CRM" solution you investigate or implement provides all these services. If it doesn't - and only the expensive ones do - then you need to know how the software you select integrates with providers of other legs of the CRM stool. Alternatively, determine whether a one-leg provider has partnerships with other one-leg providers to hammer together a solution that works for you.

When it comes to CRM, one size does not fit all, but all implementations will have to find a way to keep the stool standing because the future of your relationship with your customers rests on that stool.

Alexis D. Gutzman is an author, speaker, and consultant on e-business and e-commerce topics. Her most recent book, The E-commerce Arsenal: 12 Technologies You Need to Prevail in the Digital Arena, was named one of the 30 best business books of this year. For more information on her upcoming speaking engagements, please contact her directly at

Reprinted from ECommerce Guide.

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