Despite companies spending millions of pounds on customer relationship management (CRM), many have merely succeeded in transforming their customers into rabid Victor Meldrew clones.
Examples are common, such as the person who was sent direct mail by Abbey offering a loan just after the same bank had turned him down. In this instance, the Advertising Standards Authority stepped in and rebuked the bank. Earlier this year Prudential marketing director Roger Ramsden had to take to the airwaves to apologise after the insurance company sent out open postcards to tell its savers they were getting a bonus, alerting some to the horrifying prospect that their wealth was being publicised. The insurer is still being investigated by the Information Commissioner to see if it contravened data protection law.
Too often, marketing initiatives designed to target individuals and offer a personal touch misfire. And this is despite staggering sums being spent on CRM. For instance, the RAC has spent &£30m on CRM over the past three years, and overall it is estimated that CRM costs industries &£8bn a year.
For many, CRM has held out the promise, promoted by IT companies, of a purely technological solution to knowing and keeping in touch in their customers. “Many large technology companies invest a great deal in creating and perpetuating the myth that customer value and satisfaction comes packaged in a box,” says The Database Group chairman Richard Lees.
Paul Gordon, managing director of advertising agency CCHM, agrees: “CRM should be the basis of how a brand relates to its customers and so give the benefits of a stronger emotional commitment to that brand, with obvious commercial benefits such as retention, cross-sell and up-sell. However, in practice, it’s been hijacked by the technology companies which understand what technology can do but not what brands mean.”
Aston Martin, as a producer of luxury sports cars, is in the lucky position of having small enough volumes to produce the genuinely personalised marketing that so many other companies would aspire to. While last year it sold 1,500 cars, next year it expects to increase sales to 5,000 cars when it introduces a cheaper car, costing a relatively small &£70,000. Aston Martin has a limited database of existing customers, relying primarily on existing and carefully cultivated relationships.
Aston Martin director of public affairs Tom Watson accepts there will have to be some limited use of technology as it expands, but that it will not change the way it interacts with its customers.
Watson says: “People don’t just buy a car, they buy an Aston Martin experience. It’s not about direct mail, is more like establishing and maintaining a friendship.” He adds: “It is absolutely vital that front-line staff represent the brand. It is not rocket science, it’s a just a case of doing things properly. We spend a lot of time flying our dealers here and going to visit them.”
The level of personalisation is extremely high, not only is each Aston Martin signed-off by an individual who the buyer can meet, but the customer can speak to the designers and engineers – even to the chief executive.
While few companies could replicate Aston Martin’s deeply personal approach, or would even find it appropriate for their market, most want to maintain some element of personalisation in their marketing.
Part of the implementation of IT-based CRM and the efficiencies that large corporations now expect means that all too often CRM systems hold so much information on on customers there is no need to interact with them.
Catalyst head of consultancy Keke Patissier says: “People play a major part in generating and maintaining a positive brand experience. In recent years, people have been backed by CRM systems, but in time this has been used to cut corners and to merely give the illusion of relationship.”
She observes that the brand gets dissipated the further away it gets from the marketing department, and suggests a way of effecting genuine relationships with customers is for marketing departments to work closer with their human resources and IT counterparts.
Like a Virgin
At Virgin, an increased co-operation between its HR and marketing departments has been in effect, to make “Virgin feel like Virgin from the inside”. Virgin group brand manager Catherine Salway says: “If our brand values are about fun, there is no point in having ads that say we are fun if we don’t feel like that on the inside. Just putting words on boards in call centres doesn’t work.”
Salway says Virgin keeps the scripting of call centre conversations to a minimum, believing that it leads to happier staff and therefore more positive communications with its customers. Of course, Virgin is unusual in that its brand positioning is one of freedom and informality created around the figurehead of Sir Richard Branson.
At the John Lewis Partnership, despite its reputation for customer service and unorthodox participatory corporate structure, there is no direct crossover between its marketing and HR departments to promote its brand values. It believes instead that its attitude to customer services permeates all that the company does.
John Lewis head of customer development Andrew Wiseman says: “The personal touch is often about partners implicitly understanding what drives customer behaviour. Smart use of technology and CRM techniques allows us to adopt a similar approach for developing customer relationships away from the shop floor.”
Patissier point out that for some brands the personal touch may be inappropriate. At McDonald’s, people merely expect fast service and food that doesn’t poison them, she points out. At Ritz-Carlton, by contrast, discreet monitoring of customers means the hotels will remember which fruit was eaten by a returning customer and ensure that the basket contains only the customer’s favourite types.
While the personal touch is expected from luxury brands, there are mass-market brands that have been built around personal interaction. The AA, for instance, has been careful to build on the positive emotions from encounters with its staff. As part of maintaining this perception, AA customer services director Simon Skinner says it is important that he allows front-line staff to use their own initiative.
For example, the AA takes a number of calls on Christmas Day from people panicking about how to cook a turkey. He says: “Members called us not just because they would get some help, but also because they knew we operated on Christmas Day. No CRM systems development plan for a breakdown and financial services company would incorporate the provision of cookery tips.” Its current “Just Aask” advertising is premised on just this kind of interaction.
Another danger with CRM, especially as the sophistication of database manipulation increases, is that the consumers companies are targeting with pin-point accuracy might simply be disconcerted by the amount of information that is collected about them.
Dr Tamsin Addison, a psychologist and head of research at RSM Robson Rhodes Business Consulting, warns that sometimes companies can overstep the mark and exhibit inappropriate behaviour by making the relationship seem too close. She says: “Some organisations believe that knowing customers’ inside leg measurement, for instance, and sending them masses of information is the best way of optimising CRM. I would disagree, as our research has indicated that some CRM communications make customers feel they’re being stalked.”
Loyalty cards such as Nectar, or even developments such as the London Transport Oyster card, are increasingly being viewed with suspicion by consumers aware of the amount of personal data that can be collected. For instance, a shopper at Tesco was recently wrongly accused of shoplifting and tracked down using data stored on her Clubcard. The supermarket apologised and offered compensation, but lost a customer in the process.
And it is not only consumers who are feeling hounded by CRM, but marketers too. It is one of the ironies of the CRM industry that the providers of packages designed to target consumers effectively are often alienating their immediate customers – the marketers.
More Than head of marketing communications Lee Mooney says he is inundated with persistent and patronising approaches made by companies offering CRM. “It is as if they think we don’t already do it. They don’t actually make the effort to find out about the company they are marketing to,” he says.
Lower than a snake’s belly
Sainsbury’s Bank chief executive Tim Pile, a former marketer at Lloyds TSB and Alliance & Leicester, recently spoke out about the “snake-oil salesman” approach to CRM. He says he prefers the term database marketing to CRM, quipping that he has a relationship with his wife rather than the retailers he frequents. For him, it is simply a case of using data to better communicate with customers.
BT recently took the unusual step of advertising its CRM products on posters on London Underground, targeting small businesses. But to what extent it succeeds in getting new customers, and whether the businesses that buy the package succeed in deepening their relationships with their existing customers, will most probably depend on the people, not computers, using the CRM packages.