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Myths have done CRM a lot of damage: John Goodman of OgilvyOne

By , agencyfaqs! | In | March 28, 2003
The Asia-Pacific president of OgilvyOne Worldwide is in the country to oversee the change of guard at OgilvyOne India and deliver a couple of seminars on CRM


OgilvyOne, the direct and below-the-line division of O&M, is witnessing a change of guard at the top-level of management. Harish Vasudevan, president, OgilvyOne India, has moved from the local office and is relocating to China, to head Ogilvy's IBM account in Greater China (China, Hong Kong and Taiwan). Vasudevan, who will be based in Beijing, has been appointed as deputy director, IBM Brand Services, and will head all the communication initiatives for IBM in that region.

Replacing the outgoing president is another old Ogilvy hand, Preeta Singh. Prior to her appointment to the top post at OgilvyOne, Singh was looking after new initiatives - such as Ogilvy Healthcare - at O&M India. Singh, who assumes office on April 1, has also headed O&M's Kolkata and Bangalore offices in the past.

With change in the air, John Goodman, president, Asia-Pacific, OgilvyOne Worldwide, is currently touring India to "oversee the transition" - and to deliver a couple of seminars on key issues such as CRM (customer relationship management). Goodman took some time out to meet agencyfaqs! and share some of his thoughts on CRM, customer loyalty and the Indian market.

To begin with, Goodman is fairly pleased with the way OgilvyOne has shaped up. "In the last three years, our business has doubled, in revenue terms," he says. "Of course, this sector is still underdeveloped in India, relative to other marketing disciplines, but that only gives us the determination to push on. Our aim is to build this business into a strong relationship marketing consultancy by getting our clients' customer marketing programmes right."

Speaking specifically about the Indian market and its appreciation of CRM as a critical ingredient in the marketing mix, Goodman observes that "there is a good level of interest for CRM" among Indian companies, but implementation tends to be slow. "I believe this is primarily because of a lack of marketing technology in terms of customer data that can be mined," he says. "People here have not made that kind of investment, and the fear of getting into something so big and daunting all of a sudden can put the brakes on the growth of the concept." He also believes that it is this "fear of the numbers" that drives marketers to the safety of traditional media.

Goodman, however, agrees that Indian marketers have increasingly started focusing on below-the-line activities. "In India, the split between 'above' and 'below' currently stands at fifty-fifty," he opines. "In comparative terms, the split in the US is seventy-thirty, in below-the-line's favour, but that is because media is both extremely fragmented and expensive in the States."

Despite a fifty-fifty ratio, Goodman cautions that all is not well with below-the-line initiatives in India. "The focus here is almost entirely on promotions, and from data available in the US, it is evident that promotions destroy brand value and undermine customer loyalty. And we know that loyalty is what drives market shares. Loyal customers account for 50 per cent of the market share of brand leaders, and brand leaders are brand leaders only because of a loyal customer base. Take away that base and market shares will drop. I think the shift that we have to engineer in below-the-line in India is to move from promotions into the area of genuine customer relationships."

Goodman is the first to admit that CRM is a much-misunderstood term. "Seventy per cent of CRM initiatives in Western Europe failed in their first year because people didn't approach the concept with simplicity and strategy" he says. "There are two myths that have done CRM a lot of damage. One myth is that CRM has to be implemented in a way that it affects the whole company, across departments and disciplines. It sounds great, but is highly unrealistic. The better thing is to focus on one department and back the initiative fully." The second myth Goodman links to CRM is that it is seen as a technology solution. "People spend lots of money on technology, but that's not how CRM works. Yes, you must have that technology, but you must also know how to use it. You have to research and understand the emotional drivers of your customer, because only that breeds loyalty."

Which is why Goodman also pleads for more creativity in the way relationship management is approached. "I would like to see a greater emphasis on creativity - from the industry, as a whole. You can buy a box, load it with Oracle software and say, 'I have CRM', but how does that help the consumer? We need to think more original ideas that actually reach out to our customers." © 2003 agencyfaqs!

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