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.