Death of a salesman

Is this the end for CRM as we know it? Now that Siebel Systems is sinking -- sales drifting down, big investors unhappy, no apparent turnaround strategy, CEO Michael Lawrie booted out the door after less than a year -- is customer relationship management headed for a fall too?

At first glance, it doesn't look that way. It looks a lot like Siebel's troubles are, well, just Siebel's. Lots of other companies, both vendors and customers, are doing fine with CRM.

Aren't they?

After all, the idea behind CRM is solid -- maybe even brilliant. Customers are where the money comes from. We all want to get as much money as we can from them and to keep our best customers as long as possible. That's what the best salespeople have always done.

So using technology to help salespeople stay close to customers, to cross-sell and track each customer's value, doesn't just make lots of sense. Implemented right, it should also make lots of dollars.

It certainly made plenty of money for Siebel after the company invented packaged CRM. Siebel was riding a CRM rocket in the late 1990s. Then competitors took notice. SAP, Oracle and PeopleSoft ate away at Siebel's application sales on the high end. went on a tear through the market for Web-based CRM, which is focused on smaller customers. And since 2001, Siebel has lost 40 percent of its revenue and employees.

What was wrong? Why couldn't Siebel manage relationships with its own customers? A year ago, the theory was that Siebel's cutthroat sales culture was driving potential buyers to its competitors. That's when founder Tom Siebel was replaced as CEO by Lawrie, a long-time IBM sales exec who was supposed to cozy up to the customers.

It didn't work. Now Lawrie is out, replaced by former Andersen Consulting CEO George Shaheen. Does this mean Siebel will shift toward services -- consulting and Web-based CRM? Or is Shaheen the unlikely choice to revitalize Siebel's flagship CRM software? Or is he a placeholder CEO who will spruce the company up for sale to SAP, IBM or Microsoft? Those are urgent questions for Siebel customers.

But they're missing the point.

Siebel was built, inside and out, on CRM. Siebel was all about automating CRM as a business process.

Trouble is, customer relationship management isn't primarily a business process that can be automated. Real management of customer relationships is a culture, a strategy, a way of doing business.

And too many organizations use CRM in a way that marketing guru Herschell Gordon Lewis has dubbed CEM -- customer elimination management.

They don't use CRM software to help good salesmen do a great job. Instead, they feed customers into the CRM sausage machine, a mechanical data-grinder that combines a phony familiarity -- strangers in a call centre who know everything about the customer -- with a relentless, robotized drive to sell, sell, sell.

It's the sales approach that drove Siebel's early success. It's the model built into Siebel's software, and every other CRM product. It couldn't last. It failed Siebel. And without a radical overhaul, it will fail every CRM vendor -- and every CRM user, too. What customer wants to keep doing business with a mechanical salesman?

That's not what the salespeople we support need. They need what CRM software promised: technology that really does help them with customers by supporting a customer relationship culture, not just automating a process.

That's what Siebel needs too, in more ways than one. If Siebel is to survive, it will have to abandon old-school CRM and reinvent it as a better way for people to sell to people. Then Siebel will have to build that into both its products and its own way of selling them.

Because CRM-as-we-know-it is dead -- and deadly. And it will take Siebel, and more than a few CRM customers, with it.

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