It's Time to Redefine the "R" in CRM

half the functionality of their existing systems.”

The dismal performance of CRM in so many organizations led Graham Hinde, a manager at Business & Decision UK, to lament that “despite all this effort and investment [in CRM], it is hard to discern a noticeable increase in consumer attachment to the companies such as financial services or utility providers who have invested most heavily. Something appears to have gone wrong along the way; could it be that the basic foundations of CRM are flawed?”

Something Fishy?

The question we are left with is why the RDBMS, which has proven so profitable in countless other areas of business, is so often sub-optimally effective when it comes to CRM. The answer, as with most IT solutions, comes from the mistake of focusing on the technology—and not the use case. When it comes to CRM, defining our terms, and in particular what we mean by a Relationship should be a critical first step.

Returning to our friends at OED, the Dons at Oxford offer an alternative definition of Relationship to the one relied on by Codd, a definition that appears considerably more salient when it comes to CRM:

“Relationship: The way in which two or more people or organizations regard and behave toward each other.” It is this much more humanistic definition of relationships, I would argue, to which we must aspire if we are truly interested in serving our customer’s needs—and not merely efficiently transact business with them.

As with all human relationships, the B2C relationship must be grounded in communication and in caring about who our customers really are and what they really want. While attributional research (surveys, focus groups and interviews) can certainly help enrich those understandings, it is through gathering information about the overt and implicit behaviors that demonstrate what our customers truly care about. It enables us to transcend the insights afforded by merely focusing on the transactional aspects of our interactions with them. When Hyatt Hotels marry a record of which paper I prefer in the morning to the comments I have made on my various stays—and then ties that data to records of how often I use which amenities, the typical cadence and duration of my visits, and which restaurant recommendations my colleagues and I prefer—and then integrates this information with the billions of bits and bytes of the digital trail I leave in my wake as I visit various Hyatt properties around the globe, Hyatt gets to know me. In so doing, they ensure my Diamond status is unlikely to ever lapse.

In short, if we truly want a relationship with our customers, we must do more than check off times and types of purchases, visits and clicks; we need to concern ourselves with who they are, what they want, what they do and what (and whom) they care about most deeply.

A New Paradigm for Relationships

Big Data, Advanced Analytics and NoSQL databases offer more than just a way to contend with the volume, variety and velocity of the torrents of customer data we now have access to. They also offer us a new way of understanding that data–and, by extension, our customers.

Hadoop enables organizations to move beyond transactional data and focus on the nuances of behavior that would otherwise be inaccessible. Graphical databases, like Neo4j, allow us to examine relationships in the most meaningful sense: between people, entities, places and preferences. Social Network Analysis provides a means for better understanding and appreciating the evolving and dynamic interplay between our customers and their connections; while Cassandra allows for an examination of behavior in context over time. Who would have thought a few short years ago that the recommender systems enabled by Machine Learning and Mahout would give us an ability to anticipate, understand and serve our customers’ needs so much more effectively.

By munging multiple sources of data and working in symbiotic collaboration with our advertisers, we are able to leverage this new mindset to provide organizations across a wide-range of industries with insights into their own customers that often transcend what would have been possible on their own. When we incorporate their messages with compelling content, we are more effectively able to ensure that they are providing the right message to the right person at the right time in the right context. Perhaps even more importantly, by breaking free of a pure RDBMS perspective, we are helping our partners strengthen their client relationships in deeper, more rewarding ways. And at the end of the day, that’s not just a more humane way to do business. It’s good business.