Considering the sheer spending on Customer Relationship Management software
this year alone, it's clear that enterprises see the benefits of popular CRM
platforms like Salesforce.com and Microsoft Dynamics CRM.
According to a recent Gartner research report, global spending for all enterprise software (including CRM) will be $304 billion in 2013, with growth of 6.4 percent over 2012 spending. The market research firm said demand is being driven by strength in software suites offering customer relationship management, supply chain management, and social networking, as well as Web conferencing and collaboration.
Gartner predicts that CRM specifically will grow to be a $36.5 billion market by 2017. That's on a compound annual growth rate of 15.1 percent between 2012 and 2017, and is dramatically up from a Gartner forecast earlier this year of a $20.6 billion market by 2017.
While those numbers are key to the CRM software makers, what's most important to customer service managers and sales directors is how to leverage their CRM platforms to improve the customer experience in ways that boost customer satisfaction, sales, and profitability. If the customer experience isn't managed well from a human resources front, all that spending on CRM tools can be a complete waste.
Melding Business and Customer Strategies
To learn more about how companies are using CRM software not only manage customer relationships, but also to shape the overall customer experience, we spoke with Colosa CEO Brian Reale. His company develops ProcessMaker and ProcessMapper -- open source software for Business Process Management, workflow management, and related analytics . His perspective reflects how CRM software can be used most effectively as part of a broader Business Process Management (BPM) approach.
Reale describes Customer Experience Management as a classic example of a knowledge-worker discipline.
"Today's knowledge worker needs the ability to quickly find and utilize customer information in order to deliver the best possible customer experience," he said. "When software is used as part of Customer Experience Management in an organization, the ideal solution should utilize not only CRM software but also BPM software." And knowledge workers, whether they're service reps, contact center staff, or salespeople, need to "be able to move in and out of the worlds of CRM and BPM interchangeably."
Reale points to high school physics as a reference. Sometimes light behaves like a wave and sometimes like a particle. As he sees it, Customer Experience Management (CEM) is similar with regards to its relation to both Customer Relationship Management (CRM) and Business Process Management (BPM). Sometimes, the knowledge worker needs the flexibility of CRM-style activities, while at other times, that same worker needs the rigorous repeatable discipline that only BPM can provide. Any solution that ignores one side of this equation will inevitably result in an incomplete and potentially undesirable outcome in terms of actual customer experience.
Where's the Disconnect?
"One thing I have noticed over the years is that the CRM world generally does not tend to know much about BPM. On the other hand, the BPM world has a much better understanding of CRM," Reale said. "The explanation is relatively simple and is akin to the same reason why the stereotypical American is often accused of not knowing much about the rest of the world."
The ignorance may be simply a matter of relative size. BPM is about a third of the CRM market. For that reason, CRM gurus will often be oblivious to their counterparts in the BPM world.
"This is one of the main reasons that focus needs to be brought to this subject, and it is important to highlight the different benefits of both CRM and BPM when it comes to CEM," Reale said. "Otherwise, CEM will always be equated with CRM, thereby resulting in an incomplete and unfulfilling customer experience."
The Real Take-Away
It's important not to get lost in the acronym-laden debate of CRM vs. CEM vs. BPM. The key take-away for sales and service managers, as well as top level execs, is this: While customer relationship management software gives you the tools to stay in touch with your customers and prospects, that's not necessarily enough to ensure success.
Managers also need to consider and guide the business processes that dictate how best to leverage CRM tools. The goal is to ensure that your business processes are customer focused -- with an eye toward optimizing each customer contact and ensuring that the customer experience is positive.
A sales rep can efficiently use CRM software to contact the same prospects over and over, but, is that repeat contact resulting in a sale? By taking a business-process management approach in combination with a customer-experience management approach, managers can help set a course to guide the sales team most effectively.
The big picture is that today's enterprise software tools are more powerful than ever before and integrating CRM tools with business process management can boost sales as well as customer satisfaction.
No doubt, as companies continue to leverage CRM tools, tied in to customer experience management, social marketing, and the huge databases that result, the enterprise software market will continue its strong growth over the next five years, just as the Gartner forecast predicts.