Ready for a real shocker? The single biggest opportunity in 2010 for innovation in Digital Marketing lies in the Digital Customer Relationship Management space, not in flashy widgets, genius iPhone applications or distributed (“viral”) campaigns. Traditionally CRM (as a service) has been a bit of a dull space and is mostly used for offline activities, mailings and low-level data mining. Agencies are often mistreating CRM as a stale database of customers and are not doing much with it other than spamming their customers over email. Not good enough!

Not surprisingly; the leaders in Digital CRM today are the likes of Google, Microsoft, Apple, Facebook and Amazon, who each sit on top of a huge treasure chest of invaluable user data. Just as an example; why is Apple able to provide you with a wealth of personal recommendations on which music you might like, but is Nike unable to tell me, which color shirt I might be interested in. Or, how come Facebook can (quite accurately) recommend companies or products I might be interested in, but is HP unable to recommend me a single printer on their website.

All of the above mentioned companies maintain expensive CRM systems, but only the first category (Apple, Facebook, etc.) is treating me as a real person with interests and friends. The second category (Nike, HP, etc.), often managed by their respective agencies, is only treating me as a visitor and is looking for clicks and impressions. Which one do you think will actually lead to more conversions in the long run?

A short case study

Meet Joe; a 16 yo basketball nut living in Seattle, who loves playing online games and spends most of his free time online. Over the last year, Joe has bought many Nike products, visited nike.com over a hundred times and left his contact details for a grand total of 4 times to enter all the lucky draws (never won a thing of course). Yet, each time Joe visits nike.com, the site treats him as a new visitor and he is forced to dig through the navigational structure to find the content he likes.

Building a new type of CRM

Let’s get to know Joe. By providing a single sign-on solution for all Nike properties, including campaign sites, we can start treating Joe as a real person and start tracking his interests, so next time Joe visits nike.com, he is not greeted by the generic front page, but with highly personalized content.

Having a single sign-on solution does not magically fix everything of course, as there has to be a real incentive for Joe to use it. This could be solved by attaching a “rewards” program to the CRM; something airlines figured out a long time ago. If Joe buys a product; have him register it and give him real rewards (virtual currency). Joe completes an online game on the latest basketball campaign site; excellent, more virtual currency for Joe! Joe recommends a product to his friends? Awesome, he’s building his social graph and without realizing it, by connecting with his friends, Joe is improving his own customer profile.

Next time Joe visits nike.com, we’ll be able to provide him with accurate product recommendations, updates (or even purchases) from his friends and opportunities for Joe to engage with new Nike web properties. And with his newly created wealth of virtual currency, Joe can unlock additional games, movies or other types content, buy Nike virtual goods to liven up his profile or exchange it for real Nike products.

Picking a winner and distributing success

Nike could opt to build a CRM on top of another provider’s single sign-on solution (Facebook for example), or build their own. Both have pros and cons, but I’m going to make a case for the latter; by building their own solution, not only does Nike control all the data, but it could be building a foundation for distributing its newfound success.

Executed properly, the single sign-on CRM plus “rewards” program could actually have the potential to mature into a rather large (sports focused) Social Network finding itself a real competitor to Facebook (for example), creating a much more lucrative business for Nike. The brand sure has the online traffic, loyal fan base and sponsorship ties to do some real damage in the space.

Thinking ahead, Nike’s single sign-on could evolve along the lines of that of its competitors by becoming a distributed solution for other web players. Nike, the next big social network, not a crazy thought after all.