Uikoo Blog

The consciousness of traditional marketing is unquestionably numbers-dominated, starting with consumer research in which rules of statistical math are given greater weight than principles of behavior. A poverty of influence by behavioral science on research and marketing is why this is so. It speaks volumes that a person can earn an MBA in marketing without taking a single course in behavior. If marketing is not about attracting and holding the interest of minds and persuading them to a course of action, then what is it about? Most marketers feel marketing is about moving as much product as feasible, at the lowest cost, with the highest possible margins. Marketing’s current woes are not solvable from that numbers-defined, product-centric consciousness. The salvation of marketing and consumer research depends on a better understanding of human behavior than is generally the case.

Better grounding in behavior will not only improve research quality and marketing productivity, it will give companies a better picture of upstream markets. The last chapter told how the Yankelovich Monitor informed its subscribers that consumers are acting more paradoxical, wanting less "stuff," reprioritizing their lives, behaving with greater self-reliance, and seeking more balance in their lives. Proof that these changes in behavior were predictable years ago is suggested by the fact that SAM 1990 foresaw these changes. Those predictions were based on the certainty that middle-age and older people would soon dominate in numbers and spending, as well as in determining that the New Customer Majority would shape the leading behavioral attributes in the marketplace.

More sophisticated surveys, more sophisticated statistical analyses, better data mining, or more of anything other than getting a handle on the basics—not opinions—of human behavior will not change things for the better in research and marketing. Statistical mathematics obviously has a valuable role to play in analyzing customer behavior and plotting marketing directions, but it hardly is qualified to be the cornerstone of research and marketing that custom has made it. Another bit of Einsteinian wisdom indicates why that is true:

"Not all that can be counted counts and not all that counts can be counted."

Those words emphasize the core truth in the epigram to this chapter: The laws of mathematics do not refer to reality. Yet, in every sector of business most decision makers believe that "what the numbers say" refers to reality.

Customer relationship management (CRM) has taken the idea of marketing as a numbers game to new heights. Lusting after great fortunes in the CRM space, software vendors and consultants proposed that virtually everything worth knowing about customers could be captured in databases. However, they have been tripped up by the fact that not everything that counts can be reduced to numbers. Over half of all CRM initiatives fail. They fail mostly because the core drivers of human behavior are left out of the CRM equation. CRM installations do not account for the fact that customers’ decisions are based in nonrational processes that resist reduction to bits and bytes. How does one reduce motivations, dreams, emotions, and feelings to Boolean logic?

Mr. Spock’s Problem

Antonio Damasio, who heads up the neurology department at the University of Iowa, studies patients with brain traumas that have robbed them of their emotional functions in the cortical layers of their brains, what Damasio calls secondary emotions. His patients still experience primitive emotions deep in the midbrain, but those emotions at that level resist rational constraint. They are reflexive responses to basic urges including the urge to fight or take flight in the face of threat.

Damasio’s patients are rather like Star Trek’s Mr. Spock. They have fully functioning memory, comprehension, and reasoning abilities. Their biggest problem, aside from missing the rich joys of emotional life, is that they find it virtually impossible to determine when something has personal importance to them.

Poor Mr. Spock. He would have a hard time deciding what car to buy or what toothpaste or deodorant he should put in his shopping basket. Thankfully, Star Fleet uniforms relieve him of the need to make clothing decisions, for if he wore civvies, he’d have a problem, similar to problems Damasio’s patients have, figuring out what to wear to his next power meeting with Captain Kirk. Despite being much like you and me in reasoning abilities, likely Mr. Spock and certainly Damasio’s patients, cannot determine the importance of something to them through reasoning processes. The bottom line of Damasio’s research is:

Emotions are the touchstones of personal relevance.

To give emotions the scant attention they get in CRM applications is to ignore the most influential force in buying behavior. As a result, rather than being the silver bullet many thought it would be, CRM has been a poison apple for many companies. It has proven counterproductive in important respects, including contributing to lowering customer satisfaction and loyalty. When companies go overboard replacing human beings with technology, the quality of the customer experience falls.

Despite billions spent automating marketing and sales functions via CRM platforms, it is becoming clear that the company-customer relationship cannot be automated to the degree once hoped. What a company might save in manpower costs it often stands to lose in customer attrition and in the costs of replacing customers who abandon a brand because a company offers them no emotional incentives for remaining loyal. Moreover, as Reichheld details (with numbers, by the way), when corporate consciousness is numbers-driven, the subtler behavioral aspects of workers and customers simply don’t get on the corporate radar screen. As a result, much of what it would take to retard worker turnover (which is cost saving) and to attract and retain customers (which is cost saving, too) never gets done.

CRM grew out of a product-centric consciousness as a high-tech means for getting more products into customers’ hands by matching company product to customer profile. This is neither customer-centric nor a new idea. Marketers have been doing that for decades. CRM is simply a theoretically more effective way of matching products to customers. Change CRM to read CDM—customer data management—and you have a more accurately descriptive name for what CRM is really about: moving more product less costly. It is less about serving customers than many claim—a lot less!