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I've been noticing lately that everybody wants to have a close long-term relationship with me. That's right. They want to have a similar relationship with you too! At least that's the impression I get from companies selling the newest B-to-B software craze called "Customer Relationship Management" (CRM).

Companies like E.piphany (EPNY), Oracle (ORCL), Siebel Systems (SEBL), and Broadvision (BVSN) sell products that help "build, develop, and hook" customers into a relationship. They want deep knowledge about my buying behavior. In return, I get coordinated access to these companies via email, web, phone and whatever - a true "one-to-one" experience.

Now, I like having various ways to access and interact with Schwab (SCH), MediaOne (UMG), and other companies that use CRM. But is this a relationship? No, it's good service and that's what customers expect when doing business with these firms. Maybe the software should be called CSM for customer service management, but it's not. So be it.

But if a long-term relationship is what these companies promise, well that's another thing indeed.

RELATIONSHIPS AND ONE-NIGHT STANDS

Long ago marketing academics noticed that a company with a close customer relationship has it great because the customer will buy from the company forever and they are usually willing to pay higher prices. These have been called "Lost for Good" relationships.

CRM vendors' appear to promise their software solution will help companies develop this type of relationship with their customers. As an example, Epiphany promises "unbreakable, lifetime customer relationships."

Other customer relationships, however, are quite different because they look more like a one-night stand (or a series of one-night stands). A one-night stand is also a "one-to-one" experience, but it's not a long-term relationship. And like a one-night stand, customers in these relationships will buy, but you can bet they won't devote themselves to one company forever.

FOREVER RELATIONSHIPS SHOW MUTUAL DEPENDENCE

So how do you get a lost-for-good relationship? Well, academic research shows that a lost-for-good relationship is one that is "mutually dependent." That is, both parties perceive the other is dependent on them. The relationship is symbiotic. Think of a good marriage as an example.

Here's another example. For several years Dell (DELL) and Intel (INTC) have, to a large part, been mutually dependent since both have well-known brand names and, as a result, each needs the other to sell their products.

But in fact Intel can sell to a large number of box manufacturers, while Dell has traditionally bought only from Intel. So Dell is actually more dependent on Intel than vice versa. Research predicts that Dell might balance its dependency on Intel by looking around for other chips to use in its computers – which Dell has done. So much for a lost-for-good relationship.

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ABOUT THE AUTHOR

image of Allen Weiss

Allen Weiss is MarketingProfs founder and CEO, positioning consultant, and emeritus professor of marketing. Over the years he has worked with companies such as Texas Instruments, Informix, Vanafi, and EMI Music Distribution to help them position their products defensively in a competitive environment. He is also the founder of Insight4Peace and the former director of Mindful USC.