5 myths about Customer Relationship Management
When listening to stories and feedback from suppliers and customers, one could quickly get the impression that CRM more and more stands for Customer Risk Management or Customer Relationship Mismanagement. Customer loyalty programs are sprouting like mushrooms offering advantages obscuring the value of a real brand relationship. It is time to turn things around.
Find out which five key misconceptions about customer relationships are presently the main threats to your CRM success.
Myth Nr. 1
‘Knowing a lot about someone qualifies to be in a relationship.’
Really? If someone collects as much data as possible about a person, are they entitled to assume that person is involved in a relationship? Is this not precisely what some psychotic people do? Gathering as much as possible information about someone and imagining that that person is part of one’s relationship? Since when is knowing a lot about someone equal to having a relationship? Since when is collecting socio-demographic data about customers and keeping track of their sales and contact moments history equivalent to a relationship? Who came up with this? You don’t need to be a rocket scientist to figure out that this doesn’t make any sense. Make sure that you are not in an imaginary relationship. There is a word for this. It is called stalking.
Myth Nr. 2
‘Focusing on your strengths will strengthen a relationship.’
Sounds logical, but it isn’t. Imagine a relationship in crisis caused by a specific deficiency in that relationship and the two implied parties shift their focus away from that deficiency and put their hopes on something that is abundant in the relationship? If the relationship crisis was caused by the deplorable behaviour of one of the involved parties, how much good would emphasising on strength be of help? What once was admirable can become irritating and even nauseating, when overemphasised in a relationship crisis. Do you honestly believe that you can save a relationship by emphasising your strength as a form of compensation while ignoring the cause of the crisis? Focusing on the weaknesses in a relationship and dealing with it is the secret to a healthy relationship. The same is true for customer relationships.
Myth Nr. 3
‘Loyalty is an accurate indicator of a good relationship.’
In other words, if two people are together for 20 years, they are having a great relationship? Can we say anything about the relationship only based on the fact of their coexistence? Is loyalty giving us any clue about the quality of the relationship? Could there be other reasons why these two people might stay together? Could it not be because it has become a habit, or because of fear of change, fear of rejections, insecurity, monotony, not knowing any better and much more?.
Is commitment not telling us a lot more about the quality of a relationship and is a commitment not automatically generating loyalty? If in a relationship two people are loyal it doesn’t necessarily mean that they are committed, but if they are committed, they will be loyal. By striving for a committed customer relationship, loyalty will be an automatic consequence.
Myth Nr. 4
‘What was crucial for initiating a relationship will always remain essential.’
Hmm, is a relationship not progressive and organic? Does a relationship not need to be nourished? If it is not nourished, does it not die? Is nourishment the same unchanging ‘relationship food’ going to help the healthy growth of the relationship? Do you feed an infant the same food as an adult? In the case of growth, it is evident that the nutritional needs and requirements shift. If you don’t have an understanding of this, you might still be feeding what you were used to in the beginning and cause indigestion or malnutrition.
Yes, relationships can also suffer from indigestion and malnutrition when not properly nourished. As a relationship grows, it needs more substantial food than was required in the beginning. This is precisely the same for a mature customer relationship.
Myth Nr. 5
‘The quality of the data determines the quality of the relationship.’
Not exactly. What determines the quality of data; its accuracy or its relevance? You could say both, but ask yourself: is it possible to collect accurate but irrelevant data? Yes, absolutely. What is the value of this accurate, yet irrelevant data? The value is zero because it is useless to stimulate the customer relationship.
Most CRM systems shine as ‘Data Management’ tools, focusing on socio-demographic data and client history. What is the relevance of this type of data if we measure the quality of a relationship? Do you know what your customer is thinking about your brand based on socio-demographic data and past behaviour? If your data is not linked to relationship principles, then your CRM tool is nothing more than a library or a logbook.
Also ask yourself, what is accurate and relevant data worth if you don’t know what to do with it? Does it make any sense to have a pricy CRM system and not to integrate these findings in your communication strategy? If your advertising agency is not able to convert relevant data into growth stimulating messages, why bother collecting all these data?
If your CRM program is not part of an integrated communication strategy, then you are probably giving yourself and your customers a hard time for nothing.