How can you know whether or not CMR is important, or even right, for your business? You might start by thinking like Yogi Berra, who once said, “Before you build a better mousetrap, it would help to know if there are any mice out there.” There are some cases where a firm’s customers don’t fit the CMR “trap,” and you won’t find any mice waiting.
One of the measures of potential CMR value to a company is the frequency of its customers’ purchases. Without frequent interaction, it is difficult to maintain the dialog to
What else should you consider before embarking on the CMR journey? As is often the case, the answer to this question leads to more questions:
Are you prepared to move CMR to the center of your corporate strategy as a process of learning to understand the values that are important to your individual customers?
Will CMR fit with your business strategy—can it serve your financial and business goals?
Can you get everyone in your company to agree on a common definition of CMR and understand that CMR is not just an advanced stage of database marketing?
Are you willing to give away power to the customer? Can your corporate culture support this change?
What will be the cost of deploying CMR? What will be the cost of not deploying some degree of CMR?
Will you be able to integrate your customer data so that all of the data sources can be used to create a single view of the customer? Can you afford to do it?
Will your IT team be willing and able to find new ways to manage the customer data and make it available on an enterprise-wide basis?
Can you identify the kind of customers that are right for your business?
Will some of your best customers want to be empowered? Will that empowerment add value to their customer experience? Will it add value for your firm?
Will your sales managers, product managers, sales personnel, and others be able to develop customer service strategies and product offerings based on customer needs?
Can you identify what return on investment will be expected from the CMR initiative?
Do you have total commitment from most senior management?
And, finally, will you and your company—and that means everyone in the firm—have the belief in the durability of this customer-centric process and have the patience to see the project through?
If you can’t answer yes to all of these questions, it’s time to close this book and look for a new challenge somewhere else. But, if you’ve responded with an enthusiastic “yes!” to each of these questions, it is worth examining them more closely.
Are you prepared to move CMR to the center of your corporate strategy? Everything we see suggests that most companies want this to happen. The Gartner study, mentioned in Chapter 1, showed 52 percent of surveyed companies rated customer relations their highest priority. But that study was asking about CRM initiatives—there are no statistics developed yet to measure commitment to CMR. Empowering customers is a great dream, but be realistic.
Will CMR fit with your business strategy and serve your company’s financial and business goals? If your business strategy dedicates your firm to be the low-price leader (period!), there is not much chance that CMR is important or even right for your company. That is not to say a low-price leader shouldn’t or can’t find ways to
If there ever was a retailer who had built their reputation on the attribute of low pricing, it
certainlyis Wal-Mart. But, how well we know that low prices are only half the process. Only when it is counterbalanced by a commitment to the lives, needs and wants of customers does it all make sense. Price deals with the fact of the matter. But the human factor, like customer care and service, leads us to another thing, every bit as important—the heart of the matter. 
The question of whether or not CMR will fit with your business strategy has little to do with your pricing policy and everything to do with your people policy—how much you care about the human factor and how much you are willing to empower your customer. If you can commit to the lives, needs, and wants of customers you can find the way to make CMR serve your financial and business goals.
A good starting point in deciding if CMR is right for your business is asking if you’re up for the challenge of getting everyone in your company to agree on a common definition of what CMR is. This should be addressed with the understanding that there are different levels of CMR, and that the right level for each business is based on the long-
Only after you have reached agreement on your definition can you address the
In making this decision it is time to explore the opportunity cost of not deploying some degree of CMR—not an easy calculation. Referring to earlier CRM
The fact is that the customer does have new power. If a company is not prepared to recognize that element of the business equation, then, sooner or later, that company will be losing customers and
Louis Columbus, senior analyst at AMR Research, says, “In the present economic environment, many companies are surviving only because they are holding onto their current customers. We still aren’t into positive economic growth yet. Given the fact that so many companies are relying on their customers for
How can your competitors put you at a
CMR will require you to have a 360-degree view of your customer across all channels, and this integration will have a cost. It has been
Working with client companies, I have found the simple technology solutions are often the best. Big dollars don’t always buy big wins. There are other costs of course: people to manage and maintain the database, analysts to
The greater question is whether or not you can count on solid support from your IT team to make your customer knowledge available, in real time, enterprise-wide. You will need their buy-in from day one because, in the end, they are the ones who must supply the customer data that will drive the CMR engine.
Can you identify a return on your CMR investment? This gets us back to the discussion of the cost of not deploying CMR. There are metrics that can be applied. Starting with benchmarks of share-of-wallet and customer retention, it is a simple matter of calculating the profit potential of a set amount of improvement for a defined segment of the customer base. This becomes your goal for the program. Those incremental profit dollars, less the cost of your implementation, begin to define the potential ROI. This is discussed further in Chapter 17.
We have talked before about identifying the customers who are right and most profitable for your business. Now you have to decide if your best customers will want to be empowered and to what degree. Chances are you will find that empowerment adds great value to some but not all of your customers. That
Sometimes it’s difficult to predict whether or not it will be worth it for a company to empower its customers. You might never expect CMR could have value for a baker of cheesecakes. Yet Chicago-based Eli’s Cheesecake has proved the value of empowering its customers. Since giving customers the option of custom designing their purchases, the firm has
You can deliver customer empowerment only if everyone in the firm can contribute. Of course that starts with all customer-
The question of total commitment from most senior management should really have been first on the list. Without that backing, your plan will have no chance of success. And, that commitment must carry with it the understanding that the process of customer empowerment is not just another short-term campaign, but the life blood of the company’s growth and development far out into the future.
 Frederick Newell, loyalty.com—Customer Relationship Management in the New Era of Internet Marketing (New York: McGraw-Hill, 2000), p. 300.
 Erica Morphy, “The Cost of Not Deploying CRM,” ecommercetimes.com, March 26, 2002, pp. 1–2.
 Ibid., p. 2.
 Matt Hines, SearchCRM, March 21, 2002.
 Don Peppers, “Customer Relationship Management: Delivering the Benefits, INSIDE 1to1, August 13, 2001.