Definition

customer-managed relationship (CMR)

What is a customer-managed relationship?

A customer-managed relationship (CMR) is a relationship in which a business uses a methodology, software, apps and perhaps internet capability to encourage the customer to control access to information and ordering.

CMR can be viewed as an alternative to -- or as a possible approach to include in -- CRM, or customer relationship management.

What are the three functions of customer-managed relationship?

CMR consists of the following three functions:

  1. Customers should own their own information, including their profile, transaction history and any inferred information such as marital history and even behavior.
  2. Customers should have access to this information across all departments.
  3. The entire system should be designed with the customer's needs and feelings having priority or equal weight to the company's needs and desires.

The goal of CMR Is to improve customer experience and maximize customer satisfaction. CMR allows a customer to define how they communicate with the company, what services or products they will purchase and how they will pay for them.

CMR is an attempt by enterprises to change with the times by addressing customer demand for more control.

The aim of customer-managed relationship is to improve the customer experience and foster satisfied customers.

CMR vs. CRM

There is some confusion between CMR and CRM.

CRM focuses on improving the relationship between customers and the business through the collection of customer data. Today, CRM tools are used by companies for a wide range of purposes. This is in the form of contact management, sales management or marketing automation.

For example, CRM tools monitor customer interactions on social media such as Facebook or LinkedIn, collect contact information by sales teams or set up marketing campaigns. This can then be put to use with the help of CRM software which compiles customer information, streamlines processes and makes it easy to be connected to the customer.

On the other hand, CMR is management that focuses on giving more control to the customer in the marketing process.

Unlike CRM systems, CMR is designed to meet the needs of the customer. This gives greater control to existing customers, and increases customer loyalty and customer retention. CMR aims to achieve the benefits of CRM by empowering the customers.

CMR falls under the umbrella of customer experience (CX) and has a different purpose than CRM.

The pillars of customer-managed relationship

Following are some of the key ideas that guide CMR business strategy:

  • Effective communication and follow-up. CMR involves keeping in touch with existing and potential customers in a way that is best for the customers. This might involve having conversations with customers, redefining the sales process or investing in marketing automation.
  • Building brand loyalty. CMR requires understanding the needs of the customers and what they want from a company. For this, companies need to look at the customer journey and determine the potential value that customers are seeking from the buying experience.
  • Flexibility. CMR dictates that a business shouldn't blindly go for profitability but provide services to customers at the right price. While this might risk revenues for the company in the short run, the increase in new customers and customer engagement will reap benefits in the long run.
  • Optimize for customer happiness. The goal of CMR is to keep the customer happy. This will require market research and training of customer support staff to maximize customer happiness. For example, some customers might prefer real-time phone calls while others want to receive updates through SMS or email marketing. The sales reps can inquire about such preferences.
  • Forecasting. This involves using management tools to forecast customer behavior through the entire customer lifecycle.

See also: Ultimate guide to customer service for businesses.

This was last updated in March 2022

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