One of the leading authorities on CRM, Michael Lowenstein has written several books on the topic, including his most recent, One Customer, Divisible. Lowenstein, managing director of Customer/Staff Loyalty Research Associates in Collingwood, N.J., sat with Deliver recently to talk about the state of the CRM landscape.

Deliver: There is a perception that many CRM programs are unsuccessful. Would you say that is true?
Lowenstein: If you look at study findings by organizations like Gartner and Forrester, they conclude that a very high percentage of CRM programs have failed to meet objectives. Put simply, they haven’t yielded the results or achieved expectations of the companies that implemented them. I see the same problems in my own analysis, but I also prefer to use a somewhat simpler definition of CRM.

Deliver: How do you define CRM?
Lowenstein: “Customer” refers to all sorts of internal and external constituencies — staff, consumers, the general public and the financial community. “Relationship” means all kinds of contact at every touchpoint. “Management” refers to finite, scarce financial resources but also management of employees, culture and data.

The most appropriate definition of CRM I have seen is that it represents a single, integrated view of customers across the entire enterprise: Everyone from the janitor to the CEO knows the same thing about the firm’s customers on as microsegmented and real-time a basis as possible.

Deliver: How important is a good CRM program?
Lowenstein: When companies like Forrester ask executives about CRM programs, something like 92 percent say CRM is critical or very important. But when you ask whether they are doing CRM, only 2 percent say they have fully executed CRM programs, with perhaps another 10 percent saying they have partially done such programs.

For most companies, CRM is a brass ring at a carnival ride on a carousel — it is a golden objective. When companies do CRM and do it well, they have tremendous leverage with their customers in providing value, and as a result, customers get more benefit from the supplier.

Deliver: What role can direct mail and direct marketing play in a successful CRM program?
Lowenstein: Direct response can be an effective component of an overall customer communication and relationship program. For instance, companies can tightly target and microsegment messages, newsletters and offers using customization or variable digital printing, positively impacting the perception of tangible (functional) and intangible (relationship/emotional) value.

Deliver: Why do so many CRM programs fail?
Lowenstein: When these giant programs fail or do not meet their objectives, typically nobody wants to take responsibility. The supplier will say the client failed to define the goals, while the client will say the supplier didn’t properly involve the firm. It goes on ad infinitum. Because no one takes sufficient ownership, the CRM programs are left very vulnerable. Companies often try to overautomate and overcomplicate the messaging process. What customers consistently want is personal value — they don’t care how good the database is.

Deliver: Do you have to be a giant company to put an excellent CRM program in place?
Lowenstein: Not at all. Though companies like Royal Bank of Canada, Harrah’s and Tesco (a U.K.-based supermarket chain) are all outstanding CRM examples, in upstate New York, there is a single high-end supermarket called Green Hills Farms. It’s a family-owned business, but one of the family members happens to be a database expert; he manages the customer life cycle so effectively with that database, it would make most supermarket chains quite envious. It means that companies of any size, and in any industry, can do this with great success.

The bottom line to creating customer advocacy through CRM is really about the data, the culture, the level of commitment and — this is critically important — staff loyalty. Even in B2B, the staff can influence what goes on among customers and the community at large. There is a direct connection, and much of what happens with customers is influenced by interactions with employees. All companies would do well to keep focused on this vital linkage.