What IS CRM, Anyway?

The question sounds odd, doesn't it, when every month I write a column about CRM -- and you, presumably, read it? But do we all really know what we're talking about when we say customer relationship marketing?

I've written a lot about how we're losing the "relationship" part of the CRM equation, and I've given suggestions for how to improve it and reclaim it from the internet coupon companies. And I'm not trying to undermine the importance of that. But maybe it's time for us to take a step back and define exactly what that relationship is -- and how it's inextricably bound to the "marketing" part of the term.

The relationship that we're discussing here isn't a deep interpersonal relationship. Let's make that clear. You're not inviting your customers to come to your place this weekend for a barbeque. They're not going to make you the godparent of their next child. No one's falling in love here.

When we talk about relationship, what we're really talking about is a familiarity with a customer's purchasing history and a handle on what they might be looking to purchase in the near future. That's all. So CRM really is about marketing -- it's just personalized marketing.

That's an important distinction. I'm not trying to minimize how essential that relationship is -- I just want to clarify it. According to Len Barry, who coined the term, "relationship marketing is a form of marketing which emphasizes customer retention and satisfaction, rather than a dominant focus on point-of-sale transactions."

That fits in nicely with my views. I've written a lot about retention being the new acquisition (most recently in my new book), and that's exactly what we're talking about here: using techniques and technology (backed up, of course, by a superior-quality product or service) that will keep you connected to your customers in such a way that it never occurs to them to go anywhere else, no matter how tempting the current Groupon-type offers might be.

The relationship, from the consumer's point of view, is similar. No customer is looking to you to be their new best friend; they are looking to you to deliver what you've delivered in the past. Their trust and confidence in you comes from your track record in the past.

What they want is to get the best product or service for their money. That's all. They want to be marketed to in such a way that they're sure that's what they're getting, and part of that assurance is dealing with a marketer with whom they already have a positive and satisfying history.

So let's not stray far from the marketing part of the equation when we think about CRM. And the essence of good marketing really does entail good relationship-building. For example, good marketing talks about the benefits of a product or service rather than just its features -- that's talking directly to the consumer about his or her needs, which is a relational conversation. And extending that conversation over time is how good chatter marketing -- my term for using new online technologies for recapturing the offline familiar relationship between salesperson and customer -- works best.

It's not all that difficult, either. It just entails being aware of one's customers between the times when they're placing orders with you. If they're opted in (and good marketing always respects the opt-in requirement) to receive communications from you, then you can contact them between purchases with special offers or to draw their attention to an item complementing one they've purchased in the past. You can be aware of what they're talking about in social networks and understand their near-future shopping needs while those needs are still at the thinking-about stage.

Good relationships always entail an awareness of the other. A good marketing relationship does the same. And that's what CRM really is all about: being a good marketer who has good relations with his/her customers.

2 comments about "What IS CRM, Anyway? ".
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  1. Karen Fratti from The New School, October 11, 2011 at 7:25 p.m.

    I thought CRM was clicks per thousand.

  2. Karen Fratti from The New School, October 11, 2011 at 7:28 p.m.

    I wish I could delete that comment. Read too fast.

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