CRM: Navigate the Maze

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The spotlight is burning brighter on CRM-customer relationship management (or marketing)-as the buzz term spews from the mouths of marketers looking to boost their bottom lines in tough economic times. Yet when CRM proponents and disbelievers are asked to define it, their responses are far from uniform. Advertising Age asked experts three basic questions about CRM; their answers illustrate the vastness of the term and its still unresolved definition. The questions:

1) What is CRM?

2) What isn't CRM?

3) Boom or bust: Is CRM working for marketers?

Lester Wunderman

Chairman emeritus of WPP Group-owned Young & Rubicam's Wunderman, New York:

1) "CRM is a process that builds more information, understanding and dialogue between sellers and buyers."

2) "CRM is not advertising. It's not one-way anything. It implies dialogue."

3) "I think it's been working for a long time."

Don Peppers

Partner of Peppers & Rogers Group, Norwalk, Conn.:

1) "I define CRM by the plain English words-managing customer relationships. If I'm managing customer relationships, it means I'm treating different customers differently, across all enterprises. A relationship involves interaction, a back and forth. The relationship develops a context over time; it drives a change in behavior, and this is really critical because this is where a lot of thinking becomes very fuzzy on the part of some folks who are talking about this topic. To manage a customer relationship means that I have to change my behavior as an enterprise based on a customer."

2) "CRM is not looking through your customer database to find which particular customer might be the right customer for this new product. That's direct marketing, and it's a sophisticated form of direct marketing, but it is product-oriented. I'm an ex-direct marketer myself, and I don't blame direct marketers for laying claim to CRM ... but it's laughable."

3) "I think as a business model it works, but I wouldn't say it's working for marketers, because I don't think CRM is something the marketing department can do. If I'm going to treat you differently as a customer, then the back-end of my company has to understand how to do that."

Ian Baer

Exec VP-director of Interpublic Group of Cos.-owned Deutsch's directDeutsch, Los Angeles:

1) "CRM is the most overused, misunderstood term in marketing today. I've heard CRM used as a straight substitute for the term direct mail, but really, to me, CRM is a company committing to building its sales and marketing systems around its customers."

2) "CRM is not a short-term boost to anybody's business. I start to get really nervous when I hear about six-month CRM initiatives; there's no such thing."

3) "For those that are actually doing it to its proper extent, it's a good thing, but the term is being overused more than the practice. Everyone thinks they're using it. It's kind of like a sense of humor-everybody thinks they have one. I could count on two hands the number of companies that are doing it at the nirvana level. When CRM works, it works because it's been a systematic change."

Stan Rapp

Chairman of Interpublic-owned McCann-Erickson WorldGroup's MRM Partners Worldwide, New York:

1) "CRM is the fashionable new life form of direct interaction to retain customers and maximize their lifetime value. It is driven by interaction with prospects and customers across all touchpoints and all communication channels. It is achieved through the efficient use of increasingly powerful back-end technology to manage the data in support of front-end strategies for effective two-way communication."

2) "CRM is not about loving the customer; it is about serving the customer. It is not about technology infrastructure; it is about inno-vative selling ideas. It is not about the customer being king; it is about leading the customer to where you want her or him to be. It is not about making your numbers this quarter; it is about building a company that endures and prospers. It is not about manipulating the customer for greater profit and glory; it is about thinking of the customer as your most vital business asset and acting accordingly. It is not about how marketers influence the marketplace; it's about changing the culture of the entire enterprise."

3) "Most [marketers] aren't even coming close to doing it well."

Mark Hodes

Managing director of WPP-owned Ogilvy & Mather Worldwide's OgilvyOne, Chicago:

1) "CRM is a combination of people, processes and technology to ensure that all interactions with your customer are informed by all previous interactions, regardless of where those interactions occur."

2) "CRM is not technology."

3) "Absolute boom. In the past, it's been a bust, but it has the opportunity and potential to be a boom. You just have to do it the right way."

Brett Gow

Independent consultant:

1) "CRM is consumer relationship management, the process of managing individual consumer contacts over a longtime association, with the goal of maximizing customer value through mutually satisfying interactions and transactions ... CRM simply means the consumer is always right. They always have been, but are now able to exercise it in new and powerful ways."

2) "CRM is not just a `marketing thing.' It's not a tactic, just an advertisement, advertising campaign or program. It is not limited to one or two channels. It is not only technology elements."

3) "CRM is working because it has reawakened business to the expectations of consumers."

Steve Silver

Partner of Helios Consulting Group, New York:

1) "CRM is the natural extension of targeted marketing or one-to-one marketing with what technology is enabling companies to do in terms of being able to manage the entire customer relationship over the entire life cycle-from awareness, lead generation, conversion, retention and across all of the touchpoints with the customer."

2) "CRM is not a software package. It's not a database; it's not a call center or a Web site. It's not a loyalty program, a customer service program, a customer acquisition program or a win-back program. CRM is an entire philosophy."

3) "[If CRM is working] is to be determined. It clearly has not lived up to the promise and the expectations that have been set by the supply side in terms of what the technology is capable of. ... However, there are a lot of companies that have built real capability in this area and gained real value from doing so. It doesn't mean that the promise isn't real."

Eric Holmen

Director of loyalty marketing at Catalina Marketing's Market Logic direct mail division, Costa Mesa, Calif.:

1) "CRM is the systematic and intentionally managed dialogue between a business and a customer that maximizes the lifetime value of a relationship."

2) "CRM is not technology."

3) "It's a huge boom for those who can get it and can get on board. There are some companies that are doing that. There are a lot of companies that are trying some things and seeing some good results."

David Scholes

President-CEO of Omnicom Group's Targetbase, Irving, Texas:

1) "CRM is applying customer knowledge to critical business problems."

2) "CRM is not the unbridled application of technology over good common marketing sense. It's not a technology panacea for all your marketing problems."

3) "It's working on multiple levels. We have case after case of clients' applications of CRM principles that prove it works."

Craig O'Keefe

CEO of Interpublic's Marketing Drive, Chicago:

1) "CRM is an integrated, brand-building strategy. Its mission is to learn, create and motivate. ... It is one brand, one voice, one promise delivered in different ways to each one of the targets."

2) "CRM is not executing an individual or small series of segmented programs. CRM is not a single discipline, medium or genre."

3) "I don't believe CRM is either a boom or a bust because neither CRM philosophy [single discipline or integration] is being developed to its fullest potential."

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