Customer Relationship Management (Mini Series Part II)

http://www.euroscientist.com/trust/
http://www.euroscientist.com/trust/

CRM!  how exciting!  I mean it!:)

Remember the days pre-internet?  (ok, maybe some readers won’t) but back in those days shopping was more local and personal.  We’d walk to the local shops.  Book through the local travel agent.  Go to the local bank and grocer.  We knew all the traders, maybe not by name but by face and they knew us.

They couldn’t afford to give bad service because word would get around and customers would move on.  Their customer base was finite when compared to today.  The traders did their very best to remember customers and try to personalise the shopping experience for then, personalised chat, relevant products, some banter maybe….customers had a good time.

Of course, there was competition, that made it more fun.  The days of the old high street.

Fast forward to today.  How things have changed….or have they?

http://www.entrepreneur.com/article/247408
http://www.entrepreneur.com/article/247408

Customers still want a good experience, thats the same and the most important point.  Everything else is different.  Its been well publicised that our High St’s are changing, shops are closing and some streets have more closed space than open.   The internet and digital accessibility has brought down barriers to entry and opened up new platforms for commerce.  Look at Uber, a platform for thousands of people to become a self-employed taxi driver.    Look at Etsy, giving thousands of artisans a shop window they may not otherwise have had.

Some travel agents are thriving.  We hear of the closure of many travel agents yet hundreds if not thousands are  have turned to home working.  They curate and develop a customer base who come back time and time again.

So platforms have changed but expectations haven’t.  Have businesses become better at knowing their customers and generating repeat business?  difficult to answer.  Knowing customers I’d say no.  Repeat business generation, in some cases yes primarily because they’re easy to use rather than customers love them.

Lets look at some of todays’ large on-line businesses, Amazon, Expedia, Netflix.  Do they know their customers? Do they generate repeat business?

http://en.memory-alpha.wikia.com/wiki/Data
http://en.memory-alpha.wikia.com/wiki/Data

In summary I’d say No they do not know their customers but yes they do generate repeat business.  The repeat business is generated not by customer understanding but by technological innovation which makes purchasing easier.   Amazon is getting there with ‘knowing me’ but is still largely crap, they seem to throw everything at you and hopefully something will stick.    Netflix is awful despite spending millions on R&D and continuing investigations into AI.  Is Expedia any good?  Not really.  They’re in the same bracket as Priceline who keep recommending me places I’ve already been to and had booked through them! This signals they don’t know me whatsoever.  Frankly, I don’t want them to know me.  Technology in this case has not yet helped in keeping conversations going.  The technology employed has been great to   gather data but progress then seems to have stalled.  The communication which should then follow isn’t up to scratch.

In Bond films we see our hero finding out about the villain, learning what he can and deploying his knowledge to build a rapport with his enemy.  Bond understands that knowing who you’re dealing with yields results.

Maybe that’s the secret of great CRM.  Keeping the conversation going with the customer without the customer really taking too much note.  The real trick is expressing ideas that really are of interest to the customer which can only really be achieved when one has some knowledge of the customer.  The longer the conversation goes on and the more interested each party becomes the better.  After time a relationship is built, trust is built and familiarity.  This leads to repeat purchases.  Maybe the large on-line businesses aren’t generating an interesting conversation, they’re just suggesting something to buy.

Maybe Customer Relationship Management starts with Relationship Creation.  So the questions becomes how to build a relationship and how to maintain that relationships.  Well, one things is clear, creating a relationship is not instantaneous.  It takes time.  So what goes into building a relationship? some thoughts:

  • Common Interests
  • Humour
  • Talking
  • Sharing ideas and thoughts
  • Ongoing contact

These are not new ideas. Everybody knows this! So if we know what goes into building a relationship the next question is how does a business build a relationship with customers?

If a business has a small number of customers it could literally contact them all and know them all.  However, when a business starts to get to thousands or hundreds of thousands of customers then personal contact becomes impossible.

The traditional method then has been ’email marketing’  Most business are crap at this.  One email for all.  I shudder.

Surely what a business must do is start to profile customers and create clusters.  So we move away from marketing and over to profiling.  This is really a data exercise.  Analysing customer habits, matching ‘like for like customers, trending customers against each other and creating cluster groups.  So, this is really taking your hundreds of thousands of customers and placing them in groups of hundreds when ‘personal’ communication starts to become more possible.

Clearly, I’ve skimmed over profiling but this topic deserves numerous blog posts all on its own.  It’s incredibly important and it’s where much technology is now focused as this is one of the foundations of AI.

Its seems to me those who excel at technology and communication will reach customers and ways others will find difficult to match.  There are few companies that can do this.  I can’t think of any large-scale businesses that manage this.  Certainly some smaller businesses can.  If one can get this right then the business will go from strength to strength.

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