Put the Customer in Charge of the Relationship

By Heather Baldwin

If you look at the term CRM – customer relationship management – it’s all about companies managing relationships. Yet, if you think about it, the last thing customers want is to be managed. They don’t want to be tracked down and directed and categorized. They simply want the organizations with which they do business to make their lives easier and less stressful. So instead of CRM, says Frederick Newell, author of Why CRM Doesn’t Work (Bloomberg Press, 2003), we should be practicing CMR, or customer management of relationships. “You have to put the customer in charge,” he says. Otherwise, CRM is about the company, not the customer.

Consider these two examples from Newell’s life. Newell is a five-million-mile customer with American Airlines. AA knows it and provides many benefits for that loyalty – a faster check-in, frequent upgrades, early boarding, even special surprise gifts sent personally from the carrier’s senior vice president of marketing, such as ice cream toppings, interesting books and Tiffany crystal. “It’s all greatly appreciated,” says Newell, “but it’s still about American Airlines desiring to manage customer relationships, not CMR.” CMR would be about Newell. For example, the airline would stock Beefeaters, Newell’s favorite gin, on his flights. They would include the current issue of Yachting magazine, knowing him to be a sailing fanatic. And rather than simply asking if he’ll need a rental car, which is a generic offer, the airline would know Newell’s limousine preference and book his limo right along with the flight.

“It’s as if companies believe the technologies that allow them to capture customer data will allow them to change results without having to change what they do,” Newell says. “They haven’t yet invited customers to be part of the process, understanding that the customer can add value to the product.”

Some companies think they’ve done so, but have failed miserably. Take, for example, the bookseller that recently sent Newell an email saying it was unable to find any titles to recommend after reviewing Newell’s purchase history. The email then went on to ask Newell to fill out information about his interests, clicking choices such as: I own it, Not interested, or More like this and so on, next to various titles. Newell did exactly as he was asked, checking off preferences for business books and some sailing books. Since then he has received offers for The Mummy Returns DVD, The Best of Martha Stewart Living and other titles that bear no relationship to his stated preferences. “For all their good words about wanting to create useful recommendations for me,” Newell laments, “this company is not letting me manage the relationship. They still come across as trying to do more for their sales curve than for their customer.” If that sounds like your company, you might want to juggle some letters and turn CRM into CMR.