Why CRM Doesn t Work - How to Win by Letting Customers Manage the Relationship

Frederick Newell

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2003 by Frederick Newell. All rights reserved. Protected under the Berne Convention. Printed in the United States of America. No part of this book may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher except in the case of brief quotations embodied in critical articles and reviews. For information, please write: Permissions Department, Bloomberg Press, 100 Business Park Drive, P.O. Box 888, Princeton, NJ 08542-0888 U.S.A.

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This publication contains the author’s opinions and is designed to provide accurate and authoritative information. It is sold with the understanding that the author, publisher, and Bloomberg L.P. are not engaged in rendering legal, accounting, investment planning, business management, or other professional advice. The reader should seek the services of a qualified professional for such advice; the author, publisher, and Bloomberg L.P. cannot be held responsible for any loss incurred as a result of specific investments or planning decisions made by the reader.

First edition published 2003
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Library of Congress Cataloging-in-Publication Data

Newell, Frederick
Why CRM doesn’t work : how to win by letting customers manage the relationship / Frederick Newell.-- 1st ed.
| p. cm.
Includes index.
ISBN 1-57660-132-3 (alk. paper)
1. Customer relations--Management. I. Title

HF5415.5 .N49 2003
658.8’12--dc21 2002153916

Acquired by Jared Kieling
Edited by Tracy Tait

Don’t believe what your eyes are telling you.
All they show is limitation.
Look with your understanding,
find out what you already know,
and you’ll see the way to fly.

—Jonathan Livingston Seagull
Richard Bach

To the pioneers of customer relationship building from whom I have learned so much and to the many marketers who truly want to make life better for their customers—with the hope that some of these words will help you to look beyond today’s limitations, find out what you already know, and see the way to fly.


My sincere thanks to all the companies that cared enough to share stories, numbers, and insights. Special thanks to the many fine people at the companies I work with throughout the year. They have taught me more than I have been able to teach them, and I continue to learn from every visit.

Many individuals deserve my heartfelt thanks for their professional contributions. First among these is Loren Lemon who spent hours reading early drafts, always providing exactly the right incisive comments and suggestions.

Equal thanks to Professor Katherine Lemon, author of Customer Equity—How Customer Lifetime Value is Reshaping Corporate Strategy, my coauthor of Wireless Rules (and my delightful daughter), for adding the text that ties the customer management of relationships to the development of customer equity.

For the foreword I went to the one professional who really pioneered the concept of transferring power to the customer with his earliest thoughts about permission marketing. My sincere thanks to Seth Godin for accepting the challenge.

Thanks to my agent, Ed Knappman of New England Publishing Associates for finding the good folks at Bloomberg Press, to Jared Kieling, editorial director, for his dedicated counsel, and, above all, to my editor, Tracy Tait, who brought order out of chaos in the kindest possible way to help me sharpen my thoughts throughout the book. Special thanks to my associate, Devon Wylie, for her quiet patience, sound advice, and dedicated research.

I especially want to acknowledge the following executives who shared stories, quotes, and ideas: H ctor Bajac of Johnny Walker, Richard Barlow of Frequency Marketing, Bob Brand of the Newtown Bee, Susan Cohen of increMETRICS, Deborah Galea of email replies.com, Barton Goldenberg of ISM, Bernice Grossman of the DMRS Group, Sandra Gudat of the Customer Communication Group, Guara Verma and Todd Hollowell of informationweek.com, Kenneth Kanady of KANA, John Lawlor of Spectra Marketing, Federico Tapper of BancoRio, and Paco Underhill of Envirosell.

Finally, most special thanks to my wife, Harriette, for her unwavering support and encouragement, and thanks to our three great children for their enthusiastic advocacy.

The quote on pages 74–75 is reprinted with the permission of Simon & Schuster Adult Publishing Group from Why We Buy, by Paco Underhill. Copyright 1999 by Obat, Inc.

The sidebar on pages 140–141 is reprinted with permission, CMP MEDIA LLC, Information Week, February 18, 2002, “CRM Makes Strides in Self Service,” Guarav Verma and Todd Hollowell. All rights reserved.

The text in Chapter 17 from Driving Customer Equity appears with permission from the publisher. Driving Customer Equity: How Customer Lifetime Value is Reshaping Corporate Strategy, by R. T. Rust, V. A. Zeithaml, and K. N. Lemon. Copyright 2000 by Roland T. Rust, Valarie A. Zeithaml, and Katherine N. Lemon. Reprinted with permission of The Free Press, an imprint of Simon & Schuster Adult Publishing Group.

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About the Author

Frederick Newell is a leading international marketing consultant who has helped giant multinationals as well as small businesses around the world develop customer relationship management strategies to strengthen customer loyalty and increase profitability. He works with large companies in the United States, Canada, the U.K., Brazil, and Argentina and is a sought-after keynoter for conferences around the world.

Newell is a member of the Board of Directors of the Retail Advertising and Marketing Association, International; a former member of the Operating Committee of the Direct Marketing Association’s Retail Marketing Council; an associate member of the CRM Forum; and serves on the Board of Directors and Advisory Boards of several start-up companies in the United States.

He is the author of Wireless Rules (McGraw-Hill, 2001), loyalty.com (McGraw-Hill, 2000), and The New Rules of Marketing (McGraw-Hill, 1997). Newell’s awards include the PR News Public Relations Award, Advertising Professional of the Year, and election to the Retail Advertising Hall of Fame.

He can be reached at frednote@aol.com.

For in-depth market information and news, visit the Bloomberg website at www.bloomberg.com, which draws from the news and power of the BLOOMBERG PROFESSIONAL service and Bloomberg’s host of media products to provide high-quality news and information in multiple languages on stocks, bonds, currencies, and commodities.

Why CRM Doesn't Work(c) How to Win by Letting Customers Manage the Relationship
Why CRM Doesnt Work: How to Win By Letting Customers Manage the Relationship
ISBN: 1576601323
EAN: 2147483647
Year: 2003
Pages: 141

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