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Without adopting a paradigm of sustainability and the principles on how to treat people that flow from that paradigm, CRM’s promise lies dormant. Marketers are spending more than $1.5 billion per quarter on CRM (Intellibusiness, February 10, 2008), but are failing in the eyes of their customers.
Gartner Group and Meta Group have documented the problem of spending on CRM technology while failing to embrace the true long-term values behind relationship marketing. According to the Gartner and Meta Groups, 55% to 75% of all customer relationship projects failed to meet their objectives and through the year 2006, and more than 50% of all CRM projects will be viewed as failures from a customer’s point of view (Johnson, 2004). Marketing researcher Fournier and colleagues’ prognosis is ominous: “Corporate performance will suffer unless relationship marketing becomes what it is supposed to be: the epitome of customer orientation…Relationship marketing is powerful in theory but troubled in practice“ (Fournier et al., p. 42). Relationship building requires not only a different skill set, but also a different fundamental value set, than a traditional sales model.
Slapping a CRM tool on top of a short-term, sales-oriented, business model is not going to create profitable, long-term relationships. The problem is wider than the mere misapplication of relationship marketing. John Bogle, investment giant and founder of the Vanguard Fund, the first index mutual fund, details the business climate of short-term thinking run amok in his treatise, The Battle for the Soul of Capitalism (2006).
Bogle rallies congress and corporate America to change the structure of the business climate itself so that companies can focus on creating value rather than on creating (or often, fabricating) numbers. Indeed, the principles under which capitalism itself operates have been altered away from stewardship for customers, citizens, and investors, and instead have been replaced by a “get rich quick“ and “we’ve got to meet this quarter’s numbers“ mentality.