Customer Relationship Management

The Internet marks a major qualitative shift in the ability to collect, store, analyse and exchange customer data because in this seamless electronic environment customers continuously leave digital data traces that are easily recorded, stored and cross-referenced. Therefore it is reasonable to assume that the full extent of CRM was not exploited to todays level until the mass acceptance of the Internet in the mid to late nineties. Businesses began to undertake the trend towards “digital consumer surveillance” in an effort to gain insight into the mindset and patterns of consumer spending. However it is important to analyse just how these systems are failing.

 Firstly an interesting development is the drive by companies on segmentation boasting that it is key in knowing and understanding your customer. It basically describes the process of categorising your customers using broad macro and micro variables with the supposed advantage of being able to “market each sector”. However it has strange connotations with the process of herding animals into different fields and under no circumstances does it account for the word individuality. Any psychology or marketing book for that matter will tell you of the importance of the individual and how each relationship will differ therefore should be approached with different tact. Referring briefly to the adage again it is the understanding of the individual needs of each customer that creates the relevance and appropriateness of the communication as opposed to creating annoyance and environmental waste. It makes you wonder if the CRM should be an acronym for the term Customer Relevance Management.

Since the early adoption of the Internet there have been several legislations introduced in Ireland and elsewhere to protect a consumers privacy rights. It is no astonishing factor to learn that security was almost every consumers reason for not purchasing online. Consumers information both financial and personal were being kept, swapped and sold at large scale where businesses were compiling large databanks of customer information. Legislation in Ireland such as the Data Protection Act (1988, 2000) and the Opt-In clause (2003) have improved the situation somewhat but have not eliminated the whole topic of digital consumer surveillance. How do companies expect to benefit from such “ploys” which do nothing but impinge on the rights and time of the ordinary consumer particularly with relation to the now infamous term junk-mail and similar unsolicited communications?

Radio Frequency (RFID) technologies for example can be used as “tracking devices” in stores as they can transmit and store information about an objects location and status. Benetton were the first to use such devices when the introduced them to various clothing and when particular items were worn at particular shops and venues they were able to transmit information about the locations and habits of the consumer. The legalities of such a tactic are yet undeveloped however the moral and ethical issues are very obvious particularly with no pre-consent by the consumer.

 The reputation of CRM in the minds of consumers which associates it with junk-mail does not mean that it does not have value in the future. Indeed it is a very important and revolutionary concept that if correctly and legally applied will lead to a better understanding of the benefits of symbiotic business relationships between consumers and companies.

 First of all it is paramount, other than taking into account all of the legalities, to know the database. They should be taught of primarily as technologies of customer construction. A central and relatively new concept with regard to CRM is the idea of “Customer Authorship”. In other words giving customers involvement in his/her record creation. As the customers profiles were being authored to a large extent in absence of the real customer, identity management promised only a minor success. If a customer is given authorship rights and control over their own records it is suggested as having the following benefits:

  1. It will prove that a customer is interested in transacting with your company.
  2. It will reduce errors and data redundancy.

   is recognised as having created a “strong link” between the customer and its database. It has done this by giving customers control and authority rights to their “customer identity” in the company. 

What then does the future hold for CRM? With its tarnished reputation companies will now have to reassess their plans with regard to understanding their customers. In my opinion Amazons move towards customer authorship will lead a similar trend in the marketplace as a whole and with time, proper foresight and correct implementation; it will steadily grow into being a success.