La traviata.jpg

Violetta meets her consumptive end in La Traviata. Image courtesy of Steven Ford.

One of the great delights of advancing middle-age is that you can decide that some things are just not your cup of tea.

You can say categorically that you just can’t be doing with them. You’ve tried them, often repeatedly and you just don’t like them.

I feel that way about opera. I love virtually all performing arts, but I hate opera. In fact I genuinely believe that there are two types of people in the world, people that don’t like opera and liars.

And I have come to the same conclusion about Customer Relationship Marketing or CRM as the acronym freaks like to call it.


Theoretically CRM makes bags of sense. You build a programme (whether paper based or online) that creates a direct and one to one dialogue with your customers customised around their lives, lifestyle, life-stage, behaviour or attitudes.
Loads of people think that CRM is the future of marketing, particularly eCRM, because anything with an ‘e’ in front sounds like it is probably the future of marketing.
Maybe it is but it bores me rigid, an opinion that I have wisely kept to my self until now.
And until I started reading the excellent ‘Herd, how to change mass behaviour by harnessing our true nature’ by Mark Earls and gained the confidence to come out of the closet
At one level it is just a question of personality.
A recent Vanity Fair article on the US pollster and political Svengali, Karl Rove, divided marketing people into lumpers and splitters. Quite clearly he is a splitter obsessed with the differences between people and ways to communicate ever more targeted messages to ever smaller audiences. As in many things I am the opposite of Rove, I am a lumper. I enjoy understanding the behaviours and attitudes that draw people together far more than those that divide them. So I was never going to be a CRMer by instinct.
But it is not just that I am temperamentally unsuited to the fiddly detail of CRM. I want to question whether it actually works either practically or philosophically.
I don’t know about you but for all the grand talk by practitioners with their amazing case studies (there is the one for Tesco, the other one for Tesco and not forgetting the one for Tesco) I am not aware of having my customer relationship managed by any of brands whose services I enjoy. ‘Aha’ the CRM mongers would say, ‘that just shows how seemless and well integrated into your life this stuff is, you are part of loads of CRM programmes you just don’t know it’.
Well er, no.
I own a car, I am a member of the AA, I have a number of bank accounts with high street banks, a mortgage, donate to a few charities, have my groceries delivered by a supermarket and and none of them manage a relationship with me. Sure they send me loads of un-targeted direct mail, a few blanket emails desperately trying to up-sell me and the odd utterly pointless “magazine”. But it is hardly what we had come to expect from the CRM evangelists. Is the truth that it is practically impossible to turn communications into a relationship and to personalise the interaction sufficiently for it to make any sense? And is the truth that creating something approximating a relationship depends on so much technology that the actual relationship is with an algorithm and not a brand at all.
Then there is the question of whether individualised communication programmes actually work, whether loyalty can be built and deepened at the level of the individual at all, or certainly to the extent that many people believe.
Mark Earls calls this into doubt in his introduction to ‘Herd’.

“Far all its internal intellectual consistency, for all its rigour and measurability at an individual level and for all the common sense axioms behind the approach, CRM turns out not to be the roaring success that it has been claimed to be”

And he cites research by Forester that CRM consultants are vastly more enthusiastic about the benefits of CRM programmes than the businesses they were supposed to revolutionise.
Of course what Mark is suggesting (I think) is that we don’t make decisions about the brands that we favour and show loyalty towards as a result of individual or atomised relationships, we do it en masse, or at least as a result of the collective behaviour of our ‘herd’.
And this put me in mind of the awesome Douglas Holt and his book ‘How Brands Become Icons’.
In it he advances a new model for understanding customer relationships and loyalty based on the identity value that the brand delivers to those customers – identity value being a critical component of brand success. He divides customers up into insiders, followers and feeders.
Insiders help co-create the brand myth and their relationship with the brand is based almost entirely on its utility to them. Athletes are insiders for Nike, the creative community are insiders for Apple. Others feed off that brand myth and their relationship is based on the exchange of patronage for identity value.
The followers identify strongly with the brand’s myth, become devoted to its creator and form the nucleus of its customer base – they follow the brand come what may. Unlike the feeders who have a merely superficial relationship with the brand’s myth and the identity value it confers on customers – for them it is little more than a short term status symbol, valuable because others value it.
You can see this all playing out with Apple and specifically for the Ipod. Insiders are busy co-creating Apple’s brand myth through the music, art, movies and design they produce with Apple kit. Followers are Apple fanatics that treat it as a lifestyle brand consuming multiple products across the portfolio regardless of the number of Ipods they have had to replace. Feeders like having the white headphones and will buy Ipods until something else comes along. And in this we see an inherent tension, the more feeders there are the less the insiders respect the brand and if they leave the followers leave to.
The point is these groups act as groups and follow or divest themselves of a brand on the basis of its identity value and not personal experience or individualised relationships. I am convinced that this is what happened to UK retailer Marks and Spencer in the dark days. M&S’s Middle-British followers rather scarily decided that the brand no longer conferred identity value on them and left over night. I remember doing research and having people apologise if they admitted to buying something at M&S. Suddenly shopping at Marks and Spencer became a source of shame that had nothing to do with their individual experiences of and relationships with the brand. These people were acting as a herd.
So my point is that CRM seems to promise more than it can ever deliver.
Practically its is impossible to pull off convincingly and philosophically it is working to a theory about customer loyalty that seems intuitively right but is actually moribund.
Which is a relief for us lumpers.

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