CRM technology designed to help online customers can just as easily be used against them

Eye for Travel’s web site on July 23 had an interesting story on customer relationship management (CRM) software called, “Spy on Your Customers (They Want You To).” The article detailed how Travelocity, locked in a head-to-head booking struggle with online rival Expedia, uses CRM to identify and instantly reach those customers most likely to respond to certain fares.

Online users don’t mind having detailed information about their preferences stored and retrieved, says Travelocity, if that data can produce lower fares and customized sales pitches.

Fair enough. CRM is the culmination of some nifty relational databasing. It’s a great tool in the hands of savvy retailers because it allows them to see and respond to each of their customers in a personalized manner.

Alas, like any technology, CRM can work the other way, too. Information gathered on buyers’ preferences can be sold indiscriminately. State and federal laws protecting against such sales are a mishmash and the issue of who owns personal information will be a major courtroom theme over the next 10 years. (Do you own all information about yourself and merely “lend” it to CRM users like Travelocity? Or does anybody who can get you to answer a question or fill in a box have the right to sell your responses to anybody who will pay the price? Or is there some ground in between?)

The technology could also be used against consumers in a bait-and-switch scenario. Say Company Y acquires enough information to know that Customer X has a disposable income of above $150,000 a year. Despite the fact that Customer X loves a bargain and is always searching for them online, he has also become habituated to the very thoughtful suggestions and menus of choices that Company Y constantly presents him.

So habituated (and so trusting) is he that he fails to detect it when Company Y begins sending him lists for goods or services that are priced just a tad higher than what he might find on his own. Company Y is so convenient, and has been so good to him that he has little reason to look closely to see if it is continuing to bring him the best possible deal. Multiply Customer X and those teeny bits of overcharge by a factor of hundreds or thousands, or millions and you have a sweet little bulge in the bottom line.

Surely companies in this day and age wouldn’t stoop to this? Well, much as we’d like to think that businesses and corporations – especially ones involved in high-volume, low-margin industries – will always act ethically, we know that is a hope better reserved for Utopia or the afterlife.

Finally, there’s a more abstract issue at stake here, but it’s just as important. Humans are creatures of habit. We tend to stick with what we know or like. CRM users can collect millions of bits of data about our preferences, but that’s all they can do. They can’t suggest anything outside the boxes that we ourselves construct for them. If they know we like vacations in Tuscany, the most daring thing they’ll ever do is suggest a vacation in Provence.

But they will never challenge us by suggesting something different. Because their real interest isn’t in challenging or stimulating us, it’s in doing those things to our pocketbooks.

We’re not Luddites. We know CRM is here to say. Still, we’re seeing another technology, like credit cards or the ability to “personalize” direct-mail pitches, that offers a lot of convenience and an element of “gee-whiz.” But in the end, no matter how many smiley faces it comes wrapped in, it helps to remember that CRM exists like those other technologies for one end: to separate people from their money.