CRM only useful in some sectors

Wasn’t David Reed’s article “Payback time” an eye-opener (MW January 20)? Under the theme “customer loyalty”, the article actually focused on the practical applications of customer relationship management (CRM), with all comments on CRM’s return on investment focusing on better campaign targeting and cost containment.

This is not a criticism of either Marketing Week or the author (who says “there is considerable confusion about what constitutes CRM”). Everyone believes companies should buy into CRM, but few seem to know what they are buying.

Cynical observers might also say that using improved campaign targeting to justify the return on investment on a CRM system amounts to budgetary sleight of hand, especially since improved performance has been repeatedly achieved without buying into the trendy CRM thing.

CRM is supposed to encompass all “touch points” with the customer, bringing them into a single, automated, intelligent control system that treats customers differently according to their worth, or potential worth, to the company. The reality is that few organisations are sufficiently important in the minds of consumers to merit the idea of a “relationship”.

Look at the types of organisation quoted in Reed’s article: banks, mail-order companies, utilities. You don’t want a “relationship” with a box of soap powder, but you probably have to have one with your bank, and want one with your favourite fashion retailer.

So the first, and most rigorous, task for marketers is to decide whether their customers will value “relationship management”, and therefore whether CRM will deliver a strategic competitive advantage in the first place.

If the answer is no, then forget CRM.

Shane Baylis

Managing director

The Database Group



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