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September 1999


CRM Cannot Exist Without ERM And VRM

BY NADJI TEHRANI,
EDITOR IN CHIEF, EXECUTIVE GROUP PUBLISHER


On a number of occasions in these editorials, I have mentioned that outstanding customer service, customer care, customer retention and finally, customer relationship management (CRM) cannot exist without employee service and employee service management. The more I study what is going on in a majority of companies in corporate America, the more I come to the conclusion that my suggestions may have fallen on deaf ears. For this reason, I believe true CRM cannot exist if top priority is not given to employee relationship management (ERM). It is only logical. Why should an employee care about the customer if the company does not care about the employee? You may say that this is only common sense, but one of the greatest things I have learned in my life is that common sense is indeed uncommon. Every company that wishes to be progressive is talking about CRM, but I don't hear many companies talking about ERM!

In my view, this is the "chicken and the egg" situation. Before you can have eggs, you must have a chicken and, by the same token, before you have CRM, you must have ERM.

The other problem I see with CRM is most everyone seems to want to solve the CRM problem through technology. But in the final analysis, people like to talk to people. As a result, in marketing, we have gone from shotgun marketing to targeted marketing to one-to-one marketing. In fact, the entire business of telemarketing became an overnight success because it is such an effective way to communicate people-to-people, one-on-one, without the need to meet face-to-face.

Relationship Management
Relationship management and development must be, in my opinion, the main objectives of any CRM plan. Nothing in the business world is more powerful in culminating a business deal than having an unsurpassed relationship with the customer.

Not long ago, I visited a mid-sized (100 seat) call center and upon meeting the president of the company (who made most of the center’s major purchasing decisions), I noticed that he had purchased the least-known and perhaps less-proven technology products from a relatively unknown vendor. I asked the president, “How did you decide to buy this particular system?” He said, “I met with all of the sales and marketing staffs of competitive companies and I finally purchased the systems from Company X because I had a much better relationship with the salesperson representing Company X.” Need I say more?

My Personal, Firsthand Experience
Every company needs to have a strong financial institution behind it. Not just for a rainy day, but also for funding new products and services. Over the years, I have dealt with a variety of banks and other financial services companies and I was satisfied with none of them. Everyone had a major problem and above all, they wanted to loan me money when I didn’t need it and conversely, none of them wanted to loan me money when I needed it! I often wondered about the raison d’tre (reason for existence) for these institutions. If I didn’t need them, they were willing to lend me money, and when I needed them, they didn’t want to talk to me. Such was the case until I met a truly outstanding financial executive (interestingly, at our TCCS convention, which was the forerunner of our CTI™ EXPO). This gentleman took an avid interest in our industry and studied the call center, CTI and Internet teleph-ony areas and became extremely involved with our great industry over the years. We became good friends and developed an unparalleled relationship. What did he gain from this outstanding relationship? How about the lion’s share of our business! Unlike the banks, he is there when we need him and interestingly, he is there when we don’t need him. Unlike the banks, he appreciates our business and often offers unsolicited advice that has consistently saved us a tremendous amount of money. He has out-performed any other financial institution by lending us funds at a rate one point below prime rate. Most important, he offers us clever ways of financing our business and handling our financial matters in the most cost-effective and expeditious way. Last, but not least, he does not require us to sign documents ten inches thick. How did he gain the lion’s share of our business? Because he really works at CRM. No other vendor even comes close to this gentleman in terms of having a strong relationship with our senior management.

What About VRM?
As I indicated above, the first mistake corporate American management makes is not paying the necessary attention to employee relationship management. The second mistake is that even fewer companies (practically none) pay attention to their vendors. In my opinion, this is absurd, for without reliable, quality-conscious vendors, a company simply cannot exist. For example, among respected publishers, maintaining a church-and-state relationship between editorial quality/ objectivity and advertising is a vitally guarded, cardinal rule. Nevertheless, if the printer (who is a vendor) does not do a flawless job of printing or deliver your print jobs on time, the publisher is no longer in business.

We all recognize that every company is similar to the links in a chain: The company is only as strong as its weakest link. If the vendor link is weak, the company is weak. If the employee link is weak, the company is weak. If vendor and employee relationships are not addressed by management, the company will not have customers and thus there is no need for customer relationship management. Simply stated, a company cannot exist if CRM, VRM and ERM are not respected and addressed equally by senior management.

The Golden Triangle
I call the relationship between CRM, VRM and ERM the golden triangle on which the foundation of every successful business is based. There is no shortcut to this solution. Every link of every chain must be strong for the company to be strong.

During my travels around the United States and the rest of the world, I normally visit dozens of companies annually. I also interact with the CEOs of many of these companies. I have never heard any mention of VRM or ERM. However, almost everyone talks about CRM. Little do they know that without ERM and VRM, true CRM is nothing more than wishful thinking.

We Practice What We Preach
You might ask, Nadji, do you really mean it and do you practice what you preach? The best answer I could give you is to let the record speak for itself. Here is an unedited version of an e-mail we recently received from Mr. Paul Cheslaw, managing director of Latitude Communications, Ltd. of the U.K. Mr. Cheslaw discusses Technology Marketing Corporation’s customer satisfaction policy:
“TMC wins the customer satisfaction race and sets a new standard for delivery to Europe!

Being a frequent customer of many of the large online booksellers, I have to award TMC the Gold Medal for your service. I ordered two books late on Friday and they were delivered to me in London first thing on Tuesday morning! I know that customers in the U.S. take next-day delivery for granted, but those of us overseas are not so privileged. In fact, given that there was a weekend between order and delivery, you effectively managed to get my order to me in London in two days without my paying additional for prompt shipment. Compare that to eight days for one large online bookseller and an average of 14 days from another.
Please extend my congratulations for a job well done to all at TMC.”

Naturally, I remain grateful and ap-preciative of a job well done by all of Technology Marketing Corporation’s staff.

CRM…Not Just A New Technology, But An Evolution
While the human resource matters discussed above are clearly not fully appreciated, there seems to be a rush to develop CRM technologies by several new pioneering companies. We applaud these companies for their visions and understanding of the fact that CRM is not a luxury, but a necessity for competitive survival. During my career, I have learned that 75 percent of buying decisions by customers are based on emotion. As a result, in our highly sophisticated, high-tech world, we simply cannot afford to give CRM lip service only. Companies with great vision are devoting millions of dollars to this subject.

A Case In Point
I recently had the pleasure of meeting with three high-ranking managers from Oracle Corporation. During this meeting, I learned from Marcus Heth, vice president of call center and teleph-ony development, that Oracle has made a major commitment to CRM, call center and CTI technologies. For example, Mr. Heth informed me that Oracle now has a staff of 750 people addressing CRM development and management, plus an additional 100 engaged in the call center and CTI technology development group. Learning about this commitment by Oracle Corporation, which is arguably the world’s leading database company, gave me additional respect for Oracle’s vision of the true CRM evolution. Mr. Heth has been a friend of mine for the last 15 years, since the mid 1980s when Mr. Heth was a senior executive at a company known as N.P.R.I., which later became Versatility Corporation and was subsequently acquired by Oracle. I have asked Mr. Heth to write a sidebar describing Oracle’s vision and commitment to CRM. I urge you to read Mr. Heth’s sidebar for his informative views on current trends and technological developments.

I also suggest that you read the columns entitled “Remote Control” by Technology Marketing Corporation’s Dara Bloom, editor of TMCnet.com. The columns are available on our Web site at www.tmcnet.com.

Sincerely,

Nadji Tehrani
Executive Group Publisher
Editor-in-Chief
ntehrani@tmcnet.com 


Removing Complexity And Cost From Your Call Center Strategies

BY MARCUS HETH, ORACLE CORPORATION

As customer relationship management (CRM) becomes a leading topic in boardroom discussions, many companies are looking for ways to move their call center from simply handling calls on a one-off basis to becoming the cornerstone of their CRM initiatives. While technology has been seen as a facilitator for CRM, it has also made some aspects prohibitively complex, risky and expensive, especially in the call center.

As call center technologies have matured, companies have advanced the sophistication of their call centers to handle various customer interaction capabilities. Technologies such as computer-telephony integration (CTI), data mining, predictive dialing, inbound/outbound call blending and advanced scripting and business applications such as telesales, marketing and service have enabled call centers to move beyond traditional customer service to become revenue-generating business units.

Companies were quick to recognize the value of call center-enabled business applications and anxiously sought to integrate them into their existing call center operations. While this multi-vendor, multi-application integration approach may have advanced certain operations of a call center, it has also introduced serious problems that have prohibited bottom-line effectiveness.

With each new technology that is introduced, complexity and cost increase exponentially. Traditionally, each new “solution” has come from a separate vendor and required its own database and complex integration to existing applications, so companies looking to improve the performance of their call center have had to implement many disparate point solutions. While implementing a specific point solution may satisfy a particular problem, the piecemeal approach has several serious ramifications for the overall health of the call center. With each new point solution, the company unnecessarily increases risk, complexity and cost.

For example, every vendor’s point solution is on a different upgrade release cycle. How many times have we read about a company whose systems have crashed as the result of performing a simple software upgrade? With myriad different call center applications on the market — and the requirement to share data among them — changing just one software component can unleash a Pandora’s box of problems. Inevitably, these problems result in lost revenue and dissatisfied customers.

Additionally, the integration costs can quickly skyrocket out of control. Every point solution that is brought into a call center brings with it systems integrator’s consulting fees.

Another downfall of disparate point solutions is that valuable customer data are hidden within multiple databases. When critical customer information is not housed in a common repository, it is impossible to appropriately service customers. For example, in most instances, when a customer makes a purchase on the Web and then calls into the call center to follow-up on an order, he or she is required to explain the details of the purchase to the call center agent who has no visibility into the customer’s Web-based transactions. This transforms a sale into a negative customer service experience.

Also, with multiple, disparate point solutions, it is impossible to gather the insightful business intelligence necessary to accurately analyze your business or model different scenarios to make strategic decisions. For instance, in today’s world of multiple sales and service channels, it is paramount for a company to be able to accurately predict which customers will purchase which product at which price via which channel. But these types of business insights are unattainable in a multi-vendor, point solution call center architecture.

It becomes clear that the nature of the call center needs to evolve toward a unified — or synchronized — application approach, where applications are seamlessly pre-integrated for out-of-the-box functionality and customer data are transformed into actionable intelligence. The new model for the evolving customer interaction center is based on a single system — a single set of pre-integrated applications — which will decrease cost, risk and complexity. This new model will enable more meaningful interactions with customers and allow businesses to operate on knowledge and certainty, rather than be restrained by a complicated patchwork of multi-vendor applications.

Marcus Heth is vice president of call center and telephony development of the Customer Relationship Management division at Oracle. He may be contacted at 650-506-7000.







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