All successful businesses manage their customers, but very few have realised the importance of managing the other relationships which define their success. Simon Kent explains why being a pioneer could give you a critical competitive edge.
Back in the 1990s, as state-owned monopolies were legislated out of existence and globalisation opened up markets like never before, competition for business became fierce. In this more dynamic and changeable economy, lifetime loyalty was no longer a given, and customer relationships became a business critical topic.
Years of trying to standardise customer interactions and distill them into a single, repeatable event (think call centres) had unsurprisingly proven to irritate and alienate customers. Businesses had to accept that customer relationships were nuanced, complicated, changeable and adjust accordingly.
These conditions led to the creation of Customer Relationship Management (CRM) software. The logic was clear: use technology to log and track each customer, learn about their behaviour to ensure they stay loyal, and understand their preferences to offer them other services.
Managing relationships becomes a billion dollar market
As the value of customer relationships became better understood, the importance of CRM grew. Very quickly. Back in 1999, the market leader, Siebel Systems, was the fastest growing software company in the US, while myraid providers and consultants profited handsomely from this gold rush as businesses scrambled to fill what now seems like an obvious gap in their technology stack.
The key phrase here is “seems obvious”. Failing to manage and track the status of customers and their behaviour is unthinkable now, but just 20 years ago, it was a bold and visionary strategy.
Yet despite the lessons learnt about the important of customer relationships, there remains an area just as crucial for business which is currently ungoverned and similarly left to chance. The relationships between departments and individuals within the business are critical. Anyone working within a business understands this implicitly – it’s almost too obvious to mention (just like CRM is now).
These inter-dependencies define whether the business succeeds or fails. Yet whereas there are endless books, courses, conversations, strategies and ideas about things such as company culture, motivation, leadership, management, and strategic direction, we’ve somehow missed the obvious element which defines the business: these relationships.
This isn’t exclusive to internal, peer-to-peer relationships. Increasingly, businesses are defined by the connections they have with external providers and suppliers, particularly IT which now has now accepted that consumer technology and cloud IT providers are an integral part of the technology landscape.
We manage customer relationships. So why not manage those equally valuable relationships within and outside of the business? It will soon be recognised that overlooking business relationships is as neglectful as ignoring customers. This is why Business Relationship Management is poised to become as important as CRM. The opportunity to provide differentiation for your business by becoming a BRM pioneer will not last long, so start now. The best ideas don’t stay hidden for long.
Build your knowledge of BRM by reading our beginners guide.