Why CRM Doesn't Work: How to Win By Letting Customers Manage the Relationship [Hardcover]

Frederick Newell (Author), Seth Godin (Author)

Book Description

Series: Bloomberg | Publication Date: April 1, 2003

CRM was supposed to help businesses better understand their customers and increase efficiency. Yet most companies are not getting the return they expected. Is it possible to make customers happy and, at the same time, improve ROI? Is there a practical, affordable way to get customers to say what they really want?  

In Why CRM Doesn't Work, leading international marketing consultant Frederick Newell explains why it's time to change the game to CMR (Customer Management of Relationships). CMR allows companies to empower customers so they'll reveal what kind of information they want, what level of service they want to receive, and how to communicate with them--where, when, and how often. It is a bold solution for businesspeople at all levels in all industries who want to stay ahead of the curve in the development of customer loyalty.  

Newell shows by lesson and example why the current CRM isn't working, what needs to change, and how to put the CMR philosophy to work--without additional expense. The book includes case studies of good and bad relationship marketing from companies as diverse as Kraft Foods, Procter & Gamble, Budweiser, Charles Schwab, Dell, IBM, Lands' End, Sports Authority, Radio Shack, and Staples.  

With the knowledge in this book, a company can learn to build long-term relationships and bring in profits instead of relying on one-time sales. Why CRM Doesn't Work is important reading for companies of every size that are trying to satisfy and sell to today's consumer.

Editorial Reviews

Review

"Fred Newell raises relationship marketing to a new level, beyond database marketing, loyalty programs, targeted advertising, and customer relationship marketing." -- Philip Kotler, SC Johnson & Son Distinguished Professor of International Marketing, Northwestern University Kellogg School of Management

"In this competitive world, hanging onto customers is critical. This book's a commonsense approach to helping you do just that." -- Jack Trout, President, Trout & Partners Ltd.

"The book is filled with practical tips and is an ideal solution for business executives intent on avoiding ‘CRM backlash.’" -- Jonathan Copulsky, Lead Partner, Customer and Channel Strategy Practice, Deloitte Consulting

Review

"Fred Newell raises relationship marketing to a new level, beyond database marketing, loyalty programs, targeted advertising, and customer relationship marketing. Read this before your competitors do."   
- Philip Kotler
SC Johnson & Son Distinguished Professor of International Marketing, Northwestern University Kellogg School of Management      

"In this competitive world, hanging onto customers is critical. Fred Newell's new book is a commonsense approach to helping you do just that."
- Jack Trout
President, Trout & Partners Ltd.    

"Frederick Newell has hit the CRM nail on the head. A lot of company managers thought you could create profits by buying CRM software and building an expensive data warehouse. Fred has pointed out that they were wrong. You cannot predict or modify customer behavior with CRM. What you can do is waste a lot of money. What you need is a customer database and intelligent customer communications, which come from creative strategies, not a piece of software."
- Arthur Middleton Hughes
Vice President for Business Development, CSC Advanced Database Solutions    

"Fred Newell does a wonderful job of helping us understand why so few companies get the return from CRM initiatives that they expect. Why CRM Doesn't Work makes a compelling case for putting the customer in the driver’s seat and allowing the customer to manage the relationship. The book is filled with practical examples and tips and is an ideal solution for business executives intent on avoiding 'CRM backlash.' In the process, Newell addresses a host of relevant topics ranging from wireless technologies to brand building to permission marketing in a cogently written and easy-to-read treatise. Newell moves beyond the buzz and quickly gets to the essence of what companies need to do if they expect to win the 'hearts and minds' of customers. A must-read for any manager in an enterprise focused on improving its profitability, as well as the quality of its customers' lives."
- Jonathan Copulsky
Lead Partner, Customer and Channel Strategy Practice
Deloitte Consulting  

"Fred Newell, in his trademark easy-to-read style, showers us with ideas and examples to illustrate his message that 'it's not technology that drives CRM, it's intelligence about the customer.' He rightly reminds us that the customers must truly be placed at center stage and that we must listen with both ears to their stated and unstated needs. As a recent definition of CRM states, 'Customers Really Matter.' Fred's book is timely for all businesses."
- Brian Woolf
Author, Loyalty Marketing: The Second Act    

"CRM has been promoted as the answer to customer development and loyalty. Fred addresses head-on why this has failed for so many companies that have spent heavily and had such big expectations for CRM. Importantly, Fred now takes customer development and loyalty to a new level--beyond CRM--by redefining and empowering the customer. This is the way to build a successful customer-focused business. Fred is always ahead of the curve."
- Charles J. Beech
Chairman and CEO, Message Factors, Inc.    

"If you're struggling with a CRM initiative in your company, get this book. It can set you straight clearly, easily, quickly and, most of all, through a very readable format."
- Don Schultz
Professor, Medill School of Journalism, Northwestern University

See all Editorial Reviews

Product Details

• Hardcover: 256 pages
• Publisher: Bloomberg Press; 1 edition (April 1, 2003)
• Language: English
• ISBN-10: 1576601323
• ISBN-13: 978-1576601327
• Product Dimensions: 9.1 x 6.4 x 1 inches
• Shipping Weight: 1.8 pounds
• Average Customer Review: 4.2 out of 5 stars  See all reviews (9 customer reviews)
• Amazon Best Sellers Rank: #934,437 in Books (See Top 100 in Books)
  • #73 in Books > Business & Investing > Marketing & Sales > Marketing > Telemarketing

Customer Reviews

Most Helpful Customer Reviews

30 of 30 people found the following review helpful:

3.0 out of 5 stars Cost-efficiency isn't enough: Improve external effectiveness, October 1, 2004

By 

Peter Leerskov "The Strategist, www.lace.dk" (Denmark) - See all my reviews
(REAL NAME)   

This review is from: Why CRM Doesn't Work: How to Win By Letting Customers Manage the Relationship (Hardcover)

Newell focuses on an important issue by trying to explain: "Why CRM doesn't Work". He reports that only 25 to 30 percent of companies implementing CRM initiatives feel that they are getting the return they expected.

He also manages to put forward many of the real causes for CRM projects failures. Most prominently that CRM projects are more concerned about internal efficiency in handling customers (automation of sales force, marketing, and customer service) than the real needs of the customer. So at the end of the day, the firm might have saved some dollars in internal processes and manpower, but the customers are probably treated even worse than before.

This quote from the book illustrates the point:
"Marketing automation is fine, but it's not about the customer. Most marketing automation is about costs and speed. Selling efficiency is not about the customer, it's just about leveraging your resources. Value maximization, in terms of figuring out which of your customer segments are going to deliver the most top or bottom line, that's not about the customer. So a lot of the benefits that are claimed for CRM are really benefits that accrue to the enterprise, but have nothing to do with the customer"

That's why Newell calls for a change. Instead of CRM, we should put the customer in charge instead and call it CMR. That is Customer-Managed Relationships. It's a good and a valid point.

Newell summarizes the journey from CRM to CMR like this:
* From the company is in control ... to the customer is in control
* From make business better for the company ... to make business better for the customer
* From track customers by transaction ... to understand customer's unique needs
* From treat customers as segments ... to treat customers as individuals
* From force customers to do what you believe they'll want ... to let customers tell you what they care about
* From customers feel stalked ... to customers feel empowered
* From organized around products and services ... to organized around customers

The reason why I rate the book somewhat low is that it is poorly structured with endless anecdotes scattered all over the book.

If you're interested in CRM, then take a look at the new bible: "Managing Customer Relationships: A Strategic Framework" by Don Peppers, Martha Rogers. It is highly recommended ;-)


Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

17 of 17 people found the following review helpful:

4.0 out of 5 stars Put Customers in Charge of Defining Your Relationship, May 6, 2004

By 

Donald Mitchell "Jesus Loves You!" (Thanks for Providing My Reviews over 109,000 Helpful Votes Globally) - See all my reviews
(VINE VOICE)    (HALL OF FAME REVIEWER)    (TOP 100 REVIEWER)   

This review is from: Why CRM Doesn't Work: How to Win By Letting Customers Manage the Relationship (Hardcover)

Why CRM Doesn't Work is an excellent discussion of why most companies are disappointed in the results of their CRM investments in shiny new technology to attract and retain profitable customers. The basic problem: Companies are trying to use new tools to manipulate customers in ways that customers hate. An example would be a company that asks about all of your preferences, and then sends you enormous numbers of offers for things you aren't interested in. The solution: Use a management process that lets customers decide what relationship they want with your company, and then develop capabilities that efficiently provide what's needed for that relationship. An example would be all the fun programs that Budweiser provided on-line for those who wanted to enjoy participating in its Whassup?! advertising campaign.

As many people point out in the book, someone will sell you lots of technology bells and whistles whether you need them or not and whether or not you are prepared to use them properly. With this book, you can overcome that problem by using the thoughtful process outlined in the book to make your whole company move into an effective, customer-focused direction. I especially liked the way that it focuses on those relatively few current and potential customers who could make a real difference.

Although the message is a simple one that you could have gotten from a magazine article, I found it helpful to read the many detailed examples in the book. Those that described customer frustrations were the best as reminding me of how badly most companies treat their customers.

I should admit my bias in liking this book so much. On pages 172 and 173, Mr. Newell repeats two of my favorite stories about why humans have stalled behaviors that serve no current purpose . . . both of which appear in a book I co-authored in 1999, The 2,000 Percent Solution. In the first story, a woman cuts off the end of a ham before roasting it. When asked by her husband why she does that, she says that her mother always did. It turns out that her mother's roasting pan was too small for a ham . . . so that's what started the habit. In the second story, experimenters douse monkeys with cold water when one reaches for a banana. Soon the other monkeys will attack any monkey that tries to reach for a banana. Gradually change all of the monkeys in the cage, and they will still attack any monkey who tries for a banana . . . even though none of them have ever been doused with cold water.

So break out of your old habits of manipulating customers to reduce your costs and improve your profits so that you can establish a mutually advantageous and pleasant relationship that makes it easier for profitable customers to do more business with you.

Why did I grade the book down one star? Well, in a lot of sections the book is very repetitious. In some sections, one set of ideas follow another that don't seem to fit together . . . but there's no discussion of how they connect . . . although Mr. Newell clearly thinks they do.

If you agree with his premise and just want to work on doing the right things, you can skip forward to chapter 16 which focuses on the change process that he recommends.

4 of 4 people found the following review helpful:

5.0 out of 5 stars What the CUSTOMER Wants is What Really Matters, September 5, 2003

By A Customer

This review is from: Why CRM Doesn't Work: How to Win By Letting Customers Manage the Relationship (Hardcover)

Two years ago, in the midst of CRM furor, no one would have paid attention to "Why CRM Doesn't Work," however, this summer it has made its entrance with impeccable timing.

Newell introduces the idea of customer-managed relationships (CMR) and also shows by example (and spices it up with humor) how often CRM initiatives fail because most companies are still product--- and not customer--- focused.

Newell then goes further and explains how any business can discover why, when, how, and where customers want to be contacted....simply by realizing who today's customer is, and by listening to them. With these ideas in mind, it really makes you wonder how any company can miss these clues and continue to alienate customers as often as they do. With this book in hand, perhaps more executives will be able to create a truly customer-focused culture; one that lets the customer take control.

Beyond these insights and ideas, Newell questions how technological, financial, and other changes of the future will effect how CRM is being done today, and how CMR can be an answer to many of the most pressing issues.

This book truly speaks to businesspeople in any industry, at any sized company, and at any stage of their CRM initiative (even if they don't yet have one)

This book entertains while also encouraging its readers to think hard and formulate their own answers to their company's problems. CRM - such a grand (and wonderful) business strategy, still needed a new approach, and Newell delivers it.