When Is a Guarantee Not a Guarantee? When Its Coming from a CRM Vendor

 
 
By Evan Schuman  |  Posted 2006-05-06 Email Print this article Print
 
 
 
 
 
 
 

Opinion: A CRM vendor introduces a new CRM package, promising a rock-solid ROI guarantee. Vendors seem to be embracing the word "guarantee" these days. Too bad they're not also embracing its definition.

There are few things harder to deliver in a provable and concrete way than a good return on investment. Its what CEOs and CFOs insist that IT departments deliver, and yet its incredibly hard to prove. Smelling an opportunity, tons of hardware, software and services vendors are trying to lock in sales with promises of guarantees, sort of like ROI service level agreements. (Please shoot me if I start referencing ROI SLAs as though its meaningful.) The idea is laudable and should be encouraged, but these vendors seem to have conveniently forgotten that the word "guarantee" is not a synonym for "vague promise."
An essential element of guarantee is "If we dont deliver what we promise, we will give you XXXX."
Thats the guarantee part, as in "if this product doesnt last for months, well give you your money back" or "if this window doesnt reduce your heating costs by 20 percent, well pay you the difference" or my personal favorite: "double your money back." A couple of years ago, ISP EarthLink started offering an upgraded technical support plan which—for an extra fee—"guaranteed" that a tech support service person would answer the call within five minutes. I went 20 rounds with their marketing people, asking "What happens if they dont?", to which they replied, "They will."
A guarantee isnt a guarantee without an answer to "What happens if you dont?" On May 5, Loyalty Lab introduced an outsourced CRM package that promised "guaranteed ROI outcomes for the most common problems faced by consumer brand marketers." They promise—in exchange for a $68,000 flat fee—several rather specific deliverables, including a 20 percent revenue increase for second sales, a 30 percent increase for smart e-mail and a doubling of customer acquisition through an automated refer-a-friend program. Thus far, their program is laudable in that it gets a lot more specific than the vast majority of CRM programs out there today. Read more here about PetSafes call center solution. But, you might ask, whats their guarantee? What do they do for the customer if those impressive benchmarks are not reached? Do they make up the difference between the promised gain and the realized gain? Do they at least refund the $68,000 fee for the service? Nope. Their punishment if they fail to deliver what they guarantee is that the customer is not obligated to pay Loyalty Lab any more money. After their initial six months, they can walk away. Next Page: A sad strategy.



 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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