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Customer Relationship Equity 
August 2004

With the advent of customer relationship management (CRM), much has been written and much remains to be written on this subject, which superficially seems straightforward, but appears more complex when looking below the surface.  From what appears to be an extension of knowing the customer before developing the offering, the management of the relationship has grown into a multi-billion dollar business.  The crux of the issue are the number of failures reported in the literature and trade press surrounding the management of the relationship. Begging the issue is: What is being managed and how is it being managed?

If one looks closely at CRM from both a technical and marketing viewpoint, one will quickly observe that CRM begins from the inside looking out, rather than the outside looking in.  That is, the starting point is how can I (IT or marketing) manage the relationship to generate more business.  Not what does the customer want in a relationship, or, even more succinctly, can I even develop a relationship.  If one were to honestly examine the potential for relationship building, one would quickly see that in a large number of cases, there is little, or no possibility of building a relationship.  One, in fact, should be content to build brand equity as a best-case scenario.

The research issue, across boundaries, to be examined is whether there is an opportunity for developing a true customer relationship.  First, and foremost, the customer assessment and transactional situation must be examined for true relationship building.  If no, then brand equity building is the answer.  If yes, then the researcher must determine the direct and indirect components in building the relationship.  Direct components include: value, quality, consistency, packaging and imagery.  Indirect components include: communication, trust, caring, and involvement.  Further a field, but contributors to potential relationship building are: stage in the life cycle, nature of the offering, folklore, belonging, and experience.  While the above list is not meant to be inclusive, it presents an initial step in a relationship "audit" process.  If a relationship can be built, then it is imperative to determine those components and qualities that the customer is seeking in a relationship. 

CRM has heretofore really been relationship selling or relationship marketing:  unidirectional in nature and aimed at increasing sales or top-line growth.  To truly develop and manage a "relationship," the ground must be fertile and the customer must want a relationship to develop.  Once it has been established that there is a true foundation for relationship building, the researcher must then determine what it is that the customer desires in the relationship as well as the IT manager or marketer. 
 

 
William J. Lundstrom, Cleveland State University
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