Will CRM Be Displaced by Customer Engagement?

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A new school of thought on customer relationships is amassing support from industry leaders and innovators. It's the idea that customer relationship management is dying, and will be replaced in the near future by its cousin, "customer engagement."

In a recent press release, SAP made the controversial statement, "The CRM experiment has failed. Today's empowered customer requires a new model for engagement." That model, they suggest, caters to a fragmented customer journey and requires organizations to provide "personalized brand experiences that engage and delight customers every step of the way."

There is some truth to this statement.

Customers are interacting with the companies they buy from in totally new, unpredictable ways. Point-of-sale is no longer simply a cash register: it's a Web site, an email link, a smartphone app, a social network share, or even an instant chat. And the customer doesn't always make a purchase, either.

But is CRM really a "failed experiment?"

Engagement Lives on Data

CRM, of course, is the traditional approach to managing customer interaction, and relies heavily on data storage and automating processes, such as sales and customer service.

Paul Greenberg, author of CRM at the Speed of Light, is both a customer engagement advocate and a believer in CRM. Greenberg acknowledges the inevitable proliferation of engagement-focused companies, but doesn't believe engagement and CRM are mutually exclusive. "To put it really simplistically," he says, "the data gets captured from the interaction [via the system of engagement] and is stored for future use in the CRM system [system of record]."

The question is: What happens to the data then? How much of it stays in motion and how much of it hibernates in a dusty, backroom database?

Customer engagement analyst Esteban Kolsky, in a new report called "Engagement for a Changing World," found that four out of five brands have more information about their customers than they know how to properly capitalize on.

The Engagement Ideology

It's hard to envision a market where big data is outmoded and something called engagement is the solution. However, if that were to happen, the eventual outcome would be the wide-scale replacement of CRMs with...something else.

What is the "something else"?

It's tough to define a market that's still in its early stages, and even tougher to project the success [of] technological innovation (or to even find a consensus on what engagement means). But there are some working definitions for the ideology of customer engagement.

Greenberg says customer engagement is "the ongoing interactions between company and customer, offered by the company, chosen by the customer"— 

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