Poor CRM (customer relationship management) is a waste of scarce management resources

A large retailer sent a letter to my wife with coupons as reward for her belonging to its exclusive loyalty program.

On thick, high quality paper, the letter started….”Dear Member”….
Dear member?

Is that how important CRM is to this retailer that they can’t afford to do a basic mail merge and personalise the letter?

It gets worse.

Of the dozen coupons, there was not a single offer made was of interest to my wife. She simply does not buy those product categories. This is a horrible waste of money.

• The shop has been in business for 5 years or more.
• We have shopped there regularly for a year.
• We bought a lot of our household furniture from there when we moved back to Bangalore last year.
• Ritu is a member of their loyalty program, having shared information on her age, interests, occupation.

You would think this would be more than enough information for them to design some seriously useful offers. Each of their offers was for purchases of an “indulgence”. High end stereo, watches, jewelry, pens, make up. A terrible selection in a time when people are postponing purchases of everything but the most essential items.

Unfortunately as I criticize this initiative, I will not know how successful their contact program was. Perhaps my wife was just plain unlucky. But I think not.

What would we have preferred?
- Offers on savings on purchases of petrol.
- Clothes
- Service offers on household whitegoods/ furniture

I am sure the retailer is under pressure to build up sales of slow moving items. But what’s the point of throwing good money behind bad? A consumer, unsure of his next pay check, is not thinking of a high end home theater system.

This is the time to seriously connect with the consumer.

Why would I be excited about a “buy one watch, get a pen set free”, or “buy a watch and get a T Shirt free?” when I am doing everything possible to postpone the watch in the first place? What do I do with a pen set? Or a Reebok T Shirt. The cross promotions were not attractive.

The amount of discount required for a consumer to reconsider an indulgence purchase during an economic slowdown are simply too deep. Anything less, is useless.

Venkat

Stephen Baker's "the numerati"

Just finished reading the book..a few months behind schedule!

Its a great read. One of the few that has no inherant "functional barriers"....from IT- to Fin to Marketing...whatever your calling in life, this book makes a great read.

What is it about... the fact that powerful computers and great analytics software will allow us to understand more about ourselves, how we are evolving...and enable companies around the world to design better more useful products and services. Thats our take.

The book talks of the power of analysing data. Sure we are aware of how credit card companies use our data to predict our future purchases and send us "offers" for the same. But how about using the same data to understand our poilitical preferences and how to "influence them". How to target messages at us better...how to identify potential criminals earlier and identify the onset of debilitating disceases before traditional medical practices can spot them.

On the other hand, how much of our privacy do we lose in all this?

The author poses the question, but in all fairness refuses to go further into the debate. We believe as these technologies evolve and offer more obvious benefits, we may begin to see the benfits of giving up on some of that privacy.

The book is a great collection of case studies across fields as diverse as medicine/ employee efficiency/ medicine/ love/ work/ politics/ health care....and it is this diversity of content that makes it very fascinating.

The possibilities of using computing power with analytical models are simply limitless. No business will be isolated from this.

A point maybe a lot of us understand, but always worth repeating.

Ritu and Venkat