That was the year that was – a review of 2003

MyCustomer.com
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For those of you using the Gregorian calendar, you've just come out of a fairly long break at the end of the year, and, in the Northern Hemisphere, the shortest days of the year. So an old year ends and a new one begins, with the promise of spring and summer to come. This is a time for reflection on the year past before facing again that brave new world of the future.

So what happened in 2003? Well for us it started with an editorial trying to outline some of the key issues that provide the framework in which CRM operates – using a Caribbean island economy as a case study. Now, because I had just had a prolonged holiday on that island some at least of you thought the whole thing was a joke, but on re-reading the article, I still think there’s some pretty good points made, if in a humorous context. Check it out for yourself at CRM essentials – understanding the context of CRM.

But what were the major trends of 2003 in the CRM space? There were four trends that seemed to me to dominate the year – some of them new, some old favourites.

First of all, the shift to self-service via the web in most B-C industries seemed to become unstoppable. The benefits of the shift seem clear to all, but the key issue is how to deliver self-service in a way acceptable to the consumer, and cost-effective for the organization. We published an important document, Profit or Pain from your user experience, from the Hewson Group which provided helpful advice in meeting that key issue. We’ve also covered the topic in a number of editorials including: Generate a massive ROI by getting self-service right and Getting web self-service right from your customers’ perspective to name just two. We expect to see a continuing shift to web self-service as more consumers adopt the Internet as a transactional channel. We think Christmas shopping figures, expected to be down in retail stores, will be significantly up in the e-channel.

Staying with the e-channel, 2003 was the year when spam on the Internet became intolerable, threatening to destroy the value of e-mail for many individuals, and with dire consequences for web-based services like the customer knowledge zone who depend on regular email news bulletins to inform members of developments in the zone. We first raised the topic in an editorial in mid-February, Why Marketing isn’t working any more, of which more later. Towards the end of the year, US, European, and UK governments were beginning to respond by introducing, admittedly inadequate, legislation (see A spam-beating Christmas present for everyone), by which time my own inbox was running at around 95% spam. This is an issue that is not going to go away until the spammers are brought under control, and we expect that to take a number of years.

Another major trend was the continuing move to shift contact centers offshore (see Stresses emerge in shift to offshore contact centers). The offshore contact center has become accepted in most industries with India, China, Mexico, and Canada being the main beneficiaries, and the USA, UK, Ireland, and other English-speaking countries suffering most from the export of jobs. Towards the end of the year serious concern was being raised in the UK about the impact on the UK economy.

The last major trend that we observed n 2003 was a growth in the power of the consumer compared with the organization. This was covered by a number of authors, and writers. The Customer Management Zone saw the launch of the Buyer-centric commerce forum with a large number of papers published. Much of the thinking on the Buyer-centric forum is based on Alan Mitchell’s books, Right Side Up: Brand Strategies for the Information Age and The New Bottom Line - Bridging the Value Gaps That Are Undermining Your Business. But other authors were at work on similar lines. Jim Maxmin and Shoshana Zuboff published The Support Economy: Why Corporations Are Failing Individuals and the Next Episode of Capitalism an extensive analysis of changes happening in the US economy. Similarly, Chapter 17 of Kellogg on Marketing, ‘Marketing in the Age of Information Democracy’ by Mohanbir Sawhney and Philip Kotler (Kellogg on Marketing, Iacobucci, Dawn and Kotler, Philip - John Wiley & Sons, SKU:0471054046 - © 1999-2001, Adobe Systems Incorporated) outlines reasons for a similar shift of power to the consumer, and how marketers should adjust to that shift. Although 2003 was the year when that trend became identified, we expect that it will take a decade or more for that trend to work through the economic system, so we can expect ongoing changes for some time to come.

One symptom of those changes was ‘The Great Marketing Debate’. As mentioned above, back in February I wrote an editorial, Why Marketing isn’t working any more, which has been the most-read editorial I’ve ever written, and has a significant number of comments on it. It also stimulated other articles including: Why marketing isn’t working any more – a definitive answer, The rebuttal to - 'Marketing doesn't work anymore', and Why Marketing won’t EVER work. A version of the article has even been published, we understand, in a publication celebrating the Advertising Industry’ 50th anniversary. We even held a well-attended debate on the issue in the last quarter of the year in London. Looking back on it, perhaps we generated more heat than light through the articles and the debate, and it certainly went on for most of the year, but it does seem there is a serious issue about the effectiveness of Marketing in the current environment, if only judged by the interest and comments on the topic.

Every year brings its conferences, and there were four this year that I particularly enjoyed and found valuable.

I found a conference in Bratislava on Customer Loyalty particularly interesting, partly because of an excellent keynote presentation by Jill Griffin on Twelve simple steps to Customer Loyalty.

Three conferences for the Retail Financial Services sector posed challenging questions for the industry. A dilemma at the heart of European Retail Financial Services companies was highlighted by IQPC’s European Financial Services Exchange in London in May. The key issue is that bank’s find it difficult to change their core processes as fast as consumers would like them to. Some interesting ideas on how handle that problem came out of the conference and are outlined in the article highlighted earlier in this paragraph. In Monte Carlo, in November, CRM Europe highlighted another issue for RFS companies. Most of them are making money from CRM, but at the expense of the customer. CRM – Is it working in Retail Financial Services? outlines my contribution and the conclusions from the conference. Finally, CITY IT on board the Aurora in November (without any stomach bugs), highlighted the logical consequences of both the previous issues: Customer Disenchantment the key issue at City IT.

So we’ve dealt with the trends and the conferences from 2003. What else happened? Well something very close to our hearts happened in April. The Customer Management Zone of insightexec and the CRM-Forum came together. This has added a level of resources and professionalism to the resulting customer management zone that enables us all to achieve much more in supporting you, our members. It takes time for the benefits from such a joining of forces to show through, but in the second half of the year, a number of improvements to the zone were implemented and there’s more to come in the coming year, so hopefully we should be able to continue to improve the services we offer you.

So at the end of 2003, things feel a lot more positive than they did at the beginning of the year. Only one factor upset my Christmas and New Year break. Here in the UK in December, both UK utilities and Financial Services companies were accused of subsidizing the bills of new customers’ utility bills and mortgages at the expense of long-standing customers. Now I know we have said for a long time that loyal customers are worth more than new customers, but I’m not sure that this is the sort of activity we were trying to promote. Penalizing your best customers so that you can attract new customers is not a very sensible strategy in the long-term. It stimulates customer churn, and educates your customers that you are not really interested in long-term relationships. The tactical wins out over the strategic. So the slight niggling question in my mind as we enter 2004 is – Are large-scale B-C organizations committed to Customer Relationship Mangement?

As always we’d like to hear your comments on this editorial. Make them below or email me at [email protected]

Regards
Richard Forsyth

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05th Jan 2004 19:18

In response to your 2003 Review editorial, it's the age old thinking and a perfect example of why companies still have not figured out CRM: companies think, we have this customer, they've been w/us for years, they're a reliable income stream, now what can we do/offer/discount/give away to attract new customers? Invariably, it is at the expense of their most loyal patrons. Companies, for some reason, still haven't realized that their most profitable customers (in most cases) are not the new ones they acquire but the ones with minimal marketing and customer service expenses (read: existing customers). I recently faced this exact issue when I noticed that a magazine I subscribed to was offering a yearly subscription for about 30% less than what I was paying, even though I was among the inaugural customers when the magazine began publication over 6 years ago!!! Needless to say, I got the promotional price but not before a lecture to a marketing director there. Thanks for the piece, keep up the great work!

Thanks (0)
avatar
05th Jan 2004 19:18

In response to your 2003 Review editorial, it's the age old thinking and a perfect example of why companies still have not figured out CRM: companies think, we have this customer, they've been w/us for years, they're a reliable income stream, now what can we do/offer/discount/give away to attract new customers? Invariably, it is at the expense of their most loyal patrons. Companies, for some reason, still haven't realized that their most profitable customers (in most cases) are not the new ones they acquire but the ones with minimal marketing and customer service expenses (read: existing customers). I recently faced this exact issue when I noticed that a magazine I subscribed to was offering a yearly subscription for about 30% less than what I was paying, even though I was among the inaugural customers when the magazine began publication over 6 years ago!!! Needless to say, I got the promotional price but not before a lecture to a marketing director there. Thanks for the piece, keep up the great work!

Thanks (0)