THE BLOG
04/02/2013 07:11 pm ET | Updated May 26, 2013

Customer Relationship Management (CRM) Is About Love

It was an honor for both Michael Krigsman and I to speak with Paul Greenberg , considered by many including myself as the Godfather of CRM, and the author of the bestselling, definitive book on customer relationship management (CRM) titled 'CRM - at the Speed of Light, Fourth Edition'. In our video, we discussed the meaning of being a customer company, marketing and socail CRM, the relevance of net promoter score (NPS) and most importantly the science of hugging.

Our discussion started with what it means to be a customer company. We spoke about Salesforce.com's new messaging of how to become a customer company -- benefits of listening and social collaboration using social technologies, connecting across multiple channels, with the purpose of delighting customers. Personally, I find the message to be very relevant and impressive in today's connected, knowledge sharing economy. I believe that Salesforce.com does a great job of putting their customers in the forefront of their messaging and vision.

All enterprise software companies have a lot to prove in terms of showing genuine customer focus. When does customer-centricity go beyond messaging? The challenge for all software companies is to show how they view customers as partners, said Greenberg. What does a customer value versus what a company values? "A customer at an individual level, values being valued," said Greenberg. Greenberg's definition of CRM at the simplest level: "If a customer likes you, and continues to like you, they'll continue to do business with you. If they don't, they won't. CRM's job is to make this happen."

"CRM is about love." said Michael Krigsman. What is the purpose of the names and information about your customers inside of CRM? The purpose is to learn about our customers and to improve the relevancy of our conversations, including all social channels. Social CRM is now in the mainstream. 96% of all marketers have some interaction with social as part of the work - according to B2B magazine, per Greenberg.

We also discussed if the measure of customer advocacy as defined by Net Promoter Score (NPS) is enough in today's social era. The idea behind NPS is incredibly simple. You ask one question" How likely is it that you would recommend our company to a friend or colleague?" As we discussed NPS, it was clear that it is time for us to evolve to another question, or set of questions, that shifts away from intent to action.

"NPS was fine for its time; it's time is over. NPS is based on intent, which is not a measure of advocacy. It's the action that seals the advocate," said Greenberg.

Paul Greenberg referenced Dr. V Kumar, author of the book titled "Managing Customers To Profit" and the four necessary questions for measuring customer's referral value. From a customer lifetime value point of view the more appropriate questions to ask include:

  1. Do you intend to recommend our company/product to someone you know?
  2. Did you actually refer this product or company?
  3. What percentage of those you referred became customers?
  4. How many of those customers are now profitable customers?

Based on research, only 1 out of 3 customers with intent for advocacy actually do recommend companies and products, said Greenberg. We did agree that the simplicity and trajectory measure of NPS has some value for broad referential and marketing studies.

We also talked about Paul Greenberg's CRM Idol competition and how innovative, smaller companies are trying to innovate in the CRM space. The competition shows us future trends in CRM - in 2011 it was social CRM, and in 2012 content marketing. The trends that are reflected indicate the increasing right-brain requirements that exists out there -- the emotional and behavior stuff. There is also a mobile first pervasive approach to CRM solutions.

Mr. Greenberg also gave sage advice on personalizing business. "If a company is smart they're going to think, okay well our job is to do as much as we can to give people the ability to control how they deal with us, and provide them with what they need to be happy with us, which will make them happy with themselves," said Greenberg.

We ended our conversation with my favorite part of our interview which was about the science of hugging. Yes, hugging. Anyone who has ever had the privilege of meeting Mr. Greenberg would know that he is one of the best huggers in the technology and business industry. You have to watch the video to truly learn the essence with hand gestures and all. But here it is in a nutshell:

The science of hugging authentically:

  1. Please, no half-grab around the neck, chest bumps
  2. Do not be afraid to close in -- authenticity and enthusiasm matters
  3. Throw your arms around a person and squeeze

Companies must genuinely show that the love and respect their customers. Metaphorically speaking, companies must practice and demonstrate an authentic bear hug and true desire to connect. Companies cannot be afraid to be open, transparent and socially active. They must authentically show core values and guiding principles, while enthusiastically throwing their arms wide open, around their customers, partners and employees. And lastly, they must squeeze themselves to earn the trust of their employees and customers, with the purpose of co-creating value that is meaningful to their customers.