A quick searchof online bookseller Amazon.com lists close to one hundred books on customer relationship management (including three of mine) with specialty titles covering Canada, Western Europe, Central Europe, Japan, and Latin America. Why does the world need one more? Because all ninety-eight—including mine, I’m not afraid to admit—have gotten it wrong. The very phrase explained in these books—CRM, or “customer relationship management”—implies that companies can manage the customer relationship by targeting specific customers for specific product offerings. How audacious! How impudent! How wrong!
Most reports show that only 25 to 30 percent of companies implementing CRM initiatives feel that they are getting the return they expected. Too many executives want CRM deployed quickly and broadly because they think it will bring a rapid return on their investment. Not only do these executives underestimate the magnitude of the task, but they also fail to understand what the customer really wants from a business relationship. As a result, the very things they are doing to try to build and manage relationships with customers are all too often the things that are destroying those relationships. Customers don’t want to be targeted like hunted animals. This is seen in studies of marketing channel use and as increased numbers of consumers opt out of mailing lists. Consumers want companies to make their lives easier and less stressful by not forcing them to do anything they don’t want to do. With product and service options exploding on the Internet and through multichannel purchase opportunities, the balance of power has shifted to the customer, and the customer wants control.
The time has passed for customer relationship management (CRM); it’s time to transition to customer empowerment and switch to customer management of relationships (CMR). CMR gives the customer the power to tell us what he’s interested in and not interested in. For a customer relationship building initiative to be effective, it should be a well-managed process of turning control over to the customer. And that means letting customers tell you what kind of information they want, what level of service they want to receive, and how they want you to communicate with them—where, when, and how often.
Why CRM Doesn’t Work is written to speak directly to the executives in companies of every size who are concerned with achieving a profitable return on their investments in building and maintaining customer relationships. It is an ideal solution for business people at all levels in all industries who want to stay ahead of the curve. This book will show you how to create business strategies and processes that put customers first and will help you develop a clearly defined plan for profitable return on customer-centric marketing investments.
Projecting a step beyond CRM, to CMR, this book shows by lesson and example how companies can improve the quality of peoples’ lives while, at the same time, improving corporate profits. You’ll find out why the current CRM isn’t working, what needs to change, and how to apply the CMR philosophy at your company. You will learn why so many initiatives fail, a new view of customer service, and a new definition of permission marketing.
Part I of Why CRM Doesn’t Work, “What’s Not Working,” takes you through the essential errors in CRM thinking, from not recognizing that the power is in the hands of the customer, to misunderstanding what CRM is all about, to misplacement of technology's role. This section explains the problems caused by failure to change from a culture of product-based management, and by lack of commitment from senior management. The case histories cover different marketing challenges and provide ideas that any business can put into action.
Part II, “What Needs to Change,” explains specific alterations that must be made to current CRM programs and why. You will learn the new power of permission marketing, the most profitable role for e-mail in building customer relationships, and important rules for e-mail marketing. The ten commandments of personalization will show you how to balance personalization with privacy. In Chapter 10 you will learn the new role of loyalty cards. Chapter 12 shows how the traditional market-speak of branding hasn’t helped most companies and how the new CMR can build strong brands one customer at a time.
Part III, “How to Change,” is about updating both your mind-set and your approach to customer relations, and deciding whether or not CRM is important—or even right—for your business. You will see why “best customer service” can be a cause of failure for a CMR program and why you can’t let every customer manage the relationship. In Chapter 15 you will learn the questions and rules for evaluating customers, and Chapter 16 has eight steps for your transition to CMR. Chapter 17 shows how you can transition to CMR without additional expense, and how to get a true return on investments in relationship-building initiatives.
Part IV, “A Look Ahead,” will stretch your thinking about your market, and will show you what customers really want from mobile messaging. Chapter 22 demystifies customer lifetime value and shows how your company’s stock can earn a higher multiple based on it’s price-to-customer-relationship ratio. The Conclusion suggest the big-picture changes that will occur in a move to CMR, and directs the actions you can take today.
Throughout the book, you will learn from packaged goods giants like Kraft Foods, Procter & Gamble, and Budweiser; financial service leaders Charles Schwab and Fidelity; technology influentials Dell, IBM, and Hewlett-Packard; hospitality and travel firms Ritz-Carlton, Hilton Hotels, and EasyRentaCar; and retail champions Lands’ End, Norm Thompson, Sports Authority, Radio Shack, Staples, Tower Records, eBags—even upscale retailer Prada. With examples from airlines, booksellers, banks, telecoms, newspapers, supermarkets, shopping centers, and theme parks, this book has an important message for everyone whose success depends on selling to customers: consumers, business-to-business, internal clients—any kind of customer.
Switching to the new CMR is a process of realizing you are not in charge and allowing the customer to guide your efforts. That’s the only way companies will be able to build and sustain profitable relationships with customers. That shift is what this book is all about.