A CRM(C) Reality Distortion Field

We attended the CRM Conference last week in Chicago and reached the end somewhat blown away (and not by the wind).  The revelation that left us with a bit of a vacuous stare concerned the challenges we understand exist for large-scale retail in knowing and engaging their customer. 

You see, based on work we’ve been doing with well-known brands, we had come to assume that certain tenets about taking on digital initiatives for relationship and retention marketing are well understood.  Well after several hallway and reception chats, maybe that assumption is not such a good one. 

We were fortunate to have some candid conversations with some of the best brands and retailers who disclosed some of their internal challenges.  That led us to think it would be worth reiterating six of those tenets of CRM initiatives below. 

1. Digital Shift vs. Transition
A common theme we heard through out the conference is that adopting and adapting to the digital age was expected to be more of a transition rather than a sudden shift.  CMOs expected there to be a window of opportunity to gradually introduce digital innovations.  The reality, however, is that for many retailers and brands, their marketing technology assets are falling woefully behind. The real trouble is that for many of these large brands and retailers, there is no shareholder appetite for making the necessary upgrades (read: investments) to bring up-to-date the systems necessary to leverage new technologies that would enable them to keep pace with their competitors.

This is in effect a shift, not merely a transition.  And the disturbing truth is that difficult but intellectually honest conversations need to start today within the Board room first and with shareholders next.  It’s no fault of management at any level; the acceleration of digital innovation has put everyone on a technology treadmill that no one really appreciated just three years ago.

2. Pay Now or Really Pay Later
Given the first tenet, it should be obvious that the potential cost of continuing to stave off significant capital commitments to re-factor a Brand’s marketing and information technology will likely result in exponential growth of those costs.  Kicking the can down the road is no longer an option.  But here is a more insidious side effect of delaying the inevitable of completely re-factoring your technology base: The subsequent cost is going to be far more than capital commitment.  The real cost will be diminished customer base, dilution of your brand, and a depreciating market share.  If you intend to be in business in five years, let alone a market leader, it is time to have the “re-factoring” discussion.  But there is a silver lining explained next.

3. The Capital Commitment Reality Distortion
Another observation we came away with from CRMC is that CMOs are led to believe there are unrealistic costs associated with making moves to upgrade at least and re-factor at most.  We feel compelled after this conference to diffuse that reality distortion field.  You see, one of the upside results of all this digital shift is the arrival of new technologies that are fundamentally changing the technology model for customer engagement, knowledge, loyalty, relationship, and retention systems.

Consider one quick example regarding the heart and soul of your marketing technology: the customer marketing database.  Several well-established, highly capable, and expensive marketing database companies have and continue to produce marketing databases based on legacy technology using something called a relational data model.  The relational model remains a solid approach for a variety of requirements.  And yet there is rapidly emerging new data models, well suited for the new kinds of unstructured data that is rapidly being amassed in this digital age (think: the customer data associated with a Facebook account, for instance). We simply want to observe that these new technologies bring with them a substantially changing (read: “shrinking”) investment requirement.

The reality is, marketing technology capital outlays may not be as difficult or large as CMOs may be led to believe.  While significant investments may be required for some situations called “re-factoring” in many instances, much can be achieved by tuning existing systems (and more likely the related processes) and augmenting with new technology where required.  Reinventing the company in a digital age may be imperative, but we know from experience there are ways to adopt and adapt without necessarily committing to wholesale re-factoring (or as our CTO likes to call it, “forklift upgrades.”)

4. CRM is Not About Intellectual Navel Gazing
We also discovered that management was perplexed that on the one hand they have an in-house army of data analysts (or an outsource militia ;-), but on the other they still are not engaging any better with their customers.  Simply put, its one thing to have lots of data analysis, its quite another to leverage the resulting customer intelligence into actionable engagement initiatives.  We heard multiple stories about the ease with which companies can now amass enormous data stores—especially with new web traffic and behavioral tracking capabilities, but then find themselves drowning in data they don’t know what to do with.  The key is acting upon the findings, and ideally in a more automated fashion.  How does that work?  The analytics should produce triggers that drive engagement campaigns.  This means making three things work better together: [1] your customer marketing database; [2] your analytics tools and [3] your campaign management and messaging tools.

OK, so it seems bizarre that this would occur, right?  Not really.  What we know is that in larger organizations there is typically a matrix management structure, rigged with inertia from consensus building requirements.  Frequently, stakeholders drive these initiatives in somewhat or even considerable isolation.  Without a chief systems architect of sorts, there is no holistic visibility on the individual technology decisions.  Moreover, without all stakeholders engaged and an integration strategy really well thought out before the investment is made, technology often ends up partially implemented, not integrated, or even left sitting on a shelf.  We even witness situations where by the time the original technology investment is properly implemented, there has been so much change in the original system acquired that significant updates or alterations costing nearly the original price are required to just to maintain the value in the utility of the solution. 

And this leads to the next tenet (a sensitive and difficult one to discuss from our vantage point).

5. Being Intellectually Honest Can Be Hazardous to (Some) Vendors
It is with trepidation that we call out the elephant in the room, but we see this issue so often that it’s really starting to irk us.  You see, some consultants appear to believe they are in a conflicted situation when assessing a client’s marketing technology and making recommendations.  On the one hand, they know they must be as objective and honest as possible, and yet on the other hand it is imperative that they maximize the lifecycle of their client relationship (read: generate as much revenue as possible).  The result is – more often than not – a set of recommendations that can enable the consultant to continue work, extending the engagement into a next phase.  Simply stated, at the risk of being willing to offer advice which results in a single engagement, they may not be completely forthright.

This tenet suggests that companies should guard against the proverbial promise of “that’s available real soon now,” or “I’m sure it will only cost X” (with the unspoken knowledge that they will make it up in the proverbial claim of “changed requirements”). And that leads us to our last tenet for the day.

6. Up Front Clear Business and Marketing Requirements Are Imperative
Companies are racing to catch up with or pass competition, and feel they must rapidly evolve to serve their customers in a digital age (especially those “millennial” types), but without a real plan to do so. On the one hand, it is very good to have recognized the need to rapidly innovate, and it’s awesome to be able to try something literally by visiting a website and signing-up. But make all of that a part of a thoughtful strategic planning effort. But that ends up “firing” before you aim, let alone are ready.  In other words, in order to best address all of these tenets we’ve mentioned today, we believe a solid “RFP” process is essential. 

The RFP (Request for Proposal) requires planning, both strategic and tactical.  The RFP process drives requirements gathering up front; it enables you to gain visibility on what you have, and what you need vs. what you desire; and it allows you to acquire real market intelligence on trends, what’s available, the competition, and a more genuine sense of cost.  However, there are three important points to be made about the RFP process. [1] The RFP need not result in an immediate decision nor does it require you to proceed to implementation necessarily.  It can simply be used as an intelligence gathering and strategic planning tool. [2] Too often the RFP is flawed in development because it lacks the domain expertise required to know the right questions to ask based on the requirements gathered.  [3] Turning to an outside domain expert to assist, facilitate, guide, and marshal the entire RFP process is particularly important given that your business is not CRM or marketing technology, whereas their business is exactly that.  It is not enough to look to outside experts to craft your RFP.  The marshaling process (recruiting responses; managing submissions; assessing and scoring proposals, and guiding you through either [a] application of the resulting intelligence in your strategic planning, or [b] actually selecting a solution or vendor) is the most important, time-consuming step in the process of RFPs.  However, up-front clear business and marketing requirements are the most valuable results of an RFP process.  Gathered correctly, your situation and needs will be far more informed, and you will gain tremendous insights (internally and outward looking) in the process.


We note, in a shameless blog plug, that we at C[IQ] Strategies have all spent years (actually decades) on your side of the table.  We understand your challenges, processes, change agency, and your half-acre of hell.  We do RFPs.  And we do them more thoroughly, more thoughtfully, with higher value results than anyone.  Ask our clients.  We insist on a no-nonsense approach to this work, and are here to help you cut through the reality distortion fields, regardless of who or what causes them.  In some cases, clients have brought us in just to facilitate strategic planning and requirements gathering apart from, and prior to, any formal RFP process.  Good idea, actually.  Here’s the really nice part: We don’t have the overhead of those big brand name consultancies that ultimately assign their junior “consultants” to the project. With C[IQ] you work directly with the partners here who’ve spent 20+ years on the same frontlines you find yourself on today.

Marketing technology for the digital age need not (and should not) unduly leverage or bankrupt your business.  Determining whether you are in a “re-factoring” situation in order to have your own intellectually honest discussion with your Board and ultimately your shareholders is important, if not imperative.  Navigating this ever-changing technology landscape requires looking to experts who have literally “been there and done that.”  Hi there, we’re here.  Talk to us.  You, too, may be a bit bewildered by the fact we not only listen, we actually hear.


Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.