CRM & Knowledge Management

The key to really great CRM is in the way that businesses can leverage what is known about a customer’s needs, goals and desires; (knowledge management or KM) by translating tacit (and essentially unstructured) knowledge into customer insights.

The difficulty with customer interactions is that much of the really useful information needs to be collected in a structured way before it can become a business asset. A CRM is the ideal platform to capture such knowledge.  

Those tacit insights can then be used to better serve those customers in a more defined way. Therefore the CRM is contributes mostly to what becomes the Relationship capital of the business within the definition of capital as used by the KM model.

The other two types of generally acknowledged Knowledge management are Human Capital and Structural Capital.  The model comes from Sveiby and is a convenient way of understanding the different ways in which intellectual capital might apply to business.

Relationship Capital includes brands, reputation, customers and suppliers. Where it fits in a CRM is that it is often the ‘tacit’ knowledge that we gather via the process of engaging in multiple roles and processes with our customers.

Nonaka and Takeuchi described the difference between explicit knowledge and tacit knowledge as a vital concept. They also credited Japanese business success to being better able to socialize and translate that tacit knowledge into explicit knowledge.  

Long ago I worked in a large consulting firm where the best currency was what we called “war stories”.  These anecdotes were a form of experience and knowledge transfer from the senior staff to juniors and were based on actual projects and invaluable in developing the tacit knowledge needed for real success in that business.

Years later when computers and intranets and the actual knowledge management concept was popularised I worked for another large management practice which had a vast KM resource. Technology had arrived in a big way but ironically much of the knowledge asset that was documented was of the lowest value to staff. This was partly because of the culture of that business and partly because explicit knowledge is easier to document.

Explicit knowledge is the type of material that can be kept in a library for collaboration such as templates and other structured process formats that can enable reuse and leverage by staff. We missed much of the wisdom of tacit knowledge that might have been in a CRM if we had used one.

Tacit knowledge by contrast, is often unstructured knowledge for example about what  customers might like or not like. When your business has a “moment of truth” which is often when a customer asks a question that is outside the normal script – will your staff know where to look for answers?

Thomas A Stewart has a useful list on the essential tasks for managing explicit knowledge. From “The Wealth of Knowledge” ISBN 0-385-50071-8 published in 2001.

assemble it, validate it; as much as possible, standardize and simplify it;
keep it up to date, leverage it;
make sure that everyone who needs it knows that it exists, where to get it, and how to use it; automate and accelerate the processes of retrieving and applying it;
add to it,
sue any bastard who steals it.

Tacit knowledge is not so easy to frame, however a smart FAQ (frequently asked questions) list distilled from customer interactions and available to staff in service, development, marketing and sales teams from alternate angles might do the job.

Knowledge Management often exists as an overlap zone between the frontline functions of sales, services and marketing delivery. In the early days of computers we dreamed that expert systems might be able to build on a platform of business rules and processes but for many businesses a more creative outcome is required.

This is where a CRM system can help. A CRM is the best place for tacit knowledge as it can provide a non-linear format for structuring some of the common memes and recurring patterns in customer engagement. 

Here are 5 practical ways I believe a CRM can help with knowledge management

1.  Provide tools for collaboration and leverage of common goals needs a framework anchored in behaviour
2. Capture the practice DNA and cultural differentiation of an organisation / customer
3.  Provide information architecture for significant and relevant practice standards within the organisation.
4.  Provide a platform to replicate and enhance key moments of truth in a business on a sustainable basis.
5. Build corporate memory and customer values into outcomes according to a defined methodology or customer service approach.

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