Tuesday, October 23, 2007

CRM: Seeing things from other people's perspectives.

We've just finished teaching for the semester here at Monash, and one of the subjects I taught was a Masters level unit on customer relationship management. As part of teaching the unit, I created a blog, which I've just switched off, but thought this post was worth saving, and relevant to this blog here. It was originally posted on the 2nd of August, 2007, and appears slightly edited (for context) here.

Sometimes we lose sight of the point of our business initiatives, failing to put ourselves in the shoes of stakeholders like customers (or users, in the case of BI).

Fournier, S., Dobscha, S. & Mick, D.G. (1998) Preventing the Premature Death of Relationship Marketing, Harvard Business Review, Jan/Feb98, V. 76, I. 1, pp. 42-51

I came across the HBR article above today and was struck by its relevance to the Barry Schwartz video below* (and the one viewed in this week's seminar). Although it's a bit old now (nearly 10 years), the article talks about how the idea of relationship marketing (the underpinning of CRM) is often subverted by the very activities marketers engage in to fulfil it. The relevance of Schwartz's idea of the paradox of choice to CRM is that it raises doubts about this ideal of the one-to-one relationship between a customer and a company. The article above builds on this theme very nicely. From the article:

Every company wants the rewards of long-term, committed partnerships. But people maintain literally hundreds of one-to-one relationships in their personal lives - with spouses, co-workers, casual acquaintances. And clearly, only a hadnful of them are of a close and committed nature. How can we expect people to do anymore in their lives as consumers?

"It's overkill," said one woman we interviewed, referencing the number of advances from companies wanting to initiate or improve their relationship with her. "One is more meaningless than the next."

The article points out that consumer-satisfaction is at an all-time low, despite all these relationship-marketing efforts. I reckon a lot of that has to do with the phenomenon that Schwartz talks about, but relationship-marketing, aided and abetted by CRM, seems to only exacerbate it all. You have to wonder how effective our BI systems are at doing what they try to do: improve the decision-making process.

[* The Schwartz video referred to was posted on the original blog - it is a presentation by Barry Schwartz to Google on his concept of the Paradox of Choice. You can watch it here. It's worth watching in it's own right. ]

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