Customer is a knot into which relationships are tied







The higher level of customer expectations that exists today is one of the reasons behind the fashion for customer relationship management (CRM) programmes. Relationship marketing has caused a great deal of excitement within the marketing industry. The big idea is that companies put their customers at the heart of their marketing efforts, asking for and listening to their wants and needs.

Product-focused marketing, which often resulted in a company contacting individuals numerous times with unrelated messages about different products, is being replaced by customer centred systems aimed at what might be called “joined-up” communications with customers and potential customers.

The marketing model shifts from mass marketing to one-to-one marketing where the classic market segments become, theoretically, a one- person segment. The growth of the customer-centric business strategy has led to an increasing emphasis on finding the overall profitability by customer and calculating a customer lifetime value.

Huge investments are being made in customer databases that collate information on all purchasing behaviour. Thereby, the theory goes, relationships are created that emulate the bond that customers had with their local shopkeeper in days gone by. Companies are beginning to understand that retaining customers over the long term is key to profitability.

For relationship marketing to be successful, marketing and IT departments must work together to define the kinds of memories and the elements of trust that characterised the ideal bond between shopper and shopkeeper. This means that a CRM initiative must be sanctioned and supported by senior management and embraced at entry level and by every department, to ensure that different parts of the company do not operate in a territorial way that undermines the effectiveness of what each part is doing.

The main problem with the CRM concept is that although companies are keen to build these associations, customers themselves are less interested. Yes, people want to deal with brands they trust, but loyalty is probably less to do with any emotive attachment they feel than with inertia relating to effort involved in switching allegiances. This is not to say that companies that listen to customers’ views are not appreciated; it is more that this has become an expectation.

Suspicion is also aroused when customer information is used too effectively. Analogies to a big brother state are invited when companies analyze data and market to customers accordingly. It might be a fair assumption that 27-year-old Mr. Gupta, who opened a joint account with his wife one year back and has moved to a bungalow with a garden, is planning to start his family. But when the bank uses this information to market a loan for decorating the nursery, Mr. Gupta might be somewhat unnerved.

The challenge for marketers is to get the balance right being helpful and being intrusive!

0 comments: