Firms believe that forging relationships with customers will make them more profitable. But people recognize a company’s true goal: to take their money. To succeed with CRM efforts, firms must make each interaction a satisfying experience in its own right.
Customer relationship management (CRM) is all the rage, as companies increasingly use technology to craft relationships with consumers. The goal: improving customer acquisition, retention, and lifetime value. Firms believe they can achieve this by:
Increasing contact. To expand their mind share with customers, firms craft additional ways to interact with customers. This ambition drives automakers to pack cars with telematics equipment and just about every Global 3,500 firm to launch email campaigns.
Harvesting data. Companies expect that data logs will reveal customer desires. To create as rich a record as possible, companies meld third-party data, such as credit bureau reports, with their own customer information.
Customers Don’t Want Relationships
In theory, CRM tactics mimic the way that interpersonal relationships evolve — spending more time together, learning about each other, and exchanging something of value. But the similarities are misleading. Unlike person-to-person interactions, person-to-company interactions will never grow into relationships because consumers:
Like anonymity. A person may gladly share secrets with his friends, but he doesn’t like to disclose information to a vendor. In a recent survey of nearly 6,000 North American online consumers, 69% of respondents told us they are either very or extremely concerned about losing control of their personal information.
Pursue their own agendas. People don’t contact companies for a friendly visit or an impromptu chat. Consumers interact to accomplish specific goals. That’s why only 3% of visitors to consumer packaged goods (CPG) sites look for lifestyle content — despite CPG firms’ significant investments in this content.
Remain suspicious. Companies’ desire to build long-term relationships with customers falls prey to other objectives, such as meeting quarterly numbers. Customers see this in firms’ high-pressure sales tactics, reluctance to replace defective products, and seemingly arbitrary contract termination fees. And high profile events like the 1980s junk bond debacle of today’s Enron scandal solidify people’s belief that companies simply can’t be trusted.
CRM Must Focus on Customer Experience
Since customers will rebuff corporate relationship advances, firms need a new CRM focus. Forrester recommends that companies build and sustain their customer base by obsessing about customers’ experiences at every touchpoint. To succeed, firms must:
Redesign internal processes, not customers. Changing the way a company operates may be hard work, but changing human nature is nearly impossible. A large hotelier recently realized that confused customers called the reservation line for tech support, and vice versa. Rather than bracket the numbers with instructions that no one would ever read, the company built a consolidated contact center.
Fulfill current goals — don’t rely on loyalty. Firms must redouble their efforts to anticipate user behavior, expecting increasingly empowered consumers to forgive even fewer missteps. Companies should use the questions of Scenario Design — who are your users? What are their goals? And how do they accomplish those goals? — to guide the design of customer-facing systems.