Mapping the re-engagement ofCRM with relationship marketing

Darryn MitussisNottinham University Business School, Nottingham, UK, and

Lisa O’Malley and Maurice PattersonDepartment of Management and Marketing, Kemmy Business School,

University of Limerick, Limerick, Ireland

Abstract

Purpose – This paper aims to reframe and enhance the relationship marketing literature throughadvocating an emphasis on process and a renewed commitment to social and informational exchanges.

Design/methodology/approach – The paper is conceptual. It takes as its starting-point therecognition that customers exist in complex dynamic systems in which they enact multiple roles.However, current implementations of customer relationship management (CRM) typically only viewcustomers through a single lens (as customers) that denies firms a holistic view of those with whomthey interact. Moreover, CRM systems typically embed and script actions (i.e. call centre options, offersdriven by cross-selling and segmentation) rather than enabling rich communication and facilitatingappropriate responses that emerge from that communication. It is argued here that, as a consequence,both parties to a relationship need to negotiate the nature of systems that connect them, because thosesystems, in part, determine the content of relationship exchanges.

Practical implications – Understanding of the central argument will contribute to betterorganisational-customer interactions and more informed relationship management techniques.

Originality/value – The paper argues for a renewed emphasis on processes and onsocial/informational exchanges within those relationships. This initiates a process of framerestructuring that will benefit RM.

Keywords Customer relations, Relationship marketing, Communication technologies

Paper type Conceptual paper

IntroductionThe relationship marketing (RM) literature is a theoretically, ideologically andempirically rich documentation of marketing practice beyond the mass-market focus ofthe mainstream marketing literature. Originating in the late 1970s on the edges ofmarketing practice (i.e. services, business-to-business, channel management), by theend of the 1980s RM was being proposed as a solution to some of the problems faced bymass marketers (see Dwyer et al., 1987). The 1990s represented the golden years forRM, as evidenced by the increasing academic and practitioner attention afforded to it.Indeed, it might be argued that mass marketers attempted to obtain ownership of RMfrom their colleagues in services, industrial and channel contexts through theformulation and propagation of customer relationship management (CRM) as a massmarketing strategy or tactic.

While, in principle at least, CRM is influenced by the richness of RM, its almostexclusive focus on managing relationships with the end customer (as opposed torelationships with suppliers, competitors, intermediaries, etc.) may be somewhat

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Received May 2004Revised April 2005

European Journal of MarketingVol. 40 No. 5/6, 2006pp. 572-589q Emerald Group Publishing Limited0309-0566DOI 10.1108/03090560610657840

counterproductive. We say counterproductive because most of the interaction thatoccurs with respect to a product or service in the mass-market happens within thechannel and, as such, CRM deployments fail to influence many relevant exchangeswithin the network. Moreover, the management of supposed relationship outcomes,rather than relationship processes, must make it difficult to achieve those outcomes.Perhaps not coincidentally, despite the extensive time, money and technology devotedto CRM, results have been disappointing (Johnson, 2004; Kale, 2004) and manymanagers are now sceptical or hostile to CRM deployments (Patron, 2002; seecommentary in McNulty et al., 2003).

To address this general issue in more detail, we undertake the following. First, wereview briefly the rationale behind RM. Second, we outline the nature of CRM andcritique its partial appropriation of the ideology and concepts of RM. Third, we identifyand explore some problematic issues in the narrow treatment of CRM by focusing onthe failure within CRM to understand that consumers are parts of complex, dynamicsystems. Fourth, we argue that, in consumer markets, marketers need to re-engagewith the RM ideal to prevent its ideological and conceptual richness being lost. In doingthis, we clearly share the view of others (e.g. Fournier et al., 1998) that CRM, as it iscurrently envisaged and enacted, risks a premature death. As such, we advocate anincreased focus of the processes of engagement, which are themselves the desiredoutcomes of relationships and not instruments for achieving something else as CRMdeployments typically presume. We also acknowledge that in many cases consumersdo not want relationships with particular firms or that firms do not have therelationship experience and expertise to enact successful RM programmes. In suchcases, improved execution of mix management programmes would seem to be mostappropriate (e.g. O’Malley and Mitussis, 2002).

Relationship marketingThe ideological appeal of RM has rarely been questioned and has regularly beenappropriated in various “calls to arms” to instigate paradigm shifts in the theory andpractice of marketing (e.g., McKenna, 1991; Blattberg and Deighton, 1991; Shani andChalasani, 1992; Gronroos, 1994; Hakansson, 1982; Morgan and Hunt, 1994).Traditional marketing, it has been argued, has failed in that (despite the extensiverhetoric) customers have been put last, not first (Brownlie and Saren, 1992; Desmond,1997; O’Malley and Patterson, 1998). This inherent lack of customer focus on behalf oforganisations led many consumers to conclude that organisations generallyover-promise and under-deliver (Sisodia and Wolfe, 2000; O’Malley and Prothero,2004). This has earned marketing and associated public relations activities amuch-maligned image as instruments of corporate manipulation (Fitchett andMcDonagh, 2000). RM was positioned in such a way as to address this poor imagedirectly by instigating a fundamental transformation in the practice of marketing. Itheralded a distinct move away from customer manipulation and toward genuinecustomer involvement becoming, in the process, a champion of corporate credibility(McKenna, 1991). Moreover, such a transformation would also increase both theefficiency and effectiveness of marketing by bringing the customer into a cooperativepartnership with the organisation (Sheth and Parvatiyar, 1995; Gordon, 2000). Ratherthan competing on economies of scale, as had been the norm, organisations couldleverage these relationships and compete on economies of scope (Gordon, 2000).

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Moreover, the practice of RM would lead to greater value creation through cooperativeand collaborative relationships, with this value benefiting all parties engaged in therelationship (Tzokas and Saren, 1997; Parvatiyar and Sheth, 2000). At its most basicthen, the ideological grounding of RM is simply that cooperation is better than conflictand that mutual benefit is more valuable than greed.

Complexity of relationship processesIn order to achieve this transformation in marketing practice, an equally momentoustransformation is necessary in terms of how marketing as a discipline is viewed.Gummesson (1994, p. 12) successfully captures this new understanding through hisdefinition of RM as marketing seen as “interactions, relationships and networks”. Thisdemands a more holistic approach to theory and methods to explore and understandhow markets work, how companies interact, and how relationships are created (Berry,1995; Wilson, 1995; Ford, 1997). Once it was acknowledged that companies arenaturally involved in a whole host of relationships with employees, suppliers,competitors, non-profit organisations, distributors, retailers and consumers(Hakansson, 1982; Morgan and Hunt, 1994; Gummesson, 1997), a radical shift in theconceptualisation of marketing was required. Moreover, each of those parties is alsoinvolved in a complex array of relationships with other parties, each of which can havean impact on the financial success of any given relationship within the network(Hakansson and Snehota, 1995). Attempts to understand the nature and content ofthese diverse relationships have necessitated the development of a new language thatappropriately and adequately describes them. As a result, the RM literature drawslargely upon insightful theories and concepts from social exchange theory (i.e. followingBlau, 1964) and upon a rich qualitative research tradition (Moller and Wilson, 1995).

In addition to observations of the complexity and interdependence of relationshipsoccurring within networks, the RM literature also highlights the multidimensionalityof relationships. For example, Cannon and Perreault (1999) indicate that relationshipexchanges occur in multiple dimensions (e.g. informational, financial, social, legal, etc.).Importantly, a willingness to engage in information exchanges about deeper processesand a willingness to adapt processes as a result is evident in relationship exchanges(see Wilson, 1995).

Relationship outcomesIn the preceding section we highlighted briefly the complexity of relationshipprocesses. In addition to the observation of these processes, a number of concepts haveemerged to describe successful exchange relationship outcomes, including trust,commitment, mutual goals, shared values, intimacy and loyalty (Hunt and Morgan,1994; Berry, 1995; Wilson, 1995; Ford, 1997). Moreover, when faced with high levels ofuncertainty (such as in underdeveloped markets or in the face of enormous choice),developing a network of committed, trustful relationships with parties that share thesame goals may be an end in itself. By their very nature, concepts such as trust andcommitment encompass the ideological values of RM and reinforce its moral andethical imperatives. Furthermore, the focus upon developing relationships that gobeyond purely economic bonds also makes sound financial sense because relationshipsthat are underpinned by social and structural bonds are less easily imitated bycompetitors, and therefore lead to sustainable competitive advantage (Morgan, 2000).

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Relationships in consumer marketsWhile the RM literature is quite categorical that customer relationships are only one ofthe many possible or actual relationships in which companies are involved, there hasbeen a disproportionate amount of time, money and effort expended by marketers inattempting to create and manage relationships with the end consumer[1]. Perhaps this isa reasonable outcome given marketing’s traditional focus on the customer, together withtypical understandings of the economics of customer retention (Reichheld and Sasser,1990; Reichheld, 1996; cf. Reinartz and Kumar, 2000). Thus, by the late 1990s,mainstream marketing appears to have limited its interest in RM to those aspects thatdeal specifically with end consumers. In essence, mainstream marketing bought into theconceptual outcomes of RM but not the ideology that drives the multidimensionalexchange processes within complex networks that can lead to those outcomes. BecauseRM outcomes have been divorced from their direction-giving ideology, the issue ofimplementation (how to actually do RM in mass markets) is generally the mostproblematic aspect of CRM. This is because approaches to implementation arecontext-specific and are contingent upon the nature of the focal relationship (e.g.interpersonal, business-to-business, service or mass market). Indeed, there has beenmuch discussion of the problematic nature of RM implementation in mass markets dueto the distance between customer and supplier, the limited opportunities forinterpersonal interaction, the absence of intimacy, a limited understanding of themotivation of consumers to participate in exchange relationships, and the requirement touse technology (Barnes, 1994, 1995; Christy et al., 1996; Sisodia and Wolfe, 2000; Smithand Higgins, 2000; O’Malley and Mitussis, 2002). Indeed, initial attempts to implementRM in mass-market contexts may have created greater distance between customers andthose organisations attempting to forge relationships with them (Fournier et al., 1998).However, despite criticisms, the ideology of RM (McKenna, 1991), the economics ofcustomer retention (Reichheld and Sasser, 1990; Donaldson and O’Toole, 2002) and thepossibilities afforded by technological developments (Blattberg and Deighton, 1991;Shani and Chalasani, 1992; Sisodia and Wolfe, 2000) have propelled the focus oncustomer relationships in mass-markets, resulting in the emergence of CRM.

Technological dependency of CRMThe ability to develop successful customer relationships lies in an organisation’sability to understand its customers, their individual preferences, expectations andchanging needs. In other words, organisations need to understand “real customers onan individual basis” (Sisodia and Wolfe, 2000, p. 551, original emphasis) andcommunicate with them appropriately. The complexity of contemporary marketsrenders such customer intimacy difficult (Di Tienne and Thompson, 1996). As aconsequence, the collection, analysis and use of information to identify, understand andmeet customers’ needs is crucial to the successful implementation of RM in massmarkets. As a result, technology, initially in the form of the database, is widelyregarded as the core of CRM with data used “to build a long-term connection betweenthe company and consumer” (Copulsky and Wolf, 1990, p. 17). As such, CRM can beregarded as a “business strategy that uses information technology to provide anenterprise with a comprehensive, reliable, and integrated view of its customer base sothat all processes and customer interactions help maintain and expand mutuallybeneficial relationships” (Zikmund et al., 2002, p. 3).

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Transaction data held in the database are overlaid with demographic,geodemographic and lifestyle data, and a range of other data sources includingCounty Court bad debt judgments (CCJs) and the electoral register[2], to create,according to CRM rhetoric, a relatively complete picture of the customer (Evans, 1999)or, a “360 degree view” of that customer. Thus, the database is positioned as the centralknowledge tool for the organisation (Di Tienne and Thompson, 1996; O’Malley et al.,1999; cf. Payton and Zahay, 2003) and is used to simulate indicia of intimacy andconnectedness (O’Malley and Mitussis, 2002). These data are used to communicatepersonalised service by allowing company employees access to a complete history ofthe customer’s contacts and transactions. In theory, employees are provided with theinformation they require to engage with customers’ requests effectively (Gordon, 2000;Larson, 1996; Zikmund et al., 2002).

In addition to the database, other technologies have emerged with the promise ofopening up new channels of dialogue, which can be customer-initiated as well asorganisation-initiated. These developments include the internet, telecoms,computer-telephony in call centres, personalised web pages, chat rooms, e-mail,frequently asked questions (FAQs), tracking capabilities and web-based call centres(Turban et al., 2004). Each of these technologies promises opportunities at the customerinterface to secure real-time or near real-time interaction (Gordon, 2000). This hasresulted in a need to move beyond the customer database as the basis of CRM and tolink the central information centre with call-centre software and internet systems thatallow direct interaction, as well as into other functions that contain histories ofcustomer interaction (such as accounts and product service departments).

Process versus outcome orientations in CRMThe implementation of CRM has, however, not been unproblematic. While CRM hasclearly attempted to foster the outcomes observed in good RM practice, concepts such astrust, commitment, mutuality, promise keeping and dialogue (Gronroos, 1994) have notbeen internalised, resulting in a lack of sincerity (O’Malley and Mitussis, 2002). “Often,database marketing is little more than manipulation of consumer data in ways intendedto create an illusion that the provider is presenting a customised response to anindividual consumer’s needs. This is fundamentally an inauthentic play for a consumer’sattention” (Sisodia and Wolfe, 2000, p. 560). Many might argue that, by ignoring theideology of RM, CRM was always doomed to fail. While this may indeed be the case,efforts at implementation have also encountered problems. These problems are a resultof the failure to adopt the holistic vision that is at the core of RM. In this regard,limitations in terms of tunnel vision relating to customers, technology and marketingdecisions are highlighted in this paper. In the mass market, any synthesis of relationship,sincerity and the other presumed CRM outcomes must be enabled by technology.Unfortunately, because so many interactions between a firm and its customers occur,most need to be automated and/or scripted. Processes, therefore, become inflexible andout of control of the customer facing staff, thus precluding everything but an outcomeorientation and, probably, any incorporation of a RM ideology.

Consolidating RM versus CRMIn our brief overview of the established RM literature we noted four important themesthat usefully juxtapose RM theory and practice with CRM practice. First, the RM

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literature includes a distinction between ideology and concepts, where ideology is a setof principles (e.g. a commitment to a rich interactive social environment) and whereconcepts include some of the things we might commit to (such as trust, socialexchange, multi-level interaction, etc.). Second, the CRM literature and practice has notproperly engaged with the ideology of RM (i.e. attempts to use the concepts divorcedfrom their direction-giving ideology). Third, the RM literature indicates thatorganisations are complex and dynamic, their exchanges altering both theparameters for any given set of dimensions and the dimensionality of therelationship itself. CRM literature and practice, on the other hand, largely presumesthat consumers are dimensionally static and committed to outcomes (i.e. utilitymaximising through consumption) that can be achieved through better pricing,positioning, delivery, etc., of products and services. Fourth, successful relationshipsevolve around the integration of non-standard information and soft data that typicallyonly happens when engaging with real people or with highly flexible systems (i.e. thatinvolves a process orientation). The noted lack of success in CRM implementationsmay therefore seem to stem from the failure to adopt an ideological approach tosupport the relationship rhetoric. In the context of the preceding discussion, CRMdeployments that attempt any meaningful operationalisation of a “relationship” wouldneed to acknowledge the complexity of relevant business and personal networks, thecomplexity of interactions that occur within them and the limited capacity totechnologically synthesise those interactions.

Dynamic systems, dynamic consumersHaving made an important distinction between the process orientation crucial to RMsuccess and the outcome orientation largely adopted in CRM, in this section we focuson the way that consumers are part of a dynamic system and are influenced by otherstakeholders, internal agendas and systems and issues and processes external to thefirm (systematic and otherwise). Of course, such complex networks of interactions havebeen documented in the RM literature (e.g., Hunt and Morgan, 1994; Morgan and Hunt,1994; Hakansson and Snehota, 1995). In addition, such interaction has beenacknowledged in some of the more avant garde consumer behaviour literature (e.g.Cova, 1997; Ritson et al., 1996) and in discussions of online and brand communities (e.g.Patterson, 1998; Armstrong and Hagel, 1995; Hagel, 1999). The purpose of this sectionis to highlight that even if an outcome orientation in CRM is initially successful, thedynamics of consumer markets mean that a failure to systematically engage inrelationship processes may lead to long-term failure. In addition, the need to interactwith dynamic consumers might also require more dynamic (and hence problematic)interaction between a firm’s systems. This is because CRM technology influences andis influenced by other technologies employed within the organisation (i.e. DSS, ERP aswell as attempts to engender and maintain external relationships through technologysuch as supply chain integration systems, call centres and web portals).

Marketing and other organisational agendasThe success of marketing is fundamental to the success of the organisation. Indeed, formost firms, or operational units within conglomerates, marketing strategy andcorporate strategy are practically indistinguishable (Rayport and Jaworski, 2002). Thisunderstanding should lead to integrated approaches to relationships that form the RM

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ideal. However, intra-organisational rivalry between marketing and sales, betweenproduct line units and between marketing and other functions creates silos that inhibitthe implementation of a RM agenda (O’Malley and Mitussis, 2002). Indeed, it is tellingthat product line units are often identified with the “division” moniker (e.g. the creditcard division, luxury car division, etc.), which seems to both highlight and exacerbatethe very real divisions that inhibit richer understanding of, and interaction with,customers. Moreover, the absence of the RM ideology in CRM praxis means that thevision that would guide senior managers to integrate more than sales relevant data ismissing.

As a consequence of organisational silos and competing agendas, CRMimplementations fail to live up to the relationship rhetoric. Consumers becomealienated because the integrated picture about them fails to materialise or, becausewhen it does exist, it is used only very tactically. One of the informants reported inFournier et al. (1998) makes the point well: “firms can call me at home, but I can’t findthe number anywhere to contact them” (p. 46). Moreover, when CRM systems domanage to cross intra-organisational divisions, they can be exploited within competingorganisational agendas without consideration to either the whole customer or thewhole firm. For example, a bank’s credit card division and its personal loan divisionwill send invitations to the same customer offering “unbeatable” rates, where the creditcard rate beats clearly the personal loan rate, and neither are as cheap as the offers tonew customers in the bank’s branch windows. Such examples highlight the failure ofagendas to be aligned within organisations, thereby sending mixed messages tocustomers. Unless agenda alignment occurs, customers will resort to their othercommercial and non-commercial relationships for guidance on and supply of relevantproducts and services. Such activities are, of course, a normal part of consumerbehaviour. However, where firms fail to manage their relationship practice properly,they risk helping consumers to initiate and/or develop stronger relationships withothers. More importantly, such examples highlight the problems of being focused onoutcomes rather than processes. Where firms reward specific, profit-related targets,employee behaviour will, at least, pay lip service to those targets. Targets such as newcustomers, profit per customer, gross margin, and so on, all serve to discourageemployees from attending to the processes and values required for relationshipdevelopment (i.e. firms end up using some of the conceptual outcomes expected of RMin their rhetoric but fail to support an ideology that fosters processes that gives thoseoutcomes a real, lived meaning for their consumers).

The RM literature acknowledges that customers interact with suppliers at differentlevels and that good internal information exchange is essential to managing theseinteractions (e.g. Ballantyne, 1997). CRM practice has taken this on board to the extentof trying to develop unified repositories of data on each customer. Indeed, most CRMdeployments are more systems integration exercises than anything else, and sufferfrom the attendant issues of interface design, user expectations mismatch and so on(Payton and Zahay, 2003). CRM practice does not appear to have gone so far as to helpthe customer develop a unified view of the firm from the artifacts of competingorganisational agendas. As such, firms have focused on the knowledge outcomes (i.e.“What do we know about the customer?”, “What does the customer need to know aboutus?”) and have not engaged with the processes of knowledge sharing (i.e. “How doesreciprocal sharing of information work?“). Consumers therefore feel used by the

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demands for information and the lack of obvious reciprocation or even efficient use ofthat information (Fournier et al., 1998).

Consumers in their contextA key problem with CRM is that firms fail to embed themselves within richstakeholder networks and treat those they mix with appropriately given their multipleroles. As a consequence, firms fail to understand the extent to which they aresignificant within their customers’ lives (see Fournier et al., 1998). As outlined earlier,RM emphasises an holistic approach to understanding the nature and dynamics ofcustomer relationships and identifies a host of actual and potential relationships inwhich firms are involved (Hakansson, 1982; Morgan and Hunt, 1994; Gummesson,1997). In turn, CRM advocates a 360-degree view of the consumer. Despite thisambitious aim, CRM only recognises interactions by individuals in their role asconsumers, and only within the firm. Regardless of operationalisation difficulties, CRMmust acknowledge that individuals interact with firms in a number of different roles.Individuals also have interactions beyond the firm that are relevant to their interactionwith the firm (e.g. with family, media, friends, reference groups, competitors).Furthermore, despite the promise and potential benefits of customising offerings basedon knowledge of individual customers, much CRM remains focused on marketsegmentation: “The promise of CRM technology is to define segments that are largeenough to approach with a unique marketing mix” (Zikmund et al., 2002, p. 17). As aconsequence, much of the practice of CRM remains rooted in the mix managementparadigm (Gordon, 2000).

Following from the above, CRM is by definition limited in its vision, with itsexclusive focus on customer relationships. Customers, it is argued, choose continuingrelationships with those suppliers that consistently offer higher value (Sheth andParvatiyar, 1995; Ravald and Gronroos, 1996). Moreover, it has been assumed that theability to understand and respond to individual customer’s needs through a firm’sability to collect and use information is fundamental to creating high customerperceived value (Karlenzig, 2002). However, an understanding of the impact of the fullrange of relationship exchanges in which firms are involved is important because eachprovides interaction with opportunities to create or lose value (see Starkey andWoodcock, 2002). While the importance of traditional measures of value (such as priceand quality) are seen to be influenced by supply chain activities as well as bymarketing activities, there is a growing recognition that there are also other influenceson customer perceived value (Payne and Holt, 2001). For example, the behaviour oforganisations within the supply chain is increasingly influential in consumers’ choiceamongst competing products and services (i.e. based on issues such as work practicesin the supply chain, ethical and legal sourcing of raw material, etc.). This has led togreater recognition of a need to create, manage and maintain a viable corporate imagewhich impacts not just upon product quality, brand recognition and the like, but onethat also creates a moral and ethical imperative that consumers and other stakeholderscan understand. At a single stroke this demands greater transparency inorganisational activities and elevates the requirement for centralised control of, andresponse to, those activities. This highlights a fundamental difference between RMorganisations and most CRM tactics. Successful RM requires a large degree of processtransparency (O’Malley et al., 1997) that allows customers to understand not just the

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outputs of the firm, but how and why those outputs are produced. Delivering processtransparency can have a substantial impact on the marketing strategies adopted byorganisations. There is also increasing recognition that those marketing strategieshave, in turn, a profound impact on corporate image. In an environment where themarketing department and its personnel are already under considerable pressure toperform (O’Malley and Patterson, 1998; Rowe and Barnes, 1998; Sisodia and Wolfe,2000) and, in some cases, to justify their very existence, this realisation increases theirvulnerability in quite significant ways.

Despite the sophisticated technology being utilised, many companies still fail to getit right. For example, American Express credit card customers were showered withpromotional brochures and telephone contacts from numerous different sales staff,each from different product groups and departments. This was not only excessivelycostly and wasteful to the company, but was also inconvenient for customers andresulted in negative rather than positive associations with American Express (Buss,1999). An important consequence of beginning to see customers in their context is that,in relationship terms, the importance of any one firm or brand is probably seen to berather negligible. Consumers probably have much stronger and more importantrelationships with many other parties (e.g. family, friends and, maybe, a small numberof significant organisations, such as school or university, employer, sports club orteam). For most consumers it would seem that there is little motivation or emotionalenergy left for more relationships (O’Malley and Tynan, 2000; Smith and Higgins,2000). Moreover, where there is motivation for relationships, in stark contrast to RMpractice, most mass marketers deploying CRM only try to build relationships withinnarrow (non-negotiable) parameters and then only to exploit those relationships. Assuch, it is unsurprising that consumers fail to respond to firms’ relationship pitches.

CRM and other information technology systemsThere is no question that CRM solutions are essentially implemented as technologysolutions. Indeed, the dependence upon technology is such that CRM is most readilythought of as an exercise in technology implementation (O’Malley and Mitussis, 2002).As such, problems of specification, valuation, sourcing and implementation that aretypical in information technology projects (e.g. Willcocks et al., 1997; Wilson et al.,2002) are likely to be present in CRM initiatives. In mass markets, informationtechnology is absolutely essential to manage the huge difference between the numberof employees in a firm and the number of customers. Thus, when an RM ideology ispresent, information technology might become “an agent of surrogacy to be enlisted tohelp marketers to re-create the operating styles of yesterday’s merchants” (Sisodia andWolfe, 2000, p. 526). However, in the absence of an appropriate relationship ideology,IT becomes only a tool for signaling a misplaced or insincere desire for a relationshipwhile exploiting information asymmetries and customers’ goodwill.

It is useful here to make the distinction between three different roles for technologywhere that technology becomes an actor in the networks of consumers and firms (i.e.following actor network theory generally; e.g. Law and Hassard, 1999). First,technology might be incidental to interactions between firms and consumers. Whentechnology is incidental to interactions it neither determines nor inhibits relationshipdevelopment and maintenance (e.g. an alarm that wakes us in time for a breakfastmeeting). Second, technology might facilitate interaction between firms and

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consumers. When technology facilitates interaction it can play a role in relationshipbuilding and maintenance (e.g. the use of a computerised diary to keep reminders ofpromises we intend to fulfil and the use of telephones and computers to mediatecommunications). Finally, technology might determine interaction between firms andconsumers. When technology determines the interactions it probably does not helpbuild and maintain relationships (e.g. when all interaction with a firm must go througha call centre that scripts employees to work in particular ways and when the CRMsystem controls product offers to be mailed to a customer). This final role can be linkedto a philosophical tradition that understands the way in which structures (systems andprocesses) help create the basis for their own replication (i.e. structuration theory,following Giddens, 1984). Because the ideological basis of CRM (as opposed to RM)demands that customer control be circumscribed, technology systems that limit, oronly enable to a limited degree, communication between the firm and consumers aredesired.

Of course, even if the way that a consumer can use a technology to interact with afirm is prescribed by the firm, that does not necessarily mean that the way thetechnology will be used by the consumer is determined (generally, see Orlikowski andRobey, 1991; DeSanctis and Poole, 1994; Orlikowski, 2000). For example, firms try tolower the cost of customer interaction by constructing websites and call centres todirect consumers in particular ways. Websites can only be used to answer questionsthat the firm has decided can be asked. Call centres limit interaction to themes or issuesthat can be defined in certain categories. If such direction clashes with consumerexpectations then consumers may react in ways contrary to the firm’s interest. Yet it isthe information exchange precluded by these systems that is probably most relevant inanswering questions about the structure that such systems should impose onconsumers. An important consideration, therefore, when examining the role oftechnology and other information systems in determining the nature of theinteractions, is the extent to which it precludes integration of information into thefirm that has not been specifically catered for in the design of the information systems.As we noted in the sections above, successful relationships evolve around theintegration of non-standard information and soft data (and that this can happen whenthere are strong interpersonal or social exchanges).

CRM systems therefore appear to have severed the dynamic between firms and theircustomers, and, in the process, formalised interaction around limited sets ofinformation exchange and lost considerable richness. CRM systems are determiningthe nature of relationship exchanges (and, perhaps, destroying them in the process)rather than facilitating their development. Moreover, “disparate business processesand systems, compounded by the proliferation of customer contact points andchannels, have created incomplete and disconnected views of customers” (Chan, 2005,p. 32). Thus, in many ways, CRM technologies undermine rather than underpincustomer relationships.

Re-engaging with the relationship marketing idealIf we are going to make CRM work we need to re-engage with the RM literature andemphasise process rather than engage with the consumer behaviour literature (in thehope of better managing outcomes), because the RM literature provides guidance on thebroad structures for developing a grounded understanding of consumers. The

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consumer behaviour focus on predicting and managing behaviour without engagementis, in fact, the antithesis of relationship development, because when in relationships wehave an ideological disposition to interactive engagement and learning.

The difference between the two approaches becomes manifest when we see that afocus on behaviour results in the enacting of two very different agents – the individualand the large corporation. It would seem impossible to sustain the ontologisation of alarge organisation as an individual that behaves in ways that a single individual canmanage. On the other hand, if we focus on the various structures that enable exchangesof all types (i.e. social, informational, financial, etc.) as a principle, a shared ideologicalbasis to interaction (i.e. one directed to the processes) can develop. Understanding andspecific action can then follow. In the following three subsections we make managerialprescriptions that follow from the understanding of RM and the failures of RMdocumented above.

Embedding process versus embedding outcomesThe preceding discussion has emphasised the need to focus CRM practice onrelationship processes, rather than on the presumed outcomes of relationships asproxies for those processes (see Plakoyiannaki and Tzokas, 2002, as an example of aCRM conceptualisation with a process emphasis). Given this, CRM must be anorientation adopted by the whole firm and therefore is not incompatible with thenotions of market orientation. In firms that practise CRM the important role ofnon-marketing staff highlights this firm-wide orientation (e.g. Gummesson, 1987). Assuch, CRM must be integrated fully within the firm, and not simply appended tomarketing communications or sales management programmes (Yau et al., 2000).Technology can assist with many of the information and transactional exchanges thatoccur within commercial relationships. However, many mass-market firms have noexpertise or experience in creating exchanges in the other dimensions, such as legalnegotiations rather than specified terms and conditions, social exchanges, processadaptation and shared goal development (O’Malley and Mitussis, 2002). Moreover,even with the support of technology, and presuming appropriate expertise, these moresophisticated types of exchange that both distinguish relationships and demandprocess flexibility might simply be impossible to implement if the economic benefits ofmass production of goods and services are to be maintained. The point here is that theRM literature very clearly demonstrates the importance of a rich, process orientation asthe basis of a multidimensional understanding of relationships and relationshipexchanges. Unless firms re-engage with this tradition (at least conceptually) they willhave no sound basis to determine how much of the relationship ideal can beimplemented. Of course, it could be that very little of the relationship ideal as practisedin industrial markets and high-contact service markets can be implemented in the massmarket. In such cases, a re-engagement with the RM tradition will help evaluatewhether or not any of the insights borrowed from RM can result in something that canreasonably be defined with the word “relationship”, and therefore help prevent staffand consumers from presuming the existence of processes that the firm cannot deploy.

Supporting the social versus exploiting the socialA useful distinction can be made between attempts to deploy relationship concepts inmass markets and RM. In CRM deployments social or emotional engagement is

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exploited for financial gain, whereas a theme in RM practice is that the creation andmaintenance of the social might be as important as the creation and maintenance offinancial transactions. This view is also strong in the guanxi literature (e.g. Yau et al.,2000; Luo et al., 2004), which considers relationship building in Chinese societies. Thisobservation would seem to be just as pertinent in the consumer space. Recent literaturenotes that in response to the disruption of traditional societies, people look to createnew social spaces. Sometimes this is directly linked to their consumption habits andsometimes it is not.

The notion of the neo-tribe (i.e. following Cova, 1997) highlights that people oftenseek new social linkages (i.e. the development of social relationships) that might becentered on a shared consumption interest. While the value created by networks ofconsumers has been acknowledged, it is typically suggested that these networks existonly for their information value (e.g. Armstrong and Hagel, 1995; Hagel, 1999) and thevalue of the social capital generated through interaction is ignored. Even casualanalysis of online communities highlights that much of the contribution to them is notspecifically about facts and opinions relating to the products or brands providing theinfrastructure for the community (see Muniz and O’Guinn, 2001). Instead, much of thecontribution is of the kind of “chit-chat” that is the glue of many social networks.

Less casual observation bears out this position (e.g. Latour, 1996). The importanceof making the link between online communities and social networks is that firms canprovide the infrastructure and perhaps even some of the symbolic resources to supportsocial exchanges. The issue that they must address carefully is the extent to whichthey manage to insinuate themselves within those networks so that their commercialactivities can support them. Here we are making the distinction between providing theinfrastructure for social exchanges, providing (probably accidentally) some of thesymbolic resources to facilitate social exchanges and creating profitable products andservices that support those social exchanges.

Information technology facilitated relationshipsThe final theme is that information technology should facilitate relationships ratherthan structure or determine them. We provided a sense of this potential byacknowledging that many firms already provide the infrastructure for socialexchanges. Typically, we might think of this as online discussion groups and so on (ofcourse more primitive technology such as the bar or coffee shop, telephones and e-mailalso facilitates relationships). In such a view, key lessons from the RM literature shouldbe heeded. Importantly, these include enabling both parties to a relationship tonegotiate the nature of systems that connect them because those systems, in part,determine the content of relationship exchanges. In addition, both parties must beprepared to make adaptations in their internal systems to facilitate exchange (seeWilson, 1995; Cannon and Perreault, 1999). Given the view that facilitation rather thandetermination of relationships is important, perhaps we should not be developing CRMsystems, but rather more general relationship facilitation (RF) systems. Thede-emphasis of the term “management” is not accidental. Such systems wouldsupport relationship processes rather than deliver specific messages, specifyparameters within given product matrices, and so on. For many organisations, suchsystems may well be extensions of existing knowledge management systems thateither serve as a repository for an organisation’s knowledge or facilitate the location

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and connection of members of the organisation with required knowledge (e.g. Hansenet al., 1999; Massey et al., 2001). Online communities take this notion of facilitation astep further and deploy their technology to facilitate relationship development betweencustomers rather than only between the firm and a customer.

Conclusions, forward to the pastIn this paper, we have sought to carefully identify some of the failures to apply theinsights of the RM literature to the practice of CRM. We note three important points.First, firms seem to forget that although they are “in business” to make profit,consumers are “in life” to live. This difference sets up an important tension that makesrelationships a difficult concept to enact. Firms need to focus on the broader issue ofprocess, rather than the narrow diametrically opposed issue of outcomes. Second,consumers seem to react badly to attempts to either exploit social connections ormerely signal relationship intentions for profit. They are becoming increasinglycynical about the use of relationship rhetoric (O’Malley and Prothero, 2004) withoutserious attempts by firms to facilitate the social capital development that such rhetoricsuggests. Finally, while we acknowledge that information technology is absolutelyessential to sustaining any sort of interaction between firms and consumers in massmarkets, there must be a distinction between technologies that are merely incidental,and those that facilitate or determine the nature of interaction between firms andconsumers. Where this technology serves to structure employees’ and consumers’interactions and prevents the incorporation of nonstandard and soft data into a firm’sprocesses, it is likely to hinder relationship development. The discussion hasnecessarily focused on the social dimension missing from most CRM initiatives, thegeneral conclusion being that, in order to prevent the premature death of CRM, firmsmust seek to embed relationship processes, support rather than exploit social capitaland use technology to facilitate rather than determine relationships.

Although RM may be intuitively appealing for practitioners, the high failure rates ofCRM technology testify that rhetoric is insufficient for strategy development. As such,divorcing RM from its theoretical and ideological roots serves no useful purpose. It istherefore timely to truly re-engage with the fundamental axioms of relationshipmarketing and to reassess the ability of CRM technologies to operationalise relationalideals. In this regard, the paper highlights a number of particular issues that can beimmediately considered by interested practitioners and academics. There are alsolessons to be learnt beyond CRM. In particular, although new concepts may beintuitively appealing, practitioners must be cautioned about embracing them without afull understanding of how those concepts will be used, and how their success will bemeasured.

Notes

1. Although we acknowledge that the earlier supply chain integration movement tried tocreate, manage and automate relationships between firms and suppliers, these were typicallynot mass-market operations (and where such systems did interface with a large market theywere typically connected to a market making mechanism, rather than connected directly tothe participants in the market).

2. The electoral register is a database of all those registered to vote.

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Further reading

O’Malley, L. and Tynan, C. (1999), “The utility of the relationship metaphor in consumer markets:a critical evaluation”, Journal of Marketing Management, Vol. 15, pp. 587-602.

About the authorsDarryn Mitussis is a Lecturer in Marketing at Nottingham University Business School. He has heldposts at Cardiff University and St Hilda’s College and St Anne’s College, Oxford. He has publishedon marketing in Advances in Consumer Research, Journal of Marketing Management and Journalof Strategic Marketing. His current research focus is on the link between changing technology,changing culture and changing business practices, particularly in emergent economies such asChina. Darryn Mitussis is the corresponding author and can be contacted at: darryn.mitussis@nottingham.ac.uk

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Lisa O’Malley is a Lecturer at the Kemmy Business School. She has previously held positionsat Nottingham University, Cardiff University and the University of Glamorgan. She haspublished widely in the area of relationship marketing, including a textbook and articles in theJournal of Business Research, the Service Industries Journal, the European Journal of Marketing,Marketing Theory, the Journal of Marketing Management, the Journal of Strategic Marketing,and other scholarly outlets. Her more recent research themes centre on consumption andmotherhood.

Maurice Patterson is a Lecturer in Marketing at the Kemmy Business School, University ofLimerick. He has previously held positions at Nottingham University, Nottingham TrentUniversity and the University of Glamorgan. His current research interests centre on therelationship between consumption and embodiment, although he has been known to writepapers on marketing management, direct marketing and branding. He has co-written a textbookin the field of direct and relationship marketing, and his publications have appeared inConsumption, Markets and Culture, the Journal of Marketing Management, Marketing Theory,the Marketing Review, and a variety of other scholarly outlets. He is on the editorial board of theJournal of Consumer Behaviour.

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