TRC

As the economy feels its way out of the recession, it is worth considering how survey research will change as Customer Relationship Management (CRM) becomes increasingly popular. This is a particularly relevant topic not only because of the emergence of CRM as a major phenomenon in the data collection business, but also due to the nebulous nature of the relationship between survey research and CRM. Because of the limited resources a firm can allocate to understanding customers, should CRM be perceived as a threat, or is there a more complicated dynamic at play here? One could easily take the former view, but we argue the latter case. It is our view that the research industry is threatened not by CRM, but rather by a failure to focus on client's real needs. CRM is simply trying to fill that void, and understanding that dynamic is crucial for the survey research industry.

WHAT IS CRM?

Customer Relationship Management, as the name implies, is a process of managing relationships with customers in order to maximize firm revenue and profitability. It aims to do this by building a composite picture of the customer that is based on tracking the various interactions a customer has with the firm. Such composite pictures can then be used to identify and anticipate both the needs and opportunities each customer or group of customers presents.

Due to the "enterprise-wide" nature of this effort, an appropriate form of software is usually required. Such a process also generates an enormous amount of data that needs to be properly analyzed to draw useful conclusions, which leads to the emergence of data mining as another critical part of CRM.

While both survey research and CRM involve the collection and analysis of data, the nature of the information and the way it is collected raises the question of whether CRM can actually be called "research."

IS CRM "RESEARCH"?

Traditionally research has come to encompass a wide variety of techniques and data collection methods. On one end of the scale are large-scale quantitative techniques, which utilize a sample of a specific group of respondents to provide information on what the entire group is thinking. On the other end of the scale are methods like focus groups and in-depth interviews. They are not projectable to the population at large, but rather help in understanding how and what people are thinking. The combined impact of the full range of techniques allows clients to better understand and satisfy the needs of customers and prospects in the hope that they can work to meet those needs.

The problem begins when attempting to implement the changes suggested by the research. Given that only a sample is interviewed and given the "cloak of anonymity," it is not possible to provide anything better than generalized segment-level recommen- dations. As long as the findings of the study relate to large, easy to define groups, there is no problem. But in an increasingly complex world, clients are faced far too often with a plethora of problems and oppor- tunities, each of which affect relatively few people. Unfor- tunately, anything that affects relatively few people rarely shows up as a finding in a research study and therefore is not acted upon.

CRM, while massively engaged in the collection and analysis of data, does not operate under the same premise as research. For CRM, the objective is to be able to identify problems or issues that individual customers (or groups of customers) have, and work to rectify them.

While the ends are the same for both survey research and CRM, the means are different. In the CRM approach, every possible piece of information about a customer is collected through the various contacts the cus- tomer has with the company. (Quite frequently, outside infor- mation is also appended to the database.) This information is used to identify patterns and make predictions about future behavior. Such predictions can then be compiled to under- stand their scope, or if appropriate, reviewed on an individual basis. The result is an effective CRM program that can make recommendations at the individual level and can lead to changes in a particular individual's behavior.

Thus, while CRM tries to address needs and opportunities by working on individual customers directly, survey research, by necessity, takes a more circuitous path. CRM, therefore cannot technically be called "research." While as researchers we might be tempted to view this as a non-scientific and invalid approach, we do so at our own peril. CRM, while lacking much of the science we pride ourselves on, purports to not only deliver the kinds of results that we do, but to do so in a far more actionable way. Further clients can, through the use of holdout samples, test the effectiveness of such campaigns. Given the growth the CRM industry has seen, we must con- clude that CRM is at least partially delivering on the promises it has made. Finally, because CRM utilizes data that the com- pany already has, it is far more integrated with clients' needs than research ever has been.

In short, CRM is here and will stay here as long as it can deliver results. CRM is also in a far stronger position to main- tain and direct client relationships than survey research. What does this mean for survey research?

THE FUTURE OF SURVEY RESEARCH

In past years, before technology had progressed to its current stage, survey research was the only organized, quantitative way for firms to understand their customers. Today it is a different world. Technology-powered CRM provides firms with an enormous amount of near real-time customer information. For firms that create an effective CRM process, survey research does not play as important a role as it once did.

Of course, CRM is still a relatively new phenomenon. It shows much promise, but thus far it is still mainly that … a promise. It is quite possible that it will not deliver and be discarded as any other ineffective system would. Even if this is the case, it will take years to sort out and we believe that the damage done to research in that time will be irreparable. Clients are looking to CRM because they need answers, real answers, to their mar- keting and customer relationship questions and survey research by and large has failed to deliver them. No matter what the future of CRM is, clients will only look to survey research if we provide them with the answers they are looking for.

In a recent monograph, Jack Honomichl talked about the emergence of the Business Intelligence Model. This essentially posits the creation of a Corporate Intelligence Officer who would be responsible for understanding and managing the relationship with the customer in all respects. Other functions such as survey research, database management and modeling, secondary research, as well as competitive intelligence would report into this one entity. An alternative path toward a simi- lar goal is the creation of the title of Chief Customer Officer. This latest C-level executive position started with Internet companies and is now beginning to spread to more traditional corporations. Marketing authorities such as Russell Winer of UC Berkeley feel that this function may be the one under which research will ultimately be bundled under, along with the other customer-centric functions.

It could be debated whether these exact titles or some other title will finally take hold, but that would be beside the point. We believe the structure laid out here makes sense in the cur- rent business environment and further see CRM as being far closer to this model than we are. Already, in some cases, the CRM manager is taking over the responsibilities listed above. This is understandable given the rapid improvements in tech- nology and the consequent technology-based enterprise-wide influence of CRM. As mentioned before, it is too early to say if CRM will last. It may be that this new function will be taken over by database mangers, IT managers or even survey researchers. Regardless of who leads this effort, two things will be true.

Firstly, survey research (or more broadly, market research) will not continue as a separate entity. It will be one part of the customer relationship management process. Secondly, survey research will be forced to produce results that are directly rele- vant to the bottom-line. The more relevant the results are, the more prominent survey research will become within the customer relationship management process. Given the other avenues for information gathering, if results are not found to be useful, downsizing the survey research function will become uncomfortably easy.

Therefore, understanding the role of survey research in the context of CRM is important for the future of the research industry. Simply perceiving CRM as a threat and attempting to produce more "scientific" data will not be sufficient. Information collected through CRM may not be "research," but if it is useful, actionable, and reliable then that is what firms will use.

CRM is really a strategic process that is too broad and perva- sive for survey research to compete against. However, since the entire focus of CRM is the customer and since this is precisely the same focus that survey research has (or should have), we have to consider if survey research is really a part of the CRM process. In other words, if there is a company-wide effort to collect information on every customer in order to understand needs better with the objective of improving the bottom-line, shouldn't survey research logically be a component of that effort?

If so, then the question really is what kind of contribution can survey research make to the CRM process that other pieces in the puzzle cannot? What types of unique information could survey research provide that would make it indispensable? Listed here are a few examples based on survey research's existing areas of expertise.

Attitudinal Information

As CRM processes are currently implemented, there is virtu- ally no scope for the acquisition of attitudinal information. Transactional and demographic information is being collected in massive quantities, but these do not always predict attitudes well. If firms are interested in understanding what their cus- tomers are thinking and why, attitudinal information obtained through surveys are still a better bet than predictions made from transactional information. By combining the two, however, models can be created that populate entire customer databases with predicted attitudinal data, even if only a traditional sample of customers is surveyed. This enhancement makes CRM's ability to drill down to the single customer level even more effective.

Analytical Methods

Traditional survey researchers have long been familiar with analytical tools and more importantly an analytical mindset. If collecting data is one big part of the expertise of survey researchers, then surely analyzing data is the other big part.

Methods as simple as cross tabulations to as complex as struc- tural equations are familiar territory for survey researchers. And more recently, the use of artificial intelligence based methods including neural networks has been rapidly gaining prominence. Given the massive amount of information that CRM systems are capable of collecting, there is tremendous scope for the analytical skills of survey researchers in deriving useful information from all that data.

Competitive Information

While the volume of data collected by CRM systems on cur- rent customers is very high, such systems do not provide any information on competitors. For collecting information on key competitors, or the market in general, survey research is still the way to go. In fact, we could say that survey research is almost tailor-made for this purpose. Survey research is designed to collect data on a small sample of anonymous respondents and generalizing to a large population, and this is exactly what is required when collecting competitive information.

Product Testing

This is an area where the "custom" capabilities of survey research and the statistical properties of sampling, are really useful. Products and concepts can be tested to almost any level of detail with a carefully chosen group of respondents with the knowledge that results could be generalized with a great deal of confidence. Usage of more advanced methods such as conjoint analysis allows an enormous number of product configurations to be tested with relative ease.

These are some areas where survey research can make unique contributions to the customer relationship management process, but by no means are they the only ones. Making the results of survey research useful and actionable is limited only by the creativity of survey researchers.

CONCLUSION

As Yoda would say, "Impossible to see the future is," it is impossible to know if CRM, the Business Intelligence Model, CCO or some other function will represent the future. However, it is clear that the world is trending toward gaining a better insight into how to improve individual customer relationships. As such, if survey research is to survive, it must work toward playing a meaningful role within the process. To that end, we should be embracing CRM and working to enhance its value through survey research. Perceiving CRM solely as a threat to be warded off with more scientific methods will not work. When firms have limited resources to expend on gathering intelligence, every research dollar will be accompa- nied by questions about relevance and actionability. Survey research's success in meeting these objectives will determine its future.

Rajan Sambandam is Vice President/Research at The Response Center, a For t Washington, PA based marketing research company. He received a Ph.D. in Marketing from SUNY, Buf falo and his interests span the details of marketing research and its strategic impact on the firm. Outside of research, Rajan continues to believe that one day the Buf falo Bills will win the Super Bowl.

Richard J. Raquet is President and co-founder of The Response Center. He received his formal education at Drexel University and has spent more than 20 years working to enhance the quality and professionalism of marketing research. Outside of research, Rich is a six-time Fall Classic Champion.

CASRO® Journal 2002