Being direct... AdVantage Oct 2002
As we shall sow,
so shall we reap …
Last month I wrote about some new technology and the provision of brand-oriented information-on-demand across a whole variety of digital platforms. The idea of enabling the kinds of interactive communication that promotes dialogue between brand and consumer, and insodoing deliver a depth of communication focus that encourages relationships, is exciting indeed.
During this week however, I received e-mail from a one-time protégé, Chase Hawkins - who now heads up Interactive Marketing (South America/Middle East/Africa) for General Motors USA, based in Miami, Florida. He sent me a copy of a piece that appeared in the California Management Review, Volume 44 No 3, called Customer Relationship Management: In B2C Markets, Often Less is More by Grahame Dowling. It attempts to throw a serious dampener on the issue of why companies try to introduce Relationship Management programmes at all - (which we'll come back to in a moment) but it also suggests that CRM should perhaps be replaced with CPM (customer profit management).
The paper, typical of academic works of this type, is jam-packed with references from a veritable who's who of the world of marketing academia including Frederick Reichheld; Peppers & Rogers; Don Schultze; Uncles; Jack Trout; Andrew Ehrenberg; Brandenberger and yes, even the great Rosser Reeves (of USP fame). But that's exactly the point about its conclusions - its fundamental approach is to pontificate the subject - from a purely academic viewpoint.
It matters not what the discipline may or may not be - academics always seem to try and find formulae to understand, and so describe, the behaviour of their fellow humans. They seem to forever be on a single-handed quest to find the missing 'piece of the puzzle' that will slip right into their chalked up formula, and allow them to go down in history as the 'one' who discovered the missing link!
If, on the other hand, we consider that any single human being is most likely to be different people on different days of the week, or times of the month, depending on mood, state of mind, level of well-being, et al - then how on earth can we possibly talk in terms of formulae to understand, let alone predict, real world human behaviour. It's like saying that all 25-34-year-old females living in Cities, and who speak Zulu - are identical, and this is patently not true. They may indeed share these characteristics, but they are as individual as ever!
Unfortunately, it is the nature of many academics to reduce everything down to understandable and (what's worse) predictable behaviour, so that they can receive the one thing that seems to drive all of them: peer-group recognition. Those of us who work in a somewhat different environment - the real world, need more. We need to see the work that we do being acknowledged by the people that count: our client's customers, whose responses are a much more important measure of what matters - to them.
Whilst on the subject of the real world, one of my clients gave me a copy of a great little book a few days ago called 'Why we Buy' by Paco Underhill. This insightful work was based upon many years of study and real world measurement of actual consumer behaviour in the shopping situation, and describes many of the mistaken assumptions that we make about consumer motivation, and shopping environment interaction. One of these is that the majority of people who come into a store, make a purchase.
We all no doubt appreciate that there are 'gaps' between primary awareness, need recognition and actual purchase. This is the process known as 'shopping' and one of the very first points made by Mr Underhill is that shopping and purchasing may be the opposite sides of the same coin, but this does not necessarily mean that people who shop, actually buy.
For example, there is the interactive process within the store itself - merchandise, price/value assessments, promotional messages and the staff themselves. All of these can have a positive and/or negative effect on the final purchase decision. One of the (real-world) observations in 'Why we Buy' is as follows: '…The Interception Rate: The more shopper-employee contacts take place, the greater the average sale. Talking with an employee has a way of drawing the customer in closer…'
The real money remains therefore, on the interactive process between customer and company, assuming that all the stimuli for the customer having been there in the first place, have been effective. Quite frankly, this does not surprise me at all, when I think back to the shopkeepers and servers of my youth. The relationship between customer and shopkeeper was usually a genuine one based on mutual respect and an unwritten contract of exchange, and was driven by the one-to-one nature of the interaction - a part of being served - in those days.
This brings me back to the probing of Customer Relationship Management by Mr Dowling. Of course, CRM can be a questionable business practise, unless it is attempted on a genuine platform of serving, rather than one of simply trying to manage profit. The business success secret is NOT just to try and manage the profit of each individual customer - as if they are incidental to the process, but to recognise the massive potential of driving increased and ongoing support - through making the customer feel as if he/she is respected, served, and through doing so, genuinely satisfied.
It actually bothers me that these days, in their absolute greedy quest for profit, companies can easily rationalise that they need to cut costs - and so they reduce customer-facing staff, or employ part-timers that have no clue (a function of experience) as to how to contextualise what the company sells, to the needs of the customer. The potential long-term damage of this strategy is mind-blowing.
As I have so often said in these columns, any relationship (but especially a business one) can only grow from a sense of win-win (serving and being served). Giving is what it is all about. Taking (fewer people, not enough of the right stock, overpricing, etc) is an invitation for a great number of customers to simply walk away, and no selfish attempt at just any so-called CRM program - would ever negate such a response.
... 'til another time.