CRM in intermediated financial services markets: THE CORE ISSUE: GAINING COOPERATION

Of course, none of the techniques described above are new. They are just the application of classic direct marketing. The difference is that the approach involved cooperation between two big companies with a shared customer base. How was this cooperation achieved? In another research project completed by one of the authors it is clear that such cooperation is contingent upon the existence of trust between the two parties.

Arguments for sharing customer knowledge

The main arguments for sharing customer knowledge include:

—    improved targeting of marketing strategy

—    improved targeting of marketing communications

—    improved/more relevant content of marketing communications

—    improved product planning

—    improved pricing

—     reduced costs of data acquisition

—     reduced costs of data processing

—     reduced media advertising

—     reduced direct mail expenditure

—     increased responsiveness to changing market conditions

—     gaining an advantage over competition at the same level of the value chain

—     bargaining more effectively with other value chain partners (eg divide and rule)

—     reducing market risk

—     learning/skills transfer

The respondents focused primarily on improved targeting, cost reduction and competitive advantage.

Arguments against sharing customer knowledge

The main arguments against sharing customer knowledge include:

—     increased complexity of the marketing process

—     increased marketing costs

—     increased problems with data management

—     conflict caused by mismatch in types/ pace of marketing/sales process

—     general conflict of interest

—     conflict of interest over customer ownership

—     conflict of interest over data ownership

—     systems incompatibilities

—     legal complexities (regulatory, data protection)

—     data security

—     political difficulties

—     skills shortage — data analysis

—     skills shortage — data management

—     accentuating of marketing skills difference between partners.

In this research, which consisted of seven in-depth case studies, most respondents stressed issues relating to lack of alignment in skills, processes and systems. Conflict of interest was also raised.

The reasons for or against sharing operations include the following.

Sector-specific issues

These may be regulatory, but can also be cultural, eg a history of conflict, or to do with the product, eg an intermittent purchasing cycle can give the retailer the upper hand because the supplier becomes more remote from the customer.

Representative APR 391%

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