Why large companies cannot cultivate customer intimacy and customer relationship theory is misguided

How easy is it to large corporations to cultivate customer intimacy?

You can argue intimacy leads to loyalty and you can also argue that loyalty leads to intimacy; I see the relationship between intimacy and loyalty as depicted by the diagram that shows the relationship between yin and yang.  So it is no surprise that many business executives have an interest in cultivating intimacy and loyalty – flowing from their customers to them and not the other way round.  And of course a lot has been written about these topics by the relationship marketing school and brought into the mainstream by the CRM folks.

Customer Intimacy Doesn’t Scale that is what Barry Dalton asserts in one of his latest posts.   And Guy Letts, in his comment, makes a good point: he doesn’t want to be intimate with large companies and is not sure that he could reciprocate the intimacy.  This got me thinking about how the language around human (social) life has been adopted by the relationship marketing school and then corrupted by the CRM school.  For example here is what Wikipedia has to say on the subject of intimacy:

“Intimacy generally refers to the feeling of being in a close personal association and belonging together. It is a familiar and very close affective connection with another as a result of a bond that is formed through knowledge and experience of the other. Genuine intimacy in human relationships requires dialogue, transparency, vulnerability and reciprocity.”

And the same source (Wikipedia) sounds the warning bells of strategic (exchange) relationships masquerading as intimacy:

“It is worth distinguishing intimate (communal) relationships from strategic (exchange) relationships. Physical intimacy occurs in the latter but it is governed by a higher-order strategy, of which the other person may not be aware. One example is getting close to someone in order to get something from them or give them something. That “something” might not be offered so freely if it did not appear to be an intimate exchange and if the ultimate strategy had been visible at the outset.[13] Mills and Clark (1982) found that strategic (exchange) relationships are fragile and easily break down when there is any level of disagreement. Emotionally intimate (communal) relationships are much more robust and can survive considerable (and even ongoing) disagreements.”

And if you look up the definition of customer intimacy what do you get?  Here it is: “Customer intimacy is a concept from marketing, which describes the ability of a supplier to become accepted and known as the regular partner with its customer. Customer intimacy creates a virtuous circle: the better the supplier knows the customer company with its objectives and difficulties, the better able he is to provide an optimal solution. The more adapted the supplier’s product or service is, the happier the customer will be, and the stronger the “intimacy” between the two parties.” That sounds very much like a strategic (exchange) relationship.

All of this got me thinking about a post a wrote about a year ago when I started this blog – so you are unlikely to have read it.  I’d like to update it a little and share it with you to get your feedback.  Here it is:

“The critical flaw at the heart of modern customer relationship thinking

When I was working as a Senior Consultant with The Peppers & Rogers Group the customer paradigm was explained through the analogy of a small grocer (or florist) serving his/her local community.  The thrust of it was that the grocer got to know the customer – the person, his circumstances, his shopping history, his attitude, his values, his beliefs, his preferences – and used this knowledge to offer him the right products, at the right time, at the right price in the right way.  The end point – this is important – we have the technology to recreate that kind of business relationship with our customers.

What the analogy leaves out is the social context.  In days gone by the local grocer (or any other shopkeeper for that matter) was living in the same community as his customers.  He was likely to come across his customers in the social life of the local community.  Some of the customers used to be fellow students at school, others went to the same church, others frequented the same pub, others were friends of friends and so forth.

In short the grocer’s relationship with his customers was much a social one as an economic one; he experienced his customers as rounded multi-dimensional human beings not as one-dimensional economic objects nor as abstractions on a revenue statement. Because of the shared local context the customers also invested in the grocer – they knew the grocer in a rounded context and not just as an economic entity, a grocer.  A different way of saying this is to say: the social and economic relationship were in a yin-yang relationship (as illustrated in the diagram above).

Furthermore, the owner was also the CEO and the person having the daily contact with customers – listening, talking, interacting, serving customers. 

That situation today for Mr Multi-National Enterprise (Mr MNE) is completely the opposite.  There is no social relationship between Mr MNE and the customer – they typically live and move in very different social circles.  The customers do not have to support Mr MNE (like they did with the grocer – else no local grocer) and Mr MNE can find other than local customers – the world is full of potential customers.  And importantly, Mr MNE is completely divorced from the customers – he never has to see, talk with or serve a customer.

So whilst the technology exists to gather information, the all-powerful social context that is necessary for building enduring mutual win-win relationships is absent.  And that is the critical failing at the heart of modern customer relationship thinking.  It misses the fact that relationship are a natural by-product of a social context.  That social context  is missing from the modern corporate world and it cannot be recreated in the typical tenure of the CEO.”

One year later on I might add that there are a lot of people (like Barry and Guy) who do not want a “relationship” with large (impersonal) corporations even though they find themselves intimate with local stores that are embedded in their social lives because the owners/employees of these stores are embedded in the same community (as Barry and Guy).

What do you think?  What is your experience?

Author: Maz Iqbal

Experienced management consultant working at the intersection of strategy, customer, and technology. Combine a tendency to think strategically with a penchant for getting my hands dirty at the coalface of implementation.

3 thoughts on “Why large companies cannot cultivate customer intimacy and customer relationship theory is misguided”

  1. Hi Maz,
    This is really interesting and points to problem that exists in modern marketing where businesses need to be honest and real about the sort of relationship that they want to build with their customers and the sort of relationship that they can build with their customer. And, even more importantly, to know the difference.

    There’s too many deluded pieces of marketing out there that is trying to build ‘intimacy’ where the customer may just want functionality and convenience. There’s a piece of research that was done by RightNow that I talked about in a guest post that I wrote here (http://www.biggirlbranding.com/forget-about-finding-new-customers-pamper-the-old/) that speaks to the different perceptions that customers and businesses have of the reasons that customers leave.

    That’s the real danger. Be clear about your assumptions and what is really happening and don’t chase something that your customers just don’t want.

    Adrian

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  2. Hi Maz,
    My last comment didn’t seem to post so I’ll try again.

    I see too many companies that are ‘striving’ for intimacy when all the customer wants is functionality or convenience. There is a danger in making assumptions about relationships and why things happen. I wrote about this via a piece of research that RightNow did in this guest post (http://www.biggirlbranding.com/forget-about-finding-new-customers-pamper-the-old/). Check it out.

    Intimacy is sexy amongst marketers but they need to be careful that they do not damage their brand and existing relationships by making assumptions about customer relationships that are based more on what they want rather than what the customer wants.

    Adrian

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  3. I agree Maz, I don’t have the same relationship with my mobile phone supplier that I do with my fish and chip supplier (Andy)

    Which is the biggest sin:

    The multinational business trying to create the social context?
    The local business failing to create the social context?

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