The Current State of CRM Vendors & CRM Systems
It's often said that a melon seller will always praise his own melons. But how much of this self-praise is actually based on real quality? Many CRM vendors today are in the ironic position of selling CRM solutions while not necessarily implementing them effectively within their own operations. For instance, companies specializing in CRM may not have properly segmented their own customer base or positioned their customer value. This is an interesting phenomenon where CRM providers preach CRM ideals to business users but do not always practice what they preach in their own operations.
Today’s problems in the CRM industry partly stem from unclear positioning by CRM vendors. The CRM market is a large pie, but it's not one that can be monopolized by just one or two players. Instead, it consists of different large segments, each representing a distinct customer segment – a niche market. If CRM vendors could clearly define their core value and target appropriate customer segments, they could secure specific niche markets without engaging in fierce competition.
Consider vendors who don't belong to the mid-range market yet persistently try to develop products for that market or participate in the competition for mid-range customers. In a market segment that doesn't suit them, all they can offer is price competition, which tends to confuse and even disrupt the entire market. Ultimately, this results not in a single winner but in mutual losses.
The essence of CRM lies in customer segmentation and customer value, rather than merely following a CRM process. While many CRM vendors have mastered the CRM process, they often lose sight of customer segmentation. This is why CRM vendor products tend to guide enterprises towards process management rather than deeper levels of customer interaction and detailed analysis.
Customer Needs and Behavior
Customer focus means CRM providers should pay attention to their core customer groups, understand their characteristics and needs, and based on customer value positioning, determine the value level of the target customer group. This enables effective differentiation in service provision, making company operations more efficient.
However, in the current international CRM market (whether domestic or foreign vendors), there is still a tendency to passively promote CRM solutions as software packages rather than actively tailoring solutions to meet specific customer needs. This approach lacks both depth in understanding customer requirements and flexibility in adapting to specific situations. In such an immature market, without more neutral institutions or voices guiding the way, customers remain the dominant force. Unfortunately, CRM vendors' product lines are still insufficient to fully satisfy the complex demands of these customers.
As enterprise users become more mature and rational, CRM consulting services begin to emerge as neutral representatives of enterprise user interests. Regrettably, many consulting service providers still align closely with system vendors. However, they are starting to design customer relationship management solutions based on real user needs.
CRM vendors' understanding of their potential customers' needs and target customer profiles is still insufficient to influence decision-making processes and product development. Behind the basic survival needs, there is also a lack of clear customer value differentiation. When good and bad customers are mixed together, both brand and cash flow can be dragged down.
Customer Mining and Value Continuity
Post-sale CRM consultants often talk about upgrading sales and cross-selling, but the reality is that after completing a project, they rarely provide continuous service. Once the system's workflow is established, there is little further optimization or alignment with business processes. Enterprise users are left to gradually understand and explore the system themselves.
Of course, due to price competition issues, CRM service providers cannot offer more continuous services and optimizations to clients. Moreover, they are often preoccupied with chasing overdue payments necessary for survival, leaving little room to consider deeper customer mining. At this point, simply surviving and maintaining the CRM market is considered success. Project payment recovery becomes more important than customer satisfaction. Meanwhile, due to the immaturity of enterprise users who cannot fully grasp that CRM is not just a hardware solution and are not ready to allocate more budget for services, CRM service providers struggle to ensure deeper customer mining and continued value delivery.
CRM is not static; its implementation must continuously adapt to business developments through optimization. This optimization includes not only processes and systems but also adjustments in customer and detail alignments, changes in consolidated markets, and differentiated marketing strategies. These dynamic service needs could potentially support the survival and even profitability of a CRM service provider. However, enterprise users have yet to mature to this level of understanding, and the service capabilities of CRM vendors are not yet sophisticated enough to reach this level.
Customer-Oriented Product Lines
Foreign CRM vendors' product development is still primarily technology-driven. Compared to the rich product lines of foreign CRM software vendors, domestic products still appear weak and have not truly entered a customer-needs-driven phase.
In the CRM market, another consideration is the agency channel system. Channels are a special customer group for CRM vendors. In the domestic channel system, a small portion of CRM partners have relatively strong consulting and implementation capabilities. They can achieve satisfactory maintenance and project sales, but post-sale support and consulting implementation still heavily rely on the vendor.
An important factor in channel management is providing channels with a certain profit margin. To ensure a profit margin, not only must the product support such a space, but a training system and talent pool must also be established so that partners possess certain consulting and implementation capabilities. This allows them to gain additional profit margins in the service domain.
CRM vendors have yet to fully recognize the importance of talent cultivation and channel training. Of course, this issue requires comprehensive participation from the entire CRM market. As service outsourcing becomes a trend in the ERP industry, CRM service outsourcing also shows potential. However, without a foundation for talent cultivation, service outsourcing remains a shortcut.
Have You Paid Attention to Your Users?
In foreign countries, there are many user associations, either spontaneously formed by users of various software vendors or established with vendor support. Vendors can timely engage and understand user issues and needs, transforming user feedback into research directions and ensuring that products genuinely reflect user requirements.
Domestically, however, there is no CRM user association or club, whether vendor-organized or spontaneously formed. Without such an organization, are CRM vendors really trying to effectively engage with users? Are they truly paying attention to their users?
In continuous service, the value gained from customers is not singular. Throughout the entire customer lifecycle, enterprise users' demand for CRM services and optimization is ongoing and dynamically changing, continuously contributing value to CRM service providers. However, many CRM vendors have yet to focus on this part of the value, prioritizing early-stage sales revenue instead.
Only by first doing well in their own CRM and then promoting CRM solutions can vendors truly get closer to their customers and the market, allowing the CRM market to enter a rational development fast track.