Rising to the challenge of good CRM

Customer relationship management is a long-term business. Diageo and SK-II certainly appear to understand this, consolidating their regional CRM briefs with one agency each in recent months, in a bid to derive greater value from their efforts to acquire and retain loyal customers.

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These two high-profile examples are, however, exceptions to the norm. According to several agencies, it appears that most companies in Asia still see CRM as an afterthought, opting for quick-fix CRM programmes, rather than true long-term initiatives.

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"Not all clients understand it," explains Chris Riley, managing director of OgilvyOne Singapore.

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"Many don't get what CRM or real strategic direct marketing is either. Those brands with large consumer bases to manage, like banks, airlines and certain aspects of IT or logistics, have a greater appreciation of maintaining a customer relationship… and there's inherent long-termism because clients aren't usually one-offs. That isn't the same for all brands."

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Unilever, for instance, pitches out all activation and CRM work in the region on a project-by-project basis. While Unilever global VP of shampoo brand Clear Seokhee Won is quick to stress that CRM can only be viewed through a long-term prism, he admits that the project mentality may just be down to a lack of know-how.

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"We are not heavily experienced with CRM to begin with, and it's not something that was always in consideration," says Won. "In Asia, the cost of TV is so low it gets more attention. But in Europe, our CRM is much more systematic."

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Won's candour is certainly refreshing, and, as he himself emphasises, true CRM can only ever be a long-term initiative. But the trepidation among CRM agencies, many of whom decry the tendency towards short-termism, is understandable.

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"If the client or agency is looking at short-term direct marketing or CRM, they really don't understand what it's all about," says Paul Hourihane, founding partner of independent Singapore shop Go Direct. "It takes time. If somebody says 'can you do me a six-week DM or CRM project?', they really don't know what they're doing."

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It's true that well-run CRM programmes often yield quick results, "but the initial results are nothing like what you would achieve in the longer term," Hourihane says.

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But if short-termism remains rampant, are the advances in CRM technology to blame for creating this environment? Digital tools mean that marketers can now link powerful CRM programmes with tremendous cost-effectiveness.
As Argha Sen, head of marketing and CRM at Toys R Us, points out, however, technology is no substitute for strategy.

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"It's very, very cost-effective, but first and foremost comes your creative and strategy and relevance," he says. "If you can get that right, then technology can be very powerful and cost-effective. But if you don't, then there's no point using it."

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Hourihane agrees, pointing out that long-term thinking still lies at the heart of great CRM. "A shot of 2,000 emails isn't going to change that," he notes.

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While Toys R Us handles all of its CRM in-house, in common with a number of airlines and banks around the world, the experiences of the FMCG players in Asia indicate that agencies are hardly becoming dispensable.
"I don't think we'll do much in-house," confirms Won. "You need the expertise agencies can bring."