November 2000

Everything You Always Wanted To Know About CRM, But Were Afraid To Ask

BY NADJI TEHRANI

Almost all companies are talking about CRM/CIM, but few are getting it right so far, as we see in the news every day. Too many companies imagine they can bluff their way through good customer relationship management and, as a result, are failing. These companies view CRM, and especially eCRM, as a single element: e-mail only, for example. Most companies have installed auto-response software to acknowledge receipt of e-mail, but most of them do not follow up in a timely manner, if at all! E-mail ACDs are one way to route e-mail messages to the correct departments and agents, but more importantly, following up on an e-mail makes a huge difference in how a customer views a company.

The way I see it, the companies that are going bust for failing to provide good CRM are those that don't really understand what CRM is...it's not a packaged software solution, it's not e-mail management alone, it's not having a mission statement just stating that the company wants to improve its CRM. It's a whole management philosophy that everyone in the company must understand and embrace. Companies that do not realize this will fail sooner or later.

The good news is, the explosion of the CRM/eCRM market has meant many good things for customer interaction management. The telecommunications industry has been busy increasing the global bandwidth capacity and driving down the prices of voice and data communications. This means it is easier and cheaper than ever to implement a true distributed call center where a call or any other type of customer contact can land anywhere in the world and be dealt with by a live agent.

To present you with some fresh perspectives on the state of the CRM industry today and what you need to consider before purchasing CRM/eCRM products and services, I spoke with many of my esteemed colleagues here at TMC and asked their opinions on the subject. What I came up with is a wonderful collection of extremely valid points I think will help you in your pursuit of the ultimate CRM program.

E-Business Is Providing The Push
C@LL CENTER CRM Solutions' associate editor Randy Kemp made the point that it is e-business that has generated the driving need for improved CRM. More and more, e-businesses are requiring strong integration of e-mail, voice, phone and fax communications. Are you both short-changing and losing e-customers at your Web site because you are not taking advantage of (or even providing) customer-friendly, multimedia contact alternatives such as chat and voice over IP, Web collaboration (screen push and sharing) or customer self-help? Empowering your customers with self-help/self-service tools adds vitality to your e-business, eliminates addressing repetitive support and service issues (when combined with a practical knowledge base strategy), reduces substantial volumes of e-mail, phone and fax queries and provides your customers with a sense of control and satisfaction. And let's not forget that every query must be viewed as a potential sale or cross-selling lead. The bottom line is, loyal customers mean lower costs!

Needs Determination
Sometimes the hardest part of implementing CRM is figuring out what your company's requirements are. Customer service and relationship management should be primary considerations in your analysis. Is your current infrastructure supporting your sales and marketing efforts and customer retention and loyalty? Can your infrastructure grow with your business? Does it meet the goals of your business plan in the long run? Are there inefficiencies in your systems or applications that, due to legacy issues, will require costly investments to correct, and does the end (an upgraded legacy system/application) justify the means (spending a lot of time, money and resources)?

If you are maintaining data or knowledge bases and would like to realize greater efficiency and reduce or eliminate cost of ownership, evaluate data and information services that you can obtain from third-party sources (such as aggregated data service providers). Also, determine if your current infrastructure is providing a sufficient level of shared data and intelligence across your enterprise. Can real-time, business-critical information be accessed by all who need it? Integration with other systems and applications is important for providing Web-based sales, information and support. Can you link your customers, suppliers and employees through the Web?

What Do Your Customers Want? Your Employees?
Erik Lounsbury, editorial director of C@LL CENTER CRM Solutions, believes that before implementing a CRM program, you must first sit down and analyze how your current customer interaction systems function, how they affect each department, your suppliers, distributors and partners. You must also examine the customer/company interaction from the customers' point of view. Analyze what is most important to them and what questions they are asking. Next, find out which customers are the most profitable, which are the least profitable, and how they are segmented. You must also look at where the data is stored and work to integrate into the corporate knowledge base any data silos you may currently have so that whichever department needs the information can get it.

You must work hard to explain your plan, not only to management, but also to the team members who will be on the front line. Make sure that every department is included. While it may not seem to affect all departments directly, CRM should be an enterprisewide effort. Explain the long-term goals of the CRM plan and provide your employees with plenty of training. If they don't understand the technology or the goals of the company, chances are they won't be eager to contribute.

You Can't Bluff CRM Anymore
Chris Donner, editorial director of TMCnet.com's eNews In Your Inbox and contributing editor of Communications Solutions, believes that part of the challenge of CRM is that customer expectations have changed dramatically. He points out there is a significant difference between the way things were done 20 years ago, with the birth of our industry, and the way they are done now. When businesses first began using communications technology to interface with their customers, there was a sense of novelty present, for both the customers and the businesses. This novelty helped, at least to some extent, to "cover a multitude of sins." Customers were more likely to forgive errors simply because no one understood the systems with which they were interfacing. Ordering by phone, receiving customer service by phone, and being able to "talk" to a computer using a touch-tone phone was something novel, and to a certain extent enjoyable.

This is no longer the case. Business today must rush to keep up with the knowledge base and expectations of their customers. Your customers are increasingly likely to use the Web and e-mail as contact methods -- perhaps they have been using them for years. They have been expecting you to be accessible by e-mail or on the Web for quite some time. Now it is you who must catch up to them.

Additionally, as wireless technologies advance, the possibility that someone will be contacting you, or that you will want to contact them, in the most convenient manner at the time (rather than in the same manner that they originally contacted you) increases. People only need to communicate with you; they don't necessarily have to do it via the phone or e-mail or online. They will chose the method, and if you aren't ready, you will look foolish or behind-the-times.

In other words, no longer are businesses offering novel contact methods for their customers to enjoy. Instead, they are playing catch-up in hopes of meeting their customers' expectations.

What does this all mean? Well, for one, it means that you must have a CRM strategy before you consider making CRM purchases. You need to think like your customer. What are your customers' behavior patterns? Are they likely to be checking their order status regularly? How regularly? Are they likely to need help setting up a product, and then never need help again? Is this product something that requires continuous contact to be sure that they have the most recent version available and can take full advantage of what the product offers?

If your customer is going to need information from you regularly, you need to make that information available as easily as possible, to as many customers as possible. Your customers are going to expect to be able to access that information from their cellular phones, or at least via the Web. If/when they find out that they can't, they will be disappointed and will look to your competitors.

Interoperability Is Key
Since seekers of CRM and interactive customer service solutions desire greater interoperability with their existing infrastructures, manufacturers of these products have given integration and interoperability a greater priority in product development and enhancement. When examining various systems or software, find out how they will integrate with current systems, what the limits are as far as scalability, the ease or difficulty of upgrading and how they will be used by various departments.

Don't Forget The Less-Visible Elements
TMC Webmaster Vahid Hashemian pointed out that many of the most important elements to consider in buying CRM products are the features that you don't necessarily see on the surface, or features that may be up-and-coming. He provides some examples.

The backend. At the heart of any CRM process are databases. The problem with many new initiatives in Web and e-mail technologies is the fragmentation of those databases. As new methods of customer contact are devised, new databases are created to accommodate the data gathered. Unfortunately, the new databases are never synchronized with the existing databases, causing fragmentation, duplication and, ultimately, unreliable customer data. This means that a customer who orders a certain product by phone, mail or though the Web ends up in three separate databases. When that same customer places orders through the phone and then decides to check on his or her order on the Web, information may not be available. With new advances in distributed databases and XML technologies, companies can unify all their databases, allowing customers to access their information over any media they choose. This also simplifies a company's task of maintaining the databases, which in turn can drive down the cost of doing business and analyzing the customer activities.

A global village. We all know about skills-based routing, but as the world steams ahead toward a global economy, language-based routing has become an important factor in providing customer care. This also applies to other means of customer access as well, such as the company's Web site. While automated translation services are still in their infancy, there are translation services around that can handle the porting of a Web site to other languages.

Wireless. With the demand for wireless technology rapidly rising, no customer contact strategy is complete without a wireless strategy. WAP (wireless application protocol) has emerged thus far as the dominant protocol to disseminate information to wireless devices. WML (wireless markup language), which is based on XML, is the language of choice for designing wireless applications. New products allow real-time conversion between HTML and WML, which not only means savings for the company, but also presents a consistent interface for the customer.

Security. In the past few months, several companies have come forward admitting that their line of defense had been broken and crucial customer data (credit card info, medical data, etc.) had fallen into the wrong hands. This is perhaps one of the quickest ways to turn off customers from doing business with a company in the future. Firewalls, authentication schemes and rigid testing are musts for any company that wants to maintain a trusting relationship with its customers. Once that trust is broken, it may take a long time to repair.

Dot Com In Distress: Call In The Outsourcers!
C@LL CENTER CRM Solutions' managing editor Tracey Schelmetic points out that it's impossible to be all things to all people. Your company may make a fine product, or offer a superior service. You can handle the accounting functions, the warehousing, the marketing and advertising and even have an IT department to keep your internal systems up and running, but it is possible there is no way your small call center is going to be able to handle the broad array of media necessary to remain competitive today. Outsourcing may be the answer you seek. Just as in the old days, when a teleservices agency would make and take the multitude of telephone calls required to sell and service your product, there are CRM outsourcers available today that will not only make and take calls, but manage your inbound and outbound e-mail, process Web forms, browse collaboratively with your customers on your Web site (or your competitors'), take Web callback requests and engage in chat sessions. Can your company do all that? If the answer is no, you may need to call an outsourcer to your rescue.

Using Hosted Technology For Your CRM Services
If you can't do it all internally, but are not ready to let go of all your functionality to an outsourcer, consider a hosted solution. Laura Guevin, executive editor of TMC's newest magazine, Communications ASP, offered her viewpoint on purchasing CRM via the increasingly popular ASP model.

As you assess the many options available for your company's CRM solution, don't forget to consider an important new way to fulfill your needs -- the hosted solution. The application service provider (ASP) market is booming. Dataquest, Inc. (a unit of GartnerGroup) predicts the industry will grow to $25.3 billion by 2004. Many companies are turning to ASPs to fulfill their communication needs when the money, technology and personnel to deploy similar solutions in-house are just not available. Also, since the level of service provided with a hosted or outsourced solution is extremely customizable, customers can typically determine which components of a solution they would like to outsource, and what types of service guarantees they will require.

Once you have decided you would like to contract an ASP to supply some portion or all of your CRM technology, you must determine which services will best meet your needs. Are you looking for a soup-to-nuts solution that will take care of call routing, knowledge management, IVR, logging and call management? Or perhaps you already have a traditional CRM infrastructure in place and would like additional functionality such as integrated e-mail, text chat, voice over IP and even video conferencing. Or maybe you want to cut costs and are looking for a solution that can work with your current infrastructure to implement least-cost routing, perhaps over the Internet or a managed data network. Some companies are in the business of using their extensive network backbones to route your calls, faxes and data, saving you money on your monthly calling expenses.

The number of service providers already offering various components of hosted CRM is huge. They can provide outsourced call accounting services with a pricing structure based on the number of call stations served. You can also purchase everything from custom scripting to document collaboration services from a number of companies on a hosted basis. Some companies have begun to provide an overall integrated CRM solution.

Whatever type of hosted service you choose, make sure the pricing structure and service level agreement (SLA) are adequate for your needs. Also make sure the service will scale to meet your needs as your company grows. After all, with all the money you'll save by outsourcing valuable components of your CRM solution, your business is sure to expand more rapidly than you might have expected!

(Interested readers can learn more about TMC's new publication, Communications ASP).

A Resource For Your Needs
We know that keeping track of the CRM/CIM market is a confusing prospect. To help you, our readers, get a better idea of who does what in this marketplace, we have put together our first-ever "Who's Who In The CRM/eCRM Industry: A Compendium Of Industry-Leading CRM/eCRM Companies." The companies listed in this directory are ready and willing to assist you in all your CRM needs, whether you are establishing these systems in-house, going the hosted route or leaving it up to an outsourcer to handle.

A Lot To Think About
Your business is about making profits, and the financial rewards depend on how well you interact with your customers (in so many different ways) and achieve cost reductions that can help you maintain a competitive edge. The technology tools you select will, hopefully, optimize your front- and back-office operations, provide scalable service and support for customers and employees, and fulfill your business goals. Most important, always remember that CRM is an ongoing process.

I hope to see you at Communications Solutions EXPO at the Sands Convention Center in Las Vegas, December 7th through 9th, where among the many exciting features you will be able to attend CRM World, a new venture designed to provide our readers and show attendees with the latest information on customer interaction solutions.

As always, I would love to hear your thoughts and experiences.

Sincerely,

Nadji Tehrani
Executive Group Publisher
Editor-in-Chief

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