CRM: Customer Relationship Misuse

Fictional, insight guru Sherlock Holmes once observed, “It is a capital mistake to theorize before one has data.” So on that basis, one can only presume that Mr. Holmes would have just loved having access to a Customer Relationship Management (CRM) database.

CRM, billed as a customer-centric business strategy, uses technologies and databases to capture, store, and assess customer “information,” to take the guesswork out of marketing. Marketers can compile and analyze information that delivers appropriately tailored and timed messages to those consumers who appear to be the most appropriate targets for the product du jour. Websites, ad servers, and marketing companies track the online activity of millions of Internet users and have wired into the usual life information that’s “out there.” As you read this, someone is deciding just how to use it about you. Anyway, it’s not all data-mined. A lot of the information consumers turn over freely and without question.

Just think about it. Social networking sites contain vast amounts of information, most of it willingly supplied in the form of their member profiles: name, age, hometown, phone number, education, marital status, job, hobbies, religious and/or political affiliations, interesting (and sometimes disturbing) facts about themselves, photos, family photos, pets, blogs, phobias, music, cultural and culinary preferences, and links to “friends and family.” Virtually anything about members’ on and off-line activities can be readily found someplace on the Internet.

Last November, Facebook, launched two targeted ad programs on just that fact. In one, advertisers could deliver ads to Facebook members tailored according to the information in their profiles. The other collected information about Facebook members' online activities and sent that information out to members' "friends." A kind of viral marketing that let everyone know what you were doing and what you were buying. Spooky, huh!?

A number of years ago, real-life guru Peter Drucker, observed, “the truly revolutionary impact of the information revolution is just beginning to be felt.” And that is certainly true today, but consumers aren’t necessarily feeling good about it. For example, complaints poured into Facebook that users didn’t actually know which websites were participating, and couldn’t actually opt-out of the feature, or at least not easily. And the notice that did tell a user that the information was about to be transmitted to thousands of their nearest and dearest Facebook “friends” was not clearly evident and didn’t stay visible long enough for the member to actually stop that from happening. Sound complicated? This is the kind of data issue that, as complicated as it sounds, if you look at it in just the right way, just becomes more complicated.

OK, Messrs. Holmes and Drucker, having data is good; But in measured doses. More is not always better (insights are better than data, but that’s another issue). Eventually consumers will want to decide which information is aggregated and in what ways it is used. Want to see a worst-case scenario? Turn up the volume on your computer, click here: http://aclu.org/pizza/images/screen.swf and carefully watch the cursor.

Efficiencies related to CRM and the ability to better target consumers are always going to be extraordinarily appealing to advertisers. But as sure as someone someplace is adding this blog to some database somewhere, such approaches will give rise to a new, high percent-contribution loyalty value. And it will be one that will make itself felt in virtually every product and service category that touches upon personal data: choice.

And we’re predicting that it’s going to be way more important than what toppings you want for your pizza!