Saturday, March 14, 2009

What A Bad CRM Program Could Cost You

Customer Relationship management programs are based on the fact you could reward your best customers in order to retain them and create loyalty.
I wanted to tell you a story that happened on Friday, March 6 while I was doing some grocery shopping. This will illustrate actually what a bad CRM offer could generate in terms of non sens financially if it is not properly prepared.

As any French person would, I was going to buy some bread for diner. It happened that I did not have cash, so I asked the cashier if it was OK for me to pay per card, even though it was only for dozens of cents (34 cents of euros). She said ok. You need to know that using my credit card, which is actually branded by the retail I was buying my bread at, they give me 10 cents any time I use the card.

They Give Me Money For My Baguette!

Then I pay my baguette, and she hands me some Catalina coupons. These are the coupons the cashier gives you with your ticket, printed with some discounts. The coupons was offering me 2 euros, which will be usable within the next month.

What does that mean? That basically mean that they gave me 2.10 - 0.34 = 1.76 euros for getting a baguette! It's 5 times the value I was supposed to pay! How bad a return on investment it is.

Watch Out Your Reward
Why did they give me this reward? Because I have bought with my branded card? Or do they give it to anybody?
What is for sure is that there is something wrong with the rewarding system. That creates non sense, and even for someone like me, who is loyal, this makes me wondering how good of a customer I am for the company.

I am pretty happy to have earned 2 euros, but the non sens of such a reward shows the rewarding system hasn't been made properly.