How to Mismanage Relationships With Your Customers

FRAMINGHAM (03/06/2000) - Today, companies have computing resources available to customize the delivery of services on a phenomenally personalized level.

This capability is brought to us by a combination of very reliable and fast networks, network storage technology, ultra-high-speed processors and superb data analysis tools. Using such resources properly, a company can cater to the individual needs of thousands, if not millions, of customers, even for commodity items.

So it's not surprising that companies are seizing upon customer relationship initiatives. International Data Corp. (IDC) says that the $49 billion companies will spend on customer relationship management (CRM) services this year will swell to nearly $90 billion in just three years.

But I wonder: Are many CRM initiatives already missing the mark, focusing more on attracting new customers (i.e., pumping up revenue) than on retaining existing customers, which is the real payoff from CRM?

Permit me one example to illustrate my point. It comes from the airline industry, which I would wager each of you has loved to hate at least once in your professional life.

I stood up to deplane from a recent flight, which was more than two hours late because of a combination of alleged weather-related problems (our destination had very light rain) and the quintessential "equipment problems" (in this case, the jetway was stuck). As I tried to enter the aisle, an elderly couple who had forced their way in front of me blocked my path. Assuming they were just being rude, I barked out a choice comment.

But a young woman seated next to the couple intervened, saying that the couple had been victims of two previously cancelled flights by the same major carrier, and they were trying to find their connection to Puerto Rico for their first-in-a-lifetime winter vacation. It was nearly 10 p.m., and, obviously, there would be no rum and Coke for them that night.

I followed them out to the gate area. They clearly were not flying veterans and were struggling with the English language. They were totally perplexed. No one was there to greet them.

The gate counters were unoccupied at that late hour. The flight attendants were either oblivious to the couple's plight or just didn't care. I directed them to a counter that was staffed by a lone attendant and left them at the mercy of one of the most computer-intensive organizations on earth.

There's no way that the airline wasn't acutely aware of the couple's situation.

All the data on their travel misfortunes was in the airline's gargantuan databases, probably in several places. Yet no provisions had been made in advance to accommodate these truly lost individuals.

And for this, organizations are going to be spending $90 billion annually by 2003? Consider the wealth of data that airlines have on customers, particularly its frequent fliers like many of you. Now consider the utter lack of anything approaching personal service from the airlines. I know I get none. Why is that?

Is it that despite the hype about CRM, the real efforts in business are still focused on cost-cutting and sales generation, far above all else?

Included in IDC's definition of CRM services is "building customer care processes that help companies . . . expand relationships with customers . . . to improve the customer experience." Explain that to our wayward elderly couple. As CRM's architects, IT management can and should play a role not just in implementing CRM technologies, but also in having a say in targeting their outcomes.

I'll bet there are many other companies and industries that, while professing to embrace CRM, actually fall far short of its promise in actual practice, just like the airlines. And I'll bet you know who they are and why they fail to live up to the hype.

Please write me with your CRM horror stories, and I will revisit this topic with more information in the future.

BILL LABERIS is a consultant in Holliston, Mass., and former editor in chief of Computerworld. Contact him at

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about Bill LaberisIDC Australia

Show Comments