Three Things I Think I Think About CRM & Customer Engagement

In his post, How I Think About Things, Mitch Lieberman (@mjayliebs), one of my favorite CRM bloggers, writes about how he views customer engagement and Customer Relationship Management (CRM). He treads carefully around the “definitions,” not wanting to reopen the scrum of ’08-09 when people argued long and loudly about definitions of CRM and SCRM (Social CRM). It finally ended with a stake thrust in the ground and no one who was around then wants to revisit those days ever again.

Mitch’s post elicited cogent comments by two people I also respect, Esteban Kolsky (@ekolsky) and Graham Hill (@GrahamHill). Esteban differed with Mitch’s (let’s call them) “descriptions,” and Graham sympathized with Mitch and went on to make several points, one of which I agreed with, and one I didn’t.

I replied with my own comment, as you’ve probably read, and Mitch posed a question to me. After rereading the post and comments here are three things I think I think:

It’s not the words; it’s the definitions

Mitch’s descriptions work for me and for those in my organization. I’ve come to believe that different people, such as Esteban and others interpret the terms in a different manner. For example, there’s an old cliché that some CRM though leaders and naysayers like to quote: “Customer Relationship Management is neither about the customer, nor the relationship, nor management.”

Yea, sure. But you know what, that term works for many, many organizations, including mine. It’s how people choose to define (or describe it). Only CRM geeks care about that. Our CEO’s and sales managers don’t.

Relationships Can Matter

Graham’s comment made two points. First that the words “engagement and “relationship” “have been terribly distorted through misuse.” I heartily agree.

I disagree with his second point,

Companies routinely talk about developing ‘relationships’ with their customers, despite the overwhelming evidence that customers don’t want them with companies and that companies can’t develop them with customers anyway.

Our organization uses affinity segmentation to measure engagement over a 36-month period. The more engagements there are, the higher numerical ranking there is. We then create three categories, High, Medium, and Low, and we are attempting to develop separate strategies for each group. While the “High,” category is the smallest, it’s lifetime value (LTV) is double that of the “Medium” category and that category’s LTV is about five times greater than the “Low’s.” We believe we can move people up the pyramid or at least get them to maintain their engagement levels as opposed to dropping down or out altogether.

Even Graham’s example points to five percent of the customer base wanting relationships. By the way, would Social CRM exist without the need for relationships? (Aside: I’ll bet one reason Graham and I differ on this is in how we define these concepts. See point #1 above.)

I believe that the overwhelming majority want no or limited relationships with an organization.  However, in some professions, that small percentage of customers is responsible for an outsized portion of purchasing and referrals.

Think Like A Detective

Mitch asked me what blocks those customers who are willing to increase their engagement. Let me draw a parallel to criminal investigations. Police detectives look for motive, opportunity, and means. Those three criteria also apply when increasing customer engagement.

  • Motive—Think value. What’s in it for the customer? For the organization? Complicating matters is that the customer’s needs (that’s what we’re talking about here, really) may vary over time causing the organization to either miss an opportunity or over react with too much.
  • Opportunity—How will the customer learn about the value or that you can meet her need?
  • Means—Once the customer learns about your (additional) value, is it easy to find, afford, or purchase?

If we can provide the motive, create the opportunity, and make it easy for the customer to have the means, then I believe we can increase engagement with those who are willing. Remember Fred Reichheld:

“It’s six times cheaper to retain a customer than acquire one.”

I’ll go into more detail on motive, opportunity, and means in a future post. In the meantime, what do you think about what I think? Go ahead, challenge my assumptions. That’s what we’re here for. That’s why this blog is called what it is.

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