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CRM: More Relevant Than Ever
We're facing a period of significant change — and measuring the impact of change is what CRM does best.
Posted Oct 25, 2010
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Choice. Complexity. Change.

These concepts mandate the use of CRM systems — now more than ever — to help provide solutions to the recent paradigm shift in buyer attitudes and behavior. However, first it is imperative to understand what has changed.

Choice

To put it bluntly, we're drowning in a sea of choice. 

Have you shopped for Crest toothpaste lately? Finding the basic "regular" toothpaste or your personal brand preference can be very frustrating. You'll have to sort through more than 30 variations; and those are just the adult choices!

As Sheena Iyengar suggests in her book, The Art of Choosing, in 1994 there were 500,000 different consumer goods for sale in the United States. Today, there are more than 24 million.

What to do when faced with such an abundance of options?

Sensing a critical need to fill, technologists have developed and implemented recommendation engines for people drowning in choices. However, as Lev Grossman noted in a recent Time Magazine article, most recommendation engines are based on a technique called collaborative filtering, which "works on the principle that the behavior of a lot of people can be used to make educated guesses about the behavior of a single individual."

But these algorithms still may not solve the problems presented by having too many choices. "The weak link in a recommendation engine isn't the software," Grossman writes. "It's us. Collaborative filtering only works as well as the data it has available, and humans produce noisy, low-quality data." The article also identifies a possibly fatal flaw: "Recommendation engines aren't designed to give us what we want. They're designed to give us what they think we want, based on what we and other people like us have wanted in the past."

The problem with so many choices is not limited to variety and price. Another factor is the immense growth in the number of businesses that market and distribute the choices available. According to Entrepreneur, the number of businesses increased 31 percent between 2003 and 2009, from 22.6 million to more than 29.6 million.

Obviously there is a need for better solutions to the availability of so much choice.

[Editors' Note: For more on this topic, see CRM magazine's recent one-on-one interview with Jonah Lehrer, author of the best-selling book How We Decide.]

Complexity

As a direct result of the issues raised by choice, relationships with customers have grown more complex. Pervasive use and improvements in technology have further exacerbated the complexity of relationships. As a byproduct, many new purchase-channel options have become available, including the increased usage of the Internet.

Take video rentals as one example. Just a few years ago, consumers had only one choice: Drive to the local video-rental store. Today, consumers have five or more unique options. Serious marketers have "upped their game" using CRM to remain competitive and better manage increased channels so customers can shop and purchase via the channels they prefer.

Change

The picture of change is a bit more abstract, but not by much. One only has to consider the overwhelming amount of crisis and instability during the previous decade, the change we've lived through between 2000 and 2009:

  • 9/11;
  • the war in Iraq;
  • the recession;
  • the banking crisis;
  • the mortgage-industry collapse;
  • the rise in unemployment;
  • an energy-policy crisis;
  • a generational attitude crisis in the workplace — across four competing generations;
  • a technology explosion (including the use of the Internet); and
  • the advent and rise of social media.

After considering all of this, is it any wonder that a person, family, business, organization, or other social institution would be impacted in some way?

Ask yourself the following:

  • Am I the same person I was before?
  • If not, then how have I changed — and how have others changed?
  • How has my organization changed, to keep current?

What got you where you are today won't take you where you want to be in the future.

CRM metrics can be invaluable in measuring the impact of change. When used effectively, CRM can consume, organize, and help make sense of data. The marketers who use CRM are going to be better informed and more conscientious about making decisions concerning choice. Having this information further enables organizations to improve the effectiveness of marketing strategies that guide channel selection.

It appears that the most effective marketers will benefit from their use of CRM by embracing all of this change. The most successful will be those who use the technology to help create "outside-the-box strategies" and "forward re-thinking." These efforts will assist in shaping an organization's future, by helping to negotiate this challenging era of choice, complexity, and change.

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About the Author
Alan Adler (alan@alanadlerassociates.com) is an award-winning national marketing consultant, speaker, author, columnist, and CRM pioneer. His new book, Getting the Fish to Swim to YOU & Keeping Them in YOUR Boat: Marketing Wisdom to Attract & Retain Customers, is available at www.GettingTheFishToSwimToYou.com.

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Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors

You may leave a public comment regarding this article by clicking on "Comments" below.

If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

For the rest of the October 2010 issue of CRM magazine, please click here.

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