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CRM Solutions for Customer-focused Businesses

Written by  James Haensly
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James HaenslyIssue:Asia-Pacific II 2001
Article no.:10
Topic:CRM Solutions for Customer-focused Businesses
Author:James Haensly
Title:Chief Technology Officer
Organisation:Avaya Asia-Pacific
PDF size:24KB

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Article abstract

Businesses everywhere are recognising the importance of managing customers as strategic assets and have begun focusing on superior customer service in the context of a long-term relationship as a means to attract, acquire and retain customers. Successful enabling of CRM begins through an understanding of today's key business drivers-top line growth through efficient and effective multi-channel customer relationships that leverage the full power of the enterprise.


Full Article

Telecommunications without applications makes as much sense, or noise, as the famous 'sound of one hand clapping.' A New Zealand-based financial services company, was established as an Internet gateway for customers who want to control their own financial destiny without the pressure often associated with financial planning and investment. According to the company's Chief Executive Officer "From a business perspective, the key driver was to offer consistency in delivery of both service and information, irrespective of the communications channel used by our customers. They can send us an email, phone us from a wired handset or cell-phone, or use voice over IP via our web-site. Our communications is seamless..." CRM systems are at the heart of this package. Australia's leading Internet travel company, intends to more than triple the success rate of its online booking services using an Internet Call Centre. By allowing clients to click through to talk to an online travel adviser at critical times during browsing, they believe many more people will complete their online travel purchases. "It's all about turning lookers into bookers," explains the travel agency's e-Business Systems Manager. By implementing advanced CRM systems the agency will quadruple the capacity of its communications hub and allow it to consolidate its offices in Sydney city, Parramatta and Adelaide onto a single network for handling travel inquiries. It will also allow a number of home-based consultants to be linked into the network. What do we mean by CRM? Customer Relationship Management (CRM) is a rapidly emerging business discipline being deployed as the best path to profitable growth by leading businesses worldwide. In the Asia-Pacific region alone more than 25 per cent of companies are currently investing in some form of CRM. But what exactly is CRM? Through a commitment to CRM, businesses serve their customers by managing a total relationship with their customers, rather than through individual transactions. Studies in the US show that businesses lose as much as 50 per cent of their customers every five years. Combine this fact with the consideration that a one per cent increase in customer retention can increase business profits by 25-30 per cent. It shows businesses that ignore effective CRM implementations will struggle to maintain a competitive, profitable edge in today's customer-focused business world. The goal of CRM is profitable growth through delivery of the right product or service, to the right customer, through the right channel, at the right time and at the right cost. The benefits of CRM are contained in results: top line growth, bottom line performance, and employee and customer satisfaction. Pursuit of these goals means aligning the entire enterprise around serving customers within a longer-term context and can begin from many vantage points. As businesses strive for greater expertise and the related support in systems and technology, it is becoming even more challenging to align the enterprise in order to meet the needs of the customer. Meeting customers' demand ranges from being available 24 hours a day, 7 days a week through the telephone, e-mail, the Internet, through to having accurate records of customer inter-actions and resolving issues quickly and with care. Statistics show that today in the US as much as 75 per cent of a business' interactions take place not through face-to-face contact, but through the Internet. As the popularity of the Internet grows globally, it is only a matter of time before similar customer interaction statistics are reflected in the Asia-Pacific region. As the range of products and services expand and customer demands increase the support systems and tools become the 'integrating factor' in the operations of the business. The ability for an employee, or self-service option, to serve the customer well depends on: o the speed and latency of the infrastructure moving the data to the person who needs it; o the data profiling tools to understand a customer's preferences rapidly; o well-constructed web interfaces and o the ability to manage it all as if the company is aligned around delivering on each customer's needs. The challenges that leading edge companies are tackling today are aligning the organisation and integrating the many transactions into a holistic view during each customer interaction. A commitment to CRM means moving beyond serving the customer in a transaction and sourcing new and improved tools and support systems that can link together the many pieces of the enterprise into an aligned delivery engine. CRM means that businesses can now match the customer's vantage point, perhaps for the first time. Customers, as front line employees know, see the company as an overall entity. When a customer contacts a business by e-mail, fax, or in person, these interactions are part of an overall impression of the business and how it delivers on its promises. Consistent delivery on these promises is the key to CRM. With multiple customer segments and multiple products and services, it is increasingly difficult to deliver the expertise required to keep the many promises a business is making every day. To do this and concurrently maintain a competitive cost is challenging. The solution to this problem is intelligent and proactive software that can manage various interactions and follow-up work items in a manner that aligns to the business goals and delivers the promises made, over and over again-which leads to attracting new customers and keeping them. The Reality In managing relationships with customers, organisations need to employ a range of processes and technology, usually from different sources. This requirement makes presenting a single holistic view difficult to achieve, unless a sound integration strategy is adopted. There are a variety of technology tools that are employed to help the organisation maintain relationships with customers. Much of the confusion about CRM lies here, because vendors of different types of software all lay claim to the title 'CRM Software' and therefore to all the benefits of CRM. It is worth noting that in the US alone, companies are expected to invest US$106.5 billion by 2004 in CRM solutions-such investment means there can be little margin for error when implementing CRM systems. The fact is that there is no one kind of CRM software, but a mixture of different tools and techniques required to meet CRM objectives. This raises two issues: o That there are certain functions that a CRM strategy requires software to perform, but vendors do not provide products that map directly to those functions. There is always a mixture of products required to fulfil such requirements; o That the integration to make it all work together is complex. Successful CRM strategies need both planning and execution. However, most organisations place emphasis on achieving this by one path only-either planning or execution. The fact is that both are necessary and there needs to be interaction between them to achieve the full potential of CRM i.e. 'closing the loop'. Such integration: o Automates the 'closing of the loop' between business processes for planning CRM strategy (for example, determining customer profitability, segmenting customers and the establishment of cross-selling rules) and the business processes in the front-office that implement such strategies (for example sales and support). o Establishes a definitive and consistent picture of customers, including past and present 'in progress' customer interactions. o Allows re-use of the effort required to build and maintain separate customer information for use by different software systems. There are many integration methods to implementing a CRM solution. However as the complexity of integration increases, long implementation lifecycles start to occur which may derail the organisation's CRM strategy. Along with the integration complexity comes the issues in CRM planning and execution: o Managing multi-channels and making it work with media: increasingly, customers are choosing how and when they wish to do business with the vendor, rather than the other way around. Moreover customers want the option to buy at the same time as they seek service and to seek support advice from sales. The complexity of this multi-channel environment has created a need for improved communication and information sharing-not just within departments or for a particular channel, but across all customer-facing functions and across all channels; o E-commerce: this business approach has the most significant impact on CRM strategy when an organisation uses e-commerce to sell to its customers; o It is important that transactions performed in e-commerce are captured and treated as part of the holistic customer relationship interaction. Customer records are updated accordingly and made available to all other channels. Effective CRM databases enable skilled employees to cross and up sell a company's goods and services tailored to a particular customer. Case studies have shown this CRM strategy can increase sales per order by up to 35 per cent; o The Web is another important medium for interacting with customers, especially if customers want to speak to a human being when the problem is urgent or because they do not trust the transaction media. Additionally organisations will want to talk to their customers to offer 'high touch' service or to chase non-payment; o Consistency of processes across all channels of interaction: there needs to be one consistent source of customer data, and one set of sales and support processes, regardless of the means by which customer interaction occurs; o Back-office integration: an organisation has functions that are not necessarily 'customer-facing', but that are still integral to managing an organisation's relationships with the customers. These include accounting and billing functions, product development or production, order processing and fulfilment and even information from human resources systems that may be important in dealing with a customer. For a complete view of the customer at the point of interaction, process-based integration between front office and back-office applications is necessary; o Productivity gains from automation versus true CRM: an organisation will achieve productivity gains that impact the bottom line by using sales force automation, call-centre soft-ware, customer service software and campaign management software. However, the realisation soon dawns that the best that can be achieved under this approach is productivity gains, not the larger benefit of business expansion promised by CRM. Achieving true CRM means that business processes are looked at holistically and that these processes are performed consistently across all channels with the ability to rapidly deploy them as the dynamics of business change; o A single logical view of data: a single, logical source of customer-data is vital. Typically, front-office and back-office software packages are provided with their own customer data models and associated implementation of a database. However, these software packages are never installed in isolation. All existing organisations have customer data and databases before they buy these software packages. In most cases, the organisation will install the software package as another 'island' of customer data, alongside existing ones. Clearly, this is contrary to the purpose of installing the software in the first place, which is to enable one consistent view of the customer across the organisation. Additionally, buying front-office and back-office software from the same vendor does not guarantee that these two suites necessarily use the same data model, or that they are well integrated. Conclusion Businesses everywhere are recognising the importance of managing customers as strategic assets and have begun focusing on superior customer service in the context of a long term relationship as a means to attract, acquire and retain customers. Successful enabling of CRM begins through an understanding of today's key business drivers-top line growth through efficient and effective multi-channel customer relationships that leverage the full power of the enterprise.

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