Relevance Marketing (Lumsden Nee Bottom 2004)

Relevance Marketing:

The New, Improved Relationship Marketing?

Relevance Marketing: The New, Improved Relationship Marketing?

2


Jeremy Bottom

This dissertation is submitted for the award of MA in Interactive Marketing.

I declare that this dissertation is the result of my own independent investigation

and that all sources are duly acknowledged.

Signed……………………………………………………

Academic Year of Submission: 2003-04


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Abstract

There is a view that the degree of scholarly and practitioner interest in

relationship marketing established it as the key marketing issue of the decade in

the 1990s. But what is relationship marketing? Moreover, do consumers actually

want relationships or just relevant propositions in today’s dynamic and complex

marketing environment? These questions framed this exploratory research. This

paper is concerned with the validity, generality and practical applicability of six

‘relationship marketing’ concepts within the UK’s Business-to-Consumer (B2C)

marketing environment: relationship marketing (per se); one-to-one marketing

(Peppers and Rogers, 1993); many-to-many marketing (Gummesson, 2004a);

loyalty marketing; electronic Relationship Marketing (e-RM); and what the

literature (academic and professional) generally refers to as Customer

Relationship Management (CRM). The paper then introduces an alternative

consumer marketing perspective (relevance marketing) and a contemporary CRM

measurement framework: Customer Relevance Management (CRM) (Humby,

2004). An objective of the research was to determine whether the medley of

concepts and frameworks presented in the literature review are largely academic

rhetoric or a marketing reality for a group of senior marketing managers,

independent marketing consultants and leading authorities on marketing in the

academic field. A qualitative methodology was adopted resulting in eleven one-

to-one (in-depth) primary data collection events. The author tentatively suggests

that this investigation has provided a critical understanding of the development

and future of relationship marketing as an academic and professional domain

within the UK’s B2C marketing environment. The paper concludes with a

challenging question for all marketing academicians.


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Table of Contents:

1. Introduction

1.1 Confused and Disorientated: Consumers and Marketers

1.2 Relationship Marketing in a B2C Marketing Environment: Rhetoric or

Reality?

1.3 Relevance Marketing in a B2C Marketing Environment: Rhetoric or Reality?

1.4 Summary of Investigation

2. Literature Review

2.1 Confused and Disorientated: Academics

2.1.1 Relationship Marketing: Academic Perspectives

2.1.2 Buzzwords

2.1.3 The Emergence of Relationship Marketing in the Academic Literature

2.1.4 Theory Anorexia

2.1.5 Relationship Marketing: Are Academics Missing the Obvious?

2.1.6 Relationship Marketing: Academic Rhetoric or Business Reality?

2.1.7 Relationship Marketing Definitions

2.2 The Impact of Information and Communication Technologies

(ICT) on Relationship Marketing in a B2C Marketing Environment

2.2.1 One-to-One Marketing: Rhetoric or Reality?

2.2.2 Many-to-Many Marketing: Rhetoric or Reality?

2.2.3 Consumers: Empowered and Confused

2.2.4 Loyalty Marketing

2.2.5 Relationship Marketing, Customer Relationship Marketing (CRM) and

Customer Relationship Management (CRM)

2.2.6 ICT-Enabled Buzzwords

2.3 Relevance Marketing: A Criticism of Relationship Marketing

2.3.1 Customer Relevance Management (CRM) at Tesco


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Table of Contents (cont’d):

3. Methodology

3.1 Introduction

3.2 Research Strategy: An Exploratory, Qualitative Approach

3.2.1 Rich and Relevant Data

3.3 Epistemological Considerations

3.4 Bias, Reliability and Validity

3.5 A Holistic and Non-Commercial Perspective

3.6 Method

3.7 The Interlocutors

3.8 Evaluation of Research Design

4. Findings and Analysis

4.1 Relationship Marketing > Relevance Marketing

4.2 Data Gathering > Data Analysis > Value Delivery

4.3 Win-Win-Win > Many-to-Many

4.4 One-to-One Marketing > Multi-Channel Integration

4.5 CRM Checklist

4.6 Prospect Relationship (Relevance) Management

4.7 Empowered Consumers

4.8 electronic Relationship Marketing (e-RM)

4.9 The Marketing of the Marketing

5. Conclusion

6. References


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List of Tables:

1 The Interlocutors

List of Figures:

1a Conceptual Areas of Primary Investigation (Phase 1)

1b Conceptual Areas of Primary Investigation (Phase 2)

2 Relationship Marketing Definitions (Source: Various)

3 Business-to-Consumer (B2C) Relationship Marketing

4 One-to-One vs. Many-to-Many (Gummesson, 2004a)

5 A Functional Model for CRM (Clark et al, 2002)

6 Relevance Marketing

7 Customer Relevance Management (Humby, 2004)

8 Relationship Marketing and Relevance Marketing Perspectives

9 CRM Framework (Shaw, 1999)

10 Prospect Relationship Management (PRM) (Lexus)

11 electronic Relationship Marketing (e-RM) Perspectives

Appendices:

1 From One-to-One to Many-to-Many Marketing (Gummesson, 2004a)

2 R is for Relevance: An Antidote to CRM Hype (Humby, 2004)

3 Semi-Structured Questionnaire

4 Multi-Channel Direct Marketing 2004 (Centaur Conferences, 2004)

5 Interview with Jonathan Latham, Head of Relationship Management,

Sainsbury’s (July, 2004)


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1. Introduction

1.1 Confused and Disorientated: Consumers and Marketers

Research by Mintel (2002, p.3) suggests that a significant percentage of UK

consumers are suffering from “information and decision overload”. Excess

information, too many choices and brand proliferation have generated a

confusing commercial environment for over 50% of today’s consumers (Mintel

2002, p.3). The research used cluster analysis to segment this group into

“Confused and Disorientated”, “Simplicity Seekers” and “Search Engineers”

(Mintel 2002, p.3). Moreover, a survey of UK marketers and customer insight

specialists suggests that many of today’s commercial organisations are finding

the practice of marketing more complex with increasing media fragmentation and

declining customer loyalty (The Future Foundation 2003, p.7). This recent survey

also suggests that consumer marketing has become more complicated because

consumers have less clearly defined and segmented lifestyles and are, as a

consequence, less predictable than in the past (The Future Foundation 2003,

p.7). The questions arise: how do commercial organisations add value to their

propositions and combat customer confusion; and how do commercial

organisations identify their ‘profitable’ customers and sustain loyalty? Mintel’s

(2002, p.3) research suggests many commercial organisations may benefit from

using “relationship marketing” techniques. But what is relationship marketing?

Moreover, do consumers actually want a ‘relationship’ or just relevant

propositions in today’s dynamic and complex, Business-to-Consumer (B2C)

marketing environment? These questions frame this exploratory study.

1.2 Relationship Marketing in a B2C Marketing Environment:

Rhetoric or Reality?

This investigation is concerned with the validity of relationship marketing as

presented in the academic literature. Within this discussion, “validity means (in


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essence) that a theory, model, concept or category describes reality with a good

fit” (Gummesson 2000, p.93). Acknowledging that the Information and

Communication Technology (ICT) explosion of the 1990s has had a significant

impact on the practice of B2C marketing, this investigation is predominately

concerned with ICT-enabled relationship marketing concepts and frameworks.

The primary areas of investigation determined by the literature review include:

one-to-one marketing (Peppers and Rogers, 1993); many-to-many marketing

(Gummesson, 2004a); loyalty marketing; electronic Relationship Marketing

(e-RM); and an exploration of what the literature (academic and professional)

generally refers to as Customer Relationship Management (CRM). The author

then seeks to determine whether the relationship marketing concepts presented

are largely academic rhetoric or a marketing reality for a group senior B2C

marketing managers, independent consultants and academics. Figure 1a

diagrammatically represents this phase of the investigation.

1.3 Relevance Marketing in a B2C Marketing Environment:

Rhetoric or Reality?

The second phase of the investigation is concerned with the validity of relevance

marketing as presented within this paper. Within the domain of relevance

marketing, it is assumed that a consumer’s loyalty to a commercial organisation

is primarily driven by the organisation’s ability to continuously deliver relevant

propositions rather than the consumer’s desire to have a ‘relationship’. In

essence, relevance marketing is a criticism of relationship marketing as

presented in the academic literature. Within this phase of the investigation, the

author seeks to determine whether the concept of relevance marketing and its

ICT-enabled cousin, Customer Relevance Management (CRM) (Humby, 2004),

are largely academic rhetoric or valuable contributions to the development of

B2C marketing from the viewpoint of the study’s interlocutors.


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1.4 Summary of Investigation

This investigation focuses on the B2C marketing environment and does not seek

to explore the validity, generality and practical applicability of relationship

marketing and relevance marketing in a Business-to-Business (B2B) context: the

duration of the MA Interactive Marketing programme limits the scope of the

present study. In summary, the study aims to provide a critical understanding of

the development and future of relationship marketing as an academic and

professional domain within the UK’s dynamic and complex, B2C marketing

environment. Moreover, the study seeks to determine whether relevance

marketing is the new, improved relationship marketing or just another marketing

buzzword.


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Fig.1a: Conceptual areas of primary investigation (Phase 1)

Fig.1b: Conceptual areas of primary investigation (Phase 2)

One-to-OneMarketing

(Peppers andRogers, 1993)

Many-to-ManyMarketing

(Gummesson,2004a)

CustomerRelationshipManagement

(CRM)

electronicRelationshipMarketing

(e-RM)

LoyaltyMarketing

Business-to-Consumer Marketing Environment (B2C), UK

Phase 1

Information andCommunication Technologies

(ICT)

RelationshipMarketing

(RM)


Phase 2


(ICT)

RelationshipMarketing

(RM)


(ICT)

CustomerRelevance

Management(Humby, 2004)

RelevanceMarketing



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2. Literature Review

2.1 Confused and Disorientated: Academics

The study’s literature review highlights: a fuzzy and ambiguous academic domain

suffering from “theory anorexia” (Gummesson 2002a, p.588); a teleological

climate where academics publish “self-serving jargon” (Tapp 2003, p.107); and a

marketing industry where the majority of practitioners neither read nor recognise

contemporary academic research, concepts or theories published in today’s

academic marketing journals (McKenzie et al 2002, p.1196). The question arises:

are marketing academics also ‘confused and disorientated’ in today’s dynamic

and complex marketing environment?

2.1.1 Relationship Marketing: Academic Perspectives

Ballantyne et al (2003, p.160) suggest that the degree of scholarly and

practitioner interest in relationship marketing established it as the “key marketing

issue of the decade” in the 1990s. Indeed, there is a plethora of relationship

marketing textbooks and journals. However, the precise meaning of relationship

marketing is not always clear in the academic literature (Zineldin, 2000). Brodie

et al (1997, p.383) suggest relationship marketing has become a “catch-all”

phrase with the concept being used to reflect a number of different types of

relational activity, including database marketing. However, Ballantyne et al

(2003, p.164) do not wholly support Coviello et al’s (1996) classification of

database marketing as relational marketing and suggest database marketing is

more likely to be “an enabling technology that may support any kind of practice

perspective”. This study does not intend to explore every conceptual quagmire

surrounding the relationship marketing concept within the academic literature

given the limits of this study and the sheer volume of relationship marketing

definitions, theories and perspectives. However, a useful starting point for this

discussion is Christopher et al’s (2004, p.1) perspective:


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“It is now widely accepted that the goal of any business is to create and sustainmutually beneficial relationships with customers. Equally widely accepted is theview that the cement that binds successful relationships is the two-way flow ofvalue. This is the context from which the philosophy and practice of relationship

marketing has emerged”

The author notes Christopher et al (2004) are commonly recognised as some of

relationship marketing’s chief protagonists and have been concerned with the

development of the concept for many years. However, this worldview of business

is not universally accepted within the academic community. McDonald (2000,

p.28) suggests the relationship marketing domain exists “without any

underpinning process, occupied by happy-clappy, touchy-feely, weepy-creepy,

born-again zealots”. This study’s research design will aim to offer the author an

opportunity to further explore these diametrically opposed worldviews.

2.1.2 Buzzwords

Egan (2001a, p.188) suggests relationship marketing is perhaps the best

example of a buzzword in the marketing literature where “different authors use

the same term to describe different concepts or different terms to describe the

same concept”. However, Gummesson (1994) suggests multiple uses of the term

relationship marketing are perhaps not surprising given the complexity of

relationships themselves. Furthermore, Egan (2001b, p.376) suggests

relationship marketing theory is often “highly selective” citing Reichheld’s (1996)

popular publication ‘The Loyalty Effect: The Hidden Force behind Growth, Profits

and Lasting Value’ as an example of relationship marketing research “designed to

support a particular (often consultant based) perspective”. The question arises:

how many of today’s relationship marketing academicians are guilty of

teleologism in their research and subsequent publications? This study’s

methodological design will aim to offer the author an opportunity to further

explore this contentious issue.


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2.1.3 The Emergence of Relationship Marketing in the Academic

Literature

Sheth (2002, p.590) suggests relationship marketing emerged as a field of

marketing enquiry due to a shift in marketing focus from customer acquisition to

customer retention. Bruhn (2003, p.xiv) supports this observation suggesting

that the principal aim of relationship marketing is to transform marketing from

the “inside-out” focus on transactions to an “outside-in” focus on customer

relationships. A common view within the literature is that relationship marketing

is a “criticism” (Bruhn 2003, p.9) of pure transaction-focused marketing concepts

such as McCarthy’s (1960) 4P classification of the marketing mix (product, place,

promotion and price). Gummesson (2002b, p.326) vehemently supports the

relationship marketing worldview commenting “transaction marketing theory is

clearly manipulative and management centric”. Petrof (1997, p.26) comments on

the popularity of relationship marketing in the 1990s:

“With few exceptions, marketing specialists and, in particular, academiciansaccepted relationship marketing as the latest gospel and began spreading it

faithfully as loyal disciples”

However, the issue of whether relationship marketing is (or was) a “paradigm

shift” (Morgan and Hunt 1994; Gronroos 1994; Buttle 1996; Palmer 2002; Sheth

and Parvatiyar 2002) still seems largely unresolved within the academic

literature. For example, Sheth and Parvatiyar (2002, p.14) suggest relationship

marketing is considered a paradigm change in both academic and practitioner

literature and relationship marketing has the potential to become a well-

respected, freestanding and distinct discipline in marketing. Conversely,

McDonald’s (2000) previously cited criticism of the domain highlights that

relationship marketing is not necessarily a paradigm shift universally accepted

within the academic community.


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2.1.4 Theory Anorexia

Gummesson’s (1996 cited Egan 2001b, p.376) summary of research efforts into

the concept as a “theory-less stack of fragmented philosophies and observations”

still appears valid today with at least 26 definitions of relationship marketing in

the academic literature (Harker, 1999). Daskou and Mangina (2003, p.87)

highlight that the conceptual quagmire surrounding the definition of relationship

marketing in the academic community is fuelled by the academic diversity of the

discipline’s developers and their socio-political heritage. Although the domain and

conceptual foundations of relationship marketing do not appear to be fully

developed, the author suggests there is merit in continuing this exploration

primarily because; many leading academics including McDonald (2003) and

Gummesson (2002b) have noted marketing theory is increasingly divorced from

reality; this study’s primary objective is to provide a critical understanding of the

development and future of relationship marketing as an academic and

professional domain within the UK’s dynamic and complex, B2C marketing

environment. Gummesson (2002a, p.588) suggests,

“Marketing management today suffers from theory anorexia and cannot feed onand digest what is happening in the new economy”

2.1.5 Relationship Marketing: Are Academics Missing the Obvious?

Relationship marketing is not in itself a new concept: it is clearly a “new-old”

concept for the straightforward reason that concern for relationship development

is as old as the nature of business itself (Palmer 1996; Ballantyne 2000; Payne et

al 2002). Gummesson (2003) supports this view suggesting that relationship

marketing has always existed between the consumer and the supplier and

challenges the academic community (p.168):

“Isn’t it simply that academia is often too closed and smug, thus missing theobvious?”


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Supporting Gummesson’s (2003) critique of the academic community, the author

tentatively suggests that it is likely that many of today’s relational marketing

concepts and ubiquitous buzzwords such as one-to-one marketing (Peppers and

Rogers, 1993), loyalty-based management (Reichheld, 1996) and even Customer

Relationship Management (CRM) were effectively practised at the beginning of

the 20th century by UK shopkeepers. The study’s research design will aim to offer

the author an opportunity to further explore this empirical finding.

2.1.6 Relationship Marketing: Academic Rhetoric or Business Reality?

There is a view within the academic literature that the practical applicability of

relationship marketing in B2C marketing environments is limited (Barnes 1997;

Hibbard and Iacobucci 1998; O’Malley and Tynan 2000). O’Malley and Tynan

(2000, p.804) suggest that it is neither possible nor profitable for most

organisations in a B2C marketing environment to create close, personal and long-

term relationships with all their customers. The practical and economic

arguments for dismissing this form of relationship marketing seem valid but has

the academic community been ‘over-selling’ the relationship marketing concept

for O’Malley and Tynan (2000) to reach this rather obvious conclusion?

Moreover, are marketing academics becoming ‘confused and disorientated’ by

trying to fit the realities of marketing into tight, theoretical boxes for their

academic peers? McDonald (2003, p.158) comments:

“Marketing must find a way of escaping from the increasing proclivity of theacademic community to creep further and further into the more esoteric groves

of academe, talking about increasingly narrow issues in an increasinglyimpenetrable language to an increasingly restricted audience”

Harker’s (1999, p.16) exploration of relationship marketing definitions refers to a

“relationship marketing community”. The questions arise: who inhabits the

relationship marketing community and what is the relevance of their body of

work for today’s marketing practitioners? This study’s bibliography highlights


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relationship marketing’s chief protagonists (the community) and the domain’s

specific publications such as the ‘Journal of Relationship Marketing’. But how

many of today’s B2C marketers actively embrace this knowledge resource?

Recent research by McKenzie et al (2002, p.1196) suggests that within the UK

marketing industry, the majority of practitioners neither read nor recognise

contemporary academic research, concepts or theories published in today’s

academic marketing journals. Moreover, Tapp (2003, p.112) suggests currently

there is a misalignment between the academic work published in the majority of

journals and the requirements of marketing managers. The methodological

design of this study will aim to offer the author an opportunity to explore

whether there is a significant gap between the professional practice and

theoretical development of the domain.

2.1.7 Relationship Marketing Definitions

Eloquently summarising the conceptual fuzziness of relationship marketing,

Harker (1999, p.15) highlights there is no universally accepted definition of the

concept because attempts to define relationship marketing are attempts to

stipulate what concepts should form the essence of relationship marketing.

However, embracing content analysis as a qualitative data research

methodology, Harker (1999, p.16) suggests Gronroos’s (1994) definition of

relationship marketing is the “best” in terms of its coverage of the underlying

conceptualisations of relationship marketing and its acceptability throughout the

“relationship marketing community”. Furthermore, Daskou and Mangina (2003,

p.87) suggest Gronroos’s (1994) definition is still popular within the academic

community predominately because the definition is viewed as reasonably

comprehensive. Gronroos (1994) suggests:

“Relationship marketing is to identify and establish, maintain and enhance andwhen necessary also to terminate relationships with customers and other

stakeholders, at a profit, so that the objectives of all parties are met, and thatthis is done by a mutual exchange and fulfilment of promises”


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At this stage of the report, the author feels obliged to highlight several key

references that have informed the study’s understanding and presentation of the

relationship marketing concept: Gronroos’s (1994) popular definition; a medley

of contemporary definitions (see Figure 2); an article in the professional

publication ‘Data Strategy’ (Webber 2004, p.16); Christopher et al’s (2004, p.1)

previously cited relationship marketing worldview; and Chaffey et al’s (2000 cited

Egan 2001a, p.193) one-to-one relationship marketing perspective.

Fig.2 Relationship Marketing Definitions (Source: Various)

“Relationship Marketing covers all actions for the analysis, planning, realisation,and control of measures that initiate, stabilise, intensify, and reactivate businessrelationships with the corporation’s stakeholders – mainly customers – and to the

creation of mutual value”

Bruhn (2003, p.11)

“Relationship marketing has the aim of building mutually satisfying long-termrelations with key parties – customers, suppliers, distributors – in order to earn and

retain business” *

Kotler (2003, p.13)

“Relationship marketing is the consistent application of up-to-date knowledge ofindividual customers to product and service design which is communicated

interactively, in order to develop a continuous and long-term relationship, which ismutually beneficial”

Cram (1994 cited Chaffey et al 2003, p.42)

“Relationship marketing is marketing based on interaction within networks ofrelationships” **

Gummesson (2002c, p.3)

* Kotler (2003, p.13) notes this definition embraces three definitions from the literature: Christopher et al (1991); McKenna (1991); and Gummesson (1999).

** Gummesson (2003) suggests this definition is the outcome of an inductive grounded theory approach, “going beyond the usual descriptive definitions” (p.168).


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Reflecting upon relationship marketing’s axioms and definitions, the author

suggests: relationship marketing implies the development of long-term

relationships with key parties (consumers within the context of this

investigation) in order to better understand how to develop and deliver

propositions tailored to the needs of the specific market segments identified.

Furthermore, relationship marketing appears to respect and value markets

segmented at the level of the individual i.e. one-to-one marketing (Peppers and

Rogers, 1993). In summary, the author suggests the philosophy of relationship

marketing is to create and sustain a ‘win-win’ scenario within a commercial

environment. Moreover, the practice of relationship marketing requires

commercial organisations to develop ‘interactive’ methodologies to determine

and sustain a two-way flow of value. Within this context, value is defined as “the

balance between benefits received and sacrifices made to experience those

benefits” (Buttle 2004, p.228). Figure 3 diagrammatically represents the author’s

worldview of relationship marketing in a B2C marketing environment.

Fig.3 Business-to-Consumer (B2C) Relationship Marketing

Business Consumer

* Value is defined as “the balance between benefits received andsacrifices made to experience those benefits” (Buttle 2004, p.228)

MutualExchange

Of Value *


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2.2 The Impact of Information and Communication Technologies

(ICT) on Relationship Marketing in a B2C Marketing Environment

2.2.1 One-to-One Marketing: Rhetoric or Reality?

Prior to the mass marketing approach that had accompanied the Industrial

Revolution and dominated commercial activity in the 20th century, sellers often

knew their customers and generally understood their needs (Mitchell 2000; Egan

2001a; Chen and Popovich 2003). With mass retailing (e.g. supermarkets) and

the marketing of standardised products through one-to-many (Hoffman and

Novak, 1996) marketing channels (e.g. analogue television), buyers and sellers

(inevitably) lost their “intimate relationships” (Chen and Popovich 2003, p.685).

However, there is a view that the contextual changes of the 1990s and 2000s

(i.e. the explosion of IT and the Internet) have offered commercial organisations

the opportunity to re-establish one-to-one (Peppers and Rogers, 1993) marketing

relationships with their customers (Falk and Schmidt 1997; Mitchell 2000;

Zineldin 2000; Lindgreen and Pels 2002; Chen and Popovich, 2003; Urban 2004).

The questions arise: are one-to-one (Peppers and Rogers, 1993) marketing

relationships genuinely achievable, economically viable or even desired by

today’s B2C marketing practitioners? This study’s methodological design will aim

to offer the author an opportunity to explore whether the one-to-one marketing

approach (Peppers and Rogers, 1993) is just enthusiastic, academic rhetoric

(driven by ICT developments) or a reality for today’s B2C marketing practioners.

2.2.2 Many-to-Many Marketing: Rhetoric or Reality?

Gummesson (2004a) contends relationship marketing theory will develop in a

many-to-many (Hoffman and Novak, 1996), networked marketing environment.

Specifically, Gummesson (2004a, p.1) argues:

“Marketing does not live in one-to-one relationships but in many-to-manynetworks”


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Supporting Gummesson’s (2004a) development of the one-to-one (Peppers and

Rogers, 1993) relational marketing framework (see Figure 4), Peters and Fletcher

(2004, p.1) suggest today’s marketing researchers may benefit from modifying

existing theoretical perspectives in order to take account of the increasing

interconnectedness of today’s consumers and businesses through ICT-enabled

social systems, such as the Internet. The many-to-many (Hoffman and Novak,

1996) structure of the Internet coupled with the adoption of the channel by

increasing numbers of UK consumers and businesses (Interactive Advertising

Bureau UK, 2004) suggests to the author that Gummesson’s (2004a) many-to-

many marketing framework may prove to be academically robust within the UK’s

B2C online marketing environment. The question arises, is this contemporary

framework useful in today’s broader B2C marketing environment where many

organisations are finding the practice of marketing “complex” (The Future

Foundation 2003, p.6) and many consumers are “confused and disorientated”

(Mintel 2002, p.3)? Gummesson (2004a, p.1) contends:

* Identify your customers* Differentiate your customers* Interact with your customers* Customize* Learning relationships

* Identify your networks of relationships* Differentiate your relationships* Interact with the network members* Customize* Learning networks

One-to-One MarketingPeppers and Rogers (1993)

Many-to-Many MarketingGummesson (2004)

CustomerNetwork

SupplierNetwork

SupplierCustomer

Fig.4 One-to-One (Peppers and Rogers, 1993) versus Many-to-Many Marketing(Gummesson, 2004a)


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“The contribution from one-to-one, not least through the expressive wording, isfirst and foremost to put the light on individual interaction in marketing. The

contribution of many-to-many is taking one-to-one further and addressing thewhole context of a complex world”

The author suggests Samli and Bahn’s (1992) definition of a market supports

Gummessson’s (2004a) many-to-many relationship marketing perspective as

presented in Figure 4. Samli and Bahn (1992, p.147) suggest:

“A market is a communication network, with communication defined as all meansof facilitating the exchange of knowledge, the expression of desires, and the

dissemination of information”

Moreover, Peters and Fletcher (2004, p.1) suggest Samli and Bahn’s (1992)

definition of a market has merit in today’s complex marketing environment

because it is “dynamic, focuses on the flow of information and behavioural

patterns, and considers both consumers and businesses as critical nodes in a

communication network”. However, it should be noted that there appears to be

little support within the academic literature for Gummesson’s (2002c, p.315)

foundational work:

“Relationships, networks and interaction are the core concepts of relationshipmarketing”

This empirical finding suggests that the “relationship marketing community”

(Harker, 1999) may not readily adopt Gummesson’s (2004a) many-to-many

marketing perspective. The research design will aim to offer the author an

opportunity to further explore Gummesson’s (2004a) many-to-many relationship

marketing thesis from both an academic and a professional perspective. It is

noted that the academic textbook from which this body of work emanates ‘Many-

to-Many Marketing’ (Gummesson, 2004b) has only been published in Sweden.

However, Evert Gummesson has kindly provided the author with a recent paper

‘From One-to-One to Many-to-Many Marketing’ (Gummesson, 2004a) for

reference within this discussion. The thesis is presented in Appendix 1.


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2.2.3 Consumers: Empowered and Confused

There is a view that technological developments have “empowered” consumers

within the customer-supplier dyad (Chaffey et al, 2003; Kotler, 2003; Urban,

2004). Daskou and Mangina (2003, p.87) suggest there is a new type of

consumer who is more informed, demanding and sophisticated. Enthusiastically,

Urban (2004, p.78) suggests today’s consumers now have the opportunity to

effectively verify an organisation’s claims (value propositions) and efficiently

search for superior alternatives through “enabling” many-to-many (Hoffman and

Novak, 1996) technologies, such as the Internet. However, Mintel’s (2002)

previously cited research suggests to the author that such conclusions should be

tempered with reference to the UK’s B2C marketing environment i.e. ICT

developments may also be fuelling consumer “information and decision overload”

(Mintel 2002, p.3). This study’s research design will aim to offer the author an

opportunity to further explore relationship marketing strategies in a many-to-

many (Hoffman and Novak, 1996), networked marketing environment where it is

postulated that consumers are becoming increasingly empowered and confused.

2.2.4 Loyalty Marketing

There is a view that for commercial organisations to achieve closer relationships

with their customers in today’s “new economy” (Gummesson 2002c; Kotler et al

2002), a rich customer database is required. Gilbert (2003, p.189) suggests that

some of the UK’s leading mass retailers (e.g. Tesco and Sainsbury’s) are

successfully adopting ICT-enabled programmes that generate rich and relevant

data: loyalty schemes. However, Enver (2004, p.1) suggests true customer

“knowledge” is virtually impossible to achieve within many B2C sectors where

poor data, and privacy laws, often militate against relationship building.

Furthermore, UK research by Pressey and Matthews (2000, p.272) suggests

relational marketing strategies are not practical for mass retailers, such as

supermarkets, where many transactions are “discrete, short-term, one-off acts”.


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The question arises: do any loyalty marketing programmes within the UK’s B2C

marketing environment generate ‘win-win’ scenarios? Stone et al (2003, p.308)

suggest approximately 80% of UK households participate in at least one

customer loyalty scheme and Tesco attribute more than £100 million of

incremental sales per annum directly to their loyalty programme ‘Clubcard’

(Humby et al, 2003). Moreover, Humby et al (2003, p.5) suggest Tesco has

issued more than £1 billion of ‘Clubcard’ loyalty vouchers to customers and the

organisation has run the programme for no net cost since 1995. These findings

suggest that loyalty programmes can be effective relational strategies within the

UK’s B2C marketing environment. The study’s research design will aim to offer

the author a further opportunity to investigate loyalty schemes and the concept

of loyalty marketing.

2.2.5 Relationship Marketing, Customer Relationship Marketing (CRM)

and Customer Relationship Management (CRM)

A review of the academic publications the ‘Journal of Relationship Marketing’

(2002a; 2002b; 2002c; 2003a; 2003b) and the Institute of Direct Marketing’s

‘Interactive Marketing’ (2004a; 2004b; 2004c) highlights that a number of

academics and practitioners assume relationship marketing, Customer

Relationship Marketing (CRM) and Customer Relationship Management (CRM)

are effectively synonymous terms in today’s B2C marketing environment. The

academic question arises: are the terms conceptually interchangeable? The

author suggests this is a challenging question because there are no universally

accepted definitions of relationship marketing, Customer Relationship Marketing

(CRM) or Customer Relationship Management (CRM) within the literature (Harker

1999; Egan 2001a; Kenyon and Vakola 2003; Enver 2004). However, to satisfy

the study’s primary objective, ‘to provide a critical understanding of the

development and future of relationship marketing as an academic and

professional domain within the UK’s B2C marketing environment’, the author will


24

explore various CRM perspectives and definitions within the literature. The

study’s methodological design will aim to offer the author a further opportunity

to explore this conceptual quagmire from both an academic and a professional

perspective. This research strategy should also offer the author an opportunity to

explore whether a significant gap exists between the professional practice and

theoretical development of relationship marketing, Customer Relationship

Management (CRM) and Customer Relationship Marketing (CRM).

Kotler (2003, p.52) contends the merits of a Customer Relationship Marketing

(CRM) strategy:

“Customer Relationship Marketing (CRM) enables companies to provide excellentreal-time customer service by developing a relationship with each valued

customer through the effective use of individual account information”

Kenyon and Vakola (2003) suggest Chablo’s (1999, p.12) definition of Customer

Relationship Management (CRM) is purposeful within a B2C marketing context:

“Customer Relationship Management (CRM) is a comprehensive approach whichprovides seamless integration of every area of business that touches thecustomer – namely marketing, sales, customer service and field support –

through the integration of people, processes and technology, taking advantageof the revolutionary impact of the Internet”

However, Coad (2004, p.323) suggests the idea of a ‘single-customer view’ is

somewhat utopian and in practice unworkable for many organisations in a B2C

marketing environment. Srivastava et al (1999, p.170) suggest:

“The Customer Relationship Management (CRM) process addresses all aspects ofidentifying customers, creating customer knowledge, building customer

relationships, and shaping their perceptions of the organisation and its products”

Acknowledging Srivastava et al’s (1999) definition, Zinkham (2002, p.83)

suggests Customer Relationship Management (CRM) is perhaps a broader

concept than relationship marketing. Conversely, Gummesson (2004a, p.1)


25

argues relationship marketing is the broader, overriding concept and suggests

CRM is a relationship marketing “brand” offered by consultants and practitioners:

“CRM (Customer Relationship Management) is the values and strategies ofrelationship marketing – with emphasis on the dyadic customer-supplier

relationship – turned into practical application and dependent both on humanaction and information technology”

Buttle’s (2004, p.34) definition of Customer Relationship Management (CRM) is

interesting because it takes a business strategy view of CRM rather than focusing

on the ICT component:

“CRM is the core business strategy that integrates internal processes andfunctions, and external networks, to create and deliver value to targeted

customers at a profit. It is grounded on high quality data and enabled by IT”

The author suggests that a recent CRM definition by Zikmund et al (2003, p.3)

neatly fits the ‘win-win’ and ‘interactive’ relationship marketing worldview

presented within this literature review:

“Customer Relationship Management (CRM) is a business strategy that usesinformation technology to provide an enterprise with a comprehensive, reliable,

and integrated view of its customer base so that all processes and customerinteractions help maintain and expand mutually beneficial relationships”

With CRM’s proximity to the fuzzy and ambiguous concept of relationship

marketing, the plethora of CRM definitions and perspectives is perhaps

unsurprising. In summary, the author suggests that the term CRM is more

associated with the use of ICT as a means of implementing the relational

marketing approach. This conclusion is supported by Clark et al’s (2004, p.24)

value framework for CRM (see Figure 5) and Gummesson’s (2002, p.314)

observation “relationship marketing is an attitude and CRM is a tool”. The study’s

methodological design will aim to offer the author an opportunity to explore the

validity of Clark et al’s (2002) CRM framework within the B2C marketing

environment.


26

Fig.5 A functional model for Customer Relationship Management (CRM)(Source: Clark et al, 2004)

2.2.6 ICT-Enabled Buzzwords

A review of the contemporary academic relationship marketing literature yields a

plethora of ICT-enabled ‘relationship marketing’ definitions and perspectives, for

example, Technologicalship Marketing [TM] (Zineldin, 2000), electronic Customer

Relationship Marketing [e-CRM] (McIntyre, 2003; Luck and Lancaster, 2003) and

e-loyalty (Reichheld et al, 2000). The question arises: are these electronic

Relationship Marketing (e-RM) concepts substantive variants of the relationship

marketing concept or ICT-enabled buzzwords? The author acknowledges that

marketing theory is “context driven” (Sheth and Sisodia, 1999) and endorses the

view that marketing academics must challenge “in-bedded concepts” (Egan

2001a, p.24) as the competitive environment changes but are these electronic

Relationship Marketing (e-RM) concepts inhabiting a cul-de-sac of relationship

marketing theory and impeding the development of a cohesive relationship

Cultural and Climate Conditions

IT ConditionsMarketingStrategyConditions

Data Analysisand Value

Identification

Monitoring,Feedback and

Control

Data Gatheringand Organisation Value Delivery

“CRM is the managementprocess that uses individualcustomer data to enable atailored and mutually viable

value proposition”(Clarke et al 2002, p.23)


27

marketing domain? Moreover, will tomorrow’s mobile technological developments

offer relationship marketing’s primary interlocutors an opportunity to generate a

plethora of m-RM, m-CRM and m-loyalty definitions and frameworks? The study’s

methodological design will aim to offer the author an opportunity to explore the

fuzzy and ambiguous ‘umbrella’ concept of electronic Relationship Marketing (e-

RM) from both an academic and a professional perspective.

2.3 Relevance Marketing: A Criticism of Relationship Marketing

The question arises: do consumers actually want ‘relationships’ or just relevant

propositions in today’s dynamic and complex, B2C marketing environment? The

author suggests that it is not unreasonable to presuppose that a significant

percentage of UK consumers may find the idea of having ‘relationships’ with

commercial organisations simply absurd. So where does this leave the domain of

relationship marketing within the context of this investigation? Assuming that the

function of B2C marketing is to offer relevant propositions to relevant customers

(i.e. profitable customers) and to provide relevant solutions to customers’

problems, the author tentatively suggests branding the domain of relationship

marketing as relevance marketing may enhance the validity of the definitions and

frameworks promulgated by the domain’s chief protagonists. Within this

discussion, “validity means (in essence) that a theory, model, concept or

category describes reality with a good fit” (Gummesson 2000, p.93).

The author notes: this is not a criticism of the relationship marketing philosophy

or the practical applicability of the definitions and frameworks but a criticism of

the terminology. The author presents a sample of relevance marketing and

Customer Relevance Management (CRM) definitions, perspectives and

frameworks in Figure 6. Relevance marketing is built upon the (rather obvious)

premise that if a customer is presented with a relevant proposition or solution, it

is more likely that a mutual exchange of value will occur. Within the domain of

relevance marketing, it is assumed that a consumer’s loyalty to a commercial


28

organisation is primarily driven by the business’s ability to continuously deliver

relevant propositions rather than the consumer’s desire to have a ‘relationship’.

Moreover, the author tentatively suggests that the marketing of relevant

propositions generally relies upon the organisation’s manipulation of the classic

pillars of marketing i.e. the marketing mix, or 4Ps (product, place, promotion and

price) coupled with an understanding of the customers’ perception of value

obtained through ‘interactive’ processes and marketing strategies.

Fig.6 Relevance Marketing

Cultural and Climate Conditions

IT ConditionsMarketingStrategyConditions

One-to-One Relevance Marketing(Adapted from Peppers and Rogers, 1993)

* Identify your customers* Differentiate your customers* Interact with your customers* Customize* Learning relevance (not relationships!)

“Relevance marketing is to identifyand establish, maintain an enhance and

when necessary also to terminateaccounts with customers and otherstakeholders, at a profit, so that the

objectives of all parties are met, and thisis done by a mutual exchange and

fulfilment of promises”

(Adapted from Gronroos, 1994)

“Customer RelevanceManagement, however

well designed and executedcan only work within an

environment delineated byMarketing Strategy, Cultural

and IT Parameters”

The Customer Relevance Management Space(Adapted from Clark et al, 2004)

“CustomerRelevance

Management(CRM) is a core

business strategythat integrates

internal processesand functions, and

external networks, tocreate and delivervalue to targetedcustomers at a

profit. It is groundedon high quality dataand enabled by IT”

(Adapted fromButtle, 2004)

Business Consumer

“Relevance marketing hasthe aim of building mutually

satisfying long-term, interactiveaccounts with key parties in

order to earn and retainbusiness”

(Adapted from Kotler, 2003)

“Relevance marketing is an attitude and Customer Relevance Management is a tool”(Adapted from Gummesson, 2002)

Mutual Exchange Of Value


29

2.3.1 Customer Relevance Management (CRM) at Tesco

Somewhat surprisingly, the study’s literature review has only established one

reference adopting this terminology and consumer marketing perspective: “R is

for Relevance: An antidote to CRM Hype” (Humby, 2004). The PowerPoint

presentation that accompanied Humby’s (2004) lecture at the Institute of Direct

Marketing’s (IDM) Annual Lecture is provided in Appendix 2 for further reference.

Humby (2004) contends, “the CRM revolution was a lot of hype and noise” and

“it’s time to tear up the rule book and develop some new metrics of customer

investments”. Humby (2004) suggests the Customer Relevance Management

(CRM) philosophy embraces a customer-centric approach which involves the

measurement and assessment of every aspect of customer interaction and works

on the assumption that an organisation’s brand assets are a function of its

customer assets (see Appendix 2 for explicit definitions of brands assets and

customer assets). Moreover, Humby (2004) suggests “customers generate

income and brand equity from the combination of advocacy, share of wallet and

financial value” and the Customer Relevance Management (CRM) measurement

framework “integrates all customer investment decisions and monitors their

impact across each segment in terms of current and future value”.

From an academic perspective, Humby (2004) does not explicitly define

Customer Relevance Management (CRM) and it should be noted that this concept

has not been formally published within the academic literature. However, Figure

7 (Humby, 2004) diagrammatically represents Humby’s (2004) Customer

Relevance Management (CRM) measurement framework as presented at the

IDM’s Annual Lecture in London, England. Humby is the chief information

architect behind Tesco’s loyalty programme ‘Clubcard’ and is therefore

considered to be a leading authority on (ICT-enabled) B2C marketing strategies

within the UK’s marketing environment. In a recent publication, ‘Scoring Points:

How Tesco is winning customer loyalty’, Humby et al (2003, p.16) comment:


30

“For Tesco Clubcard, the definition of Customer Relationship Management (CRM)is best summarised as: to improve our performance at every point of contact

with our customers, to make them happier and the company richer. It’s no morecomplicated than that”

Moreover, in a recent interview (Powell 2004, p.4), Humby contends:

“CRM is built on a fallacy because customers don’t want a relationship with theirbank or their grocer or their supermarket. Tesco does not have a CRM

programme. Tesco has a loyalty scheme and what this is saying is ‘we get yourdata for giving you money back, and with the data we will give you a more

relevant experience in our shops because you choose to shop there’ "

The author tentatively suggests Tesco’s Customer Relevance Management (CRM)

worldview ‘fits’ the relationship marketing and relevance marketing frameworks

presented within this study: the organisation’s B2C marketing strategy appears

to be framed an ‘interactive’ and ‘win-win’ philosophy. Moreover, recent figures

suggest that Tesco’s Customer Relevance Management (CRM) strategy is highly

effective within the UK’s B2C marketing environment with the behemoth

achieving a 12% share of the UK’s total retail sales (The Grocer 2004, p.15).

Humby et al (2003, p.1) comment:

“Before Clubcard, Tesco was stuck as the UK’s second-ranking supermarket.Today, not only is it the UK’s largest grocer, it is the world‘s most successful

Internet supermarket, one of Europe’s fastest growing financial servicescompanies and arguably one of the world’s most successful exponents of what

the jargon terms Customer Relationship Management, or CRM”

The author tentatively suggests that the concepts of relevance marketing and its

ICT-enabled cousin, Customer Relevance Management (CRM) (Humby, 2004),

may have intuitive appeal for B2C marketers who are looking to add value to

their proposition, combat customer confusion and gain loyalty in a marketing

environment where many consumers are suffering from “information and

decision overload” (Mintel 2002, p.3). This study’s methodological design will aim

to offer the author an opportunity to further explore these concepts from both an

academic and a professional perspective. This strategy should offer the author


31

an opportunity to investigate whether relevance marketing is the new, improved

B2C relationship marketing or just another marketing buzzword.

Fig.6 Customer Relevance Management Measurement Framework(Source: Humby, 2004)

Fig.7 Customer Relevance Management Measurement Framework(Humby, 2004)

Price, Product, PromotionMarketing Inputs

Retention

Marketing Inputs

Upsell

Cross Sell

New Channels

Customer Service Inputs

Multi-DimensionalBehaviouralSegments

Outcomes

Price, Product, Promotion

Sales Desk

Call Centre

After Sales

Price

Promotions

ProductInnovation

Contribution

Commitment

Championing


32

3. Methodology

3.1 Introduction

The study’s primary aim is to provide a critical understanding of the development


within the UK’s dynamic and complex, B2C marketing environment. Crudely

summarising, the study’s methodological design will aim to offer the author an

opportunity to explore the validity of the marketing concepts and frameworks

presented in the literature review. Within this context, “validity means (in

essence) that a theory, model, concept or category describes reality with a good

fit” (Gummesson 2000, p.93). Primary areas of investigation determined by the

literature review:

• Relationship Marketing;

• Customer Relationship Management (CRM);

• Loyalty Marketing;

• One-to-One Marketing (Peppers and Rogers, 1993);

• Many-to-Many Marketing (Gummesson, 2004a);

• electronic Relationship Marketing (e-RM);

• Customer Relevance Management (Humby, 2004);

• Relevance Marketing

Considering the ambitious nature of the study’s primary aim and the plethora of

concepts, theories, threads, themes and tensions presented within the literature

review, the author suggests a purposeful sample would include senior B2C

marketing managers, independent marketing consultants and marketing

academics. The author notes: the conceptual areas of primary investigation are

diagrammatically represented by Figures 1a and 1b.


33

3.2 Research Strategy: An Exploratory, Qualitative Approach

The author suggests that the adoption of an exploratory, qualitative research

methodology would be appropriate. Moreover, the author suggests that the

exploratory, qualitative nature of the research is implied by the study’s primary

aim. Denscombe (1998, p.174) suggests qualitative research tends to be

associated with: words as the unit of analysis rather than numbers; thick

description (Geertz, 1973) i.e. a detailed description of the process, context and

people in the research (Daymon and Holloway 2002, p.100); small-scale studies

rather than large-scale studies; a holistic perspective rather than a specific focus;

researcher involvement rather than researcher detachment; and an emergent

rather than a prescriptive research strategy. Moreover, Daymon and Holloway

(2002, p.6) suggest qualitative researchers have a desire to explore and present

the various subjective perspectives of participants. These characteristics

generally associated with qualitative research and qualitative researchers have

framed the author’s strategic decision to adopt a qualitative approach i.e. the

author suggests that a qualitative methodology is more likely to “fit” (Denscombe

1998, p.3) the study’s primary objective than a quantitative approach.

3.2.1 Rich and Relevant Data

Daymon and Holloway (2002, p.159) suggest the underlying principle of gaining

rich, in-depth data should guide the sampling strategies of qualitative

researchers. The author suggests that exploring the marketing concepts and

frameworks presented in the literature review with senior B2C marketing

managers, independent marketing consultants and marketing academics may

generate rich and relevant data. Furthermore, exploring relationship marketing’s

axioms, definitions, theories and concepts with such an ambitious sample may

offer the author an opportunity to explore whether a significant gap exists

between the professional practice and theoretical development of the domain.


34

3.3 Epistemological Considerations

It is important to consider the epistemological premise and ontological approach

of the research strategy in order to establish a conceptual framework to review

the research methodology (Gunter, 2000). The author suggests that the primary

research strategy of seeking the subjective opinions of the study’s participants is

informed by an interpretivist worldview. By adopting a hermeneutic position, the

author suggests the research is embracing constructivism as an ontological

approach and this is considered to be synergistic with the explorative nature of

the study. Supporting the author’s approach, Daymon and Holloway (2002, p.5)

suggest qualitative methods “are frequently seen to be inseparable from the

interpretive, constructivist worldview”. Embracing an inductive approach, the

author will analyse the qualitative data and then develop conclusions. It is hoped

that the research will move inductively from specific data to more general

patterns of commonalities (Daymon et al 2002, p.6). However, because the

research is qualitative in design, the author acknowledges that any findings can

never be more than strong possibilities. In summary, the research is primarily

concerned with gaining insight and understanding.

3.4 Bias, Reliability and Validity

It is imperative that the author does not introduce bias into the research and

therefore damage the educative authenticity of the findings. For example, the

author must be careful not to ‘over-sell’ the concept of relevance marketing

during the primary data collection. This scenario would be somewhat ironic

considering this study’s literature review highlights a marketing climate where

academics have published “self-serving jargon” (Tapp 2003, p.105) and “highly

selective” (Egan 2001b, p.376) marketing theory.

The criteria against which the quality of the research will be judged relate to the

benchmarks of reliability and validity. By embracing these benchmarks, the


35

author aims to overcome any charge of being too impressionistic during the data

collection and too subjective in the analysis. To enhance the overall validity and

reliability of the study, two strategies for ensuring the quality of the research

have been determined. The primary strategy is “member checking” (Lincoln and

Guba 1985 cited Daymon and Holloway 2002, p.95): presenting participants with

a summary of the data collected and the author’s interpretation of the data. The

second strategy is to provide a “thick description” (Geertz 1973 cited Daymon

and Holloway 2002, p.100): a detailed description of the process, context and

people in the research (Daymon and Holloway 2002, p.100). A weakness of the

second strategy is that some participants may not wish to be identified.

3.5 A Holistic and Non-Commercial Perspective

The author suggests that his previous professional experience (UK Sales and

Marketing Manager for a leading multiple retailer in a niche market sector) and

his recent academic experience (post-graduate student of interactive marketing)

may provide a holistic focus to the research. Moreover, the author suggests that

his non-commercial (academic) approach is possibly a strategic advantage for

gaining access to purposeful individuals: participants may be less inclined to help

researchers from organisations that may commercially gain from their

involvement. Furthermore, a marketing consultant or journalist investigating this

topic would possibly have commercial objectives to consider and therefore their

findings and analysis may not be free from bias and teleological assumptions.

3.6 Method

It is a common view that the use of exploratory techniques such as group

discussions and in-depth interviews are appropriate for exploring fuzzy marketing

phenomena (Gummesson 2000; Daymon and Holloway 2002). However, the

author dismisses the strategy of organising group discussions for two reasons:


36

participants may moderate their views within a group discussion; and it would be

challenging to co-ordinate the diaries of such an ambitious sample.

The author suggests that an appropriate primary data collection method would

be to organise one-to-one, in-depth interviews with an appropriate number of

senior B2C marketing managers, independent marketing consultants and

marketing academics. This method choice has been primarily influenced by

contemporary studies including Mouncey et al’s (2002) ‘Interactive marketing:

The new marketing – Or more of the same?’. Mouncey et al (2002) aimed to

explore the fuzzy and ambiguous domain of interactive marketing within the UK’s

B2B and B2C marketing environments. Embracing a qualitative methodology,

Mouncey et al (2002) conducted individual, in-depth interviews with ten senior

marketing practitioners employed across a variety of industry sectors. Mouncey

et al (2002, p.133) suggest the primary data generated by this exploratory

technique was useful for their publication:

“While a limitation of the research is the small sample size, the in-depthinterview approach has provided valuable detailed case-study-based insights

enabling the key underlying principles to be identified”

Given the breadth of this study’s primary objective, the author aims to conduct at

least ten in-depth interviews. The one-to-one interviews are to be guided by a

semi-structured questionnaire framed by the key issues and crucial questions

identified within the literature review. The semi-structured questionnaire is

presented in Appendix 3. Ideally, the interviews would be conducted face-to-

face. However, the author would consider telephone interviews, or possibly

electronic interviews (e-interviews) framed by the semi-structured questionnaire,

if a “purposeful” (Daymon and Holloway 2002, p.159) individual targeted by the

author agreed to participate but expressed a preference to contribute to the

study via these channels. The author acknowledges that semi-structured and

unstructured interviews are on a continuum and it is hoped that the interviewees


37

will elaborate on the issues raised by the author and “speak their minds”

(Denscombe 1998, p.113). However, the author acknowledges that this is less

likely via electronic (asynchronous) methods. With this in mind, the author hopes

that the majority of the primary data collection events will be face-to-face.

Moreover, the author suggests the real-time events should be at least 45

minutes in duration considering the ambitious nature of the investigation. Finally,

the author hopes to recruit individuals with diverse commercial and academic

interests to enhance the “generalizability” (Daymon and Holloway 2002, p.91) of

the research. For example, it would be useful to interview senior marketing

practioners from non-related commercial sectors (e.g. Fast Moving Consumer

Goods (FMCG) and luxury goods). An emergent rather than a prescriptive

research strategy will determine the precise ratio of senior marketing managers,

independent consultants and academics. However, the author hopes that the

sample will contain an appropriate balance of academic and professional

marketing perspectives.

3.7 The Interlocutors

The author presupposed that a percentage of the key speakers at Marketing

Week’s ‘Multi-Channel Direct Marketing 2004’ conference would be interested in

contributing to this study. Centaur Conferences (Appendix 4) comment:

“This event is dedicated to exploring and solving the challenge of how to delivereffective and measurable communications to customers within this virtual, multi-

channel world where every campaign must add to the bottom line”

The author approached (via e-mail) four of the fourteen keynote speakers and

was encouraged by a 75% response rate resulting in three face-to-face

interviews. Merlin Stone (Professor of Relationship Marketing - IBM / University

of the West of England); Jonathan Latham (Head of Relationship Management –

Sainsbury’s); and Matthew Button (CRM and Database Manager – Lexus GB)

have all agreed to be identified within the study.


38

The Institute of Direct Marketing (2004c, p.5) publishes ‘Interactive Marketing’ :

“The aim of Interactive Marketing is to provide an indispensable resource forsenior marketing managers seeking awareness of new marketing concepts,

strategies and applications from around the world”

The author presupposed that a percentage of the editorial board would be

interested in contributing to this exploratory study. Encouraging communications

with the journal’s publishing editor and co-editor in chief determined a shortlist

of potential interlocutors. The author approached (via e-mail) seven members of

the editorial board and was encouraged by 85.7% response rate resulting in one

face-to-face interview, one telephone interview and two e-interviews. For the

telephone interview, the respondent kindly offered to record the event.

Furthermore, all e-participants offered the author the opportunity to question

their responses via e-mail. Note: after initially dismissing the idea of

e-interviewing the National CRM Manager for Sears (Canada), the author

contacted the individual hoping that this strategy may enhance the study’s

external reliability. Bruce Clarkson (National CRM Manager – Sears); Peter

Mouncey (Independent Consultant & Visiting Fellow at Cranfield University); Alan

Mitchell (Business Writer); and Richard Webber (Independent Consultant &

Visiting Professor at University College London) have all agreed to be identified

within the study. The author approached (via e-mail) seven marketing

academics. This resulted in a 71.4% response rate and three face-to-face

interviews. Malcolm McDonald (Emeritus Professor of Marketing at Cranfield

University); John Egan (Principal Lecturer at Middlesex University); and Keith

Fletcher (Professor of Marketing at the University of East Anglia) have all agreed

to be identified within the study. The editorial board of ‘The Journal of

Relationship Marketing’ has only one member based in the UK. Christine Ennew

(Professor of Marketing at Nottingham University) has agreed to be identified in

the study: a 100% response rate. A “thick description” (Geertz, 1973) of all the

participants is provided in table 1 with interview timings and event details.


39

Interlocutor Organisation /Primary Role

Event Details Background / RelevantInformation

ProfessorMalcolm

McDonald

Malcolm McDonaldInternational Ltd

Cranfield University

IndependentConsultant

CharteredInstitute ofMarketing(Cookham,

Berks)30-06-04

(45 minutes)

Extensive industrial experience,including a number of years as

Marketing Director of Canada Dry.Chairman of six companies. Author of

37 books. Current interests centrearound the use of IT in advanced

marketing processes.Bruce Clarkson Sears (Canada)

National CRMManager

e-interview07-07-04

Peter Mouncey Cranfield UniversityIndependentConsultant

e-interview09-07-0413-07-04

Director of research at the IDM, avisiting fellow at Cranfield Universityand a consultant on market research

and CRM.ProfessorRichardWebber

University College ofLondon

Visiting ProfessorIndependentConsultant

Private House(London)12-07-04

(60 minutes)

Formerly Managing Director ofExperian’s Micromarketing division.

Generally recognised as the originatorof UK geodemographic systems.

John Egan Middlesex UniversityPrincipal Lecturer of

Marketing

MiddlesexUniversity13-07-04

(90 minutes)

Twenty-four years’ experience workingin the retail marketing sector withcompanies such as Bloomingdales

(New York), Harrods (UK).JonathanLatham

Sainsbury’sSenior Manager

Head of RelationshipManagement

Sainsbury’s HQ(London)15-07-04

(45 minutes)

.

ProfessorKeith Fletcher

University of EastAnglia

Professor ofMarketing

Private House(Norwich)19-07-04

(90 minutes)

Research interests include consumerbehaviour, database marketing and

the development of CRM.

ProfessorMerlin Stone

University of theWest of England

University of SurreyIBM

Consultant

IBM(London)22-07-04

(2 hours inc.lunch!)

IBM Professor of RelationshipMarketing. Business Research Leader

with IBM’s Business ConsultingServices. Director of four companies.

Author of 11 books, 40 Journal ArticlesAlan

MitchellBusiness Writer Telephone

Interview08-07-04

(50 minutes)

Author of ‘Right Side Up’ and co-author of ‘The New Bottom Line:Bridging the Value Gaps that are

Undermining your Business’ProfessorChristineEnnew

NottinghamUniversity

Professor ofMarketing

NottinghamUniversity26-07-04

(70 minutes)

Director of DeHaan Tourism andTravel Research Institute

Editorial Board: ‘The Journal ofRelationship Marketing’.

MatthewButton

Lexus (GB) LtdCRM & Database

Marketing Manager

Lexus (GB)(Epsom)12-08-04

(45 minutes)

Table 1. The Interlocutors


40

3.8 Evaluation of Research Design

While a limitation of the research is the small sample size, the interview

approach has provided valuable insight into the fuzzy and ambiguous domain of

(relationship) marketing. The author considers the methodology was appropriate

and the sample contained an appropriate balance of academic and professional

perspectives. The author suggests: adopting a “member checking” (Lincoln and

Guba 1985 cited Daymon and Holloway 2002, p.95) strategy has enhanced the

internal validity of the research; providing a “thick description” (Geertz, 1973) of

the study’s participants and the primary data collection events has enhanced the

overall quality of the research; and the reliability of the research has been

enhanced by the application of a “consistent” (Denscombe 1998, p.240) set of

questions during the primary data collection events. The author notes: the

eleven discrete primary data events satisfied the minimum requirement; the

average duration of the face-to-face interviews exceeded the minimum

requirement; the majority of the face-to-face interviews were recorded (the

single exception being Malcolm McDonald: author forgot to tape!); and the semi-

structured questionnaire was a useful stimulus during data collection. Finally, the

author feels obliged to present an extract from Gummesson’s (2002b, p.325)

publication ‘Practical Value of Adequate Marketing Management Theory’ which

has significantly influenced the author’s methodological approach:

“Vedic philosophy treats knowledge as a blend of three interacting elements: the process of knowing(methodology), the knower (the researcher) and the known (the result). All three are needed inknowledge generation...My interest in theory has gradually brought me closer to qualitative methodsand the philosophy of science philosophies as expressed in hermeneutics, phenomenology and thehumanities, and away from quantification and positivism of traditional sciences. This transition is causedby the limitations experienced in quantitative research and the complacent, taken-for-granted attitude ofmarketing academics that statistical studies are the key to truth, the superior approach, and the cure-all.From my experience both as a producer of surveys, a buyer of market research, and a user of marketingdata, I have seen it deliver only in special cases. By giving preference to a highly deductive, survey-based approach, researchers contract chronic myopia. Opportunities of getting closer to the ‘real reality’and thus securing validity are pushed aside by a fascination for intricacies or research techniques,mistaking the outcome for a valid image. In saying this, I do not disqualify quantitative research assuch, only claim that it is over-used and over-rated as a tool in decision-making and the implementationof business. An ingenious concept, category or theory gives much more guidance than surveydistributions, standard deviations, staples and random samples. Together with experience, tacitknowledge and intuition, theory gives a structure and a framework, a context”


41

4. Findings and Analysis

4.1 Relationship Marketing > Relevance Marketing

This study is concerned with the validity of relationship marketing as presented

in the academic literature. During the primary data collection phase of the study,

an Independent Consultant questioned the validity of the ‘relationship marketing’

definitions presented in chapter 2:

“Doesn’t it strike you as curious that these definitions of relationship marketingare in fact non-definitions, since they define relationship marketing as the

attempt to do something with, or for, or in the context of a relationship, andmake no attempt to define what they mean by a relationship?”

The author tentatively suggests that this insightful comment supports the

relevance marketing definitions and perspectives presented in Figure 6. A medley

of perspectives relating to the validity of relationship marketing and relevance

marketing is presented in Figure 8. These findings indicate that Humby’s (2004)

Customer Relevance Management (CRM) approach and this study’s criticism of

the relationship marketing domain may have a degree of validity within the B2C

marketing environment.

The study’s primary aim is to provide a critical understanding of the development


within the B2C marketing environment. A Senior Marketing Manager commented:

“My sense is that the term (relationship marketing) is less relevant than a clearexplanation or description of the scope of the idea. Typically there is not a

pragmatic, business related description of what we’re trying to do and how we’regoing about it. The best definition of the activities (independent of the

technologies) that I’ve come across is Dr Robert Shaw’s definition of CRM:

‘An interactive process for achieving the optimum balance between corporateinvestments and the satisfaction of customers needs to generate the maximum

profit’ ”


42

The author tentatively suggests that this definition supports the study’s

presupposition presented in chapter 2 that the function of B2C marketing is to

offer relevant propositions to relevant customers (i.e. profitable customers) and

to provide relevant solutions to customers’ problems (needs). Arguably, this CRM

definition sits comfortably within the domain of relevance marketing:

“Customer Relevance Management (CRM) is an interactive process for achievingthe optimum balance between corporate investments and the satisfaction of

customers needs to generate the maximum profit”

Fig.8 Relationship Marketing and Relevance Marketing Perspectives

“Customers want good, professional service that reflects the information held about themand respects their integrity as intelligent people! They want integration between channels.

No, people don’t want real relationships with all the organisations they trade with. Mostorganisations still struggle to get to first base in meeting the needs and expectations of their

customers and the thought that this is a ‘relationship’ is a joke”

(Independent Consultant)

“The problem with CRM has been this tremendous lack of clarity regarding its scope. Isuggest that CRM is evolving to Customer Management (leave out the relationship word).This will force harder work regarding the development of the value proposition, how the

organisation will deliver it, and what the customer experience will be. This is tough to do butthose who do it will differentiate themselves in the market”

(Senior Marketing Manager)

“Customers want the freedom to determine whom they want a relationship with and whatthe nature of the relationship should be. Humby’s reference to Relevance Management is

very close to part of Shaw’s definition of CRM” *


“Take Gronroos's relationship marketing definition and just think about it for a moment.Remove the word 'relationship' and it still stands as a definition of marketing. Where, pray,

did the need come from to add extra words?”

(Academic)

“I think there is a lot of disillusionment about ‘relationships’ in marketing and given that CRMactually isn’t about relationships in that kind of personal, marriage-type metaphor then

arguably relevance is quite an interesting perspective”

(Academic)

“Customer Relevance Management seems very sensible”


* See section 4.5 for Shaw’s (1999) CRM Checklist


43

4.2 Data Gathering > Data Analysis > Value Delivery

There was a general consensus that relationship marketing strategies (commonly

referred to as CRM strategies) can add significant value to a commercial

organisation’s brand equity (value proposition) in today’s highly competitive, B2C

marketing environment. This finding supports Mintel’s (2002) previously cited

research. Moreover, there was a common view that “segmentation is the key to

marketing” and CRM strategies can help marketers identify their ‘profitable’

customers. These findings support the presupposition presented in chapter 2 that

relationship (relevance) marketing implies the development of long-term

relationships (accounts) with key parties (profitable customers within this

context) in order to better understand how to develop and deliver propositions

tailored to the needs of the specific market segments identified. A Senior

Marketing Manager commented:

“We tip all of our prospects into a segmentation model and we then decide whichsegments are worth nurturing and which segments are not”

A common view was that successful CRM requires rich and relevant consumer

data. Moreover, there was a general consensus that (ICT-enabled) loyalty

programmes can offer commercial organisations valuable real-time data. These

findings support Buttle’s (2004, p.34) previously cited CRM perspective that

successful CRM strategies are “grounded on high quality data and enabled by

IT”. A Senior Marketing Manager commented:

“Data is the essential element of a CRM strategy. It is the key to buildingprofitable dialogue and creating value for both the customer and for us”

These findings support Clark et al’s (2002) conceptualisation of the CRM space as

presented in Figure 6. Moreover, the CRM strategies of Sainsbury’s, Lexus (GB)

and Sears (Canada) seem to fit: Clark et al’s (2002) value framework as

presented in Figure 5; and Humby’s (2004) Customer Relevance Management

framework (Appendix 2) which advocates segmenting customers by their


44

behaviour (data) and then developing marketing strategies for only those “multi-

dimensional behavioural segments” (customers) who will find them relevant.

4.3 Win-Win-Win > Many-to-Many

The study’s presupposition that the philosophy of relationship (relevance)

marketing is to create and sustain a ‘win-win’ scenario over the long-term

(Figure 3) was endorsed by all participants. However, Sainsbury’s relationship

marketing philosophy is to create and sustain a ‘win-win-win’ scenario:

“We have relationships with suppliers and with customers and the idealcampaign will have a win for the supplier, a win for Sainsbury’s and a win for the

customer. So, we work on a win-win-win scenario”

The author suggests that this marketing approach is supported by the

organisation’s broader, paradigmatic view of Customer Relationship Management

(CRM) i.e. Sainsbury’s relationship marketing approach goes beyond the

customer-supplier dyad to include commercial organisations within the supply

chain. This finding tentatively supports Gummesson’s (2004a, p.1) previously

cited worldview of relationship marketing i.e. “marketing does not live in one-to-

one relationships but in many-to-many networks”. Furthermore, an Independent

Consultant reflected upon the appropriateness of Gummesson’s (2002) many-to-

many (network) philosophy in today’s multi-channel marketing environment:

“Networks are relevant in a multi-channel environment where a consistent viewof the customer is an organisation’s aim”

However, Gummesson’s (2004a, p.1) many-to-many marketing concept was not

recognised as being a useful perspective by all participants. A Senior Marketing

Manager commented:

“This is getting way too complex when the subject is really back to influencingconsumer behaviour for commercial gain”


45

4.4 One-to-One Marketing > Multi-Channel Integration

In chapter 2, the author suggested relationship marketing respects and values

markets segmented at the level of the individual. The majority of the study’s

interlocutors agreed with this presupposition. However, there was a view that the

one-to-one (Peppers and Rogers, 1993) relationship marketing concept has been

‘over-sold’ by academics and CRM software vendors. In summary, there was a

general consensus that one-to-one (Peppers and Rogers, 1993) relationship

(relevance) marketing is theoretically possible but not a common reality in

today’s B2C marketing environment. An Independent Consultant commented:

“The capability to communicate one-to-one should be expanding all the time withICT developments – if only organisations would take data/information/knowledge

management more seriously and learn to integrate and co-ordinate channels”

4.5 CRM Checklist

A Senior Marketing Manager commented:

“I have found Shaw’s CRM checklist very useful in assessing what we’re doing(and what needs to be done) in terms of customer management”

The participant kindly summarised Shaw’s (1999) CRM checklist:

Fig.9 CRM Framework (Shaw 1999 cited by a Senior Marketing Manager)

• Measuring inputs across all functions including marketing, salesand service costs and outputs in terms of customer revenue, profitand value

• Acquiring and continuously updating knowledge about customer needs,motivation and behaviour over the lifetime of the relationship

• Applying customer knowledge to continuously improve performancethrough a process of learning from successes and failures

• Integrating the activities of marketing, sales and service to achievea common goal

• The implementation of appropriate systems to support customerknowledge acquisition, sharing and the measurement of effectiveness

• Constantly flexing the balance between marketing, sales and service inputsagainst changing customer needs to maximize profits


46

The Senior Marketing Manager noted that Humby’s (2004) Customer Relevance

Management (CRM) measurement framework (Figure 7) and Shaw’s (1999) CRM

checklist (Figure 9) share common ground. The author suggests that the only

significant difference between the frameworks is the terminology employed.

4.6 Prospect Relationship (Relevance) Management

Lexus’s (GB) CRM and database marketing strategy is based upon the concept of

Prospect Relationship Management (PRM). The components of this framework

are presented in Figure 10.

Fig.10 Prospect Relationship Management (PRM) (Lexus)

During the interview, the author suggested the term ‘Prospect Relevance

Management’. Lexus’s CRM and Database Manager commented that Prospect

Relevance Management is a valid perspective considering Lexus’s CRM strategy

involves “employing consumer insight to create relevant offers based on

spending patterns and established behaviour”. The author notes: the synonymity

of the terms relationship marketing and CRM is highlighted by the organisational

responsibilities of Sainsbury’s Senior Relationship Marketing Manager and Lexus’s

CRM and Database Manager. In practice, these roles share a lot of common

ground (e.g. the development of customer acquisition programmes and the

management of customer retention programmes).

“Prospect Relationship Management is about acquiring and nurturing prospects(across multiple channels) and making sure the customers stay happy”

(Button 12/08/04)

• PRM (Prospect Relationship Management) not CRM; successfully nurturinga prospect to become your customer

• Understand the tone with which to speak to your customer from theinsight gleaned from your data

• Employing consumer insight to create relevant offers based onspending patterns and established behaviour

• Examining different segmentation models to guarantee you’re aiming for the right target


47

4.7 Empowered Consumers

There was a general consensus that a significant percentage of today’s

consumers are “far more savvy” (Academic) than in the past. A Senior Marketing

Manager commented:

“I sense there will be a shift of power from the organisation to its customers,which goes back to Shaw’s (1999) second and third points”

As previously noted, there was a common view that loyalty programmes can be

effective mechanisms for acquiring real-time “knowledge”. However, there was

some debate as to whether loyalty marketing is the correct terminology for this

commercial activity. An Academic commented:

“I view loyalty programmes as commercial stalking”

4.8 electronic Relationship Marketing (e-RM)

The findings presented in Figure 11 challenge the validity of Technologicalship

Marketing (Zineldin, 2000), electronic Customer Relationship Marketing (e-CRM)

(McIntyre, 2003; Luck and Lancaster, 2003) and e-loyalty (Reichheld et al,

2000). An Academic commented that the term e-RM is increasingly being used

within the relationship marketing academic literature but they are

“uncomfortable” with its use primarily because:

“Relationship marketing is a continuous process and I don’t see the necessity ofdefining the means by which you build a relationship. I don’t think you need to

make a distinction between e-RM, postal RM or telephone RM”

• Acquiring and continuously updating knowledge about customer needs,motivation and behaviour over the lifetime of the relationship

• Applying customer knowledge to continuously improve performancethrough a process of learning from successes and failures


48

Fig. 11 electronic Relationship Marketing (e-RM) Perspectives

4.9 The Marketing of the Marketing

A common view amongst the participants was that many of today’s marketing

buzzwords are driven by the necessity to sell “new, exciting things”. For

example, a participant suggested that the CRM component of a recent MBA

programme was the direct marketing module “in disguise” but was branded as a

CRM module to “encourage traffic”. Another participant commented that

although the conceptual foundations of e-CRM are to be found in relationship

marketing, courses are consciously differentiated to encourage maximum

enrolment. The author tentatively suggests a buzz phrase for this empirical

finding: ‘The Marketing of the Marketing’. The study’s literature review raised the

specific question: how many of today’s relationship marketing academicians are

guilty of teleologism in their research and subsequent publications? The study

failed to explore this contentious issue in any great depth. However, a participant

did pass comment on a peer “[Author X] was given a lot of money to investigate

CRM”. The author tentatively suggests that further research may wish to quantify

the level of commercial bias within the academic marketing literature.

“The value of any e-marketing definition is probably past its sell-by date”

(Academic)

“e-marketing is a transient phenomena”


“I’ve always thought e-CRM was exactly the same as CRM and was just anotherconsultancy gimmick”

(Academic)

“e-anything is a bit of a turn off these days”


“I don’t believe e-anything”

(Academic)


49

5. Conclusion

This investigation was concerned with the validity of relationship marketing as

presented in the academic literature within today’s dynamic and complex, B2C

marketing environment. In summary, the author tentatively suggests that the

gap between the theoretical development and professional practice of

relationship marketing (Customer Relationship Management) is not significant.

For example, the findings indicate that Gronroos’s (1994) popular definition is

purposeful but removing the fuzzy and ambiguous ‘relationship’ terminology may

enhance the definition’s validity within a B2C context. However, the author

acknowledges this is a subjective issue. The author hopes this discussion will

encourage further debate and would like to take this opportunity to thank all

participants for their valuable time and contributions to this exploratory study.

With regard to any bias presented in chapter 4, the author does of course take

full responsibility. The investigation focused on the B2C marketing environment

and did not seek to explore the validity, generality and practical applicability of

relationship marketing and relevance marketing in a B2B marketing context. The

author hopes future research may include an exploratory study concerned with

the validity of relevance marketing within the UK’s B2B marketing environment.

Sheth & Parvatiyar (2002, p.5) comment:

“For a paradigm to be adopted as a discipline it must adequately summariseknowledge of related entities, laws, and mechanisms in the form of time- and

context-free generalisations”

The concept of relevance marketing may satisfy these criteria but is it really the

new, improved relationship marketing or just another marketing buzzword? The

last word goes to Malcolm Macdonald:

“Whilst I agree with your thesis - where, pray, did the need come from to addextra words to ‘marketing’?”

That is a good question.


50

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Appendix 1: Many-to-Many Marketing (Gummesson, 2004a)


58


59


60


61


62


63


64


65


66


67

Appendix 2: Customer Relevance Management (CRM) (Humby, 2004)

\


68


69


70


71


72

1


73


74


75


76


77


78


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Appendix 3: Semi-Structured Questionnaire

• Do consumers want relationships?

• Are the 2000s the era of the digitally, networked consumer?

• How valid is many-to-many marketing?

• Is Customer Relevance Management more likely to deliver measurable

benefits than CRM?

• How valid is the term e-RM?

• How valid are the definitions in the literature?

• Does academia suffer from theory anorexia?


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Appendix 4: Multi Channel Direct Marketing 2004


81


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Appendix 5:

Interview with Jonathan Latham

Head of Relationship Management - Sainsbury’s

Sainsbury’s HQ / 33 Holborn / London EC1N 2HT15th July 2004

Jeremy: Your title is Relationship Marketing Manager for Sainsbury’s.

Jonathan: Yes, I’m what they (Sainsbury’s) call a Senior Manager and I’m

Head of Relationship Marketing.

Jeremy: Could I ask what that entails?

Jonathan: That entails looking after Sainsbury’s (excluding Sainsbury’s Bank

which is a separate area) below the line activities. Which if you

break that down: is using coupons to try and attract more visitors

to the store and to try and get them to buy more when they’re in

the store; its looking after club programmes, such as the Drinks

Club and the Little Ones Club, and trying to bring new members

into those clubs and then marketing to those members; its about

looking after acquisition programmes and retention programmes to

Sainsbury’s To You, which is our online division; and it’s about

building relationships over the longer term with the customers

through magazines and through various types of programmes

which are about creating a dialogue with the customer.

Jeremy: My interpretation of relationship marketing is that it has to be

interactive and win-win. Based on the strategies you’ve just

described, would you say they fall within that camp?


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Jonathan: Yes, but you have to apply another win in there which is the win-

win-win. We have relationships with suppliers and with customers

and the ideal campaign will have a win for the supplier, a win for

Sainsbury’s and a win for the customer. So, we work on a win-win-

win scenario. Do they all fit the criteria? They do, but over different

timescales. So, if I’m building a dialogue and an interaction with a

customer and I’m looking to improve retention rates, then I’ll be

looking at promotions staggered over a period of time. However, if

I’m looking at a promotion which is just about one visit and the

next time the customer goes in I want to increase the amount of

spend that they have, then it will be a shorter term view that I’ll

take in terms of whatever value that I want from that particular

campaign.

Jeremy: Would your role then encompass monitoring CRM systems?

Jonathan: It’s the application of them rather than the systems themselves. It’s

a public fact that we use Teradata within the organisation and

we’re probably one of the leading companies (certainly in Europe).

The system we use is a benchmark for Teradata in other countries.

But my role is the point at which the data goes onto the database

rather than the database itself. So, my role is very much ‘Right,

I’ve got all this information about our customers and I’ve got

various hypotheses of how we can develop value from it’ and then

we use direct marketing to try and work out whether those are

right or not.

Jeremy: It’s interesting that you mention the word value. Would it then be

value-value-value?


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Jonathan: It’s added-value rather than value because you already have

customers going into your store (for the sake of argument) but the

objective is to increase the value they get when they’re in the

store. So you are already getting an element of value from them,

so you’re trying to add value beyond what you would have got

anyway, if you had done nothing.

Jeremy: That it is a really nice background, thank you. Do your activities

cover the digital communication channels?

Jonathan: We do e-mail. We do relatively few bits of SMS - very small

amounts. And we are starting to get much more into search

engines and banner advertising but it’s not a great part of what we

do.

Jeremy: Do CRM strategies deliver measurable benefits?

Jonathan: You have the Tescos and Sainsbury’s of this world who have

embraced CRM technologies in a big way. But you have to have a

balance between how much you in invest in developing loyalty

(your CRM spend) and maintaining a price level that keeps you

competitive in the marketplace.

Jeremy: Do we have relationships with supermarkets?

Jonathan: Customers do have relationships with supermarkets. They have

their favourite supermarket. Quite often location is the driver

behind that but you will get customers who will drive past Tesco to

go to Sainsbury’s because they’ve always shopped at Sainsbury’s


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and they feel they are a Sainsbury’s shopper (and vice versa). If

you look at your customer base, the 20/80 pareto rule for most

organisations does actually work. There is a percentage of your

customers who are really, really loyal to you and they will create

the biggest sales for you. And those guys you better have a

relationship with otherwise you’re going to be stuffed! There are

certainly the other types of customers who are more promiscuous

(and they are probably getting more and more these days) who will

flit from offer to offer (from company to company). The

relationship then tends to be much more on a price level rather

than on an in-depth, emotional bond level. And there are some

customers who you will never have a relationship with. They don’t

like shopping and don’t like supermarkets. So, if you look at your

customer base and look at the UK population, I think relationship

marketing does exist but you’ve got to segment your market down

to the ones you can have a relationship with.

Jeremy: How valid is e-RM?

Jonathan: I don’t think you can have a relationship with an individual on the

basis of one distribution channel. So I would say e-CRM does not

exist. CRM exists.

Jeremy: Are the 2000s the era of the digitally, networked consumer?

Jonathan: I hate putting labels on customers. But what I would say is that the

customers’ ability to embrace new technology is increasing and the

balance of power is much more in their favour than it has been

over the last 20 years.


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Jeremy: Is CRM flawed by definition and is Customer Relevance

Management better?

Jonathan: Clive is right in the sense that both Tescos and Sainsbury’s are able

to make much more relevant offers to customers because we have

up-to-date information in terms of buying patterns and

transactions. Data is the essential element of a CRM strategy. It is

the key to building profitable dialogue and creating value for both

the customer and for us. However, it is the interpretation of the

data rather than the data itself that is critical. We have a team of

analysts. Technology is certainly an enabler. It allows us to know

more about our customers from lots of different touch-points and

therefore we can build up a stronger knowledge of what our

customers are after. I wouldn’t get to wound up about the

definition of CRM. It’s more the application of CRM. The problem

with the word relationship is that people apply the norms of having

a social relationship into the communication relationship or the

brand relationship. And obviously your relationship with your

girlfriend is going to be very different from your relationship with

Sainsbury’s supermarket. CRM in the old days used to be called

direct marketing, then it became one-to-one marketing and now it’s

CRM. I actually think it all comes back to brand. In the 70s and 80s

we called it brand marketing. I don’t really see the point of all these

labels. Putting labels on it narrows your thinking.

Documents

Relevance Marketing (Lumsden Nee Bottom 2004)