POLICY PRACTICE
Double-Edged Sword
Holy cow! The Federal Trade Commission is holding a workshop on offline profiling. A year ago it was online profiling, and the government said that was the limit of its interest. But the old saying about the camel is true: One sniff leads to a permanent guest in the tent. What does this mean for customer relationship management?
Americans are very pragmatic. While they complain about advertising mail, they love the value, choice and competition that direct marketing brings to them. But there has been a sea change in emotion over the past five years. The Internet has made information technology much more visible to them and left them with a feeling of angst.
People want a sense of control in defining who they are as individuals and families, but they feel they have lost this. At the same time, industry’s ability to successfully apply technology to improve performance has begun to accelerate. The various technologies needed to pursue CRM have all advanced at the same time. Clickstream monitoring and cookies are the outward face of this revolution, but data warehousing, data matching and analytics have all improved as well. The collision of these two forces will determine our external public policy headaches for the next decade.
At the most macro level, CRM is the process of using information technology and statistics to maximize a company’s relationship with every current and potential customer. Maximization in some cases means providing white-glove service and pricing that expands the firm’s share of that consumer’s wallet.
In other cases, it means marginal service and high prices designed to drive the unattractive consumer somewhere else. A critic of targeting
