Here’s Why Your CRM Strategy Stinks

CRM or Customer Relationship Management Systems

How would you like to take your kids to a playground where there’s a gigantic sign that says: “No Running?” How would you like to take your kids to a playground that has a big antique railroad caboose that says: “Do Not Touch?” How would you like to take your kids to a natural history museum where, when they walk in, the “docents” are actually “don’t-cents” and they yell at your kid for almost everything they do? What if you could actually see more reptiles at your pet store? The list goes on and on and on.

But such a natural history museum actually exists! They started with a great idea, to provide a wonderful and exciting environment for kids to learn about watersheds, sustainable communities and natural habitats. What they wound up with was a severe change of their focus. Their focus went from serving a turnstile visitor to serving their granting source. They fired people in the museum to hire people as grant writers. They got rid of an approach that was customer centered, and changed to a self-centered and self-serving organization that is now all but finished.

The moral of the story here is going back to the Drucker navigators. Know what your business is. Know who your customers are. And most importantly, drive amazing innovation by knowing what your customers value – all in real time.

The natural evolutionary process of companies is to begin with an entrepreneurial spirit that is highly customer connected. As time marches on, corporations move through their evolutionary cycle, from entrepreneurship to organizational-centric models. This tends to take their gaze away from their customers and towards internal processes.

Companies have tried to deal with this issue by trying to reconnect with the customer through so-called “CRM,” or customer relationship management systems. Unfortunately, the “McDonanald-ization,” or data pooling, of customer behavior has become the new focus in terms of observing customer needs. The problem is – it’s all wrong. I believe the only way you can successfully identify what your customers care about, and to create great innovations, is to “innovate while walking about.”

For an example, at one of the largest electronic retailers in the country, if you go in and try to get some answers to your most basic questions, the sales associates have no idea about the features, the advantages, the operation of the very products that they are selling. Despite the fact that customers are looking for a “consultative sale,” that is, they’re looking for someone to recommend, and make specific intelligent, educated comments about how and why they should purchase a given technology.

This large electronics retailer hasn’t invested anything in the training or competence of their sales staff. But when you go to the register to check out, they’ll ask you to go online to fill out a survey on the Internet to get a ten dollar gift certificate. This type of data pooling through typical customer relationship management grabs data that’s dead wrong. A ten-year-old could walk onto the sales floor and realize what was wrong. They will never be able to secure meaningful data from these CRM methods that are poorly deployed.

Data pooling has its place, but the ultimate way to invent is to connect with your customer so you know what they actually care about.