Online: Reports From the Media Frontiers

CRM
False Positives
by Kevin Ryan, keryan@wahlstrom.com

CRM lacks a common definition. Its effectiveness is hard to measure, and it’s very difficult to clearly identify the problems a CRM initiative should address. For most of today's companies, having or building a CRM solution means developing massive customer information databases that will ultimately learn to communicate only the information these customers are seeking and enhance the "relationship" an organization has with its customer in the most appropriate format for that customer.

In promotional materials for a CRM panel during its upcoming New York conference, @d:Tech says that 70% of CRM programs fail; Target Marketing recently reported a failure rate of 50%. Which number is closer to the truth is tough to tell, but it seems failure is part of the status quo for CRM — failure to clearly define what CRM means to a company, failure to measure how well the investment in CRM pays for itself, and, finally, failure to identify what the CRM initiative or system must accomplish for customers. These ostensibly simple tasks demand quite a bit from any company's resources, and maybe that's why so many fail to achieve victory. Of course, devoting your time to plotting solutions while your customers walk out the door is another problem.

AOL has the right idea. The company has the problem of high acquisition costs, which makes holding on to current subscribers a really good idea. One of the biggest assumptions a CRM system makes is to believe the customer wants a relationship in the first place. Got an AOL account? Millions of people do. Ever get that bothersome "please wait" message while AOL "enhances" your user experience by downloading and auto-installing the latest bag of tricks? You want it, but by no means are you qualified to determine whether or not you want it, and the decision is made for you before you are allowed to blink.

Recently, AOL announced an aggressive plan to expand efforts focusing on retaining customers by enhancing its current array of bells and whistles (among other things) while cutting back on those oh-so-collectible direct mail solicitations, which can carry a pretty hefty price tag on eBay. It is possible AOL is providing another definition for those initials — or maybe it’s just a reminder that you shouldn't focus so much on draining the swamp while trying to catch the alligator.

Wireless
Takeoff Still a Year Away
by Paul J. Gough, paul@mediapost.com

A lot of wireless applications haven’t taken off yet because data speeds are still slow, color cell phones and digital camera interfaces haven’t met their potential, and usability problems still exist.

But all three issues are being addressed, and the results should start to have an impact in the market and in advertising within a year or so, say participants at a recent seminar on the topic.

It’s a difficult market right now, with the economy and other factors forcing wireless platforms to close up shop, says Farren Ionita, vice president of sales and marketing at Factor Inc. But there are opportunities out there for some companies. And according to Lucent Technologies project manager Nelson Hsu, technology that’s being pioneered in South Korea will make it to the United States within a year or two and turn things around.

Already wireless advertising has gone from phone-card promotions to text messaging on mobile phones. The industry is using bar codes, jingles, and simple graphics for geographical targeting and some couponing applications. Ionita says the next generation of telephones using UMTS technology, some of which are already in use in Europe, will employ full multimedia.

Evan Uhlfelder of HipNTasty, a provider of wireless advertising solutions such as contests, games, and other promotions, says his company’s success has been in focusing on what’s simple and usable. He says that successful applications take advantage of linkable text and that no one should think of a wireless application as a browser just yet. “But if you can think of a clever way of using linkable text, you can do it and it works well,” Uhlfelder says.

Peter Mitchell, president of ErgoResearch Inc., says that one of the reasons why WAP and other protocols aren’t successful is that no one is educating consumers on how to use them. Many of the people who sell cell phones are paid on commission and are interested only in sales, he says. Few people are out there teaching the public how to use the technology, which puts more pressure on marketers to understand how, in the end, to make the cash register ring.

“A lot was spent on interfaces, but they’re not always intuitive,” says Mitchell. “The simplification of the message, of the steps that a person has to go through for the whole marketing message to be successful, is key. Every marketing message has to be well thought out.”

But consumers’ cost could be an issue in whether the technology catches on.“I don’t see consumers getting beyond the pricing hurdles. [The new units] are exciting and sexy, but they’re not cheap,” Uhlfelder says.

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