After CRM
If CRM is intrinsically flawed, what is
the alternative?
OK. This is where I make a fool of myself
by making predictions about the future. Nevertheless, I really do think we need a shift of perspective: from what’s happening today to what we seem to be
moving towards. It’s a three step journey. First, see things from the point of
view of the individual or customer/citizen. We have to do this because CRM is
an apotheosis of an organisation-centric
perspective on the world. It looks at customers through the eyes of the organisation, rather than at organisations through the eyes of customers. By addressing the question ‘how can organisations
manage their relationships with customers, and what information do they need to
do so?’, it fails to address the person-centric question ‘how can I
manage my relationships with organisations and what information
do I need to do so?’
Second step is to look around to see what
may be happening to change or help individuals pursue their person-centric
agenda. And then (and only then) can we start circling back to what effects
this may have on organisations.
So here’s the big shift which I alluded to before: individuals
are becoming information managers in their own right. We can see this trend
everywhere: the 100,000 apps on the iPhone; the ways individuals are learning
how to use (and how not to use) online social media. And so on. Now,
remembering that we are focusing on what individuals
want to do rather than on what organisations want to do, ask yourself: where
will these trends be taking us in three to five years’ time?
If we step outside
the relatively narrow and rarified constraints of CRM, we can see the seeds of
a new and very different personal information infrastructure. Here are some of
its main building blocks.
1.
Personal data stores (PDS) Our current CRM conventional
wisdom is that personal/customer data is stored in organisations’ data stores.
Tomorrow however, individuals’ personal data stores will become far richer,
more comprehensive and more accurate than any data any individual organisations
collect – because individuals will be using their Personal Data Stores to
manage their daily lives.
You have a rudimentary PDS on your phone
right now: your contacts database, the lists of messages received and sent,
records of calls received and made, and so on. On your computer somewhere there
will be other records and bits of data – your passwords and log-ins, critical
admin data like your insurance policies, national insurance number or passport
number, one or two financial spreadsheets, records of correspondence with
companies. More sophisticated data stores are now being created via the rise of
personal infomatics: keeping track of, and recording, blood sugar or blood
pressure levels for those managing chronic diseases for example.
Wouldn’t it be nice if it was really easy
to populate, update, correct, analyse and share this data, so that for example,
instead of rekeying your bank account details every time you wanted to make an
online purchase, you just squirted your data from your data store into the
organisation’s system?
This is not the same as Amazon 1-click,
where the organisation holds information about you. This is Personal 1-click, where you squirt the
information you want to squirt from your own database, to the organisation or
person you want to squirt it to, quickly, simply, and easily. Rest assured, such
technologies and systems are being worked upon right now. They are set to
transform the personal data sharing landscape.
2.
Selective Disclosure Today’s Mailing
Preference Service is a great idea. If you don’t want junk mail, you can opt
out of receiving it. Good. But what happens if you want to opt out of receiving
some mail, but not other mail? Or if you are interested in receiving
information about X this month and Y next month? To do this, you need systems
that enable you to specify.
Now transfer this same idea to data
sharing. Why can’t I say ‘I am prepared to share this data with Brand X but not
with Brand Y, for these purposes but not for those, and under these terms and
conditions but not those’? Why, when I get to the end of an online buying
process do I have to tick some massive, complicated and wordy terms and
conditions contract which I can’t be bothered to read and which probably signs my
life away? Why shouldn’t organisations tick my personal data sharing terms and
conditions before we start sharing
this data?
Not long ago, the idea of opt-ins and
opt-outs and of permission marketing seemed revolutionary. Today, we accept
them without blinking an eye. Selective
disclosure – permission-based information sharing where the individual
decides what personal information to share with who, for what purposes, under
what terms and conditions – will be equally routine and uncontroversial
tomorrow.
Selective disclosure is how the fourth
law of customer data will be turned from a negative into a positive – as a
means by which trust is built rather than undermined. It’s both a mental shift
and a practical shift. Mentally, it treats personal data as a personal asset
(not like our current approach which treats personal data like fish in the sea – yours if you can harvest it). It
points to the need for a new information contract between organisations
and individuals – one that recognises personal information as a precious
personal asset and treats it accordingly.
3.
Personal Information Management Services All those iPhone
apps are just the early manifestation of a vast new industry of personal
information management services.
Think for a moment about all the things
you have to do in your life, all the processes you have to manage, the tasks
you have to organise and undertake. You need to manage ‘my money’, ‘my home’,
‘my health’. You need to organise ‘my holiday’, ‘my home move’, ‘my
marriage/divorce’, and so on. Each one of these involves intensive information processing.
PIMS are all those apps, tools, technologies, software, infrastructure and
services individuals can turn to to gather, store, correct and update, analyse,
use and share the information they need to manage their lives more efficiently and effectively.
PIMS already exist in rudimentary form today. They will grow ever more
sophisticated and professional over the coming years.
From a CRM perspective, PIMS are
particularly important because, in using them, individuals continually generate
rich new data about who they are, what they want, and what they are doing in
their lives. Five to ten years from now PIMS will tell us far more about what
customers want, are doing, and plan to do than any CRM propensity model,
and most of this data will be generated and collected outside traditional CRM
one-to-one relationships between organisations and individuals.
In fact, according to research by Ctrl-Shift
last year, in future, two thirds of the information organisations need to
manage their relationships with customers will come from outside their existing
CRM-style relationships. This is the first three laws of customer data
crystallising into a very different approach to customer data management, one which
makes CRM as we currently know it just a small part of a much bigger customer
data picture.
4.
Volunteered Personal Information (VPI) VPI is a blanket
term that covers all the information individuals could tell organisations if
they saw good reason to. It embraces factual updates such as ‘I’ve moved home’
(the first law of customer data), a genuine (person-centric) single customer
view that embraces all my category purchases (the second law of customer data),
plus all the information that resides in my head, that I could share if I
wanted to (the third law of customer data).
VPI is a fact of life already. Google’s
astronomic rise is a testimony to the power and potential of this emerging data
source. It is driven by a rudimentary form of VPI – the search term individuals
volunteer when using its service. But Google is just scratching the surface.
Over the coming years, as Personal Data Stores, Selective Disclosure and
Personal Information Services begin to mature, VPI will become a, if not the
main source of information for organisations wanting to manage their dealings
with customers. VPI means that, from now on in, interaction and transaction
data – the traditional heartland of CRM – will only be one contributing stream
to the tides of information exchange.
5.
Personal data liberation Under our current
status quo, organisations collect data about individuals and it’s very
difficult (despite what the law says) for individuals to see what this data
says, update or correct it. This spectacle, of organisations being secretive
about my data, is absurd. It will be
shown to be absurd over the next few years as handing personal data back to individuals becomes the big new
trend.
Why should organisations do this? Because it reduces costs and compliance
risk. Because this way, given the rise of personal data stores, selective
disclosure and PIMS, it’s much easier and cheaper to keep the data correct and
up-to-date. Because this way, it can be mashed up with data from other sources
to create a much richer, more rounded picture of what the individual is up to.
Because it can be repurposed in many different ways to add new value.
Take Tesco’s ClubCard data. How much
extra value could be added if it were handed back to individuals, who then made
it available to specialised services to conduct specialist analytics on it,
combine it with data from other sources, sell it on (perhaps on an anonymous
basis) to other parties, and so on. In fact, if Tesco was sensible, it would
start turning Clubcard inside out in this way right now.
By the way, the trend towards data
liberation is already well under way in other areas, such as ordnance survey
data being released to allow third parties to mash it up with other data to
create new services. All that’s needed now is to see that the core concept applies just as
well to personal data.
Now put these trends together. How do they
affect the evolution of CRM? If we go back to our four levels of data use
we see different implications.
The first level was using aggregated,
statistical data to identify and analyse trends, improve operations etc. This
remains unchanged, except that in the emerging environment organisations should
be able to access more (volunteered) data to do the job better.
The second level was using the insights
generated by these statistical analyses to generate personalised messages like
‘other people who bought this also bought that’. That’s a legitimate, useful,
application of customer data because, left alone, the individual can’t see
these patterns. Only organisations can. The only difference here is that the
organisation may be able to mash its data with other data (e.g. volunteered
information about all my category
purchases) to make it even more useful.
The third level was being able to
recognise an individual across multiple channels and touchpoints and provide
seamless service across these channels. This is essential customer service and
to deliver it organisations need to collect and keep certain minimum levels of
customer data. Engaging individuals as selective disclosure information sharing
partners will help them do this even better.
Finally, there is the fourth level of
Full Monte, control freak,
understand-everything-there-is-to-know-about-the-customer-to-generate-perfect-propensity-models
CRM. This is as dead as a Dodo; a waste of time, energy and money – because it
is in the process of being replaced by a person-centric model of information
management that does the job oh so
much better.
When push comes to shove, the very idea
of organisations ‘managing’ customers is ridiculous. What’s really happening is
that customers are managing their relationships with organisations; of ‘vendor,
or supplier, relationship management’ (i.e. the world viewed through the eyes
of the customer), not ‘customer relationship management’ (the world viewed
through the eyes of the organisation). Instead of trying to ‘manage’ customers,
organisations need to build win-win
information sharing partnerships with them.
That’s both a mental and a practical,
operational shift, and it’s one we need to start working on now.
Alan
Mitchell www.ctrl-shift.co.uk
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