Consumer or Customer?

I have to admit that it’s hard to concentrate on business with so many issues and crises swirling around lately. As if the presidential election was not enough, the financial meltdown is threatening an economic meltdown, and I am forever asking myself what this all might mean to CRM.

The political pros are saying that this is a seminal year in the arc of American history, not just in politics but also in our fundamental understanding of and relationship with the world. As I look at it, even CRM is involved, which I think only proves the pervasiveness of the paradigm shift. In my humble opinion, all of this is reflected in how you view the business processes that CRM mediates.

A Multiple Inflection Point Moment

For several years, people like Paul Greenberg, Brent Leary, myself and many others have spoken and written about the changing marketplace. Perhaps you have seen the same things that we have — today’s customers are better educated, experienced, richer and more time-starved than any prior generation. Certainly, you have heard it before if you read this column even occasionally.

If the current situation tells us anything, it is that we are at a multiple inflection point moment when, believe it or not, many things will be new again. High living and conspicuous consumption? Gone for the moment in a cloud of dust kicked up by the financial mess. Laissez-faire economics? The bloom appears to be off that rose. In their places comes a back-to-brass-tacks imperative to get value for expenditures even if it means shopping around and saying no when appropriate.

All around us, consumers — a species of human known for its high capacity for ingestion — are being replaced by customers, a wary variety of marketplace denizen known for its ability to sniff out value. For several years CRM has been slowly evolving to accommodate this new species. The tumultuous changes now taking place might just accelerate both their rise to marketplace dominance and CRM’s adjustment to that reality.

Feeding the Beast

For a long time, CRM has played to the demands of markets that were open-ended, places where emerging categories needed to be filled by eager vendors and equally eager consumers. That era ended a few years ago, and consumers began to morph into customers, but the tendency in CRM at least has been to continue feeding the beast of yesteryear. Nonetheless, conventional marketing returned less and less and conventional selling became harder and harder.

Around the edges, a different kind of CRM has begun to take shape, oriented around the customer and using tools that focus on networking and community. While many of us have looked approvingly on their developments, these new tools have as yet seemed to be not quite ready for prime time. In the time it takes for the Dow Jones to lose 500 points, much has changed.

Two weeks ago, Oracle-Siebel put its imprimatur on social CRM and in one move validated the many other social CRM efforts being made across the industry and re-established itself as a serious player in the CRM market. At the same time, the economic implosion of the last few weeks is clearly defining a leaner economy ahead, one that will be a ready market for all software delivered as a service.

Selling and Service

Finally, the morphing of consumers into customers parallels a move by vendors from selling products to a more balanced product and service mix. A key growth area for many companies will be in helping customers to realize benefits from products. It makes sense. If a customer is someone you want to see again and again, then you have to ensure that they walk away happy every time.

I expect that some of the changes now going on — plus some that are not as apparent, such as the tightening energy markets — will further influence companies to produce more things locally. Instead of sending orders and jobs overseas, we may well see a rebirth of domestic manufacturing made possible in part by higher competitiveness and productivity that advanced software and delivery systems have made possible.

While the situation on Wall Street and Main Street might look dire, it is possible to see the outlines of recovery in the technologies that we have watched incubate these last few years. As always, we have a ringside seat, and the show will be mighty entertaining.

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is working on a book and can be reached at [email protected].

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