Why You Need to Think Beyond CRM

Dr. Volker G. Hildebrand, Global Vice President, Customer Engagement and Commerce Solutions, SAP
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Dr. Volker G. Hildebrand, Global Vice President, Customer Engagement and Commerce Solutions, SAP

Digital transformation is the new reality and it’s constantly shifting with an unprecedented pace, fueled by innovations across many different technologies. It is changing everything: How we live, communicate, buy and sell, entertain ourselves, work, collaborate with colleagues and engage with customers.

The challenge for business and IT leaders is not just keeping up with this change, but seizing the opportunity: How would you re-imagine the way you engage with your customers in the near future? Digitally enabled customers will expect you to deliver better, faster, and richer personalized experiences-and will ‘unfollow’ you the moment that you don’t meet their expectations and  deliver on your promises.

Lessons Learned from My Teenage Daughter

Let me tell you a personal story that illustrates perfectly what digital transformation means in the context of “CRM”. The other day I told my teenage daughter, who was on her way upstairs to her room, that we would have dinner soon and she simply responded: “Can you text me when it’s ready?”.Those of you who have teenage kids may not be surprised by her response but it tells us a lot about how customer expectations are changing dramatically in our new digital world: Obviously, “yelling” through the house (think ‘mass marketing’) to let her and her two siblings know that dinner is ready, which I thought to be very effective (although I have to admit that it never really worked), was not what my daughter thought was effective or “convenient” for her. Today, customers expect that you interact or engage with them in real-time, in the moment when it matters to them, with contextual, personalized content that is relevant to them, and through a preferred channel that is more convenient for them to access through their mobile device; and last but not least they expect reliable execution Convenience, relevance, responsiveness and reliability are exactly the four dimensions of customer experience that we have identified in the extensive cross-industry research for our book “The Customer Experience Edge”.

 ‚ÄčGaining a complete, single view of your customer has always been considered to be the holy grail of CRM 

New Rules of Engagement

Clearly, this “new breed” of digital customers –they are not only teenagers who are changing the rules of engagement, but they are digitally connected, socially networked, and better informed than ever before. They inform themselves and may not even want to talk to a sales rep; they make their own purchases and get assistance when they need it, on their channel of choice; they jump between or simultaneously use web, mobile, chat, snap chat, text message, instagram,  or the phone (and they expect it to happen seamlessly and instantaneously with each new interaction personalized in the context of the last one. And if it is not simple and convenient, they expect to have a consistent omni-channel experience, as their tolerance for fragmented experiences, inconveniences or any delays is lower than ever.

Beyond CRM

Against this backdrop CRM needs to evolve beyond traditional approaches and technologies. According to recent research commissioned by SAP, two out of three organizations believe that their existing CRM cannot support their future vision for customer engagement. So the key question is: How do you ‘upgrade’ your existing CRM to face the challenges of digital transformation and get ahead of it? Traditional CRM technologies are insufficient in bridging the growing gap between customer awareness, conversion, ongoing engagement and execution. Previous generations of CRM solutions (no matter whether they are in the cloud or on premise) have become a commodity and primarily address internal operations such as sales process, call-handling times, and a scattershot approach to marketing engagement; they lack the holistic view of the customer across all touch points and don’t include critical business transactions such as ecommerce or billing.

Thinking ‘beyond CRM’ is a paradigm shift from managing customer relationships to engaging customers. Beyond CRM is about new ways of thinking about your customers and truly putting customer data at the heart of your business; it is about blurring the lines between marketing, sales, commerce and service; omni channel engagement vs. supporting multiple channels and mobile first vs. mobile as an afterthought;, predicting the future vs. reporting on the past, blending physical and digital experiences and bridging the gap between font office and back office.

Data is the Fuel

The foundation to all of this is customer data and customer insight. You need to understand your customers and capture their interactions, contexts and behaviors to create a continually evolving dynamic profile, surfacing actionable insights for real-time, one-to-one engagements across all touch points. Gaining a complete, single view of your customer has always been considered to be the holy grail of CRM.

Recently, big data has captured all the attention. The explosion of data has been at high volume and is increasing with extreme velocity-it can be very difficult to filter out the signals in a lot of noise. Even if you are able to capture it all, how do you make sense of all the data?

The real action is in “small data” - the individualization of that large data trends to a single person and the automation of actionable at that level. That big data set is near useless without connecting it all: store inventory, global shopping trends, the weather, and all the data about the individual-the shopping history, location, service tickets, recent website history and the latest tweets or likes. You need to be able to collect it all and break it down to the individual level so you can solve the complexity of the modern customer journey, and to serve customers contextually and digitally across marketing, commerce, sales, and service interactions. Built on customer intelligence, not just data, you need to gain insight into past behaviors, anticipate each customer’s needs, and personalize every interaction in real-time leveraging advanced predictive analytics.

CIO as the Change Agent

All of this presents a huge challenge to every organization. The CIO is playing a key role to drive this digital transformation. And he or she must serve as a change agent not only from a technology perspective but also from a strategic point of view. Breaking down the silos across sales, marketing, service and commerce and looking at end-to-end business processes to bridge the gap between front office and back office is going to be absolutely critical. In many organizations the CIO is the only person who can drive this paradigm shift (with support from the CEO). The trend to shift to more cloud solutions (especially in sales and marketing) has fostered siloed thinking and decision making when it comes to software solutions. It is time that CIOs take the lead and align with the business across departmental boundaries to make the digital transformation happen in order to engage with your customers like never before.

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