The CRM Control Illusion versus Personal Cloud (VRM)

Forrester Research CEO George Colony recently blogged:
‘We are now in the age of the customer – with buyers using technology to gain control over institutions. That power flows from customers’ newfound ability to seamlessly price, critique, and direct their purchases. What does this mean? At the risk of being overly dramatic, the future belongs to customer-obsessed enterprises.’

I could not agree more, but clearly this observation is neither new nor does it come from some moral obligation but simply from a consumer backlash that the businesses feel. Yes, in future all businesses will either be digital or fail. ‘Software will eat the world.’ as Mark Andreesen put it. But what will the software actually do? Big Data predictive analysis or customer interaction via the web or mobile?

In business interactions the commonly used distinction is C2C, B2C and B2B, with C standing for consumer or customer and B standing for business. There is also a C2G acronym, which is often used for Citizen-to-Government. I think that these distinctions are truly outdated. Also a business consists of humans. There is only one interaction that is H2H or human-to-human and while one can create a substitute web presence, it kills the emotional connection that good business needs. The rise of the Internet has brought us H2W human-to-Web and H2M human-to-mobile, because it is believed to be a simple way to cut costs by reducing the number of people a business needs to support customers. These acronyms are born from the customer process control illusion in CRM and BPM. Not true you say?

Real world example: On the Air Berlin website the call center numbers used to be right on the front page and now you will only see them one you have gone through at least seven support pages and FAQs. The booking website is an absolute mess of silly rules and restrictions. I tried to book a flight and I could not get the seating I wanted so I cancelled. Once you have booked you pay for any change. So I went through the lengthy FAQ which had no relevance to my problem. I finally got to the page with the call center numbers and I called. I had to wait for a long time and then the lady told me to book the flight online and then call back and she would do the change. I did so and after an equally lengthy wait time, another lady told me that she could not do the change. She asked me to cancel the flight and then do the booking via the call center. I obviously went berserk and she finally agreed to cancel the booking and make a new one. All the details I had entered online, including the credit card details that are stored at the airline I had to provide again on the phone. Each digital and human interaction stands alone. No one knows anything.

CRM and the Big Data control illusion

So clearly, Web (H2W) or Mobile (H2M) are NOT the best way to create a great customer experience. Not only are they dehumanizing and businesses are unable to manage the multiple channels. Web and Mobile presence become additional silos that are not connected to their CRM or call center software. It will be years before any large business is able to change the related software silos. Expect worse to come! A multi-channel process can no longer be encoded and enforced because even with BIG DATA it is impossible to judge upfront what kind of customer interactions will happen where. Utter nonsense. The true relationship challenges are not addressed by a CRM customer database and some service processes. They are adressed by people!

You might say that there are good examples of web interaction such as Amazon as a pure web merchant. Amazon does only one thing via the web as its encoded processes in its portal make up the business. Without the people who select products and the customers who write reviews, the complete Amazon website has little value. The automatic recommendations are no more than a nuisance. Without the shipment centers and a customer service department who efficiently deals with customer problems and a ‘no questions asked’ return policy, those processes are worthless. The human factor still makes the difference. The one company that comes reasonably close to consolidating the channels as well as Web and Store shopping it is Apple.

Fact: While the Internet was supposed to be the great equalizer, it has until now given more power to the large enterprises such as Amazon, Google, Facebook, and Apple and all who offer cloud services. They have just taken the advertizing business from the media and thrive off the data that we willingly hand over. Big Data as a concept is purely about consolidating YOUR data to make YOU more predictable and controllable.

The only way to change is to look at it through the customer’s eyes. And I am not talking about the ‘Outside In’ process design concept, but truly understanding what customers are looking for. One aspect of this is goal-orientation to define why certain tasks are being performed and to measure if they are reached individually.

Customers really want:

  • Finding answers/solutions for problems
  • Finding enough trusted information and vendors
  • Finding vendors who value the customer
  • Finding a solution that empowers and improves the customer
  • Finding a value proposition that fits needs and budget (not just the cheapest)
  • Simple and relevant communication and interaction with vendor
  • Building a quality service relationship between vendor and customer

The above is the reason that for longer than a decade I have been vocal against CRM and BPM as software solutions. They are focused on internal problems and not the customer. What I propose with ACM Adaptive Case Management is to consolidate not just data but communication and processes into a single customer interaction that is driven by the humans on both ends and not by silly rules. Some call it a customer engagement hub. I do however know that the problem cannot be solved by software from the inside alone. In the long-term view it does need a communication approach that is supported by a larger customer-driven concept from the outside.

VRM and the Personal Cloud

Therefore I am not just addressing this problem from the inside, but I have another software business offering the VIPorbit Contact Manager on Mac and iOS. Our medium-term target is to empower the individual and provide a much better connection with the humans inside a business.

As a consequence I had a few days ago a really interesting phone call with David ‘Doc’ Searls. Doc is an icon in the Linux and Open Source movements. In 2000 Doc Searls, and his co-authors Christopher Locke, Rick Levine, and David Weinberger converted their blog into a book called ‘The Cluetrain Manifesto: The end of business as usual‘.

Among Searls’ contributions to the Manifesto was its first thesis, that markets are conversations between human beings and not businesses that market into statistical demographic sectors. The networked individuals in the market will know a lot more than vendors do about their own products and that information will not be controllable by the business. Even the media will loose the information distributing monopoly. Other customers are a much more trusted source. Social networks require an expanded business strategy because the technology has given the customer a voice that the business cannot control. No amount of mass advertizing can drown out the few voices of unhappy customers!

Doc Searls published last year a follow-on book titled ‘The Intention Economy – When customers take control’ in which he also reiterates his work to create VRM Vendor Relationship Management. In this book he describes an economy driven by consumer intent, where vendors must respond to the actual intentions of customers instead of vying for the attention of many.

Rather than the acronym VRM he uses now the term ‘Personal Cloud’.

The Personal Cloud

The Personal Cloud

In the Respect Network that he participates in, you find a consolidated drive to create a ‘Personal Cloud’ infrastructure, which provides for the individual consumer the following:

  • Control the flow and use of personal data
  • Build their own loyalty programs
  • Dictate their own terms of service
  • Tell whole markets what they want, how they want it, where and when they should be able to get it, and how much it should cost

The Personal Cloud will be the consumer counterpart to vendors’ CRM systems and ideally make them obsolete. The most basic benefit will the ability to change your address once to inform all vendors you deal with. There are other opportunities in combining services from multiple companies in real time, for example making your choice of carrier for a shipment or for service or insurance. Amazon is actually a vendor who provides a similar kind of service to its customers as it also acts as a sales channel and payment intermediary for other vendors. Airlines try to cross-sell hotels and rental cars. But the process is still hardcoded into the vendor’s website and locks out sensible human interaction.

Also vendors will like the Personal Cloud because it will do away with having to keep the customer data accurate and with running senseless anaytics across the data to try and figure out what each customer might want. The customer will actually tell the vendor and remain anonymous until he decides to purchase.

So what does customer obsession mean? I propose that businesses will need to manage processes as free-flow communications with customers and ideally embrace them as empowered collaborators. The CRM and process control illusion will have to go. Trying to leverage typical marketing on social networks will fail eventually. A citizen living in the urbanized areas of the Western world is pounded by 3-5000 marketing messages a day. The time will come where prospective customers will only turn to those vendors who do not pester them with meaningless ads, but to those that listen to them. The business returns from social networks will be equivalent to the quality of interaction offered.

It may seem to some that addressing those customer relationship issues with a new collaboration, process or case management approach is overkill, but the market pressure will eventually demand it. What other ways are there to create opportunities for prospects with relevant information that allows fast lead conversion into opportunities? How else can those prospects find the channel for meaningful conversations and allow the business to qualify if the prospect has profitable potential? How else will the customer feel that the business listens to him/her? Predictive analytics driven ‘If You Buy Now’ messages are the same as the ones on late-night infomercials: ‘… and you get a second unit free.’

And at some time in the future the customer will be the one to initialize the communication and control how and where his personal data are used. While I come from inside the business, Doc Searls and I have the same vision. Empowered customers need equally empowered contact persons inside the business. No matter how clever software will be at some time in the future, it won’t be ‘listening’.

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PS: The digital infrastructure has also given governments an immense power of supervision and control, the least one being speed cameras on the roads and the worst being access to our private communciations. As a consequence, I use encrypted mail where possible, I have on my Mac ‘DoNotTrackMe’ installed, and I only search via ‘DuckDuckGo’. But then I am also not watching TV or listening to radio unless it is ad-free. I use YouTube a lot less since they force me to watch advertizing, Let me pay a fee to watch it ad-free.

I am the founder and Chief Technology Officer of ISIS Papyrus Software, a medium size software company specializing in communications and process management. I wrote several books and hold a number of patents. My quest is to bring common sense to IT, mostly by focusing in human quality issues rather than cost saving, outsourcing and automation. I am also Chief Architect at VIPorbit software which provides mobile relationship management.

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Posted in Adaptive Case Management, Cloud Computing, Customer Communications, Customer Relationship Management, Mobile Relationship Management, Predictive Analysis
8 comments on “The CRM Control Illusion versus Personal Cloud (VRM)
  1. Martin says:

    Nothing will ever be able to replace personal contact/human interaction. No pet, no computer, no drug.

    @YouTube: AdBlock addon works fine for Firefox.

    Like

  2. Some of this is spot on. The reality though for a personal cloud to actually work, is that a business that subscribes to it, especially if that means changing their systems to use it, will need to see some sort of added value immediately, something highly valuable and easy to measure. Without that obvious and extremely easy to measure added value, businesses won’t adopt it, and that means this all sounds good but simply doesn’t deliver….

    That all being said, this is something similar to what I’ve subscribed to for a number of years now. And the concept of a personal cloud is in some respects what we have built here at CloudZync. We probably take this further though, to include personalised channels between the business and the consumer. Right now our focus is on delivering improved customer experiences at the most common interaction point, checkout. But we do already open up personalised communications channels between businesses and their customers and are implementing a lot of what you discuss in this post.

    Sure these are not massive leaps at this stage, but the actual sale/payment process is the most common true interaction between any business and its customers, so this is our starting point, and is also the point where we deliver an immediate and compelling argument for embracing our personal cloud…payment processing cost for a business, and ease of use and instant rewards as a consumer…

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    • Andrew, thanks for commenting. I propose that businesses will have no other choice than to adopt consumer-driven interaction. Yes, the payment process is one essential element of B2C communication, but in effect it will in future turn around to be C2B. The consumer will offer a payment function of his choice and the business can accept it or not.

      But it starts much earlier. Today search engines consolidate quite poorly structured vendor information and we are stupid enough to play this game.

      In futiure the consumer will send information to consumers to recommend vendors, who then can make offers in regards to particular problems and ask them to offer solutions, services or products.

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      • I agree with everything you say here. Our whole software approach is to start forming lasting relationships between the business and the customer. Instead of payments being the jump off point, they are infact the point in which the consumer and the business build a relationship further. Your comment re C2B is spot on, and that’s the way we are heading…

        I am also trying to introduce far more social concepts to our own particular software, so that these C2C recommendations flow seamlessly and easily.

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  3. Paul Carman says:

    Excellent comments and great food for thought. It indicates a shift back to the customer being in control, which has been happening now for a while. The Bring Your Own Device movement is a good example of that.
    I also agree that the social networks of today are not the ultimate solution.
    I believe business needs to allow the customer to decide. If a business is designed properly empowering the customer will result in additional business. Markets of the future will not be created by business segment or application. They will be individuals will similar need sets.

    Like

    • Thanks Paul, for reading and commenting. The fallacy is that if a business treats many customers the same way that it is cheaper then individual service. There is also the Six Sigm fuelled illusion that quality is achieved through adhering to a certain way with no deviation. But that is only a number game. If we can assume that customer expectations vary then the standard process that is perfectly executed fails according to that variance. Making the process less ideal but allow a variance to meet customers expectation results in a much higher quality when customer satisfaction is the measurement and not the accuracy of process execution.

      The solution to this is to define goals that are measured from the customer perception and not from the inside. The customer is the judge at service delivery and not some statistical KPI averaging process accuracy across all customers.

      Like

  4. Brad Hodson says:

    I completely agree with your premise, but I don’t think CRM is the nexus of the problem. Well, let me rephrase: CRM as it currently is, is the problem; but this is thanks to the big CRM companies who have focused on one-stop solutions, miracle software, and automation.

    I wrote about bringing the human element back to CRM (http://bit.ly/15wSAG3), talking about much the same thing. We can’t let software get in the way of our humanity. CRM should be a customer service tool, not the customer service itself.

    Like

    • Brad, thanks for reading and commenting. I really like your statement that CRM is a tool for humans and does not replace human service interaction. The same can be said for any software and also for BPM that is also more and more used to automate and enforce service processes.

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Max J. Pucher
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by Max J. Pucher. All rights reserved.
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