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CRM vs. CMR: What’s in a Buzzword? 

CRM vs. CMR: What’s in a Buzzword?

CRM vs. CMR: What’s in a Buzzword? CRM’s controlling nature spawns new ideology that renders power to the people.

10/1/2001
By Donna Fluss
Customer Interface Magazine

 

The buzzword battle is back and the current skirmish focuses on Customer Relationship Management (CRM), the incumbent, vs. Customer Managed Relationships (CMR), the challenger. CRM is an oxymoron – how many customers want to be managed by the companies they buy products and services from? If the thought of being managed by your servicing companies doesn’t bother you, consider how you feel when managed or controlled by your significant other, or your health care company – not a thought that most of us find appealing, even if we are resigned to the reality of the situation. As an early thought leader in the area of CRM, it’s fair for me to poke fun. And I’ve got to tell you, there have been some wild discussions about CRM, because we knew from the beginning the term didn’t capture the essence of the business evolution and paradigm shift that popularized CRM. Even though the acronym did not do justice to the customer-centric revolution it helped to inspire, it fit better than many of the alternatives, such as enterprise relationship management (ERM) or front office.

The exact definition of CRM varies, but most analysts agree that CRM is a business strategy and not a software suite, as most vendors would have you believe. CRM is an enterprise business strategy for using customer information to maximize the long-term value and profitability of its relationship with its customers. We can and do argue about the exact wording of CRM, but we’re all in agreement that it’s about increased profitability.

I am relieved to say that even if analysts and academics continue to argue about the definition of CRM, the exact meaning no longer matters. CRM has taken on a life of its own. There is now a CRM industry with over 1,000 vendors that are expected to generate revenues of $23.7 billion in just the United States and Western Europe in 2001, according to Datamonitor. The CRM buzzword did its job – it led the battle and provided the market with a framework for investment. Good buzzwords are battle cries that are heard by CXOs. Managers who couldn’t get approval for a customer service initiative were able to get approval for the same effort, once it was included under the CRM umbrella.

As CRM slowly begins to lose its luster and therefore its momentum, the marketplace is looking for an exciting replacement to reinvigorate investments in customer-centric functions. The current challenger is CMR – customer managed relationships. At first blush, this appears to be an innocuous debate about buzzwords. But the definition of CMR presents serious and far-reaching implications for all enterprises.

There isn’t yet marketplace concurrence on the definition of CMR, but so far the term appears to refer to an enterprise business strategy that gives customers control of their relationships with an enterprise. On the positive side, CMR absolutely addresses the problem of customers not wanting to be managed and controlled. On the negative side, imagine customer disappointment when they realize that the only service component they control is the choice of interaction channel (phone, Web, Internet, fax, wireless, etc.), and even that is rare.

For CMR to become a serious contender, enterprises must be willing to cede control of products and services to their customers – taking the concept of collaboration to a new level. This represents a paradigm shift greater than the one that created the CRM industry in the mid 1990s. Consider the operational, technological and software challenges in allowing customers to manage all aspects of their relationship with a business – everything from allowing customers to define the products they’d like to buy (i.e., submitting a drawing for a new car), to setting the price to selecting the person they want to service them in their channel of choice. Sounds like customer nirvana, business hell and vendor opportunity. Whoever said life was fair?

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