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Summary
Teradata usually isn’t associated with customer relationship management (CRM), so it was somewhat surprising to find that several customer presentations at its recent conference were about CRM, although with a twist. These projects dealt with enhanced customer segmentation and creating targeted customer interactions. Ventana Research sees this as further evidence that CRM is evolving, as companies focus on how they interact with customers rather than on automating internal marketing, sales and support processes.

View
In recent months, the CRM market has diversified as more vendors, and some consulting and analysis firms, bring a wider range of products into the category. We saw examples of that diversity in three customers presented at Teradata’s recent conference in Lisbon.

This is not to say that the presentations ignored the familiar themes of the need to understand customers better and to support a proactive, multichannel customer interaction strategy; rather, they stressed them emphatically. In each case, the presenter argued that without a comprehensive view of customers it is impossible to create effective customer-focused strategies, whether for targeted marketing and sales, or differentiated customer service. Not surprisingly given the sponsor of the event, each asserted that the foundation for achieving this view is a high-quality database containing all the organization’s customer data, both historic and collected in real time, and where possible both structured and unstructured data. Having this single source, the customers said, enabled them not only to produce more informative reports and analysis but also to segment their customer base more finely, which made it possible for them to understand the behavior of different segments and to undertake more focused customer-related initiatives.

Each of the customers asserted that managing customer relationships is about managing interactions with customers, not about managing the company’s own internal activities. A critical aspect of managing them is to be ready to do so through the customers’ preferred channels of communication. Each presenter reported that when the organization did this, both sales and customer satisfaction went up, and those are signs of improving relationships.

Assessment
Ventana Research views these examples as indications that companies are changing their perspectives on managing customer relationships. Advanced companies recognize that traditional CRM really supports internal marketing, sales and customer service processes, and thus has little impact on actual customer relationships. To address them effectively requires an outward-looking approach that seeks to understand customer behavior and use this understanding to create positive experiences for the customers. In short, we see organizations increasingly complementing CRM with customer experience management (CEM), and we recommend that companies that want to improve their customer acquisition and retention rates focus more on CEM than CRM.

Related Research Notes
Customer Performance Management Research Agenda for 2008

Customer Experience Management Can Refocus Contact Centers

Customer Experience Management Technology