Subscribe to Inc. magazine
CUSTOMER SERVICE

Why CRM Wastes Customers' Time

Advertisement

Over the past 20 years, I have been continually amazed at the lemming-like behavior of a selected segment of business professionals. We all know at least one of them: The Buzz Chasers.

They are the managers, directors or VPs who seek out and grab on to the latest business buzzword like a kid on a cupcake. Most likely, this aficionado received his newfound enlightenment through an in-flight magazine or book on tape.

Of late, the fashionable management buzzword has been CRM.

Customer Relationship Management (CRM) has been around for years. But it seems that very few companies have been sophisticated enough or sufficiently dedicated to realize CRM's true potential. Yet business executives are drawn to it because it is highly measurable--which can be a good thing in times of economic uncertainty.

CRM is predicated upon the belief that if you have enough information about your customer and her behavior, you can use database technology to develop a more personalized, targeted and effective marketing effort. Conceptually, it makes sense.

Toward this end, the battle cry of the Buzz Chasers has been, "Build the database. Opt-ins, we need opt-ins!"

No doubt, there are some very smart people in the world of CRM. The legendary Stan Rapp of MRM Partners Worldwide has a great way of expressing the value of CRM. In his words, "In the 21st century, the database is the marketplace." And throughout his career, Mr. Rapp has proven that he is a visionary with the right stuff.

However, lower on the food chain are hoards of start-up CRM companies that grapple with taking their "expertise" in databases and reporting, and turning themselves into marketers. Drawing upon their analytical skills, they have some ability to look at the data, categorize and score customers, generate reports and print captivatingly colorful maps.

But their best efforts are nothing short of folly because too often they lack an understanding of the value proposition for CRM from the customer's point of view.

Lumbering forward, many consultants and business executives have ignored the "relationship" portion of CRM and what it takes to make it work. Often they will use a phrase like "the right message, at the right time, to the right person."

The question is: How do these CRM experts determine the right message?

Ask many CRM start-ups and they say that they will send out a variety of messages and determine the most effective of those by use of such feedback statistics as click-through, open rates or click-per-action. Ironically, this trial-and-error approach violates some fundamental principles of CRM and the characteristic behavior of consumers online.

Today, most CRM programs have an e-mail component. In research I have been conducting during the past decade, consumers report that they delete more than half of the incoming e-mail messages before they are opened. Admittedly, I do it and so do you.

As e-mail recipients, we look at the sender's name and the subject line before making the preemptive decision "to read or not to read."

And that behavior applies to messages from opt-in lists as well. We have all opted in for newsletters and lists that we've long since forgotten or stopped caring about.

For most of us, there is simply too much e-mail to read. Therefore, the content of any given e-mail message--even the subject line--must be highly relevant and engaging to ensure ongoing readership for future messages.

The trial-and-error method of message evaluation does not ensure optimization--it simply chooses a winner from the options provided. It also does not ensure that your message is more compelling than your competitors' message.

Worse yet, trial-and-error for CRM means that brands may undermine relationships from the very start. In the online world, consumers rarely give marketers a second chance to be meaningful. When marketers gain the reputation for irrelevant messaging, recipients will do one of four things with future e-mails: delete, ignore, filter or opt-out.

These well-documented behaviors mean that reported opt-out rates for CRM initiatives represent a best-case scenario. It's the behaviors that are less measurable by metrics that provide a more complete and often tragic picture of the "relationship" a marketer is failing to cultivate.

An approach that optimizes CRM messaging involves the audience in the creation of the entire relationship initiative, including the content. Using a set of techniques known as pre-development research, marketers can tap into insights from target audience members to create relationships that are engaging, relevant and motivating.

Here are some guidelines:

Confirm your segments with primary research. Sure, the data can be compelling. But it can't tell you how different sub-groups of customers think about your product and its messaging vs. your competitors.

Database records are like footprints on the beach: You see that people were there and you have evidence of what they did. But, you have no idea why they did it or what they were thinking.

As a marketer, you are trying to persuade consumers into a certain mindset or motivate a behavior. The types of insights you seek may not be obtainable by a survey--interviews or focus groups may be better sources for the insights you need.

Listen to the customers first, then speak. Determine the kind of words that describe how they feel about your product category and how they make choices among different brands. Understand that their level of involvement with the category is often independent of their involvement with the brand.

Learn everything you can about what is important and valuable to them. This increases your likelihood of being able to write to them in a tonality and style that resonates with them.

Incidentally, the opinion of a marketer or client is rarely a good substitute for listening to customers themselves.

See things through the customers' eyes. If you are using imagery to captivate or communicate in your CRM initiative, you need to understand which imagery best represents your brand's values. Remember, imagery is a powerful communication element--it communicates both explicitly and implicitly. Make sure you understand how members of your segments perceive your visuals.

Build the cost of pre-development research into your project. Whether your CRM investment is $5,000 or $5 million, chances are you want to ensure that it works well. Would your company buy a new building without insurance? Of course not--it's too risky.

Likewise, there is risk involved in CRM--especially the risk that it might not work as planned. Pre-development research acts as insurance for CRM projects by identifying and mitigating the risks. And the biggest dangers in CRM are those risks that haven't yet been identified.

Remember Baron Von Frankenstein? He learned a hard lesson when his "experiment" got into the marketplace before it was ready. And in his case, the market reacted negatively, albeit with torches and pitchforks.

As you move forward with your CRM initiatives, ask your CRM partners how they are using customer insights to ensure the relevance and motivational value of the messages before sending them to real customers. Have they developed the messaging with a test group of customers before they send it out to everyone? Or are they experimenting with your database and promising to "optimize it" or "fix it" on the fly?

If your CRM team hasn't done pre-development research, you may be the one who is taking a risk by wasting your customers' time.

Mitch McCasland mitch@brandinquiry.com is the founder of Brand Inquiry Partners (www.brandinquiry.com).

Copyright © 2000-2003 MarketingProfs.com All Rights Reserved

Last updated: Mar 20, 2003




Register on Inc.com today to get full access to:
All articles  |  Magazine archives | Livestream events | Comments
EMAIL
PASSWORD
EMAIL
FIRST NAME
LAST NAME
EMAIL
PASSWORD

Or sign up using: