BREXIT Shows the Importance of Loyalty

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The recent BREXIT vote, and all that comes after it, has made me think a lot about customer service, but also about customer loyalty. Having just written a book on loyalty, it was top of mind, but more to the point, the Brits gave us a wonderful real-life experiment, largely about what not to do in a service situation if you expect loyalty. The BREXIT vote was about customer reaction to not having needs acknowledged or met, in my humble opinion, but it also showed us how far we've come in CRM.

Government doesn't have CRM at all practically. It has a 19th Century arrangement with the Fourth Estate to act as intermediary with its customers. The press delivers news, mostly correctly, but oddly there is no hard and fast stricture about this; one's freedom of speech comes before accuracy. And as far as government getting useful quantities of customer data to analyze goes, well, that's stuck in the 19th century too.

In the BREXITcase, the lack of useful data made it impossible to know how close the vote was likely to be, and government was no match for the yellow press accounts of how much better life would be after a vote to leave the European Union succeeded. No one expected the outcome, and even the leaders of the leave campaign began back-tracking their over-generous promises the day after the voting.

This sounds a lot like the bad old days before CRM in business. A company's reputation rose and fell on word of mouth, which wasn't always kind, but its effects were mercifully limited. When the Internet went mainstream, vendors began to realize how fast a negative opinion could travel. That's when CRM began to change; it's when we had to add data gathering or big data, analytics, omnichannel outreach, workflow, journey mapping, and all the bells and whistles that we almost take for granted now.

The natural experiment of BREXITshowed how far we've come from the bad old days and how far government still needs to go to be responsive in democracies today. But just as we've learned in CRM, we will no doubt have to re-learn when government inevitably adopts a more proactive CRM stance. CRM won't change things over night.

No amount of CRM could have saved the BREXITvote. It was toast when they set the date for voting. There was too much pent up frustration with the EU over real and not-so-real issues. People, be they customers or constituents, act quickly but change their minds slowly. CRM is most useful as a long-term tool for efficiently engaging with customers, and it could play the same role in government. But it has to be seen as a long-term fix and not pixie dust.

What went wrong with the old 19th century model is pure economics. News media used to make a tidy living selling ads, but most of that business went to the Internet for lower costs or even for free. The media was left to scramble for revenue and settled on chasing and covering the conflict around the news and less news. As a result, there was insufficient bandwidth for serious coverage or even debunking some of the more obviously fraudulent claims made by Boris Johnson and his peers. And the voters voted.

I am no politician, and I believe that Europe will get through this convulsion. But as a businessperson, I think this real-life experiment has provided a window into a huge CRM opportunity. Government needs to take on the functions of CRM, especially in customer outreach and service, but also in organizing communities for data-gathering and more.

Various people have been musing about CRM for government for a long time, and this event might push the idea across the finish line.

Denis Pombriant is founder and principal analyst at Beagle Research.