[From iSource Business, July 2001] When it comes to personal relationships, management might indeed be an unattainable goal. But that's not the case when the relationships are with your customers. There is a whole segment of the software industry devoted to managing these highly important relationships. Customer relationship management (CRM) is a buzzword that is gaining ever-increasing currency in the business world, particularly as the business world has shaken off the dot-com fog and rediscovered the importance of the bottom line. It makes more business sense to keep the customers you have rather than go on an expensive lead hunt for new ones.
David Rubin is a principal at DAA Technologies, a technology solutions provider focused on sales and marketing solutions, and he has some strong opinions on CRM: CRM can have a dramatic impact on the bottom line, if it's incorporated as part of a company's sales, marketing and customer relationship management strategy. But the key, according to Rubin, is to move those concepts from buzzword status into practical applications. CRM should be viewed as one of the tools in a company's revenue arsenal, not as a piece of stand-alone technology that will have some magical sales producing powers, he says.
The Other IBM
Rubin gives an example of the practical application of CRM, beginning with another hot buzzword: information-based marketing. The premise of information-based marketing is to promote a company by providing people with information that's of value to them, such as white papers and promotions. The Internet's semi-ubiquitous reach allows companies to better manage the information on which they base their marketing. In other words, companies are able to do things that they wouldn't normally be able to do using the traditional paper and pen methodologies.
Such utility isn't produced at the snap of a digital finger, however. Rubin says, It's not just plain plug-and-play. It's a commitment to a new type of marketing, a commitment to a new way of managing the customer relationship, that must be part of a company's strategy.
Who Moved My Information?
As information continues to become the common currency of the business world, the ownership of information also increases in importance. Rubin points out that CRM allows a company to own customer information, and own more in-depth information, instead of having it reside on a salesperson's mental hard drive. In the event of a salesperson leaving, the company now at least owns the history of who that customer is and what the customer does. This information can then be given to the next salesperson or to management, whereas in the past the salesperson literally owned the relationship in many companies. And, when the salesman left, there was always the danger of Who really knew who that customer was and what their needs were?'
But given the dehumanizing nature of computers, is CRM an affront to a sales force's perceived utility? Does the introduction of a CRM system mean that salespeople are commoditized, as easily replaced as a pack of sticky notes? Not necessarily. Rubin says that salespeople like CRM initiatives, provided they're done correctly and no one is overwhelmed with a quagmire of new technology. The problem is the training and the rollout. If you roll out too many features all at once, the danger is that you will overwhelm people and ask for too much information. Our general approach is to roll critical features out to salespeople first, and then slowly add more and more functionality to the system for the salespeople to use. If you do that, you generally have buy-in.
Cindy Jutras is vice president of product strategy at interBiz, the eBusiness applications division of Computer Associates International Inc., a company with some 1,750 clients. She says that one of the biggest problems with CRM is that, like the rest of the hot business acronyms, no one really knows what it means. Depending on who's doing the defining, Jutras notes that it can mean sales and marketing, sales force automation and lead tracking, or customer service applications. Some people are even talking about the analytics associated with deriving intelligence about customers. That's a broad spectrum of possible focus areas.
It's Jutras' opinion that customer intelligence is the crux of the CRM quandary, and she breaks that category into three functional areas: data gathering, data analysis and data integration.
Effective, maximized data gathering is important because there's so much information that companies already have about their customers that they're not already making use of. Plus, on the Internet there's an enormous amount of data that's available to companies that they're not collecting. If you find this hard to believe, pick one of your favorite Web sites and spend an hour or so exploring every page on that site. If you don't stumble on at least one information cluster you previously had no idea existed, then put this magazine down and head to Harvard. There's a fellowship waiting for you.
The second point, data analysis, is crystallized by Jutras' question: Now that you've got all the data, how do you make some sense of that, without going into information overload? Obviously, layers of information can mean an exponential increase in layers of complexity, and a commensurate struggle factor in dealing with that complexity. Effective CRM solutions should allow you to manage that accumulated data.
Making It Pay
The third area, integrating effective data, is the most important of Jutras' three-pronged approach. The crux of the crux, if you will. She gives two examples of this integration, beginning with the placing of a customer order. Because we have a neural learning agent that we can actually use to take all that data and predict what they want, how they're going to behave and how they're going to buy, we can take the analysis of that, apply predictive capabilities and make the interaction that much easier for them by personalizing it. Being predictive can pay off, and it sure beats relying on a scribbled note that says Mr. Malloy in Peoria likes blue ink pens only.
That data has to be integrated effectively into a company's business process workflow. Jutras says, We can do event notification and management and escalation, so we're not just creating some results and letting them set out in a database or on someone's screen, but we're actually taking those results and integrating them back into the business process. And each iteration of that integration results in more focused, personalized and effective business processes. Just as a grad student can digest more information than a freshman, the more a system learns the more it can learn.
Come Together, Right Now
Robb Eklund, vice president of Strategic Marketing for PeopleSoft CRM, says that the future of CRM is the interlinking of presently discrete units. Whereas today, organizations might implement installations that only benefit a specific department (one for sales, another for the help desk, for example), the time is coming when all those units will function as a whole. Things are moving toward linking all those interactions consistently, across the business, so that I don't have a separate siloed solution to support sales interactions that isn't coordinated with a support system.
The necessity for this interaction is obvious: there's a maze of information in which a customer can get lost. Eklund uses the example of an existing customer that comes into an organization to acquire a new product or service, and the company won't acknowledge that it's ever done business with the customer prior to that time. That's quite frustrating, and that's a missed opportunity for an organization, Eklund says. If you have a consistent understanding and visibility to a customer across the organization, there are a lot of up-sell and cross-sell opportunities that open up to you.
Eklund believes that the immediacy of the Internet has increased consumers' expectations of the companies with which they do business. In other words, there had better be a fast, easy-to-navigate system for a customer to place an order. He explains, With the Internet and all these advances in communications, customer expectations have risen. It's even easier to lose a customer because their information is getting more and more perfect. You not only need consistency in terms of your interaction with customers across your organization, but you also need to be consistent through all channels.