Marketers must put the ‘R’ back in CRM

Daniel Aunvig

Daniel Aunvig
Daniel Aunvig is head of customer intelligence for SAS.

Let’s talk about Customer Relationship Management (CRM) but first, let’s go back to basics for a moment. Let’s ask, “How does an individual initiate a long-term, mutually rewarding relationship with another individual?”

One of the key requirements is obviously to make an effort to understand the actual and potential nature of the relationship. To do this we need to find out as much as we can about the other person’s  background, and when we engage with them we must be clear about why we are doing so – what is the context of the meeting and what are the other person’s attitude and aspirations? These are just basic principles, after all, and part of human nature.

Over the years, literally hundreds of millions of dollars have been invested in CRM systems, and all with the best of intentions. In keeping with those basic principles, organisations of all types and sizes have implemented CRM systems that promised to empower the building of relationships with thousands of customers. Interestingly, however, any number of major studies have revealed that customer satisfaction hasn’t, in fact, improved to the extent that justified the expense, disruption and effort.  Moreover, we find that the consumer’s trust in the corporation’s ability to communicate effectively has actually been going backwards for many years now and often dramatically so.

Why is this? My take is that organisations have overlooked focusing on the R in their CRM vision. While marketers have invested heavily in gathering and storing customer information, together with all manner of other information to support the vision – and while they’ve also invested equally heavily in channel execution – they have so often failed to improve their understanding of relationships beyond very basic levels.

I suggest the likely reason for this failed understanding and lack of insight on the part of marketers is that it has simply been too tempting to deploy mass communication programs in one-to-one channels even though their investments in CRM should have steered them towards more tailored approaches.  Perhaps that’s understandable, you might say, given that a large number of case studies have shown that those kind of communication programs are very efficient when it comes to driving short term revenue objectives.

The other reason is that understanding the relationships between the organisation and its hundreds of thousands of customers isn’t all that easy. Competition for customers has become tougher in most businesses and this, together with intensified digital communications, has had the effect of eroding face-to-face contact. This communications–intensity has actually empowered the customer with an advanced filter against one-size-fits-all types of marketing messages. In effect, today’s customers have been able to hijack the marketer’s ownership of the R in CRM.  This means that developing a broad and deep contextual understanding of customer relationships is now mission-critical.

Marketers need to refocus and further invest in understanding the customer journey – essentially to concern themselves with the specific needs of the individual in order to develop valuable long-term relationships instead of concentrating on the familiar short-term Return on Marketing Investment (ROMI). I believe the organisational courage to develop advanced customer intelligence is a key ingredient that will enable organisations with large customer bases to re-inject that much needed human touch into the communication between the brand and the masses of its sought-after buyers.

If organisations rise to that challenge, my promise is that they will be able to start improving consumer trust and eventually create a sustainable competitive edge against other organisations that are too content with the status quo or too slow to see the importance of putting the R back in CRM.