Hindsight is a wonderful thing – especially if you are
in the customer relationship management (CRM) business. Seven or
eight years since the first customer management technology projects
went live, suppliers now acknowledge that many of their technology
implementations during this time have had disappointing
results.
Today’s modus operandi, where technology is only a part of the
whole approach to customer service, is reflected in the terminology
now in vogue. The acronym CRM remains widely used but the likes of
Oracle now talk about customer information ‘flows’, Siemens refers
to ‘integrated service delivery’ and BT has coined the term
‘customer management’.
“There’s an underlying feeling that, until now, CRM has not
delivered what was promised,” says Steve Fearon, head of CRM
Solutions at Oracle. “Many projects focused heavily on the
application alone. With the first wave of CRM, few companies
aligned their technology with their business processes.”
This ‘first wave’ of customer management projects came during
the internet boom, a period when a ‘gold rush’ mentality took over:
traditional business plans went out of the window and the cost of
IT projects went through the roof as organisations raced to roll
out over-ambitious software plans.
“There was a lot of scope creep,” says Tim Bishop, head of
strategic marketing at Siemens Communications. “Companies were
seduced into thinking they could cover all customer service issues
in one go and projects went way beyond their original
intentions.”
According to Phil Robinson, vice-president for marketing at CRM
vendor Salesforce.com, 50% of CRM projects started during this time
never went live, – 42% of software licences issued were never used.
“The technology just got in the way,” Robinson says.
But far from deterring customer management technology suppliers,
these failures have spurred them on. Customer service, retention
and adoption remain universal challenges for businesses and, having
learned from past let-downs; vendors now espouse a more holistic
approach to CRM, in which the technology is regarded as an enabler
rather than the solution in itself.
“Gone is the idea that CRM is about huge, monolithic systems,”
says Paul Younger, customer management application specialist at
BT. “CRM is now seen as a principle, as a way of dealing with
customers.”
In this new world, vendors are encouraging organisations to
think about all the steps and processes involved in selling to and
supporting customers, and only then implementing technology to
underpin it.
There is also a trend towards delivering quick CRM wins.
“Traditional CRM projects took more than two years on average to
show value – today companies want to see results within six
months,” says Richardson at Salesforce.com.
The move away from big software roll-outs and costly CRM
projects has also opened the CRM market to the small and
medium-sized enterprises (SMEs), previously deterred by the expense
and complexity CRM entailed.
According to Neil Morgan, vice-president EMEA at Siebel Systems,
this shift has been caused by the ubiquitous nature of the
internet, which has created a level playing field for medium-sized
companies competing with the large blue chips.
“As more business is conducted through the web, the size of a
company becomes less relevant. Today, whoever gives the best
customer service gets the business,” he says. “Smaller companies
tend to be run by shrewd entrepreneurs who recognise the importance
of personal relationships in business and want to replicate that
same close relationship with their customers.”
As the mid-market comes alive to the benefits of CRM, more
products aimed at this sector have been introduced, while smarter
technologies have made a broader selection of CRM solutions
possible.
Siebel has launched a cut-down Professional version of its
software for the mid-market, while Oracle offers over a dozen
modules of its CRM solution to allow you to build systems
incrementally.
Most technology vendors offer hosted CRM services and have been
joined by specialist application service providers (ASP) CRM
providers, such as Netsuite and Salesforce.com, who have
established themselves in the SME space. These take away much of
the start-up and maintenance costs associated with traditional CRM,
in some cases up to 80%, according to Salesforce.com; an important
consideration for you to take on board.
As the definition of CRM has broadened beyond software packages,
telecommunications providers have moved into the space, using
technologies such as advanced automatic call distributors (ACD),
advanced voice “Traditional CRM projects took more than two years
on average to show value – today companies want to see results
within six months” recognition and IP telephony, to offer call
centres greater functionality and more sophisticated customer
services tools.
According to Younger at BT, the vendor’s customer management
approach takes advantage of increased intelligence within
telecommunications and IT networks to offer an array of services.
You can now prioritise incoming calls from your most valued
clients, enabling you to offer them a premium service. Systems can
also recognise the origin of a call, enabling it to be diverted to
your nearest regional centre or preferred agent, while centres can
be configured to incorporate more agents at peak times to handle
increases in customer traffic.
Couple this with ‘call back’ technologies and unified messaging
practices, which create screen pop-ups for agents and automatically
e-mail customers confirming details of each call and, as Younger
says: “The formalisation of call centre practices becomes a major
differentiator in customer service.”
Ensuring that your company offers good customer service is a
no-brainer, regardless of the size of your organisation, and the
benefits are well-known and many: an improvement in customer
retention; increased profitability by up- and cross-selling; and
enhanced compliance with legislation through better control of
customer contact information are just some. However, through a
combination of prohibitive costs and the failure of some CRM
approaches to deliver in the early days, you may have until now
been reluctant to buy-in.
But having let the big boys make the mistakes first time round,
it’s time you looked again at the changing landscape of customer
management so you may profit from a catalogue of empirical
knowledge that has lead to a more sophisticated approach.