Marketing to customers based on their purchase history data was what we did with CRM, and it worked for what we were trying to do—sell more of what we wanted to sell. But marketing based on the transaction database alone is not enough for CMR, where we are trying to serve the consumers or businesses by getting them to show us the solutions that will serve their needs.
This chapter’s title comes from a Warren Buffett letter to shareholders in which he said, “One girl in a convertible is worth five in the phone book.” He was explaining why he avoided the allure of the dot-com stock boom and kept his investments in companies with proven performance. For marketers it might be changed to: One customer who will communicate personal needs to us is worth five
The world changed after September 11, 2001, challenging marketers to reflect—as
not just as marketers—on what their customer messages should be going forward. The United States was already mired in a
In times like these it would be presumptuous and foolish to believe that a transactional database could still provide the correct guidance for reaching our very
At the start of a chapter in his
That’s what CMR requires; getting as close to your customers as possible and using customer intelligence, not just collecting customer data, but connecting. And connecting means more than being available on the Web.
 Steve Luengo-Jones, All to One—The Winning Model for Marketing in the Post Internet Economy (New York: McGraw-Hill, 2002), Chapter 5.
The results of ignoring customer intelligence and relying solely on customer data have been compared by one writer to steering a tanker by observing its wake. That’s what CRM
We had a similar experience with one of our retail
Research shows that the critical element in providing a positive customer experience lies in personalized and proactive service. Nearly 75 percent of one study’s
Connecting with the customer and finding ways to provide a positive customer experience go far beyond the initial transaction. The more you can “delight” customers the more they will come back. Denny Hatch, contributing editor of
His favorite classical music station came on in splendid quadraphonic sound. He
pushedthe second button; it was his favorite news station. The third button brought his favorite talk station that kept him awake on long trips. The fourth button was set to his daughter’s favorite rock station. Every button was set to his specific tastes. The new owner knew the car was smart, but was it psychic? No, the mechanicat Lexus took the trouble to note the radio setting on his trade-in and duplicatedthem on the new Lexus. What this technician did cost Lexus nothing—not one red cent. Yet it solidified the relationship. Customer delight? More like customer delirium. During the coming years, Lexus would have to screw up real time to negate that divine moment and cause the owner to switch to a Jag, a Mercedes or a Caddie. 
Dallas-based ClubCorp, a company operating 115 private golf courses, understands this kind of proactive service. Its
I learned a lot about empowerment and customer loyalty from Kenneth Kanady, education enablement manager of KANA, a leading provider of external-
Customer loyalty is influenced as much by your customer’s emotions and learning capacity as your own company’s products, services, processes, and prices.
Customer loyalty is a rare gift given to only a few over a lifetime.
Customer loyalty is not normally admitted
The three key elements of customer loyalty are: engagement, enablement, and empowerment. The presence of all three can be significantly
Whereas customer satisfaction and customer confidence can be well managed and measured up close, customer loyalty is not really manageable at all and is best assessed from afar.
Stop offering special deals designed to get loyalty. Such things just don’t work.
Kanady defines engagement as the capacity that “helps me feel connected and
Empowerment is the feeling that customers develop ‘about themselves’ as a result of interacting with a company through its people, products, processes or services. Empowerment is what differentiates a ‘repeat’ customer from a loyal customer. I view customer loyalty as the steadfast emotional allegiance or commitment given to a business, product, brand or person. As such, loyalty is an emotional state of empowerment. It’s empowerment that keeps me coming back for more … keeps me loyal. 
The advertising agency Brann Worldwide agrees that customers have taken control and says, “We’re not helping sellers sell anymore. We’re helping buyers buy.” The following case history explains how the company’s approach has changed: 
Bermuda was facing stiff competition for tourists from other islands, cruises, and even Europe. Although general media coverage had raised awareness of Bermuda’s
In the past when prospects called 1-800-BERMUDA, the phone reps asked only for their
With Brann’s help, the call center has been transformed into a customer-oriented service center that
By probing for details of callers’ lifestyles, learning what callers really want from their vacation, and using that intelligence for connecting with the customer, Brann has created a completely personalized buyer’s experience, giving power to the customer.
And it’s the customer experience that counts. Good customer experiences drive satisfaction, trust, and loyalty. Poor customer experiences have the
“It’s no secret that companies are alienating current and potential customers,” says Nancy Hallberg, executive vice president and North American insight director at Brann. “Our findings suggest that the depth of the problem is much greater than most companies realize. If even a percentage of
When customers get fed up, they aren’t just leaving—they are also engaging in anti-
In the above context, the Internet is an enemy, but it can also be a friend. It is important to remember that the original intent of the World Wide Web was to facilitate interaction among people of similar interests. We now call this community. Because people are more loyal to communities than they are to companies, community on the Internet can be a powerful force.
For example, when NASA set out to produce a map of Mars, it invited the Internet community to help identify more than 40,000 craters on the Martian surface. In a single day, more than 90,000 entries were recorded—1.9 million in two months. NASA called the work of these volunteers “virtually indistinguishable from the input of a geologist with years of experience in identifying Mars craters.” [10 ] The “customers” responded primarily to the opportunity to be part of that 90,000, not out of loyalty to NASA. But now they feel they have a special relationship with that agency.
Companies like Mercury Interactive, which provides indexes of business-to-business software products and services, are creating online communities where customers can gather to trade tips on how to fix problems and how to make best use of a product. The businesses can
The folks at Dell understand this. On Dell’s Web-based service site you get access to a community of other Dell
Another successful company, eBags, which sells luggage and over 4,000
Both eBags and Dell were ranked tops in their category by the Direct Marketing Association study, The Merchandising Scan, released in January 2002; and in June 2002 in the 3rd Annual I.Merchants Awards, eBags tied with Orvis for website of the year.
To help companies develop this sense of community for customers, a San Diego company called Akonix has developed a way for online shoppers to talk to each other in addition to sales
Akonix founder Dimitry Shapiro says, “Since the beginning of human time we have relied on the opinions of other people to help in our decision-making process.” That’s the kind of reassurance we need, but all that’s missing online. Shapiro reports that the human interaction
Communities help us tap into the emotions of consumers. Kjell Nordstrom of the Stockholm School of Economics says, “Emotion is the great differentiator in a world where sameness increasingly rules. In an excess economy, success comes from
In their preface to Emotion Marketing: The Hallmark Way of Winning Customers for Life (McGraw-Hill, 2001), Scott Robinette and Claire Brand write, “If there’s one thing we’ve learned after nearly 90 years of leadership in the relationship business, it’s that emotion matters. From brand building and employee satisfaction to product leadership and customer loyalty, nearly every major success at Hallmark can be traced to effective creation, utilization, delivery, or exchange of emotional value.” 
[3 ] Brian McManus, “10 Steps to Customer Intelligence Success,” crmguru .com, fall/winter 2001, p. 2.
 “Personalized, Proactive Customer Service is Key to Satisfaction,” iccmweekly, March 7, 2002, p. 1.
 Denny Hatch, “Delight Your Customers,” Target Marketing, April 2002, p. 33.
 Eric Yoder, “Improving their CRM Game,” 1to1 Magazine, March 2002, p. 35.
 Kenneth L. Kanady, “Confessions of a Loyal Customer … When Being Satisfied Is Just No Longer Satisfying,” CRM-Forum, April 8, 2002, p. 2.
 “Bermuda Case Study,” blau.com, January 22, 2002.
 “Seller Beware: Some Marketing Practices Are Driving Customers Away,” Brann-News, May 16, 2001, p. 1.
[10 ] David Post and Bradford Brown, “Peer Production Promises to Leap in Importance,” informationweek.com, January 7, 2002, p. 74.
 “Using User Forums to Improve the Product,” 3D-DMA Daily Digest, February 11, 2002, p. 5.
 Michael Lowenstein, “On-Line Community: A Potentially Significant, but Underutilized, Internet CRM and Customer Loyalty Tool,” crm-forum.com, January 14, 2002, p. 2.
 Kim Peterson, “Service with a J,” San Diego Union-Tribune, March 26, 2002, pp. C1, C4.
 Jennifer Kirby, “Accessing Value Groups Through Online Communications,” CRM-Forum, April 8, 2002, p. 1.
 Scott Robinette and Claire Brand with Vicki Lenz, Emotion Marketing: The Hallmark Way of Winning Customers for Life (New York: McGraw-Hill, 2002), p. xiv.