• by May 14, 2002

A new survey of 197 marketing executives by Reveries reports that almost a third – 28% -- would prefer to invest the majority of their budgets in Customer Relationship Management (CRM) programs, relative to 22% who would select traditional mass media advertising.

According to Spencer L. Hapoienu, CEO of database marketing firm Insight Out of Chaos, which fielded the study in partnership with Reveries, this result may indicate that “the softness in the advertising market is not solely driven by the economy but also by a fundamental change in the structure of marketing," explained.”

"However, it may mean only that our respondents are pioneers who are far out in front of the pack," he said.

CRM is not IT

The respondents, meanwhile, left no doubt that marketing strategies and marketing people -- not software -- should drive CRM programs. Indeed, 51% said that marketing typically leads the charge in CRM at their companies. Almost a third of the respondents, 32%, also said that marketing strategy was the most important reason for CRM success, compared to 28% who cited "executive commitment." Just 4% cited "technology excellence."

"The idea that marketing is mission control of CRM may be wishful thinking on the part of our respondents, all of whom are marketers," Hapoienu observed. "Many of the verbatim statements made by respondents indicated that a heavy emphasis on technology continues to hamper the success of CRM initiatives."

CRM Defined

Fifty-nine percent of respondents said that the initials "CRM" stood for Customer Relationship Management, with Customer Relationship Marketing and Continuous Retention Marketing among the other alternative terms cited. A few respondents noted that CRM previously stood for Cause Related Marketing.

Definitions of CRM largely fell into two buckets: 1) tracking customer behavior for the purpose of developing marketing and relationship-building processes that bond the consumer to the brand, and 2) developing software or systems to provide one to one customer service and personal contact between the company and the customer.

"The distinctions between these two definitions may be fine," noted Hapoienu, "but one that has driven a wedge between marketing and IT when it comes to the implementation of CRM solutions."

The Best and Worst of CRM

Asked to relay their best and worst experiences with CRM, survey respondents provided both personal and professional examples. "By far and away," said Hapoienu, "the most often mentioned lament was that data were not used, regardless of how extravagant or simple the systems or processes."

Many respondents also mentioned the tyranny of the technology, that the IT department leads the marketing department, as well as inflexible systems. Expensive consultants and slipshod suppliers were also frequently mentioned as negative aspects of CRM.

On the positive side, Amazon.com received multiple mentions as a CRM powerhouse. According to one respondent, "Despite their size and my spending, they strike just the right balance of letting me know what I might be interested in and when to leave me alone."

The survey was conducted online during the last week of April among subscribers to "Cool News of the Day," an email newsletter of marketing ideas and insights published by Connecticut-based David X. Manners Company. Twenty percent of respondents came from the brand/advertiser side; 7% from ad agencies; another 20% from marketing services companies; 17% were consultants; and 8% came from promotion agencies. Fifty-nine percent of respondents had 10 or more years of experience in marketing.