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Harvard Business Review Article Proposal
“Putting the ‘R’ Back into CRM”
By Susan Fournier (Boston University) and Jill Avery (Simmons College)
November 17, 2009
1.) What is the central message (the “aha”) of the article you propose to write?
What is important, useful, new, or counterintuitive about your idea? Why do
managers need to know about it?
Ten years ago, Fournier et al.’s Harvard Business Review article, “Preventing the
Premature Death of Relationship Marketing,” charged that “the very things that marketers
were doing to build relationships with their customers were destroying those relationships
at the core.” According to the authors, relationship marketing was “powerful in theory,
but troubled in practice” because marketers did not fundamentally understand what
relationships with customers were all about or how they should be built and maintained.
Ten years later, this seminal article continues to be a bestseller for the Harvard Business
Review, is widely cited by academics (406 citations in Google Scholar), is incorporated
frequently into MBA, executive education and doctoral curricula, and, importantly, has
been a guiding force for managers from diverse industries who are interested in
establishing stronger customer relationships. What accounts for the enduring appeal of
the “Premature Death” article? We argue that the fundamental lessons offered in this
article are as relevant today as they were ten years ago. In fact, our failure to appreciate
relationship fundamentals is even more extraordinary in today’s relationship-savvy
business climate than it was in 1998 when Customer Relationship Management (CRM)
theory and practice were in their infancy. Businesses have now lived through a decade of
investment in CRM: the systems, programs, and processes that identify prospects, create
customer knowledge, and build customer relationships. Sales of CRM software reached
$8 billion in 2008 and 75% of managers in a recent Gartner study indicated that they will
make significant CRM investments in 2009. Judging from the health of the CRM
industry, business has this practice tightly wrapped.
We argue that while CRM has been good for company bottom lines, investments in CRM
have been significantly under-leveraged. CRM has evolved as a customer management
tool: an analytic system that helps firms segment their customers into tiers of profitability
in order to focus scarce resources on customers with high revenues and low costs-toserve. Firing customers, once unheard of in a world where “the customer is king,” has
taken hold as a cornerstone CRM practice, and supports this economic philosophy at its
extreme. But, CRM has not delivered as the customer relationship tool that was
intended; widespread CRM investment has not brought firms any closer to the customers
that firms wish to court. Although managers embrace the idea of building relationships
through CRM, CRM systems remain agnostic on the types of relationships consumers
form with brands and companies, and the processes by which these relationships progress
and deepen over time.
In this article, we refocus managerial attention on the key word in the CRM acronym: If
firms are to create and capture all of the value that relationship marketing has to offer, it’s
time to put Relationships back into CRM. We help managers get back to the relationship
fundamentals that were intended to buttress CRM practices, and introduce a new
marketing metric to guide CRM practice, relationship equity, which we define as the
latent option value inherent within the portfolio of customer relationships engaged by the
firm. To build our story, we demonstrate four ways in which contemporary CRM fails to
unlock relationship equity and offer concrete strategies and tactics for more informed
CRM.

Knowing Customers as “Consumers,” not as “People”: When firms reduce
consumers to economic traces that can be accommodated in CRM calculations,
they fail to know consumers as the people that they are. We provide strategies
and tactics for understanding consumers beyond their buying behavior traces.

Being Trapped in Loyal Relationships: Relationships are complex and they
come in many types and forms. Despite this variety, CRM encourages a
narrow focus on building “loyal” relationships with the “best customers” of the
firm. If we are to capture all of the value that relationship marketing has to
offer, managers must learn to negotiate a more varied relationship space. We
summarize nine different types of relationships and offer guidance for how to
navigate and negotiate them.

Claiming the Benefits…but not Shouldering any of the Blame: While
companies are quick to claim responsibility for successful relationships, they
blame customers for the bad relationships they are complicit in creating, and
rarely look to themselves to understand what went wrong. We reverse
engineer common managerial practices to show how they contribute to the
development of unprofitable relationship types and offer new practices that
build relationships that benefit customers and firms.

Thinking Snapshots versus Dynamic Works-in-Process: When managers fail
to treat all relationships – good and bad—as dynamic works-in-process, they
leave option value unclaimed. We show how firms can re-engineer their
customer relationships to unlock relationship equity over time.
2.) How can your idea be applied in business today (the “so-what”)?
Throughout the article, our objective is to illuminate the challenges associated with CRM
best practices and offer a vision for a new mindset for CRM. We supplement this vision
with a series of concrete tools that managers can implement in their firms.
Through vivid examples of company best and worst practices from diverse industries,
including Peapod, American Express, Filene’s Basement, Best Buy, Citibank, HarleyDavidson, Apple, and Frito-Lay, we show how firms have stumbled and succeeded with
their CRM programs. We offer concrete strategies and tactics for shifting CRM in ways
that can unlock relationship equity. We outline nine specific types of customer
relationships and illuminate the key characteristics and rules of each type to enable
managers to better understand and negotiate them. We provide a tactical blueprint for
relationship-sensitive CRM, which involves (1) mapping the customer portfolio along
relations lines, (2) identifying relationships that are prevalent, profitable, or strategic, and
(3) designing strategies tailored to relationship types and segments. We conclude with a
two-step strategic process for capturing relationship equity which involves first
understanding the relationships firms are in with their customers, and then second,
actively and profitable negotiating these relationships to deliver on the collective goals of
customer and the firm.
3.) For which kind of companies would the idea NOT work well? For which kinds
of companies would it work especially well? Why?
This article is targeted to marketing managers and senior management who have spent
resources to implement CRM programs or those who consider it important to seek
meaningful relationships with customers and companies/brands, albeit without a formal
CRM system commitment. The research is relevant for those who feel complacent and
happy with their CRM solutions, and for those who are either frustrated with their lack of
results or haunted by thoughts that that their investments are underleveraged. The
research is also relevant for those who have shied away from CRM programs for fear of
destroying that special something that evolves organically between brands and
consumers. The research is especially useful for companies who have already invested in
CRM programs, as it provides concrete strategies and tactics for improving existing
programs, but also provides design input for those companies yet to take the CRM
plunge.
4.) What research have you conducted to support the argument in your article?
We leverage five research studies to support our ideas as well as decades of consulting
and brand management for real-world perspective and illumination. First is a survey
conducted with international marketing managers concerning their CRM practices and
relationships with customers to provide context. A multi-method research design then
enlivens the relationship story through the consumer’s eyes, providing evidence of
consumers’ experiences with and interpretations of the customer relationship activities
they receive at the hands of firms. As the cornerstone, we conducted an in-depth case
study of a highly-loyal, high revenue “best customer” of Filene’s Basement, a national
retailer, whose banishment from the store received coverage on the national news. We
also conducted ten semi-structured critical incident interviews with other consumers
whose attempts to sustain relationships were similarly thwarted by firms. These “fired”
customers represented relationships with a range of product and service brands, thus
adding scope to our findings. Our third study allowed analysis of relationship processes
as they unfolded and evolved over time. This data was collected during a two-year, fourphased longitudinal ethnographic study of twenty-eight consumers’ experiences with an
Internet grocery service provider, Peapod. Each Peapod household was interviewed four
times, with interviews scheduled three to four months apart. Nine separate experimental
studies on a range of relationship types (e.g., flings, secret affairs, dependencies, abused
relationships) also provided insight into relationship contracts and rules.
5.) On what previous work (either of your own or of others) does this idea build?
As mentioned above, this article builds from the 1998 Harvard Business Review article
entitled “Preventing the Premature Death of Relationship Marketing,” by Susan Fournier,
Susan Dobscha, and David Glen Mick. This article set the stage for the reinvention of
relationship marketing and helped fuel the explosion of CRM investment over the past
ten years.
The article also draws upon the Customer Pyramid model made popular in the 2001
California Management Review article entitled “The Customer Pyramid: Creating and
Serving Profitable Customers,” by Valarie A. Zeithaml, Roland T. Rust, and Katherine N.
Lemon. This article captures the philosophy whereupon CRM evolves into an
economically-minded customer management system rather than the customer
relationship management system that theory intended.
6.) What is the source of your authority? What academic, professional, or personal
experience will you draw on?
The central ideas in the submitted manuscript have been pretested in several presentations
delivered to business audiences, generating strong, positive response. Most recent is a
keynote address delivered this past July to an audience of over 200 in Amsterdam at the
annual SWOCC (the Center for Scientific Research on Commercial Communication
Conference). Amsterdam’s leading business and marketing press journals, Adformatie
and Tijdschrift voor Marketing followed up the presentation with a special interview and
cover story dedicated to the learnings in the talk (see articles, shared as attachments).
The themes in the current article have also been shared at the annual Research
Conference of Relationship Marketing and Customer Relationship Management, the
American Marketing Association annual meeting, and the Symposium on Marketing
Reform, among others. Several consulting clients have also adopted these ideas into their
relationship business practices, including, for example, Harley-Davidson and Frito-Lay.
Susan Fournier is an associate professor of marketing at Boston University, with
previous positions at Harvard Business School (1994-2002), Dartmouth (2002-2004), and
in practice at Young & Rubicam, Polaroid, and Yankelovich. Susan’s research focuses
on relationship marketing and branding. She has received five best article awards for
work published in Journal of Consumer Research, Journal of Marketing, and Journal of
the Academy of Marketing Science. She has authored over 20 HBS cases on branding,
many of them long-term best-sellers. Susan is a long-standing member of the Editorial
Boards for Journal of Consumer Research, Journal of Relationship Marketing, Journal of
Business-to-Business Marketing, and Marketing Theory. Her insights are frequently cited
in the popular and business press.
Jill Avery began her career with a decade in consumer packaged goods brand
management, managing brands for Gillette, Braun, Samuel Adams, and AT&T. She is
currently an assistant professor of marketing at the Simmons School of Management in
Boston where she teaches marketing management, consumer behavior, and brand
management. She received her doctorate in marketing from the Harvard Business
School, where her research was honored with the Harvard Business School Wyss award
for excellence in doctoral research. She also holds an MBA from the Wharton School.
Her research focuses on brand management and customer relationship management
issues. She has authored several HBS cases on branding in Web 2.0, and her branding
insights have been cited in Advertising Age, The Economist, The New York Times, The
Financial Times, and Strategy and Business.
7.) Narrative Outline of Article. Please see attached article for full text.
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Introduction/Problem Set-Up
Refocusing on Relationship Fundamentals
The First Principle: Know “Consumers” as “People”
The Second Principle: Move Beyond Loyal Relationships
The Third Principle: Share the Benefits…Shoulder the Blame
Unlocking the Option Value in Customer Relationships
Exhibits
Exhibit 1:
The Customer Profitability Pyramid
Exhibit 2:
Mindshifts Associated with Putting the “R” Back into CRM
Exhibit 3: Relationships and their Rules
Exhibit 4: A Blueprint for Relationship-Sensitive CRM
Exhibit 5: Unlocking the Option Value of Customer Relationships