Elon, Remember Thy Stakeholders

corporate boardroom

CRM is, in many ways, the story of maturing markets. Our technology was innovated to help with the big jobs of finding customers for new and sometimes hard-to-understand products, servicing those customers, and finding ways to renew their enthusiasm with new versions.

CRM did a lot of other things too. For the first time, CRM made it easy first to customize standard applications and later to build new ones. CRM also applied a blizzard of related technologies to understand customer motivations and desires better and lower the cost of performing a host of business activities.

Refinements were necessary because as the tech space matured, the grounds for competition continued to change. CRM may have begun as a management tool, but the demands of maturing marketplaces have caused us to put far more emphasis on the relationship part of our equation.

So, as an observer of the tech markets, I look at what’s happening with Twitter and Tesla, yes, two companies owned or led by Elon Musk, with bemused surprise at their retrograde performances.

Why Such Disruption at Twitter?

As markets mature, the only true differentiator that individual companies can provide is solid customer relationships. CRM insiders have known this for a long time through things like the 360-degree view of the customer. That’s not simply a marketing phrase but something with true importance. The management aspect of early CRM is decidedly back office, with the real power in the minute-by-minute understanding of needs and how to satisfy them.

A corollary that falls out of these ideas is that maturing markets need stability which can be provided by the CRM that has evolved with them. That’s why it is so surprising to see the grandstanding and almost intentional disruption roiling Twitter. In social media, the user is the product, and the customer is the advertiser. So, the disruptions emanating from Twitter right now must be spine-tingling for advertisers, many of whom have paused their spending.

Mature markets seek stability, and no company wants its advertising medium to upstage its message. Looking at Twitter from the outside, I see a small social media company imploding because it cannot differentiate itself in any constructive way so far. Markets tend to monopoly and usually settle for oligopoly. Twitter’s behavior makes me doubt it can join the oligopoly because too many others are vying for attention, and a mature market will not accommodate all. Winter is coming.

Tesla Needs CRM

Curiously, I fear the same possibility for Tesla. They make great cars, but the marketplace is catching up. Virtually all the differentiators Tesla started with are being neutralized as traditional car companies come online with EVs.

These market conditions leave Tesla with a need to lean on CRM, but the evidence I’ve seen as an analyst and a former customer, suggests that the customer relationship is not in their toolbox.

In the last half-century, we’ve become inured to happy financial endings in Silicon Valley. The familiar story of a person with a bright idea raising huge sums, taking the idea to market against long odds, and being handsomely rewarded.

But that’s not the only possibility. An older and sadly more common story is the rags to riches to rags phenomenon, and now, without CRM as his guiding light, the protagonist looks a little like Elon Musk.

Put Stakeholders Front and Center

What to do instead could take up a lot of space but suffice it to say that putting customers first never goes out of fashion. The only thing that changes is the underlying mechanism of support. Moreover, in these more enlightened times, we should acknowledge that it isn’t just the customer we need to put in the center but all the various stakeholders of the enterprise.

Stakeholder orientation in place of mere shareholder centrism has numerous advantages. Stakeholders include employees, partners, suppliers, and localities that host a company.

As bad as things look for Twitter now, it’s hard to believe that just focusing on employees, for starters, would have made the situation worse. How many times have you been in a job where you were just bursting with ideas to improve business but found that you had no voice?

Many employees whose position at Twitter was to take input and register customer concerns are among the recently eliminated jobs. It’s as if the message is: we don’t want your input.

If you’ve ever flown a small plane, you know that it’s possible to overcontrol the machine, resulting in erratic flying or worse. CRM has been the thing we have used to ensure that we’re not overcontrolling our businesses, and it has worked well. Twitter’s transition has been rough so far, but it’s still possible to take a stakeholder orientation and begin reversing some of the damage.

Back to Customer Basics

A more overt CRM orientation could also help Tesla deal with the inevitable commoditization of its differentiators by a fast-following herd that has spent more than a century understanding individual customers.

Technology is largely about engineering up to a point, but once you have a product, engineering must make room for more humane and softer skills. It’s a lesson that’s often forgotten — with predictable results.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.
Denis Pombriant

Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.

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