Recently, I read a provocative Forum post from a CRM professional named Phil Olivieri. Despite his depth of CRM experience, Phil is struggling to implement in a retail environment and he posted in hopes of getting other perspectives. Because his questions pertain to underlying (and under-discussed) core issues adversely affecting CRM in retail and beyond I’m posting my Forum response to Phil as a blog entry as well.
[I strongly encourage blog readers to review Phil's Forum post [1] and some excellent commentary from Bob Thompson and others, and perhaps add comments of your own.]
Phil – you describe that you’re experiencing the inability of CRM and Retail to co-exist, and with good reason. However, I’d suggest reframing your issue as the inability of CRM and marketing to co-exist, exacerbated by marketing playing a greater role in retail than in any other business sector.
Without going book-length on why CRM and marketing don’t mesh, suffice it to say that modern marketing’s values are incompatible with CRM values. The former is primarily proactive, persuasive, creative, internal-goal driven, and about talking to customers. The latter is primarily reactive, responsive, inter-personal, impact-on-customers driven and about listening to customers. As a result, making marketing adhere to CRM values would bring about the end of marketing as we know it. Marketing’s role, work activities, skill-set requirements, and culture would all change – leaving most ex-marketing managers and staff feeling abandoned by their profession.
But what about the Best Buys and Tescos of the world – where CRM and marketing apparently co-exist? “Apparently” is the operative word here, and I’ll use Best Buy to demonstrate.
“Marketing” played a pivotal role in Best Buy’s transformation from a customer-abusing to much more customer-centric company. But hardly all of “marketing,” just the analytics side. Marketing communication, which has be come so dominant in defining marketing that the two terms are nearly synonymous, was irrelevant. Think about it – how much could marketing communication contribute to adapting stores to trading-space demographics, downsizing corporate staffing and upsizing customer-facing staffing, raising hiring standards with much more sophisticated training, plus introducing new customer information management technologies? Nothing. And recently, Best Buy shut down its internal advertising agency and went outside without any impact on its customer-centricity program, further substantiating marketing communication’s irrelevance to CRM at Best Buy– except, of course, for feeding new customers into the chain’s customer-centric environment.
But all this still leaves you with your original issue – how can you get CRM and retail marketing to co-exist? Basically, you have two options. The “right” option, was it not so impractical, is changing marketing to meet current market needs for much greater customer-centricity. But don’t hold you’re breath. This transition is occurring at a snail’s pace, almost one company at a time, and it may be years before your company’s number is called.
The other, less effective but more realistic option is to “give up.” I don’t mean pack your belongings and head for the exit door. Just stop trying to get CRM and marketing to co-exist. Sure, a new marketing discipline based on “cradle to grave,” lifetime customer management would plus your CRM efforts. But in the large enterprise, corporate sandbox you’re playing in? Ain’t gonna happen. Not anytime soon. So aren’t you better off trying to free CRM from marketing; getting independent CRM budget, staff and accountabilities; and “letting marketing be marketing?”
Of course, I did omit several complications from divorcing marketing from CRM. Marketing’s going to continue creating customer negatives by making inappropriate offers to bring in new customers, unless CRM gains sufficient say in the matter. Then, marketing’s going to want to cross-sell customers’ brains out (which has a visible upside much smaller than its “invisible” downside) unless CRM gains sufficient leverage to control post-acquisition communication. Plus marketing’s going to want to hawk product, while CRM wants to focus on identifying needs and fulfilling them. And not to forget that marketing and CRM will have to share an analytics function.
But life’s never easy. And a strong enough CRM initiative can wield enough influence to restrict marketing to branding and above-board customer acquisition.
Bottom line, forget about the marriage. It can't be saved. Marketing in large enterprises is rarely ready to co-exist with CRM - and trying to force the issue is a losing battle. If management will let you separate, as Best Buy’s did, great. If it won’t, head for a small or medium-enterprise company that’s already committed to redefining marketing to suit our increasingly customer-centric world.
That’s my two cents.