The dark side of customer relationship management: Exploring the underlying reasons for pitfalls, exploitation and unfairness

• Published in: Journal of database marketing & customer strategy management Vol. 19; no. 1; pp. 56 - 70
• Main Author: Nguyen, Bang
• Format: Journal Article
• Language: English
• Published: London Palgrave Macmillan UK 01.03.2012; Palgrave Macmillan
• Subjects: Brand loyalty; Business and Management; Business ethics; Customer relationship management; Customer services; Internet; Marketing; Original Article; Prices; Social networks; Studies; Success; Trust; Virtual communities; Word of mouth advertising; fairness; trust; pitfalls; customer relationship management
• ISSN: 1741-2447; 1741-2439; 1741-2447
• DOI: 10.1057/dbm.2012.5

As customer relationship management (CRM) practices become increasingly sophisticated, there are great benefits but at the same time disadvantages that firms must consider. The aim of this article is to explore the dark side of CRM and to discuss the underlying causes. The article provides insights into understanding the essence of CRM. The misinterpretation of CRM and depletion of customer trust have resulted in customers perceiving themselves as being exploited by firms’ unfair CRM schemes. Further examination of fairness, trust and transparency is needed, as CRM schemes may pose a significant threat if they are over-used or misused. The danger of implementing CRM to lead customers to believe that they are worse off requires more research, especially in favouring certain customers over others. This article includes implications for the development of fairer CRM schemes by correctly conceptualising CRM to suit firms’ individual cases and by incorporating the essence of the good buyer–seller relationship. Indeed, incorporating fairness and trust into CRM will improve the quality of the marketplace. Customers will not feel mistreated and firms will not put themselves at risk of long-term failure. Theoretical contributions lie in the identification of issues related to CRM and differential treatment of/favouritism towards customers, and more importantly, the fact that these arise from two underlying areas, related to (i) the misinterpretation in the conceptualisation of CRM practices and (ii) the ambiguity of what constitutes good firm–customer relationships, which may lead to these negative perceptions.