CRM 2.0 – A new Definition

by Victor Rojas

CEM – Customer Experience Management

I trust that traditional CRM or at least major components such as forecasting, revenue planning and alike features will be closer and closer to ERP and other internal tools that have no touch points to the actual customers, prospects, partners or other constituencies of the market. The other part of CRM where we keep customer data, connections, conversations and so much more – and have even trouble to keep it in our old style CRM system are more likely to be a much more open tool. Scott McNealy from SUN said many years ago the network is the computer. The social network is the CRM system. And if CRM 2.0 is CEM Social networks and systems yet to develop will be the final creation of CEM.
The focus of customer relationship management is the optimization of transactions and business processes. Sure, the idea was to manage a relationship with the customer, but the focus was on the “management,” rather than on the customer. With CEM, you focus on the customer. What is the customer’s reaction to your brand, from advertising and marketing to purchasing to support to the actual service or product? And what is the customer feeling about your brand the whole way?

What is CEM?

CEM is generally a sweeping term that refers to gathering customer input the better to change business operations.
We are talking about the behavioral changes of our customers but I guess we have to more precise than that. The underlying change is significant: It is the change in the customer education process. Just 5-10 years ago customers where mainly educated by the experts in the respective companies, by their solution providers, analysts and media. Not today. The previous education process and therefore influence is rapidly declining and has just minor importance today. Customers educate themselves over the Internet. But not the Internet from 5 years ago but through their connections in the social networks, blogs, discussion forums, wikis, the whole nine yard. Customers talk to people our sales teams tried to hide: existing customers. Prospects discuss with existing customers what ‘sales’ was trying to prevent – anxious the message might have been bad. Customers are well educated and the influence from sales is more and more negligible. Sales people continue to argue about it, try to keep their “important” position but that is another story.

The focus of CRM is the optimization of transactions and business processes. Sure, the idea was to manage a relationship with the customer, but the focus was on the “management,” rather than on the customer. With CEM, you focus on the customer. What is the customer’s reaction to your brand, from advertising and marketing to purchasing to support to the actual service or product? And what is the customer feeling about your brand the whole way?

With CEM, customers are the focal point. What is the effect on the customer of your brand? How does the customer feel when interacting with your company? In CEM, the focus is on all the contacts during the end-to-end experience, not just on transactions. In airlines, the end-to-end experience might be 24 hours. In automotive, it might be five years, or more. This automatically provides an increased focus on the missing relationship part of CRM.

When Starbucks creates a home away from home for people to meet, drink, be seen and compute, is it customer relationship management? When video game companies invite users to modify the games and then sell those modified games, are they practicing customer relationship management?

A lot of these companies have millions of customers. There’s no way they’re going to individually interact, It’s almost impossible. But you can react to the customer and put in place techniques to figure out what the customer wants.