Introduction

The marketing literatures have long advocated that firms should not focus on
selling products, but rather on fulfilling customers needs (Levitt, 1960). Over
the past decades, the development of marketing has pursued this track in
an attempt to create competitive advantages by facilitating customised value
propositions on a one-to-one basis, most notably in customer relationship
management (CRM) and segmentation schemes (Peppers et al., 1999;
Simkin, 2008; Payne et al., 2008). One of the key principles for tailoring
successful products and services is to create superior value by maintaining
and enhancing buyer-seller relationships.
Customer relationship management in particular is a broad topic that
interests many marketers. However, the extensive contribution of authors,
whom have defined CRM, has produced a rich and diverse set of meanings,
which has caused much confusion in terms of handling and managing
the concept. Nevertheless, more recently, the field of CRM has begun to
converge on a common definition (Boulding et al., 2005). According to
Boulding et al. (2005) CRM is not only a customer focused orientation, but
rather, an integration of all relationships and use of systems to collect and
The Marketing Review, 2011, Vol. 11, No. 2, pp. 137-149
doi: 10.1362/146934711X589372
ISSN1469-347X print / ISSN 1472-1384 online Westburn Publishers Ltd.
The dark side of CRM
Bang Nguyen, Oxford Brookes University, UK
*
Over the past decades, customer relationship management has directed their
efforts towards customising promotions, offers and deals to suit the individual
customers, and with technological advances, firms efforts have shown to be
increasingly effective. However, there are paradoxes in marketing practitioners
efforts to build personalised deals and relationships. In this paper, I propose 5
propositions about the darker sides of CRM, introducing these paradoxes and
pitfalls that should be considered in the implementation of CRM and in efforts
to build buyer-seller relationships. These propositions include (1) the one-to-one
dilemma; (2) selecting and favouring customers; (3) the relationship symmetry;
(4) monitoring, tracking and using customer behavioural data; and (5) neglecting
the relationship trust. The implications for managers are evident. Findings starkly
reveal the importance of understanding the role of fairness, transparency, goodwill
and trust in customer relationship management than previously considered.
Keywords CRM, dark side, managing relationships, fairness, trust, paradox.
*Correspondence details and a biography for the author are located at the end of the article.
analyse data across the firm, linking the firm and customer value along the
value chain in order to develop capabilities to integrate these activities across
the firms network to subsequently, generate customer value, while creating
shareholder value for the firm.
The key concepts in CRM are factors such as the individual level treatment
of key stakeholders, use of data and knowledge and personalisation/
customisation of offerings (Verhoef, 2003; Blythe, 2005; Simonson, 2005).
The process of partnering with customers and changing/modifying activities
internal to the organisation is also a key trait of CRM (Peppers and Rogers,
2004; Payne and Frow, 2006). However, the evolution of CRM has become
noteworthy, as increasing concerns about customer tracking systems,
information storing in customer databases, the techniques of segmentation,
customisation and favouring of some customers, dynamic pricing and hidden
fees and surcharges, have all been associated with CRM (Lewis, 2005; Haws
and Bearden, 2006; Boulding et al., 2005). As mentioned by Boulding et al.
(2005), CRM activities create the potential for issues of differential treatment
of customers and for issues concerning data collection. Recent studies have
established issues of unfairness in consumer perceptions of CRM schemes
(Nguyen and Simkin, 2009a).
In this article, I introduce the darker sides of customer relationship
management and the paradoxes that exist in treating customers on an
individual basis. I suggest five propositions about the potential pitfalls of
CRM implementation, explaining the issues that should be considered in
building relationships between customers and firms, and using relationships
as a source of competitive advantage. These propositions include (1) the one-
to-one dilemma; (2) selecting and favouring customers; (3) the relationship
symmetry; (4) monitoring, tracking and using customer behavioural data;
and, (5) neglecting the relationship trust. Figure 1 illustrates the five
propositions that are used to exemplify the concerns and dark sides in CRM.
The Marketing Review, 2011, Vol. 11, No. 2 138
Figure 1 The darker sides of CRM
Nguyen The dark side of CRM
1 The one-to-one dilemma
CRM has proven to be a critical tool in increasing a firms profitability by
enabling it to identify the best customers and satisfy their needs, in order to
make them remain loyal to the firms activities (Thomas and Sullivan, 2005).
In order to retain these customers, firms have attempted to build learning
relationships with them so that products and services can be customised at
an individual level. Indeed, learning relationships have been a powerful way
to deliver personalised offerings that creates a loyalty effect. However, in
their search for this type of one-to-one customer treatment, the process of
meeting customers needs on an individual basis has resulted in a strategy
whereby one customer will receive better offerings than others. Or in other
words, customers are receiving different outcomes in their relationships
and varying offerings. And many are beginning to become aware of this
unequal distribution of outcomes (Cox, 2001) more so than ever, with the
increasing use of social networking websites, blogs, fora and comparison
search engines, which have created a more transparent market.
Research shows that these same mechanisms of inequality may lead to
perceptions of unfairness (Campbell, 1999; Xia et al., 2004; Nguyen and
Simkin, 2009a). For example, Amazon.coms test use of dynamic pricing has
attracted a range of revisited research into the fairness of a price and the
rationale for offering a certain price (Xia et al., 2004). As Feinberg et al.
(2002, p.227) put it: Few things stir up a consumer revolt quicker than the
notion that someone is getting a better deal. Thats a lesson Amazon.com
has just learned Amazon was recently revealed to be selling the same DVD
movies for different prices to different customers. The idea that someone
else is getting a better deal on the same offer can raise eyebrows and evoke
dissatisfaction. Nevertheless, foundations of CRM lie in the fact that separate
customers have varying needs and want different products and services
even different prices and ways of promotion. However, inappropriate use
of CRM will consequently cause perceptions of unfairness, which may lead
to buyers opting out of relationships, spreading negative information, or
engaging in behaviour that may damage the firm (Campbell, 1999; Xia et
al., 2004).
According to the distributive justice theory, equal distribution of
outcomes may lead to fairness perceptions whereas unequal distribution
of outcomes may lead to unfairness. Homans (1961) conceptualisation
of distributive justice focused on the distributions of outcomes and on
reactions to those distributions (Greenberg and Tyler, 1987). It maintained
that people in an exchange relationship with others, are entitled to receive
an award that is proportional to what they have invested in the relationship.
Similarly, Adams (1965) equity theory also emphasises the importance of
equality of outcomes between two parties in an exchange. It suggests that
perceptions of fairness are induced when a person compares an outcome
with a comparative others outcome. Inequity exists when input versus
output are psychologically inconsistent, and may consequently lead to
buyers dissatisfaction.
Thus, without careful consideration to the distribution of outcomes for
different groups of customers, inappropriate and incomplete use of CRM may
put the firm at risk of long-term failure. This constitutes the first customer
139
The Marketing Review, 2011, Vol. 11, No. 2
relationship management paradox and a one-to-one dilemma in the context
of CRM, leading to the first proposition:
P1: CRM aims to fulfil customer needs on a one-to-one basis. However,
this may be perceived as unfair due to the unequal distribution of
outcomes.
2 Selecting and favouring customers based on firm values
As mentioned above, the CRM literatures have advocated that a successful
relationship strategy involves meeting customers needs by facilitating
customised solutions on a one-to-one basis. Not only does this fulfil
customer needs better, but it also increases the firms profits due to the
improved segmentation and targeting efforts, effectively directing deals
and offers to the right customers and not to the masses whom may be
less interested. With technological advances, firms efforts have shown to be
increasingly effective, and firms may choose to direct their marketing efforts
and attention to customers whom they estimate are able to yield the most
profit over their customer lifetime. Indeed, CRM has adopted favouritism
in their target marketing and has been ever better at doing so. Favouring
customers enable firms to increase the attractiveness of their offerings to a
certain group and thus, increase the potential for creating cross-sales, up-
selling and for developing a long-term relationship.
However, targeting schemes also involve a paradox a dark side which
if not carefully considered, could damage the firm and its reputation. Because
firms now have the choice to select the customers they want to serve, favour
those who are most profitable and discard customers who do not fit in,
customers may feel disadvantaged and consequently, choose to opt out of
their buyer-seller relationships. To prevent such damaging effects, there is a
need for marketers to further their understanding of their customer bases.
In CRM, a firms customer base can be thought of as consisting of
customers who are targeted by a firms offerings and customers who are
not overtly targeted. The non-targeted are typically customers who do
not fit the demographics of the firm and may shop elsewhere. Within this
group there may be customers who still come along occasionally or by
convenience, but they are not seen as part of the broader key segments,
targeted by CRM practices by a particular firm. On the other hand, within
the targeted groups of customers there are several levels. In this case, there
may be favoured or non-favoured customers whom are allocated according
to a specified set of criteria identified by the firm. Thus, within this group,
there are some customers who are in an advantageous position and others
in a disadvantageous position.
Recent research distinguishes between the advantaged customers who
are getting the long end of the stick and the disadvantaged customers who
are getting the short end of the stick as a result of a firms customisation
tactics (Lo et al., 2007). It is suggested that such favouritism and differential
treatment of customers may cause perceptions of unfairness (Nguyen and
Simkin, 2009b). According to Lo et al. (2007), the customers who get the
short end of the stick either (a) pay more to receive the same quality or
(b) receive less than the favoured customers even though they have paid
140
Nguyen The dark side of CRM
the same price. Nguyen and Simkin (2009b) showed that the two groups
responded differently to various CRM offerings depending on their situation
e.g. whether they were being favoured or not favoured. They showed that
there is a correlation between feeling disadvantaged and having perceptions
of unfairness, and that different types of customers could be successfully
managed as they respond to offers differently (Nguyen and Simkin, 2009b).
Firms that favour customers whom they estimate are able to yield the
most profit may be perceived as acting opportunistically. In selecting and
favouring customers, it is important that firms decide criteria which will be
perceived as positive. For example, dividing customers into groups based
on the amount of money that can generate or based on where they live i.e.
postcodes, may be perceived negatively whereas dividing customers based
on non-personal characteristics will be perceived positively due to the norm
of the society (Jewell and Barone, 2007). This pitfall is supported by Boulding
et al. (2005) who suggest that CRM activities create the potential for issues
of differential treatment of customers. Similarly, in another application of
CRM, Ryals (2005) showed that firms may choose to reduce their attention
to customer/customer groups from which they determine they are not able
to garner enough value. Customers were favoured over others based on a
firms specific definition of value such as profitability which consequently
created dissatisfaction. However, not all differential treatment is unfair.
Recent research shows how differential treatment of customers may be
perceived as fair when the advantageous group is perceived to be expert
opinion leaders (Lo et al., 2007). Contrastingly, in a retail setting, Nguyen
and Simkin (2009b) showed how treating customers differentially caused
perceptions of unfairness due to customers negative inferences towards
such methods. This leads to my second proposition:
P2: In favouring some customers over others, CRM create the potential
for negative feelings due to the process leading to differential
treatment of customers. Firms must therefore carefully understand
their customer base and choose segmentation criteria that have
positive connotations.
3 The relationship symmetry
Recent studies refer to CRM as a pie-splitting mechanism, where extensive
research into CRM from the firms perspective may be considered as a focus
on creating more value for the firm, leaving the customer with less value or
benefit (Boulding et al., 2005; Jayachandran et al., 2005). In other words,
with CRM the firm can learn about the customer and enable it to take a
bigger slice of the created value. Building customer-firm relationships, it
seems, has been a one-sided development for the benefit of the marketer. This
constitutes the third paradox and a potential issue in CRM implementation.
While marketing traditionally advocates building relationships as a way
to increase customer retention and to enhance win-win situations, with
new applications of CRM, the firms winnings are increasing, whereas
the customers win remains little changed. Given this development in
CRM, customers are increasingly creating intuitive theories about the
firms marketing activities, not always with positive connotations. Research
141
The Marketing Review, 2011, Vol. 11, No. 2
suggests that the mechanisms that are involved in such opportunistic firm
behaviour and lack of transparency may cause negative perceptions such as
unfairness and misbehaviour (Kahneman et al., 1986; Feinberg et al., 2002;
Campbell, 1999; Boulding et al., 2005; Grgoire and Fisher, 2008; Heussler
et al., 2009).
Drawing from the principle of dual entitlement (Kahneman et al., 1986)
which builds on equity theory, it is suggested that fairness perceptions
depend on the reference transaction, the outcomes of the exchange parties
and the exchange context (Cox, 2001). For example, loyal customers typically
believe that they are entitled to better offers for their patronage and will
be disillusioned if they perceive that their supplier have used controversial
procedures and tactics in order to benefit themselves. From the dual
entitlement perspective, a firm may violate the trust of the relationship by
ignoring customer entitlements (Cox, 2001). Extensive studies on pricing
perceptions have revealed that customers may infer negatively about firms
pricing behaviours including those directed at a firms negative intentions and
motives, and that there is a link that these inferences may trigger unfairness
perceptions (Xia et al., 2004). For example, Bolton et al. (2003) show how
customers understanding of a firms costs influence such perceptions. A
price increase in snow shovels the morning after a snowstorm is considered
as unfair, but an increase in grocery prices after a corresponding increase
in wholesale prices is not considered as unfair (Kahneman et al., 1986). In
general, in the context of unfairness, retailers that have used their power to
generate higher profits for themselves as a result of their superior position
are not well-regarded (Campbell, 2007). This echoes in CRM applications
such as dynamic pricing strategies. The third paradox and cause for concern
relates to the relationship symmetry.
Relationship symmetry refers to the degree of equality between members
in an exchange relationship (Britton and Rose, 2004). Through various
relationship elements, including information sharing, dependence and
power, the balance of power determines the stability of a relationship. In a
symmetric relationship, members have equivalent stakes in the relationship.
In contrast, asymmetric relationships undermine the balance of power and
create motivation for the stronger party to act opportunistically, resulting
in diverging interests. This is a determinant of conflict and eventually, a less
stable relationship. Hence, commonality of interest is strongest when the
relationship is symmetric. This is supported by Adams (1965) theory of equity
which suggests that justice in interpersonal relationships is achieved when
the distributions of resources are fair and equal. Indeed, if value is taken
away for certain customers, so that a firm can increase its own share of the
value that it receives, this will create an asymmetric buyer-seller relationship.
This negative situation is explained by a firms opportunistic behaviour and
raises issues of inequality, due to the unequal distribution of value and the
imbalance between the two parties in an exchange relationship. This leads
to the next proposition:
P3: Successful relationships require firms to consider issues of
relationship symmetry in order to avoid negative perceptions related
to imbalances, opportunistic behaviour and misuse of power.
142
Nguyen The dark side of CRM
4 Monitoring, tracking and using customer data
The purpose of CRM is that it should considerably enhance firm performance
a quality of any marketing activity (Lehmann, 2004; Rust et al., 2004).
Recently, researches have developed specific CRM applications that are
designed to increase firms overall performance. For instance, Cao and
Gruca (2005) centre their attention on acquiring the right customer; Lewis
(2005) focuses on identifying dynamic customer behaviour that enables
a pricing scheme to increase long-term profits; and Thomas and Sullivan
(2005) develop a decision support system using an enterprise database that
allows the firm to modify its communication message depending on where
customers live and how they shop. All cases suggested an increase in profits
and enhanced firm performance.
Jayachandran et al. (2005) show that the effects of CRM technology
investments are enhanced when the firm has the appropriate relational
information processes in place. They show that as long as a firm has good
relational processes to harvest the knowledge, they were able to obtain
good firm performance. This was further supported in a different context,
where Thomas and Sullivan (2005) showed how an enterprise CRM system
coordinates and integrates data from different channel sources, enabling a
firm to gain new knowledge about individual customers and thus, enhance
firm performances. Therefore, it appears that the most important element
in CRM implementation is for the firm to acquire customer knowledge and
use it to create added value (Boulding et al., 2005). The idea of co-creating
or dual creation of value is a core aspect of CRM and collecting, storing and
utilising customer information is at the heart of this notion.
The term information reciprocity is the idea that customers give a
firm their information in return for customised offerings, and follows the
principle of reciprocity. It is a fundamental principle in CRM, as it creates a
win-win situation both for the firm and its customers (Peppers et al., 1999;
Jayachandran et al., 2005). However, there are some CRM activities that may
be in the grey area of a win-win situation, even though they follow this
notion. For example, Lewis (2005) develops a pricing scheme that creates
a differential value proposition for different customers/segments based on
varying customer characteristics and consumer behaviours. Because the firms
goal is to use its knowledge about these customers to extract more value
for the firm and create less value for the customer, this may raise issues of
unfairness and mistrust. This can be explained by the firms use of customers
data to act in its self-interest over the interests of the customer. While best
practice in any marketing activity would maintain that neither party can
be worse off in a transaction, the nature of CRM creates the potential for
the opposite. Specifically, because the nature of CRM emphasises the use
of customer information, with the aim to differentiate and favour specific
customers over others on an individual basis, this may not be regarded as
a reasonable exchange. And for a customer to give away their personal
information with the above negative inferences there is no assurance that
customers would feel confident with their privacy since the exchange deals
with such important information. Consequently, if CRM is implemented in a
way that leads customers to believe that they are worse off, firms can put
143
The Marketing Review, 2011, Vol. 11, No. 2
themselves at substantial risks. Information reciprocity can break down, and
customers may choose to opt out of relationships (Jayachandran et al., 2005;
Boulding et al., 2005). For example, if a customer decides to order a pizza
online, but the website not only asks for the necessary information about
the order itself, but also requests personal details such as household income,
size of family, age, gender, etc, it is likely that the customer may find the
request unacceptable, and choose not to proceed with the transaction. In
other words, the customer could not see the returns by giving the firm such
information. These issues of data tracking and privacy constitute the fourth
CRM paradox and should be carefully considered in CRM implementation.
In particular, customers who believe that firms are exploiting their data
will attempt to keep their data private, or distort their data. Ultimately,
this could lead to both individually-, or collectively based efforts to keep all
data private or lead to customers campaigning for more privacy regulations
(Deighton, 2005; Boulding et al., 2005). This leads to the next proposition:
P4: CRM requires careful consideration to monitoring, tracking and
using customer data and privacy. Firms that collect data excessively
may damage future opportunities due to increased regulation.
5 Neglecting the relationship trust
The essence of a good relationship and a key concept in CRM is that of
trust. Trust has been defined as, a willingness to rely on an exchange partner
in whom one has confidence (Moorman et al., 1992:314). The existing
literatures suggest that trust is an essential component of commitment
and conceptually, links with satisfaction and loyalty (for example Morgan
and Hunt, 1994; Ballester and Aleman, 2001). According to the trust-
commitment theory (Morgan and Hunt, 1994), trust has been considered
as a key variable in the development of an enduring desire to maintain a
relationship in the long term.
In a CRM context, trust can be considered as a feeling of security held by
both buyer and seller, and that building a relationship will result in meeting
expectations and needs of all the involved parties. Furthermore, trust also
entails a belief that one party will not take opportunistic advantages of
the others vulnerability, nor lie, or other unfair practices. Certainly, distrust
among a customer and a firm can be fatal. If a customer becomes less
trusting of a firms behaviour, over repeated transactions, that customer will
act strategically in return by sharing less information or shop elsewhere,
thereby reducing the firms value creation pie. Such customer misbehaviour
is increasingly evident (Grgoire and Fisher, 2008). For example, in todays
Internet setting, there has been an explosion of spywares which have been
used by firms to track customer behaviour. This has led to a general distrust
in online shopping and a desire for more consumer privacy. In these cases,
issues of trust have emerged as customers infer how firms will use their data.
As in the case of Amazon.com their firm behaviour reduced customer trust.
If a firm does not consider these issues of trust, potentially, CRM activities
will cross the line in terms of what the consumers consider as being fair. As a
result, this may decrease trust in firm activities and cause dissatisfaction and
144
Nguyen The dark side of CRM
loss of potential key advantages (Deighton, 2005). In particular, customers
who believe that firms are exploiting their data or acting in ways against
the social norm, will attempt to keep their data private, or simply, make
complaints. Consequently, trust will be damaged and the relationship
may end. Thus, long term successful implementation of CRM requires that
firms consider with foresight the issues of trust, privacy implications and
perceptions of fairness (Boulding et al., 2005). A firm must adequately
consider a fair value creation for both the firm and the customer, or they
may lose access to the data required for the dual value creation process.
As suggested by Boulding et al. (2005), the precursor to issues of
consumer trust is fairness. For example, a customer shows trust to bond
in a relationship with a firm when they know that the firm is acting fair in
creating a win-win situation. However, will customers trust that firms will be
fair in splitting the value creation pie in the first place? Attribution theory
provides insight to the inferences that people make when they wonder why
an event occurred (Campbell, 1999). It indicates that people are likely to
search for causal explanations for an event when the event is surprising and/
or negative (Weiner, 1985; Folkes, 1988). For example, if a customer believes
that a firm has increased prices to take an advantage of an increase in
demand or scarcity in supply, without a corresponding increase in their costs,
this is likely to be perceived as unfair (Ross and Fletcher, 1985; Kahneman et
al., 1986; Bolton et al., 2003). Similarly, Nguyen and Simkin (2009a) showed
the importance of understanding negative attributions and suggested ways
to manage negative inferences and turn them into positive inferences. The
evidence were clear in that trust must be considered in any relationship
building marketing efforts, including that of CRM. This leads to the final
proposition and the fifth paradox:
P5: Successful relationships require that firms consider the role of trust
and in particular, to turn negative inferences into positive inferences.
If CRM is overly applied, trust may break down and in worse cases,
end the buyer-seller relationship.
Conclusion and managerial implications
Although identifying and meeting customer needs on an individual basis is a
fundamental concept in CRM, few have questioned the implications of such
an approach. This paper addresses the darker side of customer relationship
management. I propose 5 propositions about the paradoxes of CRM,
introducing the pitfalls that should be considered in building relationships
between a customer and a firm. These propositions include:
1 the one-to-one dilemma, which suggest that the process of meeting
customers needs on an individual basis has resulted in a strategy
whereby one customer will receive better offerings than others;
2 selecting and favouring customers, which put forward that as
technology advances, firms targeting efforts have shown to be
increasingly effective, resulting in firms choosing to direct their
targeting efforts and attention to customers whom they estimate
are able to yield the most profit over their customer lifetime;
145
The Marketing Review, 2011, Vol. 11, No. 2
3 the relationship symmetry, which refers to firms having greater
power than their customers, enabling them to take a bigger slice
of the created value, especially given the extensive development of
CRM applications which has been one-sided for the benefit of the
firms;
4 monitoring ,tracking and using customer behavioural data, which
concern issues of data exploitation and privacy and how the firms
use customer knowledge to extract more value for the firm and
create less value for the customer, and;
5 neglecting the relationship trust, which entails beliefs that the firm
could potentially act opportunistically and take advantages of the
customers vulnerability. Certainly, distrust among a customer and
a firm can be fatal.
However, there are precautions which can be taken for the CRM practitioner
in order to avoid the pitfalls of CRM so that the dark side may be reversed.
From a firms perspective, research shows that explanations or justifications
influence customers perceptions (Bies and Shapiro, 1987). In particular, Bies
and Shapiro (1988) hold that with the presence of a justification for a negative
motive, the outcome is perceived as fairer than when the outcome arises
with no justification offered. In other words, a firm that is able to explain
its acts will be perceived as more fair (Campbell, 2007). This is supported
by Thibaut and Walker (1975) who hold that giving people information
into the decisions affecting them, could lead to a better outcome. Similarly,
Kanfer et al. (1987) suggest that in performance appraisals communication
is vital for perceptions of fairness (Greenberg and Tyler, 1987). More recently,
if Amazon.com have had a better understanding of the implications of
customer inferences, it could have provided justification of its actions by
clearly communicating its dynamic pricing scheme in order to build goodwill
and trust (Cox, 2001).
For CRM, there is a need to create a transparent interaction in any
relationship. As this paper shows, trust must be carefully considered.
According to Britton and Rose (2004) there are other important outcomes
of relationships based on trust including: (1) improved co-operation: trust
reduces feelings of uncertainty and risk and thus, acts to engender increased
cooperation between relationship members (Dwyer et al., 1987; Moorman
et al., 1992; Morgan and Hunt, 1994); (2) increased commitment: trust
increases commitment, however, customers are selective to trustworthy
partners, as commitment results in their own vulnerability of personal data
(Morgan and Hunt, 1994; Selnes, 1998); (3) relationship duration: trust
encourages investment in long-term relationships by securing future business
rather than short-term gains, and thus, opportunistic behaviour and self-
interest may be avoided (Morgan and Hunt, 1994; Ballester and Aleman,
2001); (4) better quality: disputes among trusted parties can be solved in
an efficient and amicable way, while in the absence of trust, disputes are
perceived as signals of future difficulties and usually bring about relationship
determination (Morgan and Hunt, 1994; Selnes, 1998; Michell et al., 1998;
Britton and Rose, 2004).
If a firm does not consider the five propositions presented in this paper,
146
Nguyen The dark side of CRM
potentially, CRM activities will cross the line in terms of what the consumers
consider as being reasonable and just. Consequently, decreasing levels of
trust in the firms activities will result in dissatisfaction and loss of potential
key competitive advantages (Deighton, 2005). The dark side of CRM is a
paradox that can be expressed in the following sentence: If you treat everyone
equal, you do not treat anyone special. But if you treat everyone special, then
everyone wants to be treated equally. Both of which are not good for CRM as
it contradicts the original and great ideas of one-to-one marketing.
References
Adams, J. S. (1965). Inequity in Social Exchange. In L. Berkowitz, (Ed.) Advances in
Experimental Social Psychology, 2, (pp.267-99)., New York: Academic Press, .
Ballester, E. D. & Aleman, J. L. M. (2001). Brand trust in the context of consumer
loyalty. European Journal of Marketing, 35(11/12), 12381258.
Bies, R. J. & Shapiro, D. L. (1988). Voice and justification: Their influence on procedural
fairness and judgments. Academy of Management Journal, 31(3), 676-85.
Blythe, J. (2005). Essentials of Marketing, 3
rd
Edition. Edinburgh: Pearson Education
Limited,.
Bolton L.E, Warlop L, & Alba J.W. (2003). Consumer perceptions of price (un)fairness.
Journal of Consumer Research, 29(March), 474-91.
Boulding, W., Staelin, R., Ehret, M. and Johnston, W.J. (2005). A customer relationship
management roadmap: What is known, potential pitfalls, and where to go.
Journal of Marketing, 69(4), 155-166.
Britton, J. E., & Rose, J. (2004). Thinking about relationship theory. In Peppers D.
Rogers, & M. Rogers, Managing Customer Relationships A Strategic Framework
(pp.38-50). New Jersey: John Wiley and Sons.
Campbell, M.C. (1999). Perceptions of price unfairness: Antecedents and
consequences. Journal of Marketing Research, XXXVI(May), 187-199.
Campbell, M. C. (2007). Says who?! How the source of price information and affect
influence perceived price (un)fairness. Journal of Marketing Research, XLIV(May),
261-271.
Cao, Y. & Gruca, T.S. (2005). Reducing adverse selection through customer relationship
management. Journal of Marketing, 69(October), 21929.
Cox, J. L. (2001). Can differential price be fair?. Journal of Product & Brand
Management, 10(5), 264-275.
Deighton, J. (2005). Privacy and customer management. Customer Management,
(MSI conference summary). Cambridge, MA: Marketing Science Institute, 1719.
Dwyer, F. R., Schurr, P. S., & Oh, S. (1987). Developing buyer-seller relationships.
Journal of Marketing, 51(2), 11-27.
Feinberg, F. M., Krishna, A. & Zhang, Z.J. (2002). Do we care what others get? A
behaviourist approach to targeted promotions. Journal of Marketing Research,
39(3), 277-291.
Folkes V. S. (1988). Recent attribution research in consumer behaviour: A review and
new directions. Journal of Consumer Research, 14(March), 548-65.
Greenberg, J. & Tyler, T. R. (1987). Why procedural justice in organizations?. Social
Justice Research, 1(2), 127-140.
Grgoire, Y. & R. J. Fisher (2008). Customer betrayal and retaliation: when your best
customers become your worst enemies. Journal of the Academy of Marketing
Science, 36(2), 247-261.
Heussler, T., F. Huber, F. Meyer, K. Vollhardt, & D. Ahlert (2009). Moderating effects
of emotion on the perceived fairness of price increases. Advances in Consumer
Research - North American Conference Proceedings, (36), 332-338.
147
The Marketing Review, 2011, Vol. 11, No. 2
Homans, G. C. (1961). Social Behaviour: Its Elementary Forms, New York: Harcourt,
Brace and World.
Jayachandran, S., Sharma, S., Kaufman, P. & Raman, P. (2005). The role of relational
information processes and technology use in customer relationship management.
Journal of Marketing, 69(4), 177-192.
Jewell, R. D. & Barone, M. J. (2007). Norm violations and the role of marketplace
comparisons in positioning brands. Journal of the Academy of Marketing
Science, 35(4), 550-559.
Kahneman, D. & Knetsch, J.L. (1986). Fairness as a constraint on profit seeking
entitlements in the market. The American Economic Review, 76 (September),
72841.
Kanfer, R., Sawyer, J., Earley, P. C., & Lind, E. A. (1987). Fairness and participation in
evaluation procedures: Effects on task attitudes and performance. Social Justice
Research, 1(2), 235-249.
Lehmann, D. R. (2004). Metrics for making marketing matter. Journal of Marketing,
68(October), 7375.
Lewis, M., (2005). Incorporating strategic consumer behaviour into customer
valuation. Journal of Marketing, 69(Oct), 230-38.
Lo, A. K. C., Lynch, J. R. Jr., Staelin R. (2007). How to attract customers by giving
them the short end of the stick. Journal of Marketing Research, XLIV(February),
128-141.
Michell, P., Reast, J. & Lynch, J. (1998). Exploring the foundations of trust. Journal of
Marketing Management, 14, 159172.
Moorman, C., Zaltman, G. & Deshpande, R. (1992). Relationships between providers
and users of market research: The dynamics of trust within and between
organisations. Journal of Marketing Research, 29(3), 314-328.
Morgan, R. M. & Hunt, S. D. (1994). The commitment-trust theory of relationship
marketing. Journal of Marketing, 58(3), 20-38.
Nguyen, B. & Simkin, L. (2009a). An examination of the role of fairness in CRM: A
conceptual framework. In Proceedings of the British Academy of Management
200., Brighton, 2009, UK: University of Brighton.
Nguyen, B. & Simkin, L. (2009b). The Influence of CRM Offerings on the Advantaged
and Disadvantaged Customers. The Academy of Marketing Conference 2009.
Leeds, UK: University of Leeds.
Payne, A. & Frow, P. (2005). A strategic framework for customer relationship
management. Journal of Marketing, 69(4), 167-176.
Payne, A. F., Storbacka, K., & Frow, P. (2008). Managing the co-creation of value.
Journal of the Academy of Marketing Science, 36(1), 83-96.
Peppers, D. & Rogers, M. (2004). Managing Customer Relationships - A Strategic
Framework. New Jersey: John Wiley and Sons.
Peppers, D., Rogers, M., & Dorf, B. (1999). Is your company ready for one-to-one
marketing?. Harvard Business Review, 77(January-February), 151-60.
Ross, M. & Fletcher, G. J. O. (1985). Attribution and Social Perception. In G. Lindsey
& E. Aronson, (Eds.). The Handbook of Social Psychology, 2, (pp.73-114). New
York: Random House.
Rust, R. T., Lemon, K. N. & Zeithaml, V. A. (2004). Return on marketing: Using customer
equity to focus marketing strategy. Journal of Marketing, 68(1), 109127.
Ryals, L. (2005). Making customer relationship management work: The measurement
and profitable management of customer relationships. Journal of Marketing,
69(October), 25261.
Selnes, F. (1998). Antecedents & consequences of trust and satisfaction in buyer-seller
relationships. European Journal of Marketing, 32(3/4), 305322.
Simkin, L. (2008). Achieving market segmentation from B2B sectorisation. Journal of
Business & Industrial Marketing, 23(7), 464-474.
148
Nguyen The dark side of CRM
Simonson, I. (2005). Determinants of customers responses to customized offers:
Conceptual framework and research propositions. Journal of Marketing, 69,
3245.
Thibaut, J. & Walker, L. (1975). Procedural Justice: A Psychological Analysis. Hillsdale,
NJ: Lawrence Erlbaum Associates.
Thomas, J. S. & Sullivan, U. Y. (2005). Managing marketing communications with
multi-channel customers. Journal of Marketing, 69(4), 239-251.
Verhoef, P. C. (2003). Understanding the effect of customer relationship management
efforts on customer retention and customer share development. Journal of
Marketing, 67(4), 3045.
Weiner, B. (1985). Spontaneous causal thinking. Psychological Bulletin, 97(Jan), 74-
84.
Xia, L., Monroe, K. B., & Cox, J. L. (2004). The price is unfair! A conceptual framework
of price fairness perceptions. Journal of Marketing, 68(Oct), 1-15.
About the Author and Correspondence
Bang Nguyen is a Senior Lecturer at Oxford Brookes University in Oxford.
His key areas of research include customer relationship management (CRM),
relationship marketing, buyer-seller relationships, consumer behaviour and
issues of fairness and trust. Bangs research examines how customers form
unfairness perceptions of firms marketing strategies/tactics. The objective
is to develop a framework for firms to consider so that a fair approach in
marketing and CRM can be implemented successfully. His research has a
direct application to any organisation with a CRM strategy. Bang has extensive
knowledge in retailing, marketing consulting and has presented at various
national and international conferences. Before joining Brookes, Bang worked
as a Lecturer for the Australian RMIT International University, and was based
at their international campus in Ho Chi Minh City, Vietnam, where he taught
both undergraduate and MBA level courses in Marketing Management.
Dr. Bang Nguyen, Senior Lecturer in Marketing, Oxford Brookes University,
Oxford Brookes Business School, Wheatley Campus, Oxford, OX33 1HX,
United Kingdom.
E b.nguyen@brookes.ac.uk
149
of Marketing Review is the property of Westburn Publishers Ltd or its licensors and its content may not be
copied or e-mailed to multiple sites or posted to a listserv without first obtaining the copyright holder's express
written permission. However, users may print, download, or e-mail articles for individual, non-commercial use
only. This article has been reproduced by EBSCO under license from Westburn Publishers Ltd.