Does your work make people happy? Check out Stefan Sagmeister.

 

I have been studying and working toward changing my career, aiming to make it more interesting, more challenging, more creative and more beneficial to the world.  It is a hard set of changes to bring into effect but I’m working at it. 

Recently the work of Stefan Sagmeister has caught my attention.

An Austrian-born designer working out of New York, Sagmeister does visual design for some interesting, high-profile clients and has built a career working for people who are
a) able to pay well for design, and
b) willing to let a designer create interesting messages and convey them in interesting ways, which is something Sagmeister is good at.

Something challenges me about Sagmeister’s work: Relative to contemporary notions about advertising, branding and marketing communications, it unconstrained by concerns such as integration, brand identity or sales effects.

Sagmeister suggests that branding is outdated. Considering this assertion in the context of the emergence of user-generated content, perhaps Sagmeister’s suggestion reaches further than he intended.

Anyway, I am a willing shill for Mr Sagmeister’s work primarily because he chooses to discuss ideas such as happiness, helping people, improving people’s lives by creating design, and so on. He does this self-consciously but not arrogantly or pretentiously. Whether you like his design style or not, I think some of his ideas are likely to appeal to almost anyone.

I think that whether materials and messages placed into the world by marketers and advertisers bring quality or value to the world, or have the ability to add happiness or interest to people’s lives, is something that we should consider seriously.

From a purely pragmatic standpoint, a brand that people associate with great ideas and design, shared without being diminished by overt marketing messages, might have some potential.

I suggest this is particularly true in a world where people can select the mediums and messages that interest them and can recombine marketers’ attempts to create coherent, integrated communications—with entirely unpredictable results.

Question:  Can organisations that are generous enough and self-confident enough to embrace this ideal compete successfully against ‘traditional’ competitors? Hmmm.

Give Stefan Sagmeister a minute of your time…

PS:  One of the art projects Sagmeister discusses, the Bubble Project by Ji Lee (a former Art Director at Saatchi & Saatchi New York, now Creative Director at Google), is an interesting implementation of user-generated content—both online and in the physical world. Brilliant results.

Definitions and critical success factors for CRM

The building-blocks of successful CRM resonate throughout marketing and management

Broadly, organisations have long been geared toward customers in terms of setting growth strategies, marketing and sales strategies, product development and internal budgeting. But organisations were prevailingly centred upon the product or services they sold (Peppers & Rogers, 2004). Customer Relationship Management is a field that exploded in the late 1990s when businesses realised the potential of internal networks and the internet for tracking transactions of all types toward managing long-term customer relationships—to maximise customer satisfaction and engagement and, ultimately, the overall ROI for a CRM initiative ^{(see note 1 at bottom)} (Bligh & Turk, 2004).

The CRM literature is vast, spanning a range of approaches and interpretations delineated among business sectors and among camps with distinct definitions of CRM itself.

The most obvious division in the literature is the distinction between CRM as a broader concept describing organisation-wide customer orientation and CRM as a more isolated field comprising CRM technology (referred to by some authors as “CRM IS” (meaning CRM information systems) or as “eCRM” by (Lin, Lin, Huang, & Kuo, 2006)).

In a non-IT context it is be easiest (and most consistent with the origin and two decades of literature) to discuss CRM as a strategic business practice enabled by technology, with customer orientation being taken (as is predominantly the case) as a necessary precondition for successful CRM technology implementation, as we will discuss in more detail below.

Since early in the explosion of CRM, and throughout the years that have followed, lists of necessary preconditions or critical success factors for a CRM undertaking have been identified and discussed by a great range of authors in academia, business and the business media. Assessing these comprehensively would fill several books; however a more brief review does begin to reveal consistencies. The most repeated—and yet neglected—of these are reduced to a fundamental three by Phillip Bligh:

1. “CRM is not just a technology initiative; it must be approached strategically.

2. “Insight into customers and demand trends should drive CRM agendas.

3. “CRM must be implemented with an enterprise-wide perspective” (three points quoted from Bligh & Turk, 2004).

An additional necessity, repeated often and with greater urgency in the literature from recent years, is outlined well by Don Peppers:

4. “Establish one-to-one learning relationships: using data about customers, predict what each one needs next, treat them uniquely and increase mutual value with the customer” (Peppers & Rogers, 2004).

Point number one, above, points to the most common source of failure in CRM identified by businesses and the business literature. Countless business leaders have pursued the implementation of CRM in a shallow, arm’s length fashion—considering CRM to be an off-the-shelf ‘product’ that a company needs simply to install and turn on. This fails to recognise that CRM is a business function involving information that is received from customers, and more importantly it is also an orientation toward those customers with the aim of acting upon the information collected.

“[A] source of confusion related to CRM is the meaning of the term customer relationship management. Customer relationship management is actually a business transformation, not just a change in technology” (Marchand, 2006).

Point number two, above, highlights a need to move beyond a marketing perspective when engaging in meaningful CRM.

“Many marketers still think CRM is just an advanced stage of database marketing—using your customer database to find which customers would be the right ones for a specific product offering. They don’t yet understand that relationship building must start with an understanding of the customer’s needs” (Newell, 2003).

Points number two and four are explicitly linked to the necessity for pursuing relational strategies rather than transactional strategies. Relational strategies take into account lifetime cost and value with respect to the total of all interactions and transactions, whereas transactional strategy is focussed on the value of a current or next transaction (Peppers & Rogers, 2004).

“By focussing on the Customer we mean that a company’s managers and sales people should direct and orient their activities at the customer before, during and after sales. The relationship term is a way of moving companies away from having a purely “transactional” contact with customers to building broader and deeper relations that create high customer loyalty. And at the same time, create higher revenues from the lifetime relationship with the customer” (Marchand, 2006).

Point number three is perhaps the most repeated recommendation in the CRM literature. Authors point out that separate, often ‘siloed’ or even competing internal divisions such as marketing, advertising, sales, customer service, fulfilment—and even executive offices—must be united in their commitment to CRM. CRM changes the way information moves through organisations, and how information is acted upon. If this is not the case, even where every employee is sitting in front of a CRM terminal, CRM is not actually taking place. (Valentine, 2005; Xu, Yen, Lin, & Chou, 2002)

“Customer strategy helps avoid the silo effect that exists among departments in many organisations… [encouraging] department managers and employees to think first about customers and second about departmental policies.

“In many organisations, departments become fiefdoms and lose sight of their mission to support the delivery of value to customers. By contrast, high performance firms breach the walls between departments” (Bligh & Turk, 2004).

Breaching silos to create a horizontal, customer-driven organisation is a change for staff that is functional and communications-oriented (both internally and externally). But it is also a cultural shift that must be embraced by managers and executives and that must unite an organisation in defining its purpose.

CRM guides organisations to make customer relationships their primary function and to permanently overcome any thinking that makes internal structure and function appear significant by comparison.

“Customer strategy must drive customer-related policy; existing departmental rules are secondary in importance”(Bligh & Turk, 2004).

“…companies must develop a mindset and culture of customer centricity in their own people, in their products/services, their channel use and their interactions with customers. The management challenge when bringing CRM into a company is both people oriented and information based. To execute CRM effectively requires a cultural shift…” (Marchand, 2006).

But this cultural shift is not an easy one to effect throughout a large group of departments and people, and this is why enterprise-wide change—the most often cited necessity for CRM—is also the least often achieved.

“Employees’ resistance is one of the major risks associated with CRM implementation. In most companies, CRM efforts often never get off the ground because they encounter such stiff resistance from IT. In some of those failed efforts, CRM is proclaimed a new cultural initiative. Similar to TQM in the 1980s, it sounds great in theory. But what happens in practice is that management encounters so much resistance to implementing CRM as a large change management initiative that it just fizzles out” (Xu et al., 2002).

Point number four ventures right into the changes Web 2.0 is bringing to business and shines some light on the significance lurking here, but stops a half-step short of the true ethos, and the potential, of Web 2.0.

Where did this bring us?

People interested in IMC and marketing generally will be familiar with the themes and the CSFs for CRM. They are reflected in modern definitions of IMC and are ever-present in dialogues about web 2.0-era marketing.

Does CRM 2.0 move significantly beyond these?

Notes

[1]  It is important to note that the relationship between CRM and ROI has been a rocky one, at best, largely due to problems described above. Most studies report that fewer than 20% of new CRM implementations lead to positive returns, that even among those organisation that report positive results roughly half are unable to provide credible business data to assess their CRM, and that over 10% of projects never even reach a ‘live’ state. (Almquist, Heaton, & Hall, 2002; Bligh & Turk, 2004; Hansotia, 2002; Nairn, 2002)

This post is part of a developing series:

1. Web 2.0 Marketing: Consumers’ online behaviours boost brand engagement
2. Does the 2.0 revolution warrant renaming business functions?
3. Definitions and critical success factors for CRM (you are here)
4. Is CRM 2.0 something new?
5. What is Marketing 2.0?

References

Almquist, E., Heaton, C., & Hall, N. (2002). Making CRM make money. Marketing Management, 11(3), 16. (also published here)

Bligh, P., & Turk, D. (2004). CRM Unplugged : releasing CRM’s strategic value. Hoboken: John Wiley & Sons, Inc.

Hansotia, B. (2002). Gearing up for CRM: Antecedents to successful implementation. Journal of Database Marketing, 10(2), 121.

Lin, C., Lin, K., Huang, Y.-A., & Kuo, W.-L. (2006). Evaluation of Electronic Customer Relationship Management: The Critical Success Factors. The Business Review, 6(2), 206-212.

Marchand, D. (2006). Customer Relationship Management Challenging the Myth: Focus on people, not the technology. Perspectives for Managers, 131, 1-4.

Nairn, A. (2002). CRM: Helpful or full of hype? Journal of Database Marketing, 9(4), 376.

Newell, F. (2003). Why CRM Doesn’t Work : How to Win by Letting Customers Manage the Relationship: Bloomberg Press

Peppers, D., & Rogers, M. (2004). Managing Customer Relationships: A strategic framework. Hoboken: John Wiley & Sons, Inc.

Valentine, L. (2005). Rethinking CRM to make it pay. ABA Banking Journal, 97(5), 62-62.

Xu, Y., Yen, D. C., Lin, B., & Chou, D. C. (2002).

Adopting customer relationship management technology

. Industrial Management and Data Systems, 102(8/9), 442.

Does the 2.0 revolution warrant renaming business functions?

Does the business world need Marketing 2.0, CRM 2.0, and even IMC 2.0—or just ‘Customers 2.0’?

Recent changes in internet functionality and consumer online behaviour, originally described as a far-reaching change in internet communications and colloquially titled “web 2.0” by Tim O’Reilly, involve (in part) a shift from an internet serving as a largely broadcast-structured one-directional medium to an internet where users contribute and collaborate extensively. The most apparent, current hallmarks of this shift include the exploding popularity of online networking, blogs, social communities and a general increase in the level of interactivity available online. Many successful commercial websites have embraced the trend by encouraging customers to contribute content in blogs, reviews, forums and other online facilities. Video games have evolved to include team collaboration and real-time communication among any number of remotely-located players.

Web 2.0 pundits suggest that this shift in online behaviour indicates a crucial new direction in consumer behaviour that entails a pervasive and growing expectation on the part of consumers that they should be able to engage with and contribute to whatever communities or entities they make contact with online.

That this appears to be borne out by the very nature of many online success stories—businesses such as Flickr, Facebook and Amazon—has led some in the business community to consider 2.0 trends as a pivotal shift that calls for a redesign or redefinition of business functions such as customer relationship management (CRM), public relations (PR) and marketing.

The lessons that are extracted from these changes, however, reflect in many respects established theory and practice in each field. In fact, lessons for business that are being touted as changes necessitated by the advent of web 2.0 echo some of the key lessons highlighted in the field of CRM for many, many years. The past two decades’ literature on the design, implementation and conduct of CRM overlaps extensively with ‘2.0’ ideas, and these overlapping indications appear to revolve somewhat upon consumer orientation.

Web 2.0 is described by some as a revolution that necessitates a significant redesign of communication with commercially important audiences. This has led some writers to suggest that new fields of thought and practice, with new titles such as ‘Marketing 2.0’, ‘CRM 2.0’ and ‘PR 2.0’, should be adopted to denote the differences to traditional practice.

Is a shift in the field of IMC toward a new era of ‘IMC 2.0’ called for, or would this essentially be giving a new name to pre-existing best theory and best practice in marketing communications?

In my next several posts I will review CRM, CRM 2.0, Marketing 2.0 and the current state of IMC—let’s see if this leads us toward IMC 2.0…

This post is part of a developing series:

1. Web 2.0 Marketing: Consumers’ online behaviours boost brand engagement
2. Does the 2.0 revolution warrant renaming business functions? (you are here)
3. Definitions and critical success factors for CRM
4. Is CRM 2.0 something new?
   
5. What is Marketing 2.0?