News & Articles


Avoiding Customer Relationship Manipulation

by Ernan Roman
This article appeared May 1, 2008

Recently I received yet another stream of e-mails and phone calls seeking to “add value” to my relationship with the seller. It quickly became apparent that these were nothing more than poorly executed sales pitches posturing as relationship marketing.

After reading these little missives, I had an “Aha!” moment. This is why CRM's failure rate is still so very high — 55% to 80%, depending on which report you read.

CRM is about customer relationship manipulation! Its justification continues to be how to squeeze more sales from customers depending on the needs of marketers. A relationship can't be sustained if it's always focused on one party's needs.

The days when marketers owned the relationship passed some time ago, yet few companies noticed. The Internet is first and foremost about consumer empowerment — information, choices and power to the people.

The fact that there are over 150 million phone numbers listed on the Federal Trade Commission's National Do Not Call Registry should be a major signal that consumers are willing to use their power to opt out. More people have opted out of receiving telemarketing calls than turn out to vote!

To make things worse, marketers have created the latest toxic mix, the unholy marriage of CRM and spray-and-pray multichannel marketing. The result is that they're becoming better at irritating people across more media. It isn't progress — but it sure as heck is more annoying.

The answer is obvious and inevitable: The customer owns the relationship. We as marketers may be invited to have a relationship if we observe the following four steps.

  • First, we must honestly define what we mean by “relationship.” Is it one-sided and managed by us? Or is it two-sided, with dialogue and respect for the customer's preferences?

The truthfulness of our answer is easily determined by the metrics we use to measure success. Are we driven by short-term sales or do we have sufficient confidence in our products' quality? Can we be motivated by the expectation of greater revenue and profit which will accrue from long-term relationships?

For example, I recently called a bakery where I occasionally shop and explained that the fancy fruit tart I bought the day before was spoiled. The person's immediate response was, “I'm so sorry! The next time you come in you'll get a $20 credit. Could I have your name and phone number so they'll be on file when you ask for the credit?”

The entire call lasted less than three minutes and didn't involve the teeth-gnashing usually associated with begging for a credit from someone who previously was so happy to take my money. Was this little neighborhood bakery's metric short-term sales, or did it simply understand the essence of customer lifetime value?

  • Second, ask prospects/customers if they'd consider opting in to a relationship with your business because you believe you can provide something of value. Create an offer that's relevant, engaging and supports your honorable intentions. If they see potential value, people often will volunteer a remarkable amount of information. This will create a uniquely accurate opt-in database.
  • Third, deliver only the benefits and products people ask for. Don't presume to know better than your customers what they need.
  • Fourth, ask customers which media you should use to communicate with them. Determine each person's media choices based on the information they provide so a proper dialogue can be maintained.

  • So…if we focus on the relationship and avoid the manipulation or management, CRM success rates will improve. And there's good news for those who like the term CRM: Use it, but change the last word to customer relationship marketing. It'll make a world of difference in your results.
New Book Release: Voice Of The Customer Marketing
"This is the definitive playbook for this new customer-driven era."
—Frank Eliason
Senior Director, National Customer Operations, Comcast
"Thank you, Ernan, for tuning us in to the inner voice of our customers! A deep understanding of our customers' needs and preferences is essential for our future growth."
—Karen Galley
President, Patient News Publishing