Tuesday, April 11, 2006
CRM Chess: How Many Moves Are You Planning Ahead?
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Depending on the source you read, many books on the subject of chess say one of the big differences between the great players and the average players is how many moves the great players think ahead. Great players by experience, intuition, intelligence and talent are able to see the game unfold before them. Some sources say the top players can see up to 15 moves ahead. But one of the best pieces of chess (and business) insight I’ve seen comes from Anna Muoio in a 1999 Fast Company magazine article about chess master Bruce Pandolfini. The movie “Searching for Bobby Fischer” was about one of Pandolfini’s students.
At the time of the Fast Company article, Pandolfini limited his chess teaching to 15 students. One of the things that really struck me was he told the students’ parents he wasn’t teaching their kids to be great Chess players, but rather, he was teaching them how to think. And, according to Pandolfini, great chess players don’t see 10 to 15 moves ahead; they see only as far ahead as they need to. That strategy keeps chess players (and business players) focused on what is really important.
Anyone associated with marketing in the last decade has certainly seen the importance of customer relationship management (CRM) grow. CRM is what helps businesses think and plan ahead by using data to build better relationships with their customers. However, for CRM to really be useful, it needs to look beyond just a few moves ahead and really see the “board” as it will be in the future. In many cases, that takes more than programming and data analysis tools—it takes insight to understand the end game and plan accordingly.
The financial services industry is a classic example of what I’m talking about. Younger customers are usually not the most profitable customers for this industry. They have little net worth and less “depositable” income. The most profitable customers in the financial services industry are those loyal customers who have built their net worth and disposable income and can avail themselves to a large number of the company’s services. That is usually the age 45+ group.
Financial services companies often invest a great amount of time in either informal or formal CRM activities in servicing this important segment, but how often are these companies really thinking several moves ahead to that end game? Often these older, more profitable customers continue to acquire wealth and become increasingly better clientele until one day they are incapacitated or pass away. Relationship over!
If these companies were really thinking several moves ahead, they would, within the permissions given to them by their clients, be cultivating a relationship with the families, advisees and others who will be recipients of their clients’ estates. This is precisely the time that siblings often trust their parents’ financial advisers the least because of feelings that their parents are in a more vulnerable position. This type of forward thinking to engage a wider relationship spectrum than just these high-value clients is what would separate the great marketers from the good marketers.
Financial services is just one example, but there are analogies in most every industry. The data that is gathered and analyzed through the CRM process is a great start, but even that process will fail you unless you are out there a few moves ahead of your competitors and the situation.
