Envision a Walt Disney World where no one has to wait in line. Ride times can be booked in advance on the Web or a smartphone app.
At this Disney World, parents wouldn't have to wander the park searching for their child's favorite character. They could book an appointment with Mickey Mouse or Cinderella and -- like magic -- the character would greet the child by name.
Turnstiles, paper tickets and cash would be things of the past. Visitors would use data-encoded rubber bracelets to enter the park and buy food and souvenirs. The bracelets would also serve as room keys and parking passes.
You won't need to call the repairman -- the repairman will call you. That's the next generation of CRM -- not social, but digital CRM.
The concept may sound like it belongs in Tomorrowland, but Disney is rolling it out now. The bracelet is a prime example of what analysts call the next big wave of CRM: using digital technologies to enhance the customer experience.
Companies in all sorts of industries are increasingly relying on computers and technology to make their customers happier, said Mitch Lieberman, a consultant who has made a career of helping companies use digital technologies to enhance customer experience.
Electric companies are rolling out smart meters that track customer usage by the minute, eliminating the need for meter readers. Customers ostensibly benefit because, eventually, the smart meters will notify them via text when a dryer is running during peak rate times or advise them to shut off a washing machine during peak usage.
Appliance companies are unveiling refrigerators that keep track of expiration dates and food supplies, and notify the owner when there's a repair issue -- often before the person detects it.
"You won't need to call the repairman -- the repairman will call you," said Lieberman, managing partner of DRI, a Portugal-based consulting firm with U.S. locations in Vermont and New York. "That's the next generation of CRM -- not social, but digital CRM."
From digital CRM flows customer data
An Oracle survey released in February revealed that, on average, businesses estimate they'll spend 18% more in the next two years on technology designed to improve the customer experience. The survey, "Global Insights on Succeeding in the Customer Experience Era," collected responses from 1,342 senior executives in 18 countries.
These digital technologies are designed to keep customers happy and loyal, of course. Disney created the MyMagic+ bracelets to help make park visits more enjoyable by eliminating some of the hassles that arise while navigating a crowded tourist attraction. And Disney benefits because happy visitors tend to spend more and will return sooner.
But the technologies also help companies collect a ton of customer data that can be used to improve marketing. Suddenly, companies have a much clearer and broader picture of customer habits and preferences, knowing exactly what they're buying and when, or perhaps what they're doing at a given time.
Disney, for instance, will know which characters you interacted with and exactly how many hot dogs you ate -- information that can be used to lure you back. Disney declined to comment for this story.
A smart refrigerator by Samsung can tell you how to make the most of a hot dog meal. It offers recipe suggestions based on what's inside the fridge. The front of the appliance has a tablet with preloaded apps that track food and allow families to collaborate in the creation of grocery lists. If someone at home adds mustard to the list, another family member who is shopping can see the addition on a mobile device.
"Now I can use data and analytics to predict what you will like in the future," Lieberman said. "It's a value exchange. The customer experience is better and the company benefits."
Jim Dickie, managing partner of the Boulder, Colo.-based research firm CSO Insights, said the latest advancements in digital CRM also provide new sales opportunities. By contacting a customer when his or her refrigerator is broken, an appliance company has the opportunity to sell repair service or an extended warranty, he said.
"That's just another way of reaching the customer when they're likely to buy something," Dickie said.
The customer perks of digital CRM
Giant companies like Disney and Samsung are not the only ones making use of digital CRM. Dickie points to Jawbone, a San Francisco company best known for its portable Jambox speakers and Bluetooth headsets.
Jawbone's newest product, the Up wristband, tracks all of a person's daily activity, including steps taken and calories burned, as well as sleep statistics such as total hours of sleep and the amount of time spent in certain sleep cycles.
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Customers who choose to share that data with Jawbone get the curiosity-quenching benefit of being able to compare their stats to those of their peers, while Jawbone gets valuable data it can sell to gyms, health food stores, sleep clinics -- you name it.
Then there's 23andMe, a Mountain View, Calif.-based company that does DNA analysis on saliva samples sent in by mail. The customer finds out if he or she has an increased risk of colon cancer or Alzheimer's, but 23andMe has the right to store that information in a database and sell it to marketers.
This type of personal data collection is controversial, but consumers who don't like it can choose to opt out. At Disney, use of MyMagic+ bracelets will be optional, at least in the beginning.
Experts do caution that there should be limits to digital CRM.
For smaller companies, Lieberman suggests automating inefficient things that take time away from customers, but not direct customer interactions. Automate functions such as sharing email or making people aware of customer satisfaction issues, but don't automate Tweets or Facebook posts. Also, never outsource customer communications, he said.
This was first published in February 2013