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Won’t Get Fooled Again: The 5 Worst Buzzwords in the CRM Industry Today

Written By: David Clark
Published On: December 18 2007

Going through our article archives, I stumbled across Glen Petersen’s excellent article A Lexicon for CRM Success.

Petersen takes aim at key buzzwords in the CRM industry, and I thought it’d be worth summarizing his list of the worst offenders--and his thinking about why they belong in the trash can.



An internationally recognized speaker, writer, practitioner, and thought leader in the CRM and e-business industries, Petersen makes great suggestions for “cleaning up the CRM lexicon.” Find out what they are.



Without further ado:



The 5 Worst Buzzwords in the CRM Industry Today



#5 Senior Management Buy-In
Senior management buy-in” is a phrase that is simply wrong-headed. If senior management signs off on the CRM expenditure, does that signify buy-in? To link CRM success with buy-in suggests that success is a function of implementation and that if the organization does a good job of vendor selection and deploys the applications correctly, then success is ensured or at least highly probable. Yet this is far from the truth—in all too many situations, senior management approaches CRM as a technology deployment and views implementation as a CIO issue. When this happens, the project will quickly produce little impact or lead to outright failure.

#4 CRM Success
Going back to the beginning of SFA, there have been periodic surveys designed to define the percent of organizations that claim success from their implementations. Often, the definition of success is left to the perspective of the person being interviewed; this makes the survey process subject to interpretation. Another issue is whether the user organization defined success prior to implementation and setup metrics and goals to measure the outcome. If the organization did not define success ahead of time, does it have the right to claim failure?

Another misconception is that CRM benefits are intangible (e.g., competitive advantage, image, etc.), and therefore defy the classical requirements of return on investment (ROI) analysis. This should come as no surprise when the industry is talking about being customer-centric. Such attitudes conveniently cloud accountability, and do not give the organization a competitive advantage or notoriety. Instead, they allow yet another failed initiative.

#3 Customer Loyalty
Customer loyalty is a term that has great intuitive appeal and is likely to become another buzz word, like Six Sigma or other initiatives. Every organization wants to have loyal customers; however, the problem is that loyalty reflects customer attitude, and can only be measured indirectly.

Furthermore, there is not always clear linkage between attitude and behavior. For example, the linkage between customer satisfaction (attitude) and retention (buying behavior) is not often highly correlated. The reasons for this lack of correlation are many and include the fact that the company is not asking the right questions. Moreover, unless the satisfaction scores are extremely high, the customer is vulnerable to brand switching. For these reasons, linking CRM success to increased loyalty or satisfaction once again uses metrics that do not correlate with profitability or effective decision-making. They sound like "apple pie and motherhood"—innocent, idyllic, and flawless, but they are actually empty objectives when they are not accompanied by other metrics that measure behavioral changes linked to organizational profitability.

#2 Best Practices
Task lists become best practices when they produce desirable results. The CRM industry has generated many best-practice lists and these collectively represent a solid framework for implementation. The issue here is not the value of these lists as much as their relevance to success in the context of ROI. It’s a question of what drives ROI results. When a regression analysis is applied to operational approaches that achieve financial results, these best practices do not correlate well with successful results. This suggests that implementing best practices alone do not produce success in the context of ROI. Achieving operational success requires best practices that address organizational and sponsorship issues such as leadership and change management.

#1 Customer-centric/Customer-driven
"Customer-centric" and "customer-driven" are politically correct ways of suggesting that perhaps the organization should pay attention to the customer as opposed to itself.

But creating a unified and cohesive customer experience requires substantial organizational change, and the mantra of "customer-centricity" is not going to create the sense of urgency that will impact the inertia of the status quo.

Ultimately, ambiguous CRM terms do not provide the vocabulary for concrete action and measurable expectations. The technological gains of the CRM industry must be accompanied with accurate terminology that will encourage users to better conceptualize and plan with their investment.
 
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