Humanizing CRM: Appealing to Intuition, the Senses and Emotions to Optimize Customer Relationships

Abstract

Customers’ bonds with their preferred brands have been found to be highly emotional and intuitive, the product of learning and experience, subject to symbolism, trust and acquired meanings, and not necessarily reason-responsive, yet most marketing practices, including Customer Relationship Management or CRM, are heavily influenced by twentieth century’s models of consumer behavior which considered a rational decision-making process and even spoke about “the logic of consumption,” however, this logical approach may not be the most effective when we consider less objective criteria like trust and affection. Research has explored the combined roles of time and money, and rationality, intuition, the senses, peers and emotions on the consumer decision process and found that even in high-involvement purchase scenarios, where others may suggest that a central, argumentative line of persuasion would be called for, customer decisions are highly intuitive. This chapter will identify the gaps in current one-on-one marketing practices and explore the most proper application of rational, intuitive, sensory, social, and emotional cues in the CRM process, extending from B2C to B2B because, in the end, we are all human. A suggested Strategy Map and Balanced Score Card, and a Core Process Map are included in our recommendations for humanizing CRM.

1. Introduction

The marketing software giant Salesforce, Inc., a major player, if not the top-rated supplier of CRM technology, defines Customer Relationship Management as a technological platform that allows companies to manage their interactions with customers and potential customers so as to improve commercial relationships and grow the business [1]. A CRM system, as it defines it, would therefore help companies stay connected with their customer base and improve profitability. This sounds pretty straightforward. However, we see it more as a softer, humanized systems-supported process, much in accordance with the AMA’s definition of Marketing. We could even consider it a philosophy about how to deal with the client, but Salesforce’s concept stands as a generally accepted beacon. As CRM keeps moving more and more into business and consumer analytics, and technology, based on a proper review of the literature and on our own primary research which looked into 129 scientific publications, our intention in this chapter is to analyze whether the process has fallen prey to the dominant logic of consumer decision making and focused only on the harder elements of customer relationships, neglecting the more subtle personal, emotional, sensory, and intuitive considerations, to suggest in the end a more humane approach to optimize customer engagement and loyalty.

2. Customer relationship management or CRM

The American Marketing Association defines the discipline as an activity, a set of institutions and processes that create, communicate, deliver and exchange offerings that generate value for customers, clients, partners, and society at large [2]. Once upon a time, it had been defined as satisfying customer needs, however, it is now clear that it is no longer enough to satisfy your customers, you have to delight them, as Tom Peters, author of “In Search for Excellence,” would say. Indeed, since the 1980s, the importance of the emotional content in the decision-making processes, which had been until then sidelined as “irrational,” has entertained researchers more and more [3].

In their quest to differentiate the concepts of rationality from emotional intelligence and intuition, some authors have turned to the biological sciences to track the evolution of the human brain and suggest that many if not most of our actions and reactions respond to unconscious triggers that emanate from a “reptilian” brain that sits at the core of our cerebellum [4]; indeed empirical research supports the idea that people follow their initial intuition and gut feeling to make their decisions [5], and that they do so sometimes against their better judgment [6], suggesting, with a bit of irony, perhaps, that intuition is –again– irrational. Furthermore, consumer research has found that unconscious mental processes are major influences in peoples’ deliberations [7]; indeed studies have pinpointed the fact that 95% of consumer decisions take place in the subconscious level [8]; to make it clear, researchers suggest that most actions and decisions may have nothing to do with conscience, but with neurochemical dynamics [9]; and to complicate matters, it has been found that moods and memories affect judgment [10], and that decisions are debated between emotional and rational criteria; or should we say between rational and irrational criteria?

Consumer loyalty and satisfaction are linked inextricably but the relationship between CSM and customer loyalty is asymmetric [11]. Although loyal consumers are most typically satisfied, customer satisfaction does not universally translate into customer loyalty [12], reiterating Tom Peters’ premise that it is no longer enough to satisfy the customer. The question that arises is then: Is CRM addressing those subtle considerations that research has shown to matter so much in building and maintaining relationships? If there could be a Ying & Yan in managing relationships [13], meaning, if there is a soft and a hard side to the process, perhaps it may come through as a balance between CRM and CXM (Customer Experience Management, sometimes labeled CEM).

2.1 The CRM process today

After all the hoopla, CRM still remains a huge investment with little measured payback [14]. When you analyze the focus of CRM efforts, broadly defined as improving the ability to target profitable customers, integrating offerings across channels, increasing the sales force’s efficiency and effectiveness, individualizing marketing messages, customizing products and services, increasing service efficiency and effectiveness, and instrumenting better pricing policies, it seems evident that on the marketer’s side, CRM is driven mostly by utilitarian motives.

To be sure, twentieth Century Marketing practices were guided by a goods-dominant logic [15]. Consumer research highlights the utilitarian nature of CRM processes, traditionally focused on customer engagement, interpersonal operant resource development, and cocreation, as they defined the expected outcomes [16]. However, as we have already pointed out, consumer preferences are not strictly rational, on the contrary, they are highly intuitive, more tied to trust and affection than logic. An improved understanding of the consumer’s thought processes in the twenty-first Century suggests the need to evolve toward a service-dominant, customer-centered, and more sensitive logic.

2.2 Best practices in CRM

Novak identified the following initiatives as best practices in CRM today [17], reflecting the focus of the process:

• Track essential sales metrics

• Improve customer service and sales team efficiency

• Automate customer reporting

• Better understand your buyers’ journey

• Improve customer segmentation

• Increase customer retention

• Create more accurate business and sales forecasts

• Shorten the sales cycle

• Manage the sales cycle more effectively

• Gain insights to make smarter marketing investments

• Identify your strongest leads

• Reduce acquisition costs

• Boost customer lifetime value (CLTV)

Although understanding the customer journey and boosting CLTV relate to, or directly or indirectly benefit customer loyalty (the customer’s lifetime value can be enhanced by the average ticket and longevity), none of these initiatives focuses directly on delighting the customer, and no mention is made of the organization, that is, the people that deliver added value. They are mostly operational, technological and results-oriented tasks.

Singh identified the Top 5 companies as being the best-in-class in terms of CRM processes and strategies [18]:

2.2.1 Apple CRM

The paper states that Customer Relationship Management plays a pivotal role in Apple’s growth strategy. Certainly, anyone who has taken their equipment back under guarantee can attest to that; the display and level of service at an Apple Store can be mesmerizing. If you have ever used an Apple device, you probably had to register it using an Apple ID. An Apple ID is an account you use to access Apple services like the App Store, Apple Music, iCloud, iMessage, FaceTime, and more value added features that can play magic on the consumer. These unique IDs synchronize across devices, save music and film preferences, and provide bespoke recommendations based on what you like. For users, this is convenient. For Apple, it’s a tool that provides insights on what customers like and it can be used for effortless, targeted marketing.

2.2.2 Coca-Cola CRM

The piece states that Coca-Cola uses CRM to promote collaboration and deal with customer issues quickly and efficiently. By using the CRM platform, every member of a Coca-Cola team can identify issues, monitor customer behavior and social media sentiment to promote offers and promotions. Team members can also use mobile apps to access customer history anytime, anywhere, creating and updating work orders, and sending out field technicians in real-time, suggesting that the process aims at the sales channels and bottling network.

2.2.3 Amazon CRM

Certainly, and especially after COVID, Amazon became the go-to online platform for online shopping. One of the main reasons for this is Amazon’s CRM system. Amazon has one of the most complete CRM infrastructures; it harnesses customer data during purchases to instantly customize the online experience. To purchase an item from Amazon, you need to set up a personal account. Based on that, Amazon can track your purchases and browsing history to tailor marketing campaigns and email messages focused on things you will probably like. Furthermore, you can configure your account to set up one-click purchasing. This is one of Amazon’s most popular features and customers appreciate it as it dramatically speeds up the checkout process when making a purchase.

2.2.4 Activision CRM

Activision is a pioneer in the video-gaming industry that uses CRM to connect with gamers via social media websites such as Instagram, Facebook and X (formerly Twitter). By using a cloud-based CRM platform, the company has been able to:

• Reduce customer service related expenses by 25%,

• Assess and resolve 82% of customer-related issues through online self-service,

• Improve communications with its gaming community,

• Reduce overhead costs,

• Increase user satisfaction rates.

2.2.5 Tesco CRM

Like most retailers, Tesco uses their Clubcard to reward its most loyal customers. For every dollar spent, you earn a point (the system is in British pounds). These points can then be traded in for Tesco Clubcard vouchers that can then be traded in for rewards. Tesco has partnerships with many suppliers like restaurants, hotels and gas stations, which gives customers more opportunities to earn points. Tesco has a program for every family member: Tesco Kids Club, Tesco Baby and Toddler Club, Tesco Healthy Living Club, World of Wine Club. The retailer uses these for targeted marketing actions through 4 million variations of its quarterly mailing to ensure that discounts and offers are personalized for each customer.

Most certainly, Apple®, Inc. is overwhelming when it comes to customer service, it is by far a service-dominant organization, but Coke®?! We will ask some important questions about CRM at Amazon® in the following sections.

2.3 Limitations and criticism

Empirical research has demonstrated that CRM must establish more humane customer–supplier bonds, based on openness, empathy, trust and genuine cooperation, and go beyond the rational, transactional boundaries of most business interactions [19]. Looking at the variables analyzed, which explained 64% of the variance in the model, one can observe a clear progression that goes from the rational, to the perceptual and the intuitive, to the affective, being the most important criteria the value proposition, personal recognition and customer orientation, reliability, the relationship itself, credibility, customization of products and services, personalization, and (Oh, surprise!) human gestures like smiling, which contribute a significant 3.87% to the variance explained. However, the challenge to humanizing CRM to such levels seems evident, especially with the increased use of sometimes dehumanizing technology.

The excessive use of AI (Artificial Intelligence) in CRM has been criticized based on the blurring of the lines between what is fake and what is real and the use of absolutely rational algorithms to make decisions on our behalf and recommend enriching the human qualities of these processes and platforms is essential [20]. The challenge is that empathy, intuition, fantasy, creativity, and thinking outside the box are near impossibilities for machines. Emotions are needed to maintain the human touch in managing customer relationships.

2.4 Worst practices in CRM

After looking at best practices, let us look at some industries that are not doing so well in terms of CRM: Supermarkets, a trillion dollar industry with which consumers interact very frequently, indeed an average of eight times per month [21], are often out of touch even with their most loyal customers; there is no direct line of communication; their relationships are basically transactional and limited to the sales floor, the cashiers and Customer Service, if needed.

Let us imagine a better world! If we shop at the same store or chain every week and even more often, year after year, the chain’s IT systems possess infinite data about our buying habits and preferences. They “know” us! They know what we buy and when we buy it. As clear as that. Now, why cannot they send us our shopping list 48 hours prior to our habitual shopping day and allow us to adjust it and then decide if we want to pick up our groceries or have them delivered, saving us precious family time? In a time when the more affluent customers will spend money to save time, while the poor will spend their time trying to save money, this CRM initiative would please rich and poor, letting their customers learn about and take advantage of any special promotions right when it matters, at the moment they click. Without these e-shopping lists, all that data simply goes to waste, and e-commerce in the supermarket industry will continue to lag behind retail [22].

Airlines, a $280 bn industry, would do themselves a big favor if they stopped calling their customers “passengers” and began to practice true CRM. Indeed, a passenger “passes,” a customer stays and returns. Airlines communicate with their passengers mostly when they are about to fly, again, the transactional approach, then they squeeze them into ever smaller seats on commonly late flights where no food or drink is served unless you pay a pretty penny for a bottle of water. Ironically, an $89 round-trip flight from NYC to Miami, quite a bargain indeed, becomes a joke when you must dish out up to $65 to carry any luggage, going and coming back, that is $130 more, and up to $26 each way to sit next to your husband, wife or children. And they insist that you choose a seat, which you do not have to, by the way. An $89 bargain can easily turn into a $300 trip if you eat or drink something onboard. And then there are the frequent flight delays without apologies or compensation. According to FlightAware [23] recent data shows an average of 30,000 delayed flights per day globally, including 7000–9000 delayed flights per day in the U.S. alone. That is one in every five flights, according to FAA statistics [24]. With so many faults, soothing customer relationships may go a long way toward achieving their loyalty.

Call centers in particular can be big disappointments. Globalization has desegregated customer service. A major computer maker answers its 800 calls in China, where language poses a severe communications problem. You just cannot understand some of the customer service agents. One of the big cell phone carriers answers calls in the Philippines with the background sounds of roosters and dogs barking. Not very professional and not quite the best way to generate consumer trust. Ironically, sometimes, today, with all the available technology, trying to make a connection can be “disconnecting.”

2.5 Current challenges to CRM

CRM focuses on data, information and account management with some hints of personalization like perhaps but not always sending the customer a birthday card; CXM focuses on the senses and the emotions involved throughout the customer journey, ideally that is; evidently, there is a gap between the two processes right there, there is no balance between hard and soft, no Yin & Yang. Furthermore, none of these processes touches directly on intuitive criteria, as trustworthiness can be defined, for instance, nor do they appeal to those other underlying senses, like the sense of justice or the sense of right and wrong, and if we consider the airlines example above, the sense of timing is trampled over very often. Why cannot these two magnificent approaches be combined and enhanced to create a rational and emotional balance between customer relationship and experience management?

Even when looking into the best practitioners of CRM, we find some sensitive gaps. For instance, does the world’s largest online retailer keep track of its missed deliveries? Statista does! From a peak of 15.9% late deliveries during the pandemic, they have dropped to 5% [25]. That sounds great, commendable, but when you consider that the company makes 1.6 million deliveries per day [26], that number could balloon up to 29.2 million complaints per year, and that does not sound that great anymore. 29.2 million is almost the population of Texas and greater than the population of Australia!

2.6 Reaching beyond rationality

Consumer decisions are the result of a combination of rational, intuitive, sensory, social and emotional, among other, considerations, however, The 2002 Economics Nobel Prize winner, Daniel Kahneman, literally wrote the book on intuitive thinking [27]; indeed, our own research which calibrated consumer choice in the fast-food vs. casual dining industries, as well as popular cars vs. high-end automobiles based on a national survey (n = 588), using a highly reliable 144-question RISE Scale (Cronbach’s Alphas between .945 and .968) showed that intuition plays a more important role than rationality in setting brand preferences in both high and low involvement purchase scenarios (β = .70 for fast-food and .71 for high-end car choices), making no difference if you are deciding on getting a burger or a BMW [28], findings which contradict the company-centered logic of CRM platforms and strike at the heart of well-established theories which suggest that high-involvement products should be promoted through a central, argumentative process, while low-involvement products should advertise peripherally, using symbols and cues that the consumer can positively associate with their consumption [29].

Man is not quite the rational animal, as Aristotle said. Indeed, we must recognize, as has been proven by previous research and ours, that as consumers, we follow our gut, our nose or our heart to make decisions, and then, if questioned or challenged, we rationalize what was absolutely intuitive. Our research reaffirms Kahneman’s findings, that even our most important decisions in life are not guided by rational criteria but by emotion and intuition. Figure 1 reflects IBM Amos Path Analysis results that show that low-involvement decisions are guided by intuitive criteria; this may sound logical when dealing with a decision like getting a bite to eat.

Figure 1.

Fast-food brand preference is an intuitive choice.

What may surprise many is that high-involvement brand preferences, like those dealing with buying a high-end automobile, which would seem to be a rational decision, considering their price, were also been proven to be intuitive choices (see Figure 2).

Figure 2.

Automobile brand preference is also intuitive.

Surely, now, low-involvement and high-involvement decisions, although proven to be highly intuitive can at times be more rational. Money and time moderate and mediate the decision process [30]. When all you have is five dollars, choosing where to grab a bite to eat will be a very deliberate decision. Another experimental study using recent college grads showed that when buying their first car they will tend to choose the vehicle they can buy; 10 or 15 years later, when they are enjoying the perks of a management position, they will get the car that they want. Other decisions may be more subject to what customers feel. Tourist destinations tend to fall into this category. So, let us not write rationality off but remember, it does not dictate consumer behavior in absolute terms.

3. Humanizing CRM

If a brand is indeed a promise fulfilled [31], CRM should be an important instrument not just for communicating the promise but for fulfilling it, contributing to satisfying customers’ needs and exceeding their most intimate expectations. However, as has been already pointed out, CRM processes tend to be based on logic, they are mostly informational and much too rational for today’s sensitive consumers.

Customer loyalty, which is the ultimate purpose of CRM, follows a cognition>affect>conative pattern but consumers can become loyal at any attitudinal phase as different elements of attitude development are triggered. Scientific research has shown that “customer delight” is different from “customer satisfaction” as the former strikes at the heart of attitude-formation (pun intended), while the latter is founded more on rational appeal. Indeed, fieldwork showed that surprising and astonishing the consumer generated maximum levels of arousal, stressing that satisfaction can be achieved by delivery-without-problems; delighting the customer requires achieving extreme states of positive emotional response [32], and that cannot be attained through today’s logic-based CRM approach.

Humanizing CRM involves bringing into the process more than logic and utilitarian motives to include emotional, sensory and intuitive considerations like affect, esthetics and trust, while catering also to underlying senses that may refer to timing, right and wrong, order, beauty and other subtle factors that matter to the customers. If indeed it is no longer enough to satisfy the consumer, information is not enough, quality is not enough, not even service will suffice, we must add value to differentiate, almost becoming intimate with the consumer to touch their hearts or psyches, as Jung defined this concept, the ego and the unconscious-self [33].

In the following sections, we will broadly describe the steps that would lead us there, starting with the acid test that ensures a positive connection with the consumer.

3.1 First step: the acid test

This first step requires wide and in-depth consumer analytics to reveal different customer segments’ needs and opinions, to unearth even their fears and unconscious motives, which in turn should generate an acid test that allows the company to make sure that its CRM and CXM processes meet their targets’ most intimate expectations.

For instance, through interviews, focus groups and surveys, we have been able to establish that customers in the insurance industry want quick responses, good coverage, and a transparent Preferred Provider Organization (PPO) network at competitive, if not cheap, rates. Furthermore, they value the company’s and/or the broker’s trustworthiness, and they check out internet sources, like ratings and reviews, to make their final decision. Once insured, they will be on the lookout for impeccable delivery to test “the fine print.” Some of these might be abstract concepts, too abstract to grasp and definitely elusive when we try to connect them with the CRM process.

Figure 3 shows a suggested application of The Acid Test based on the example of the insurance industry. In essence, if the customer wants quick responses, the company’s IT or Organization & Methods unit must improve all customer-centric processes guided by satisfaction (CSM) and perceived value added (PVA) metrics. Actuarial science should be applied to optimize coverage and rates, which should be subject to continuous benchmarking. Considering the insured and the broker’s needs and expectations, strict guidelines should fine tune and control PPO performance. Competitiveness would be enhanced by best practice analysis. In sum, the acid test provides laser-guidance for optimal customer-centered corporate performance.

Figure 3.

Applying the acid test to the CRM process.

This is just a quick general example for an insurance company; a tailor-made alignment would require a detailed situational analysis, of course, and the inclusion of the sales channels, the agents and brokers that may mediate the connection with the insured.

3.2 Second step: the strategy

The second step involves designing the most appropriate strategy for deploying a humanized CRM. Optimizing the company’s processes is not enough, the firm must include the type of organizational adjustments, consumer analytics, customer and financial metrics to perpetuate or institutionalize the humanization of CRM. Aligning plans and processes with the proper strategy would ensure delivery.

The Figure 4 shows a suggested combination of Kaplan and Norton’s concepts of the Strategy Map and the Balanced Score Card [34], which consider four separate perspectives, the organizational which the original authors call “learning and growth,” the operational or process-oriented angle, the commercial, market and customer-centered perspective, and ultimately the financial, to properly guide the combination of CRM and CXM process initiatives. These two sides have been separated in the graph to highlight the difference between the hard and soft metrics of each process.

Figure 4.

A strategy map and BSC for humanizing CRM.

Again, a true, tailor-made CRM strategy would require a detailed situational analysis of the firm’s circumstances, and of its environment, followed by appropriate process targeting and mapping. The scope of that exercise escapes the reach and purpose of this chapter.

3.3 Third step: the process

The third step could require mapping the new process, as setting into motion an unknown procedure can be tricky. We would suggest asking ourselves “what is it we want to achieve?” to define the expected outcomes and results, and to figure out what we have to do to achieve them. We call this exercise core process mapping (see Figure 5). It basically adds the detail that makes the strategy possible and is an ideal complement to the Strategy Map; it creates a clear path or bridge between the strategy and the Annual Operating Plan (AOP) to then act as a control mechanism.

Figure 5.

An example of a core process map.

In essence, drawing the Core Process Map goes counter-clockwise. Given the purpose or objective, the first task is to concentrate on the outcome. Be thorough. Then think what input is required, who provides it and who benefits from it, and so on. The final step is defining what must be done to achieve the desired outcomes.

Core Process Mapping is convenient but not always necessary. Our experience with one of the world’s largest insurance companies’ transition into retailing, following a merger between a traditional insurance retailer and a larger reinsurer, taught us that when new skills are required, the safest thing to do is to clearly define the new process to train the organization properly. By the same token, our experience with a global French-Italian dairy conglomerate which divested its retail operations to concentrate on manufacturing, its core business, taught us that there is no need to learn what is already known.

4. Conclusions and recommendations

There is a tendency to view the world in two dimensions, to consider the consumer decision process as a balance between rational and emotional or rational vs. intuitive criteria. Indeed, our own gaps-in-the-literature research showed that no one has delved into a four dimensional study that considers rationality, intuition, the senses and emotions as decisional triggers [35].

CRM must be humanized, be more personal, though that does not mean that it must abandon technology nor data analytics or write off rationality altogether, but CRM should trigger positive emotional, sensory and intuitive reactions, it must generate trust and bonding, while catering to the sense of timing, right and wrong, order, beauty and other more subtle considerations, doing or communicating what is not only expected but surprisingly and pleasantly unexpected.

Adding or enhancing soft indicators would do a lot to humanize CRM; for instance, adding Customer Experience Management (CXM) measures to sales metrics can not only improve customer retention, another hard metric, but help customer-to-brand bonding; adding Perceived Value Added (PVA) measurements to Customer Satisfaction Metrics (CSM) will enhance customer retention, promote customer references, and increase the average ticket and Customer Lifetime Value (CLTV), when properly combined with cross selling efforts. Add to these cost-reduction initiatives and you will work wonders on profitability topside.

Lastly, a humanized CRM process can be extended to B2B and B2G because ⎯in the end⎯ we are all human. Purchasing managers have feelings, prejudice and biases, so adding some soft indicators and practices can go a long way in tightening business to business relationships.

Conflict of interest

The author declares no conflict of interest in the writing of this chapter.

Originality

The submitted work is original and has not been published in a peer reviewed publication.

Thanks

I must thank Dr. Pradeep Gopalakrishna, Chair of Marketing, Pace University, New York and Pleasantville, NY, for his guidance during the dissertation research that allowed me to propose a novel angle for “Humanizing CRM.”