Is CRM the answer to better customer loyalty?

Customer Relationship Management is a general term for a variety of software systems that help us track customer names, their transactions, their buying history, and preferences. The database allegedly tells us about each person’s profitability and sorts out buyers from browsers, tire kickers, and losers, with the prime purpose to single out the good buyers and reward them with attractive perks. Now as what to do with the losers?

One of my favorite stores to spend time at when I need a change or to meet some friends is Barnes & Noble. The chairs are comfortable, the magazines are current, the atmosphere is friendly, and of course Starbucks is there to add to the experience. If statistically 10% of buyers that come into Barnes & Noble purchase 90% of the books sold, and if we could figure out how to ditch the people out of the store who just sit around and read the books, dog ear the new magazines, and just leave books and items lying around on the floor, would it be better for the 10% of us who actually do most of the buying? Would it save the company money because they wouldn’t be cleaning up or hiring staff for security? And would buyers like me bring more of my friends over who were buyers?

Not every book in Barnes & Noble is going to be sold. In fact there are shelves and shelves of dust collectors, but all of that adds up to the atmosphere of the store. The same might be said about all of the people in the store. I’ve been in small book stores in Palm Beach where I have been the only person there. There are no chairs, no one browsing the shelves, nor does the store seem inviting, and I find myself driving right back to Barnes & Noble. It’s not much different from attending some of the seminars I have recently sat through regarding maximizing my financial assets during this period of economic instability. There were loads of free-loaders there taking advantage of hors d’oeuvre and wine, however would the speaker have been nearly as effective if he were only lecturing to ten people instead of the hundred attending? Most speakers need the crowd to feel motivation themselves. And aren’t we more interested in what someone has to say when we see the room filled? It’s no different when I am in Barnes & Noble and have to walk around until I find a comfortable seat. The store just seems friendlier. The stacks and stacks of books make the store more impressive.

It’s pretty obvious that most people buy far more luxuriously than they will ever need. It’s the reason many people have a Rolex over a Timex. Both watches tell time, but in the Rolex, the second hand “sweeps” while the Timex clicks away. We’re a society obsessed with bells and whistles, flashing lights, flat screen HD televisions, and iPhones. Can any of us accurately gauge why we have spent hundreds of dollars more for BZO rims over standard rims for our cars? After all, the wheels still go round and round.

And so the CRM answer to accurately measure the profitable customers from the unprofitable customers still remains a mystery. It seems all customers whether they directly add to a company’s bottom line or in some ethereal way add to the buyer’s atmosphere, motivation, and attitude, each buyer or non buyer still maintains an important position in the success or the failure of a company.

photo credit: smulligannn