Sunday, March 23, 2008

CRM and The Law of Unintended Consequences

When a mechanism is installed in the world, things can happen as a result, that the original creator of the mechanism may not have intended. These consequences may also run completely contrary to the original intent of the mechanism. There are three basic reasons for this phenomenon:

  1. Exploitation - The mechanism is used for purposes other than was originally intended. (Examples: GPS for finding the nearest Starbucks, or fertilizer being used in bomb making)

  2. Avoidance - Because the mechanism exists, people change their behaviors (Examples: Tax avoidance strategies, driving habits in a GPS tracked vehicle)

  3. Culture Shift - The mechanism has created a cultural expectation and people come to expect things they otherwise would not expect (Example: Cell phones)

Here are a three classic examples:
  • Sophisticated alarms and immobilizers on vehicles, have resulted in more violent and dangerous carjackings, because the thieves needs to have keys directly from drivers in order to steal vehicles.
  • The popularity of cell phones has been putting pay-phone companies out of business, while forcing more people to get cell phones because of the shortage of available pay-phones.
  • Telephone systems adding prompts, ie: "For customer service, press 3" have resulted in less customer service communications being done over the phone
CRM is very interesting because it has had unintended consequences due Exploitation, Avoidance, and Culture Shift.


  • Credit card data from massive amounts of customers is stolen from a major retailer's database
  • An employee takes customer data when moving to a competitor
  • Data provided by a customer results in the customer being "Value classified" in no receiving a lower level of service than before the data was provided


  • Consumers not wishing to provide personal information, intentionally forgo "Loyalty Club" discounts provided by retailers.
  • Users avoid CRM due to fear of the information being used in performance measures
  • False email addresses are created in order to avoid providing an avenue to send marketing materials
  • Callers press "0" to avoid phone prompts and go directly to the switchboard

Culture Shift

  • Consumers expect their contact information to be transferred along with their call and remembered for the next time
  • The details of a transaction should be available long after the transaction is complete

None of the examples given above have been taken through their full progression. Avoidance is fascinating in that there is usually an escalation for each avoidance:

  • Retailers create larger pricing disparities for those refusing to join their "Loyalty club"
  • Fake email addresses, led to requiring email verification before the services are delivered.
  • Because people learned that pressing "0" on their phone, would connect them with the switchboard and avoid the prompts, companies disabled this feature, forcing the prompts to be used
  • Companies create performance measures for CRM users, that are based on CRM usage as a performance measure

Do you see the pattern here? That which was created to make things better, is perceived as making things worse, by those that were supposed to see an improvement. Avoidance of that which was created to improve service, leads to escalations, in order to force those that are avoiding the improvements, to accept that which they see as negative.

CRM was not created to become an instrument of fear for customers or employees.

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