The Ultimate Irony

  |  September 13, 2001   |  Comments

Too often, some so-called "CRM guru" denounces hidebound, greedy, stupid corporate executives who refuse to realign their organizations' management reporting structures and business operations around customers. Look who's talking...

Editor's note: CRM Strategies subscribers and other readers of the column will notice that we have a new CRM writer on board. Arthur writes for sister site eCRMguide.com; his articles will be featured in ClickZ as well. Subscribers will continue to receive Blake Rohrbacher's articles, which will now be published under the Connecting With the Consumer column heading. As always, we look forward to receiving your feedback.


I always laugh when some so-called "CRM guru" denounces hidebound, greedy, stupid corporate executives who refuse to realign their organizations' management reporting structures and business operations around customers.

These customer relationship management (CRM) "experts" often criticize corporate types for seeing CRM exclusively as a way of making a fast buck by:

  1. Using sales automation management systems to keep salespeople on a tight rein -- ensuring that they're doing more taking and talking than giving and listening

  2. Using computer telephony integration technology to get call centers to push higher-margin products

  3. Using automated voice response systems that are cheaper to use than staff but never seem to present the right options and won't allow customers to talk with a real, live human being
Sadly, it's true that some businesses develop extremely limited interpretations of what CRM really means and shortchange their customers, their shareholders, their employees, and themselves on the powerful long-term benefits that come from identifying, attracting, and retaining the right types of customers.

However stubborn and backward these executives are, it seems to me that we in the CRM industry are in no place to criticize them, or anybody else for that matter. In the ultimate irony of ironies, it may be that the CRM industry ranks as one of the greatest offenders of customer-friendly practices.

The CRM Industry's Record at CRM

Indeed, there's a great deal of evidence to support the proposition that the CRM industry itself carries out some of the most appallingly anticonsumer practices on its unsuspecting corporate clients. Consider these factors:

  • CRM technology vendors sell software packages as "customer relationship solutions" that are in fact channel-specific, often representing only a narrow improvement in functionality over existing systems.

  • CRM software salespeople sell products that are not well suited for the needs of their clients. Sad to say, it's common knowledge in our industry that corporate clients buy CRM software packages that they can't really use because these frameworks call for multichannel integration and sharing of customer information -- something that is next to impossible to achieve in many complex, multidivisional organizations.

  • The track record of systems integration, consulting, and other professional services firms in implementing CRM systems is reputed to be pretty dismal as well.
So, in light of this information, are we in any position to criticize anyone about not being customer friendly?

How bad is the CRM industry at CRM? Let's look at one the most promoted and popular concepts in CRM: one-to-one marketing.

Failed Promises

Not too long ago, software and solution providers -- many of them with cool, hip names with ".com" after them -- were telling corporate prospects that one-to-one marketing could be achieved through the magic of personalization software.

In other words, buy a package of personalization software, plug it in, and away you go! Through these solutions, you could track every move your customer makes. All you needed to do was track this information, get to know your prospects and customers better, and then... instant customer intimacy. One-to-one marketing!

Of course, the corporate customers who bought this software discovered the following:

  • Many of the "personalization" solutions were based on analyzing and tracking clickstream data. That is, they only worked on getting information on people who visited your Web site. Though this might have worked for pure-play Internet firms, the fact is that most consumers use telephones and actually visit real stores.

    And although clickstream data analysis could give you a better sense of what site visitors looked at when they came to your site, where they came from, and what types of navigation paths and searches they performed, the information didn't exactly provide the sort of detailed knowledge you would need to develop "customer intimacy." Most of these nifty personalization technologies used simple pattern-matching technology to serve different content to different types of users -- which is really one-to-many, not one-to-one, communications.

  • Collaborative filtering technology seemed like a great idea, but it too was limited to the Internet channel. It also proved less effective than anticipated because it assumed that every user was the same. If you let another person use your account, the technology would serve up recommendations based on his behavior, not yours. Moreover, it would assume that a product you bought as a gift for someone else was for you.

  • None of these systems readily integrated with existing information about customers, so they provided a limited view of them. Even more sophisticated recommendation engines, such as those using rules-based personalization, proved crude and rudimentary as automated selling machines. It seems that simple if/then logic constructs weren't quite sophisticated enough to keep up with complex minds of real, human customers. Without more advanced analytic and data warehousing systems, these packaged software products offered only very simplistic and fragmented profiles of customers.

And, to add insult to injury, many consumers didn't like the idea of being snooped on when they visited Web sites, raising invasion-of-privacy issues.

In light of these facts, it seems that all of us in the large CRM community should adhere to the following principles:

  • The customer comes first. Just because some technology enables some neat functionality doesn't mean the functionality will be valued accordingly from the customer's point of view.

  • We need to remain particularly sensitive to people's privacy. If we can't get customers' permission to demonstrate value, then we're not adequately demonstrating our value add. Most consumers will be glad to share information about their interests and needs when provided the appropriate incentives.

  • Never condemn anyone about being anticustomer. Given our track record, we're in no position to criticize.
What are your views? Please send them to me.

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ABOUT THE AUTHOR

Arthur O'Connor

Arthur O'Connor is a director and head of the CRM Integration Practice at Reuters Consulting, a unit of Reuters, PLC. As one of the nation's leading experts on CRM and business intelligence solutions, he frequently writes on business and technology trends. He's a frequent speaker at industry conferences. Last year, he served as chairperson of the Institute for International Research's CRM Project Management Conference.

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