CRM: Congenitally Rapacious Marketers

Updated: Aug 27 2004, 05:36am hrs
Almost everyone has been to some Customer Relationship Management (CRM) seminar or other, and almost no one has done too much with it. Is it that the idea of CRM is intrinsically unsound Has it been presented incorrectly Or does it require a more radical change in mindset than most businesses are capable of

On the face of it, the idea of CRM is a strong one. It argues for a vertical view of business potential. The traditional view is a slash-and-burn view of markets you keep getting new customers at every point in time. Fit and forget, as an old tagline says, and move on to the next conquest. The implicit assumption is that of an infinitely expanding universe, where tomorrows market always multiplies in opportunity. As most businesses have discovered, growth in demand is far from being a given, and hence the need for a new way of looking at markets.

The idea of seeing ones customer base as ones biggest asset recognises that businesses need to specialise in providing value to their kind of consumers. It accords primacy to the impact made in the consumers life by a business and seeks to extend that impact into a lasting and rewarding relationship on both sides. Instead of looking for new customers every time, why dont we look after our existing customers so well that they keep coming back It is easy to see why this is a seductive idea.

In a competitive marketplace, businesses create value by ensuring that consumers do not take a priori decisions every time. The idea of brands serves precisely that purpose brands create a pre-disposition that allows a brand to be chosen without going through a full revaluation every time. The idea of CRM tries to do the same ensure that people come back of their own volition. And it does so by treating every customer as an individual.

The trouble is with the way CRM has been packaged and marketed. What CRM should mean is an immersion with ones customers, wherein one attains a deep understanding of what drives them and an ability to respond to these needs with speed, sensitivity and imagination. Instead, what we have is a mechanistic data-driven system that treats customers as transaction counters. How has this come about

The problem starts with the very idea of treating customers as individuals. Except for a few categories where high-value customers translate into really big numbers, in most others it is simply too expensive to treat customers as individuals. The only way to do so is through technology one can generate data about individuals and use that knowledge to develop understanding and closeness. One can figure out what people like and dislike and use that knowledge to build a deeper relationship.

There is a big problem with this idea. It confuses intimacy with information, sensitivity with knowledge, caring with reward. Greeting me on my birthday does not make you my friend, addressing me by name does not allow you the right to drop by at my house, giving me some privileges because I have spent Rs 50,000 with you does not get you invited to my daughters wedding. CRM in its current form seeks to inflence something very delicate and nuanced with a very rudimentary, blunt instrument.

Worse, it fails to understand the very notion of a relationship, at least in our culture. Having a relationship with someone means rising above transactions shopkeepers do not accept money from those who are close. Relationships are based on what anthropologists call general reciprocity and not on specific reciprocity. In the case of the former, reciprocation happens over a period of time, often without any guarantees. Don Corleone understood this well, a favour to him was an uncashed cheque of indeterminate value its power lay in the variability of its potential.

In the case of CRM, we are always looking for specific reciprocity if you spend more than X, I will give you Y. In attempting to treat customers well, it ends up equating human beings with wallets, and discriminating one from another purely based on its size. Which is why we dont really see our customer relationship executives as friends, we see them as contracted smilers, whose politeness is indexed to our spend levels.

In some ways, badly practised CRM is actually harmful to the brand it makes the consumer a reward-junkie, forever looking for the incentive attached to any act of purchase. It de-mystifies the brand, making it synonymous with a bundle of tangible rewards instead of a motivating idea that the consumer wants to belong to.

The name customer relationship management reveals the phoniness of its intent. Clearly, this is not about feeling for the customer or burning to do more, but about managing a relationship. Its a little like an instructional manual to make friends, a plodding detached effort at building a bond.

The answer is perhaps to go back to the idea of CRM in that it values the people who believe in and buy from us. CRM allows the corporation to become human and smile back at its customers. However, this will happen only when CRM becomes a mindset, and not a system. The walls between manufacturers and customers need to break down; customer delight will happen only when we delight in our customers. Only people build relationships; corporations can do so only if they behave as humans do. Relationships call for a suspension of immediate and guaranteed reciprocity. As long as our intent is to extract more from customers, no matter how well we try to hide it, the hairy nakedness of our greed will always have customers shutting their eyes to us.

The writer is president, McCann Erickson. These are his personal views. He can be reached at santosh.desai @ap.mccann.com