Why CRM Doesn't Work: How to Win by Letting Customers Manage the Relationship

Editorial Review:

Author: Frederick Newell
There are at least eighty books available on customer relationship management (CRM), including three by Frederick Newell. Why does the world need one more? Because the old theories don't work anymore! Companies have spent millions developing CRM systems to target specific customers for specific product offerings. This approach has left customers feeling stalked and targeted like hunted prey. How do companies reach customers and find out what they want? How can companies make their customers' lives easier and less stressful? By turning CRM on its head and transitioning to the new CMR. Newell explains how great companies have shifted from the outdated, sales-oriented Customer Relationship Management to the bold solution of Customer Management of Relationships (CMR). Because it forces companies to think of customers as individuals, CMR helps to build long-term relationships, create customer loyalty, and bring in profits over time instead of speedy, high-pressure, one-time sales. This book shows by lesson and example why the current CRM has failed, what needs to change, and how to make it work through new thinking and new technology. By moving beyond CRM to CMR, companies can satisfy and sell to today's customer.

Binding: Hardcover
Dewey Decimal Number: 658.812
EAN: 9781576601327
Edition: 1
ISBN: 1576601323
Label: Bloomberg Press
Manufacturer: Bloomberg Press
Number Of Items: 1
Number Of Pages: 256
Publication Date: March 01, 2003
Publisher: Bloomberg Press
Studio: Bloomberg Press

Readers Reviews (from Amazon.com)

Average Rating: 4 stars

Rating: 4 stars - A MUST READ, but cruise past the technology implementation stuff
CRM is getting too much hype -- largely from the "consultants" that are making a fortune from it. On the flip side, I feel I've made some of my own fortunes by flipping the system around and ENABLING THE CUSTOMER TO DRIVE THE RELATIONSHIP. The author refers to this as CMR (Customer MANAGED Relationships). He gives great examples, but some of the details and technology explanations are basic and really don't belong in this book. If he had stayed with a higher-level discussion of the philosophy and psychology of CRM's shortcomings, I would have given it 5 STARS. There are far better resources available about the SPECIFIC "how to" of CORRECTLY implementing customer interaction systems.

If you are interested in this topic, you should also look into PERMISSION MARKETING by Seth Godin, as that EXCELLENT work (should be rated SIX STARS!) gives another similar perspective on solving the customer bombardment / interruption marketing problem that has arisen.

Rating: 3 stars - Cost-efficiency isn't enough: Improve external effectiveness
Newell focuses on an important issue by trying to explain: "Why CRM doesn't Work". He reports that only 25 to 30 percent of companies implementing CRM initiatives feel that they are getting the return they expected.

He also manages to put forward many of the real causes for CRM projects failures. Most prominently that CRM projects are more concerned about internal efficiency in handling customers (automation of sales force, marketing, and customer service) than the real needs of the customer. So at the end of the day, the firm might have saved some dollars in internal processes and manpower, but the customers are probably treated even worse than before.

This quote from the book illustrates the point:
"Marketing automation is fine, but it's not about the customer. Most marketing automation is about costs and speed. Selling efficiency is not about the customer, it's just about leveraging your resources. Value maximization, in terms of figuring out which of your customer segments are going to deliver the most top or bottom line, that's not about the customer. So a lot of the benefits that are claimed for CRM are really benefits that accrue to the enterprise, but have nothing to do with the customer"

That's why Newell calls for a change. Instead of CRM, we should put the customer in charge instead and call it CMR. That is Customer-Managed Relationships. It's a good and a valid point.

Newell summarizes the journey from CRM to CMR like this:

From the company is in control ... to the customer is in control
From make business better for the company ... to make business better for the customer
From track customers by transaction ... to understand customer's unique needs
From treat customers as segments ... to treat customers as individuals
From force customers to do what you believe they'll want ... to let customers tell you what they care about
From customers feel stalked ... to customers feel empowered
From organized around products and services ... to organized around customers

The reason why I rate the book somewhat low is that it is poorly structured with endless anecdotes scattered all over the book.

If you're interested in CRM, then take a look at the new bible: "Managing Customer Relationships: A Strategic Framework" by Don Peppers, Martha Rogers. It is highly recommended ;-)

Peter Leerskov, MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

Rating: 4 stars - Insightful!
Customer Management of Relationships (CMR) is not a tactic or gimmick - it's a new way of looking at your business. Author Frederick Newell promises that CMR will put your customers where they should be: at the forefront of your company's efforts. Newell, an international marketing consultant and leading Customer Relationship Management (CRM) authority, explains that a strong relationship with customers is essential to success. Although his book is unnecessarily repetitive at times and poorly organized, he provides excellent advice for companies already on the road to improving their customer interactions. Valuable testimony from experts accompanies numerous case studies. Whether you took a ride on the CRM train, or not, if you want better customer relationships for your business, we think this book may be your ticket.

Rating: 4 stars - Put Customers in Charge of Defining Your Relationship
Why CRM Doesn't Work is an excellent discussion of why most companies are disappointed in the results of their CRM investments in shiny new technology to attract and retain profitable customers. The basic problem: Companies are trying to use new tools to manipulate customers in ways that customers hate. An example would be a company that asks about all of your preferences, and then sends you enormous numbers of offers for things you aren't interested in. The solution: Use a management process that lets customers decide what relationship they want with your company, and then develop capabilities that efficiently provide what's needed for that relationship. An example would be all the fun programs that Budweiser provided on-line for those who wanted to enjoy participating in its Whassup?! advertising campaign.

As many people point out in the book, someone will sell you lots of technology bells and whistles whether you need them or not and whether or not you are prepared to use them properly. With this book, you can overcome that problem by using the thoughtful process outlined in the book to make your whole company move into an effective, customer-focused direction. I especially liked the way that it focuses on those relatively few current and potential customers who could make a real difference.

Although the message is a simple one that you could have gotten from a magazine article, I found it helpful to read the many detailed examples in the book. Those that described customer frustrations were the best as reminding me of how badly most companies treat their customers.

I should admit my bias in liking this book so much. On pages 172 and 173, Mr. Newell repeats two of my favorite stories about why humans have stalled behaviors that serve no current purpose . . . both of which appear in a book I co-authored in 1999, The 2,000 Percent Solution. In the first story, a woman cuts off the end of a ham before roasting it. When asked by her husband why she does that, she says that her mother always did. It turns out that her mother's roasting pan was too small for a ham . . . so that's what started the habit. In the second story, experimenters douse monkeys with cold water when one reaches for a banana. Soon the other monkeys will attack any monkey that tries to reach for a banana. Gradually change all of the monkeys in the cage, and they will still attack any monkey who tries for a banana . . . even though none of them have ever been doused with cold water.

So break out of your old habits of manipulating customers to reduce your costs and improve your profits so that you can establish a mutually advantageous and pleasant relationship that makes it easier for profitable customers to do more business with you.

Why did I grade the book down one star? Well, in a lot of sections the book is very repetitious. In some sections, one set of ideas follow another that don't seem to fit together . . . but there's no discussion of how they connect . . . although Mr. Newell clearly thinks they do.

If you agree with his premise and just want to work on doing the right things, you can skip forward to chapter 16 which focuses on the change process that he recommends.

Rating: 5 stars - What the CUSTOMER Wants is What Really Matters
Two years ago, in the midst of CRM furor, no one would have paid attention to "Why CRM Doesn't Work," however, this summer it has made its entrance with impeccable timing.

Newell introduces the idea of customer-managed relationships (CMR) and also shows by example (and spices it up with humor) how often CRM initiatives fail because most companies are still product--- and not customer--- focused.

Newell then goes further and explains how any business can discover why, when, how, and where customers want to be contacted....simply by realizing who today's customer is, and by listening to them. With these ideas in mind, it really makes you wonder how any company can miss these clues and continue to alienate customers as often as they do. With this book in hand, perhaps more executives will be able to create a truly customer-focused culture; one that lets the customer take control.

Beyond these insights and ideas, Newell questions how technological, financial, and other changes of the future will effect how CRM is being done today, and how CMR can be an answer to many of the most pressing issues.

This book truly speaks to businesspeople in any industry, at any sized company, and at any stage of their CRM initiative (even if they don't yet have one)

This book entertains while also encouraging its readers to think hard and formulate their own answers to their company's problems. CRM - such a grand (and wonderful) business strategy, still needed a new approach, and Newell delivers it.

This book truly speaks to businesspeople in any industry, at any sized company, and at any stage of their CRM initiative (even if they don't yet have one)

Rating: 5 stars - CMR is long overdue
Frederick Newell explains throughout exactly why CRM needs a readjustment (and so much more). This book is peppered with thoughtful insights and never-thought-of ideas for any CRM or Marketing executive wanting to justify a new CRM implementation or one who is desperately searching for a clue to begin the rebirth of an existing one.

Until this book, marketing and other business professionals everywhere may have been wondering where they should look for some fresh answers to their marketing initiatives. My suggestion is that they look right here, because this: CMR (Customer Management of Relationships)... is precisely what Customer Relationship Management will, and must, become.

Frederick Newell has done it again only this time with a lot more moxie. As always, he sees the future of this important business strategy and points the reader in the right direction.

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