CRM Paradox

CRM Paradox

The CRM Paradox, also referred to as the "Dark side of CRM", ^[19] entails favoritism and differential treatment of some customers. This may cause perceptions of unfairness among other customers' buyers. They may opt out of relationships, spread negative information, or engage in misbehavior that may damage the firm. CRM fundamentally involves treating customers differently based on the assumption that customers are different and have different needs. Such perceived inequality may cause dissatisfaction, mistrust and result in unfair practices. A customer shows trust when he bonds in a relationship with a firm when he knows that the firm is acting fairly and adding value. However, customers may not trust that firms will be fair in splitting the value creation pie^[clarify] in the first place. For example, Amazon’s test use of dynamic pricing (different prices for different customers) was a public relations nightmare for the company.