“Relationship” Counseling: Experts Examine Triumphs and Flaws of CRM at Baruch Panel

Though most panelists at the Direct and Interactive Marketing Center’s May 2 discussion “CRM—Myths & Realities” could not come to a consensus on what CRM was, is, or will be, they all agreed that they have seen the future of marketing—and it’s digital.

For the uninitiated, CRM stands for Customer Relationship Management, a concept popularized during the Internet boom of the late 1990s. Companies sought to compile supplementary information about their customers—their purchasing preferences and history, customer service requests, demographic details, habits, and so on—generally through sophisticated Web-based opt-in programs and incentive-driven surveys. CRM is very tied to marketing, even though it sounds so technical, said Jorge Miranda (05), a graduate marketing student who participated in the event.

The information would pass through a central database where it would be analyzed for patterns, interests, and preferences, which are then be used to tailor promotions for other products. Though initially attractive to many marketers, the inability to measure rates of success, sizable investments required in the early incarnations, and the distaste many businesses had for expensive high-tech propositions following the dotcom crash seemed to signal the death knell for CRM several years ago. The concept has made a strong comeback in recent times however, and ‘interactive marketing’ is now one of the hottest fields in the industry.

“At Masterfoods, we’ve made it into Consumer Relationship Marketing—a business building strategy,” said Bob DeSena, managing director of Mars Direct, a unit of Masterfoods USA. “It focuses on strengthening bonds between brands and users.”

Ernan Roman, president of the consulting firm Ernan Roman Direct Marketing, insisted that the term had outlived its usefulness. “I think it’s flawed and the faster we can bury it, the better. How do we approach a [real] relationship? We don’t “manage” it,” said Roman. “I think we need to move on to a different premise.” Erik Wennerod, vice-president and director of database services at Draft and a pioneering developer of the agency’s CRM initiatives worldwide, agreed that the term was laden with baggage. “I think the acronym ‘CRM’ should be buried because of the stigma, but I do see [the concept] having a long and relevant life,” said Wennerod. “I think the Internet is going to evolve and offer real-time CRM

Graduate marketing students in the audience took the opportunity to ask about one of the most controversial aspects of CRM—the collection of private information and the possibility of malicious use. Faye Trapani (’06), a former advertising account executive and MBA in Marketing student, asked the panel for their thoughts on the effect of privacy laws on the future development of CRM.

“I keep a copy of the Cable Privacy Act on my table at all times,” said DeSena, referring to the milestone 1984 bill that limited the amount of personal information that cable television providers could compile about their subscribers. “There is nothing in there that would constrain you from creating value for your customer.”

Sponsored by Direct Marketers Getaway, Baruch’s new Direct and Interactive Marketing Resource Center, the Graduate Marketing Club, and the Graduate Career Management Center, the luncheon was organized by MBA students Sachin Panjwani (’05), Lijo Joseph ('05), and Kalpa Ghughu Marchese (MBA '03, MS '05). Harvey Markowitz, an adjunct professor in the Department of Marketing and director of the Direct & Interactive Marketing Resource Center, served as the faculty liaison.

Panjwani, who was part of the Baruch team that won the Silver Award at the Direct Marketing Association’s Echo Awards competition, currently interns at Draft. Other students affiliated with the center have launched a full-service marketing agency, Baruch Direct, which creates real campaigns for clients both inside and outside the college. Miranda, also the supervisor of the Baruch Direct agency, said that the panel “clarified the issues surrounding CRM for students. More than 60% of CRM efforts failed in the past, and we wanted to show students what is changing.”

Olayinka Fadahunsi