Customer Relationship Management

Chapter 1:

What is CRM?

What's So Hard About Customer Service?

One person's excellent service may represent barely adequate service to someone else. What impresses one customer may make absolutely no impression on another. To complicate matters, what a customer believes to be good service in one context may be unacceptable in another situation or at another time. Service is perceptual; it is individualized; and it is situational. So how can you figure out what customers want from you in terms of service? The kind and level of service that you must deliver depends on who the customer is, what her expectations are, what experience she has had with you and other firms, what your strategy is and what role customer service plays in its delivery—along with a host of other things.

Many managers and executives are uncomfortable with this notion of variable service delivery; they would much prefer to be able to pin down service and to be able to standardize it so that it can be consistently delivered. But I don't believe service should be the same for everyone. In fact, the value of service as a relationship-building tool is its customizability. Simply out, some customers require and deserve better service than others. In some situations, you will want to be able to provide service that will impress customers so as to make an emotional connection. Whenever your employees can say to a customer, "Let me take care of that for you," you are delivering a higher level of service than the customer was expecting.

Yet customer service gets far less attention than it deserves in many companies, simply because managers do not realize or accept its importance in influencing customer satisfaction and loyalty. Many view customer service provision as a cost, rather than an investment. Many spend a great deal of time looking for ways to reduce that cost, without appreciating the impact it has on the customer's feelings toward the firm.

At the same time, managers tend to focus on what I call the functional side of service provision: the speed and accuracy of service delivery, in particular. Do we arrive on time? Do we have things in stock? Do we answer incoming calls within 20 seconds? These are the aspects of service with which managers in many firms are most comfortable, mainly because they are most easily and frequently measured in conventional customer satisfaction surveys. But they are a dangerously limiting view of service and not nearly as all-encompassing as the customer's view of service.

Four levels of service

Another element that gets in the way of impressive service delivery is management's very simplistic view of customer service. I can think of at least four levels of customer service, each of which involves the creation of progressively more emotional value for customers.

To the customer, service involves more than just the functional delivery of service (the first level, which, in a world where companies like FedEx have practically perfected technical service provision, customers take as a given). Customers care how easy you make it for them to communicate with you. This opens the door to a discussion of your phone system, your web site and your customer service center—not to mention whether customers can find someone to serve them in your store. Increasingly, when you keep them on hold for 20 minutes, don't respond to their email inquiries and ask them to deal with unknowledgeable and unhelpful staff, they will walk away.

At the third level, companies need to understand how customer service is linked to the people they employ. My experience suggests that customers are most likely to equate the notion of service with the way they are treated by employees. Finally, the level of service that customers experience is a powerful influence on how customers feel emotionally toward a company. Poor service can make a customer feel neglected, unimportant, frustrated, angry or even humiliated. Surprisingly good service leads to emotions such as comfort, relief, delight or excitement.

That holistic view again

Yet, many companies have a less-than-holistic view of their value proposition. Customer service must be seen to be an integral part of what we offer the customer. I recently encountered a major company that has separate marketing, sales and customer service departments, each of which prepares its own annual plan and sets its own budgets, without consulting with the others. In that firm, customer service is defined mainly as the operation of the call center. To the customer, service means much more.

It is far too simplistic to ask customers to rate your customer service on the predictable 10-point scale. It's much too complex a concept for customers to reduce it to a single number. You can't interpret it, anyway. So last month they gave us a rating of 8.1 on customer service. What does that mean? Very little. There's no direction on how we can improve. Anyway, the only people who are rating you are current customers. How would those customers who stormed out or hung up in disgust rate your customer service? You will never know. Yet theirs is a much more important number.

Customer service is not optional. It's not trivial. And it's not easily standardized. Don't make the mistake that one Canadian bank made of treating customer service as a promotion. That bank offered customers $5 if they had to wait in line more than five minutes in its branches. Customers were generally not impressed. To them, a wait time of five minutes was not the issue. Of course, wait time is important—but not nearly as important as being served politely and efficiently once you reach the counter.

Customer service is extremely complex, much like value, satisfaction and the increasingly popular customer experience. To apply such concepts effectively, management must appreciate their complexity. To utilize customer service to increase customer loyalty, to reinforce the positioning of the brand and to gain a competitive advantage, companies much have a strategy to guide its development and implementation.

What is Customer Relationship Management?

Before we begin to examine the conceptual foundations of CRM, it will be useful to define what CRM is. A narrow perspective of customer relationship management is database marketing emphasizing the promotional aspects of marketing linked to database efforts.

Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in which a variety of after marketing tactics is used for customer bonding or staying in touch after the sale is made.

Shani and Chalasani define relationship marketing as “an integrated effort to identify, maintain, and build up a network with individuals consumers and to continuously strengthen the network for mutual benefit of both sides, through interactive, individualized and value-added contacts over a period of time”.

In today’s hyper competitive scenario, more than three quarters of the money and time spent by companies go towards acquiring and retaining customers. Customer-centricity has become the buzzword and the ones with clear and relentless focus on customers, enjoy a better competitive position. This is proved time and again. Yet, companies go through meticulous processes to gradually and consistently mature into an “organization for the customers”. But, how would you mature into a customer-focused or customer-centric organization? The answer is: By reading and understanding your customers. Yes, this is all you need to do! And this you need to do not just once, but regularly and consistently over the lifetime of your customer and beyond.

Reading the customer demographics and understanding their needs (both explicit and implicit) is what customer insight is all about. Customer insight is the basic point or the foundation for building a customer centric organization. Everything in the value chain revolves around this. This is the raw material. This is more a conversion process rather, since the end product is Customer Loyalty! Over decades, many organizations had successfully completed the conversion process and tasted higher returns, most organizations miserably failed in their efforts.

Customer Insight goes through a set of processes to get converted into Customer Loyalty- the finished product. The set of processes include use of machine, process and people to obtain the final outcome - just like a manufacturing process in a factory. The machine here is technology - information technology to be precise, process - the custom made steps based on set objectives; and people - those who are trained to efficiently carry out the conversion process. This whole scheme of activities that begin from customer information and end in processes and interactions that result in customer loyalty - in entirety, is what CRM is all about.

CRM relies on customer data to create customer loyalty. The concept of CRM was again the result of an evolution born out of necessity. When companies understood the need to obtain and maintain customer data, which was exhaustive and scattered in nature and were desperately looking for a tool that could compile, preserve use the data in a way they want, technology came to the rescue with exclusive methods called data mining, data warehousing and thus data base management techniques were born. Technology is mechanistic and didn’t know what is required and what is not. A managerial tool was needed to perform the director’s role in order to decide the path and processes. Thus CRM was engineered as a tool to manage customer data using IT-enabled techniques.

CRM gives a framework for the activities. It decides on what to do - the objectives, what is required to do it - the resources, who should do it - the people, how to do it - the processes, how long to do it - the time frame. CRM could be ready made, tailor-made or hand made depending on the specific objectives it is set to achieve. CRM is unique in the respect that it follows a set of pre-determined processes to accumulate and manage customer data, which was hitherto unpracticed. Hence, CRM is defined as:

“Customer relationship management (CRM) is a business strategy to acquire and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes. CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy and culture.”

As is implicit in the above definition, the purpose of CRM is to improve marketing productivity. Marketing productivity is achieved by increasing marketing efficiency and by enhancing marketing effectiveness. In CRM, marketing efficiency is achieved because cooperative and collaborative processes help in reducing transaction costs and overall development costs for the company. Two important processes for CRM include proactive customer business development and building partnering relationship with most important customers. These lead to superior value creation. The basic concept is that the customer is not someone outside the organisation, he is a part of the organisation.

Purpose of CRM

CRM, in its broadest sense, means managing all interactions and business with customers. This includes, but is not limited to, improving customer service. A good CRM program will allow a business to acquire customers, service the customer, increase the value of the customer to the company, retain good customers, and determine which customers can be retained or given a higher level of service. A good CRM program can improve customer service by facilitating communication in several ways :

• Provide product information, product use information, and technical assistance on web sites that are accessible 24 hours a day, 7 days a week.
• Identify how each individual customer defines quality, and then design a service strategy for each customer based on these individual requirements and expectations.
• Provide a fast mechanism for managing and scheduling follow-up sales calls to assess post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase frequencies.
• Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion).
• Help to identify potential problems quickly, before they occur.
• Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved, and are a major source of customer dissatisfaction).
• Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction).
• Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction).
• Use internet cookies to track customer interests and personalize product offerings accordingly.
• Use the Internet to engage in collaborative customization or real-time customization.
• Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and effectiveness).
• The CRM program can be integrated into other cross-functional systems and thereby provide accounting and production information to customers when they want it.

Key CRM principles

· Differentiate Customers

All customers are not equal; recognize and reward best customers disproportionately. Understanding each customer becomes particularly important. And the same customers’ reaction to a cellular company operator may be quite different as compared to a car dealer. Besides for the same product or the service not all customers can be treated alike and CRM needs to differentiate between a high value customer and a low value customer.

What CRM needs to understand while differentiating customers is:

- Sensitivities, Tastes, Preferences and Personalities

- Lifestyle and age

- Culture Background and education

- Physical and psychological characteristics

· Differentiating Offerings

• Low value customer requiring high value customer offerings.

§ Low value customer with potential to become high value in near future.

§ High value customer requiring high value service.

§ High value customer requiring low value service.

· Keeping Existing Customers

Grading customers from very satisfied to very disappointed should help the organisation in improving its customer satisfaction levels and scores. As the satisfaction level for each customer improves, so shall the customer retention with the organisation.

· Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life stage and life event trigger points by customer, marketers can maximize share of purchase potential. Thus the single adults shall require a new car stereo and as he grows into a married couple his needs grow into appliances.

· Increase Loyalty

Loyal customers are more profitable. Any company will like its mindshare status to improve from being a suspect to being an advocate. Company has to invest in terms of its product and service offerings to its customers. It has to innovate and meet the very needs of its clients/ customers so that they remain as advocates on the loyalty curve. Referral sales invariably are low cost high margin sales.

Summarizing CRM activities

The CRM cycle can be briefly described as follows:

1. Learning from customers and prospects, (having in depth knowledge of customer)

2. Creating value for customers and prospects

3. Creating loyalty

4. Acquiring new customers

5. Creating profits

6. Acquiring new customers

Why CRM is necessary?

Several companies are turning to customer-relationship management systems and strategies to gain a better understanding of their customer's wants and needs. Used in association with data warehousing, data mining, call centers and other intelligence-based applications, CRM "allows companies to gather and access information about customers' buying histories, preferences, complaints, and other data so they can better anticipate what customers will want. The goal is to instill greater customer loyalty." Other benefits includes:

• Faster response to customer inquiries.
• Increased efficiency through automation.
• Deeper understanding of customers.
• Increased marketing and selling opportunities.
• Identifying the most profitable customers.
• Receiving customer feedback that leads to new and improved products or services

Benefits of CRM

Implementing a customer relationship management (CRM) solution might involve considerable time and expense. However, there are many potential benefits. A major benefit can be the development of better relations with your existing customers, which can lead to:

· increased sales through better timing due to anticipating needs based on historic trends

· identifying needs more effectively by understanding specific customer requirements

· cross-selling of other products by highlighting and suggesting alternatives or enhancements

· effective targeted marketing communications aimed specifically at customer needs

· a more personal approach and the development of new or improved products and services in order to win more business in the future

· enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow

· increased value from your existing customers and reduced cost associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales

Once your business starts to look after its existing customers effectively, efforts can be concentrated on finding new customers and expanding your market. The more you know about your customers, the easier it is to identify new prospects and increase your customer base.

Even with years of accumulated knowledge, there's always room for improvement. Customer needs change over time, and technology can make it easier to find out more about customers and ensure that everyone in an organisation can exploit this information.

History of CRM

Customer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990’s with the promise of forever changing the way businesses small and large interacted with their customer bases. In the short term, however, it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them.

In the last several years, however, newer software systems and advanced tracking features have vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the price of newer, more customizable Internet solutions have hit the marketplace; competition has driven the prices down so that even relatively small businesses are reaping the benefits of some custom CRM programs.

In the beginning…

The 1980’s saw the emergence of database marketing, which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a company’s customers.

In the case of larger, key clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs. In the case of smaller clients, however, it tended to provide repetitive, survey-like information that cluttered databases and didn’t provide much insight. As companies began tracking database information, they realized that the bare bones were all that was needed in most cases: what they buy regularly, what they spend, what they do.

Advances in the 1990’s

In the 1990’s companies began to improve on Customer Relationship Management by making it more of a two-way street. Instead of simply gathering data for their own use, they began giving back to their customers not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty.

This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking of customer activity and spending patterns. CRM was now being used as a way to increase sales passively as well as through active improvement of customer service.

True CRM comes of age

Real Customer Relationship Management as it’s thought of today really began in earnest in the early years of this century. As software companies began releasing newer, more advanced solutions that were customizable across industries, it became feasible to really use the information in a dynamic way.

Instead of feeding information into a static database for future reference, CRM became a way to continuously update understanding of customer needs and behavior. Branching of information, sub-folders, and custom tailored features enabled companies to break down information into smaller subsets so that they could evaluate not only concrete statistics, but information on the motivation and reactions of customers.

The Internet provided a huge boon to the development of these huge databases by enabling offsite information storage, where before companies had difficulty supporting the enormous amounts of information. The Internet provided new possibilities and CRM took off as providers began moving toward Internet solutions.

With the increased fluidity of these programs came a less rigid relationship between sales, customer service and marketing. CRM enabled the development of new strategies for more cooperative work between these different divisions through shared information and understanding, leading to increased customer satisfaction from order to end product.

Today, CRM is still utilized most frequently by companies that rely heavily on two distinct features: customer service or technology. The three sectors of business that rely most heavily on CRM -- and use it to great advantage -- are financial services, a variety of high tech corporations and the telecommunications industry.

The financial services industry in particular tracks the level of client satisfaction and what customers are looking for in terms of changes and personalized features. They also track changes in investment habits and spending patterns as the economy shifts. Software specific to the industry can give financial service providers truly impressive feedback in these areas.

In recent years however, several factors have contributed to the rapid development and evolution of CRM. These include: -

1. The growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technologies that allow producers to directly interact with end-customers. For example, in many industries such as airlines, banks insurance, software or household appliances and even consumables, the de-intermediation process is fast changing the nature of marketing and consequently making relationship marketing more popular. Databases and direct marketing tools give them the means to individualize their marketing efforts.

2. Advances in information technology, networking and manufacturing technology have helped companies to quickly match competition. As a result product quality and cost are no longer significant competitive advantages.

3. The growth in service economy. Since services are typically produced and delivered at the same institution, it minimizes the role of the middlemen.

4. Another force driving the adoption of CRM has been the total quality movement. When companies embraced TQM it became necessary to involve customers and suppliers in implementing the program at all levels of the value chain. This needed close working relationships with the customers. Thus several companies such as Motorola, IBM, General Motors, Xerox, Ford, Toyota, etc formed partnering relations with suppliers and customers to practice TQM. Other programs such as JIT and MRP also made use of interdependent relationships between suppliers and customers.

5. Customer expectations are changing almost on a daily basis. Newly Empowered customers who choose how to communicate with the companies across various available channels. Also nowadays consumers expect a high degree of personalization.

6. Emerging real time, interactive channels including e-mail, ATMs and call centre that must be synchronized with customer’s non-electronic activities. The speed of business change, requiring flexibility and rapid adoption to technologies.

7. In the current era of hyper competition, marketers are forced to be more concerned with customer retention and customer loyalty.

8. As several researches have found out retaining customers is less expensive and more sustainable competitive advantage than acquiring new ones.

9. On the supply side it pays more to develop closer relationships with a few suppliers than to develop more vendors.

10. The globalization of world marketplace makes it necessary to have global account management for the customers.

Chapter 2:

CRM Programs & Activities

CRM Programs

One-to-one Marketing

Meeting and satisfying each customer’s need uniquely and individually. In the mass markets individualized information on customers is now possible at low costs due to the rapid development in the information technology and due to availability of scalable data warehouses and data mining products. By using online information and databases on individual customer interactions, marketers aim to fulfill the unique needs of each mass-market customer. Information on individual customers is utilized to develop frequency marketing, interactive marketing, and aftermarketing programs in order to develop relationship with high-yielding customers. In the context of business-to-business markets, individual marketing has been in place of quite sometime. Known as Key Account Management Program, here marketers appoint customer teams to husband the company resources according to individual customer needs.

Continuity Marketing Programs

Take the shape of membership and loyalty card programs where customers are often rewarded for their member and loyalty relationships with the marketers. The basic premise of continuity marketing programs is to retain customers and increase loyalty through long-term special services that has a potential to increase mutual value through learning about each other.

Partnering Programs

The third type of CRM programs is partnering relationships between customer and marketers to serve end user needs. In the mass markets, two types of partnering programs are most common: co-branding and affinity partnering.

Missing process of CRM

Traditionally customer relationship management (CRM) revolves around the three functions of selling, marketing and support. Various process models have been built around how these functions are integrated and operated in a customer oriented enterprise. There is however a fourth critical function that is lacking in most CRM models.

The fourth function that often is the source of a competitive edge is that of innovation. Companies must continually reinvent themselves to deliver an improved and often a totally new value offering to their customer base. CRM must provide the customer intelligence that feeds information back into the enterprise’s knowledge management processes where it can trigger new innovation processes. When CRM is integrated into the innovation process, significant value can be derived from faster time to market cycle times and with new processes and services.

Marketing automation must ensure that the innovation processes are actually market driven. A market driven innovation process must include both strategies that are focused on satisfying customer requirements as well as strategies focused at redefining customer requirements. Sales automation should be integrated with the innovation process by ensuring that all sales channels are prepared and ready to take new processes and services to market before competitive forces can react. Customer service automation must be designed to empower the customer with the option of assisting with the design of the value offering. Redefining CRM around innovation, sales, marketing and service can identify new competitive opportunities for an enterprise.

The remaining question is whether companies are prepared to take the initiative and expand the definition of customer relationship management to include the process of innovation. The pressure to deliver results within the traditional definition of CRM already overwhelms companies. The dialog must start rather earlier than later because the competitive window of traditional CRM is decreasing and customer demands for a more innovative and responsive enterprise will increase

Architecture of CRM

There are three parts of application architecture of CRM:

• Operational - automation to the basic business processes (marketing, sales, service)
• Analytical - support to analyze customer behavior, implements business intelligence alike technology
• Collaborative - ensures the contact with customers (phone, email, fax, web, sms, post, in person)

Operational CRM

Operational CRM means supporting the "front office" business processes, which include customer contact (sales, marketing and service). Tasks resulting from these processes are forwarded to resources responsible for them, as well as the information necessary for carrying out the tasks and interfaces to back-end applications are being provided and activities with customers are being documented for further reference.

Operational CRM provides the following benefits:

• Delivers personalized and efficient marketing, sales, and service through multi-channel collaboration.
• Enables a 360-degree view of your customer while you are interacting with them.
• Sales people and service engineers can access complete history of all customer interaction with your company, regardless of the touch point.

The operational part of CRM typically involves three general areas of business:

· Sales force automation (SFA)

SFA automates some of the company's critical sales and sales force management functions, for example, lead/account management, contact management, quote management, forecasting, sales administration, keeping track of customer preferences, buying habits, and demographics, as well as performance management. SFA tools are designed to improve field sales productivity. Key infrastructure requirements of SFA are mobile synchronization and integrated product configuration.

· Customer service and support (CSS)

CSS automates some service requests, complaints, product returns, and information requests. Traditional internal help desk and traditional inbound call-center support for customer inquiries are now evolved into the "customer interaction center" (CIC), using multiple channels (Web, phone/fax, face-to-face, kiosk, etc). Key infrastructure requirements of CSS include computer telephony integration (CTI) which provides high volume processing capability, and reliability.

· Enterprise marketing automation (EMA)

EMA provides information about the business environment, including competitors, industry trends, and macro-environmental variables. It is the execution side of campaign and lead management. The intent of EMA applications is to improve marketing campaign efficiencies. Functions include demographic analysis, variable segmentation, and predictive modeling occurs on the analytical (Business Intelligence) side.

Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer. Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information of a customer in one place, a company aims to make cost savings, and also encourage new customers.

CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For example, you might be able to check your bank balance via your WAP phone without ever having to talk to a person, saving money for the company, and saving your time.

Analytical CRM

In analytical CRM, data gathered within operational CRM and/or other sources are analyzed to segment customers or to identify potential to enhance client relationship. Customer analysis typically can lead to targeted campaigns to increase share of customer's wallet. Examples of Campaigns directed towards customers are:

• Acquisition: Cross-sell, up-sell
• Retention: Retaining customers who leave due to maturity or attrition.
• Information: Providing timely and regular information to customers.
• Modification: Altering details of the transactional nature of the customers' relationship.

Analysis typically covers but is not limited to:

• Decision support: Dashboards, reporting, metrics, performance etc.
• Predictive modeling of customer attributes
• Strategy and research.

Analysis of Customer data may relate to one or more of the following analyses:

• Contact channel optimization
• Contact Optimization
• Customer Acquisition / Reactivation / Retention
• Customer Segmentation
• Customer Satisfaction Measurement / Increase
• Sales Coverage Optimization
• Fraud Detection and analysis
• Financial Forecasts
• Pricing Optimization
• Product Development
• Program Evaluation
• Risk Assessment and Management

Data collection and analysis is viewed as a continuing and iterative process. Ideally, business decisions are refined over time, based on feedback from earlier analysis and decisions. Therefore, most successful analytical CRM projects take advantage of a data warehouse to provide suitable data.

Business Intelligence is a related discipline offering some more functionality as separate application software.

Collaborative CRM

Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channels. It is a solution that brings people, processes and data together so companies can better serve and retain their customers. The data/activities can be structured, unstructured, conversational and/or transactional in nature.

Collaborative CRM provides the following benefits:

• Enables efficient productive customer interactions across all communications channels
• Enables web collaboration to reduce customer service costs
• Integrates call centers enabling multi-channel personal customer interaction
• Integrates view of the customer while interaction at the transaction level

Chapter 3:

Tools for CRM

Customer database

A good customer information system should consist of a regular flow of information, systematic collection of information that is properly evaluated and compared against different points in time, and it has sufficient depth to understand the customer and accurately anticipate their behavioral patterns in future. The customer database helps the company to plan, implement, and monitor customer contact. Customer relationships are increasingly sustained by information systems. Companies are increasingly adding data from a variety of sources to their databases. Customer data strategy should focus on processes to manage customer acquisition, retention, and development.

Call Centre

A call centre is a centralized office used for the purpose of receiving and transmitting a large volume of requests by telephone.

A call centre is operated by a company to administer incoming product support or information inquiries from consumers. Outgoing calls for telemarketing, clientele, and debt collection are also made. In addition to a call centre, collective handling of letters, faxes, and e-mails at one location is known as a contact centre.

A call centre is often operated through an extensive open workspace, with work stations that include a computer, a telephone set/headset connected to a telecom switch, and one or more supervisor stations. It can be independently operated or networked with additional centres, often linked to a corporate computer network, including mainframes, microcomputers and LANs. Increasingly, the voice and data pathways into the centre are linked through a set of new technologies called computer telephony integration (CTI).

Most major businesses use call centres to interact with their customers. Examples include utility companies, mail order catalogue firms, and customer support for computer hardware and software. Some businesses even service internal functions through call centres. Examples of this include help desks and sales support.

Systems Integration

While CRM solutions are front office automation solutions, ERP is back office automation solution. An ERP helps in automating business functions of production, finance, inventory, order fulfillment and human resource giving an integrated view of business, where as CRM automates the relationship with customer covering contact and opportunity management , marketing and product knowledge, sales force management, sales forecasting, customer order processing and fulfillment, delivery, installation, pre-sale and post-sale services and complaint handling by providing an integrated view of the customer. It is necessary that the two systems integrate with each other and complement information as well as business workflow. Therefore, CRM and ERP are complementary. This integration of CRM with ERP helps companies to provide faster customer service through an enabled network, which can direct all customer queries and issues through appropriate channels to the right place for speedy resolution. This will help the company in tracking and correcting the product problems reported by customers by feeding this information into the R&D operations via ERP.

Data Mining for CRM: Some Relevant issues

Data mining is an important enabler for CRM. Advances in data storage and processing technologies have made it possible today to store very large amounts of data in what are called data warehouses and then use data mining tools to extract relevant information. Data mining helps in the process of understanding a customer by providing the necessary information and facilitates informed decision-making.

Chapter 4:

Implementation of CRM

How to implement CRM

The implementation of a customer relationship management (CRM) solution is best treated as a six-stage process, moving from collecting information about your customers and processing it to using that information to improve your marketing and the customer experience.

§ Stage one - Collecting information

The priority should be to capture the information you need to identify your customers and categorise their behaviour. Those businesses with a website and online customer service have an advantage as customers can enter and maintain their own details when they buy.

§ Stage two - Storing information

The most effective way to store and manage your customer information is in a relational database - a centralised customer database that will allow you to run all your systems from the same source, ensuring that everyone uses up-to-date information.

§ Stage three - Accessing information

With information collected and stored centrally, the next stage is to make this information available to staff in the most useful format.

§ Stage four - Analysing customer behaviour

Using data mining tools in spreadsheet programs, which analyse data to identify patterns or relationships, you can begin to profile customers and develop sales strategies.

§ Stage five - Marketing more effectively

Many businesses find that a small percentage of their customers generate a high percentage of their profits. Using CRM to gain a better understanding of your customers' needs, desires and self-perception, you can reward and target your most valuable customers.

§ Stage six - Enhancing the customer experience

Just as a small group of customers are the most profitable, a small number of complaining customers often take up a disproportionate amount of staff time. If their problems can be identified and resolved quickly, your staff will have more time for other customers.

Types for implementing CRM

The final way to implement CRM is to find a full-service vendor of customer-service solutions, which might include phone assistance, e-mail handling, real-time chat and even creation of a knowledge base for your site. If you outsource your CRM, then you won't need any customer-service infrastructure, including customer-service representatives; however, you will need to make sure that your marketing teams can access the business-intelligence components.

§ Purchasing or Licensing Software

Owning the software and running it on your own servers is ideal if you have highly customized enterprise resource planning, or ERP, or order-management system, or OMS, software. If you have third-party software for your back-office processes (accounting, ERP, OMS, etc.) and your front-end systems (content management, merchandising, checkout, personalization engine), then you should be able to find CRM software that works with at least some of your systems without extensive customization. It's unavoidable that you will have to do some customization, but, by working with vendors that have partnerships and interfaces with your existing vendors and their software — or with vendors that have partnerships with the ASPs that host your existing solutions — you can keep customization to a minimum. Customization is not only expensive when you first install third-party software, but it's also expensive every time you try to apply a patch or an upgrade.

The advantages of purchasing or licensing the software and implementing it on your own servers are that you have complete control over the software and over the data. There aren't any of the privacy issues that might arise from having your data residing with a third party. If you already have a customer-service department with trained associates, and you don't expect rapid growth — or you believe you're equipped to handle rapid growth — then there's no point in paying to train CSRs elsewhere.

§ CRM Via ASP

Only recently have CRM services become available via an ASP. There are two kinds of ASPs providing CRM solutions. With one type, of which ShopTok is one example, the ASP hosts its own CRM software. The other type hosts a best-of-breed third-party solution. The disadvantage of the second type is that when something isn't working with the software, you don't always know whether the problem rests with the ASP or with the software, and you can't necessarily get it fixed. With ASPs that host their own software, the vendor hears your requirements for new features and your complaints about existing functionality.

When you work with an ASP, the first thing you'll want to know is the degree to which you can customize the interface and the software so that your other business software will talk to your CRM software. After all, your CSRs need to know what a customer has purchased to handle inquiries from that customer, requiring integration between the order-management system and the CRM system. If the customer database doesn’t talk to the CRM system, then your marketing department can’t segment customers based on purchases and use the analytical tools frequently built into CRM software to make intelligent decisions on what kind of promotions to make to attract the highest-value customers.

There are several advantages to either kind of ASP described above. First, the cost of getting started is usually low — certainly much lower than the cost of implementing software on your own servers. Second, the implementation time is usually short. Finally, no additional infrastructure or support are required from your IT department. However, some ASPs will tell you that they'll implement whatever CRM software you'd like (at your expense, of course), in which case you don't get to take advantage of speed, reduced cost, or experienced tech support. Rather than choosing the software and the ASP separately, let the software dictate the ASP you select.

§ Outsourcing Customer Service

While you can outsource customer service, which is one component of CRM, you can't outsource business intelligence, which is the strategic component of CRM. If you don’t need to integrate with existing systems, or you only need limited integration, then the fastest route to take is to outsource your customer service to a full-service provider who will give you Web access to the business-intelligence tools. Most full-service customer-service providers will work with the best-of-breed CRM vendors and offer you a choice of CRM systems with which to manage your customers. Some are also willing to purchase and install the CRM software of your choice on their servers, but be aware that this will eliminate the advantage of a quick implementation, lower entry costs and CSRs who already know the software. The cost associated with outsourcing CRM is usually a significant startup cost for developing your materials, their training materials and your knowledge base, then a monthly fee based either on the number of hours of CSR you want available or on the number of calls/messages they receive for your site. The pay-as-you-go model can be very attractive to smaller merchants. The ability to grow quickly can be an advantage for any size Web merchant.

Critical Success Factors for Implementation of CRM Systems

Critical success factors have been defined as the elements that make a project a success, and as the ‘events and conditions in a few key areas which absolutely must go right for the business to succeed’. These include trust, effective communication, and top management support. For this to occur, proper measurement tools and metrics must be utilized to effectively control the project. The key CSF for CRM projects are:

§ Key Stakeholder Support

Support from all stakeholders in the organization, including top management and all management levels, employees, government, suppliers, strategic partners, and investors. Includes the timely reporting of the project status with accurate information.

§ Sufficient Resources

Resources of money, equipment and expertise available with appropriate support structures in place. Includes time and budget allocations for training.

§ Clearly Defined Objective

A clearly defined mission with a set of defined goals and objectives communicated to all stakeholders through clearly defined communication channels, with alignment of project and corporate goals. This is managed through a detailed project plan.

§ Managing Change

Project changes are implemented through a formally defined process with appropriate approvals sought. Any scope changes are mutually agreed and documented, with appropriate analysis of resource requirements.

Challenges of CRM Implementation

Organizations face a number of key challenges in implementing CRM systems. These include:

§ Methodology driven by end users

IT personnel do not have knowledge or authority to influence corporate decision makers

§ Lack of executive sponsorship

CRM projects are mostly driven by a functional head, such as a VP or sales/marketing, and rarely produce an enterprise view of customers

§ Lack of customer centric culture

An acceptable return on investment will no be achieved if the organization does not have a strong customer centric culture

§ Inappropriate design approach

CRM is designed to model a single functional view not an enterprise wide customer view, resulting in failure

§ Over automation

Focus on functionality and process design leads to highly automated business functions Lack of network infrastructure Inadequate IT infrastructure and networking facilities prevent the CRM from being implemented enterprise wide

As can be seen from the challenges faced, it is important for organizations to realize that a CRM system implementation will only succeed when it is supported by a customer focused organizational culture. The CRM system will be the main driver for a paradigm shift, becoming an enabler for communication between the organization and its customers, and within the organization itself.

Chapter 5:

CRM Related Concepts

· Knowledge Management

Knowledge Management (KM) refers to a range of practices used by organizations to identify, create, represent, and distribute knowledge for reuse and learning across the organization.

Knowledge Management programs are typically tied to organizational objectives and are intended to lead to the achievement of specific business outcomes such as improved performance, competitive advantage, or higher levels of innovation.

While knowledge transfer (an aspect of Knowledge Management) has always existed in one form or another, for example through on-the-job discussions with peers, formally through apprenticeship, through the maintenance of corporate libraries, through professional training and mentoring programmes, and — since the late twentieth century — technologically through knowledge bases, expert systems, and other knowledge repositories, Knowledge Management programs attempt to explicitly evaluate and manage the process of creation or identification, accumulation, and application of knowledge or intellectual capital across an organization.

Knowledge Management, therefore, attempts to bring under one set of practices various strands of thought and practice relating to:

- intellectual capital and the knowledge worker in the knowledge economy

- the idea of the learning organization;

- various enabling organizational practices such as Communities of Practice and corporate Yellow Page directories for accessing key personnel and expertise;

- various enabling technologies such as knowledge bases and expert systems, help desks, corporate intranets and extranets, Content Management, wikis, and Document Management.

While Knowledge Management programs are closely related to Organizational Learning initiatives, Knowledge Management may be distinguished from Organizational Learning by its greater focus on the management of specific knowledge assets and development and cultivation of the channels through which knowledge flows.

The emergence of knowledge management has generated new organizational roles and responsibilities an early example of which was the Chief Knowledge Officer. In recent years, Personal Knowledge Management (PKM) practice has arisen in which individuals apply KM practice to themselves, their role in the organisation and their career development.

Knowledge Management is a continually evolving discipline, with a wide range of contributions and a wide range of views on what represents good practice in Knowledge Management.

Knowledge Management Plays a Key Role in CRM Success

CRM and knowledge management (KM) were once considered entirely different disciplines, with the two sharing little but perhaps the same data warehouse hardware and a vague understanding that both efforts were meant to improve business efficiency and customer satisfaction. It has become clear, however, that the two disciplines were really working toward the same goal, and that to deliver continuous improvement to business clients, they would have to start speaking the same language.

KM focuses largely on finding the right solution to a problem that requires detailed insight, be it locating the right expert at the right time, or ensuring that the solution to a complex problem can be written once but reused many times. It is not difficult to understand why that capability is of great interest to CRM strategists. Industry estimates suggest that upwards of three quarters of variable support costs come from the time and energy put into the resolution of customer support inquiries, rather than routing and post-call management.

Better KM/CRM integration can help companies navigate complex support problems more easily. Many manufacturers, such as computer companies, sell a single product that may incorporate dozens or even hundreds of other components. Being able to cross-reference the entire collected library for technical support and conflict resolution can make the difference between first-call resolution and a lingering headache.

Many companies still have not attained the level of deep integration that ties knowledge base activity (particularly at the self-service level) to a CRM-facing customer record, but companies like computer peripheral manufacturer Adaptec use the intersection of CRM and KM to guide product and service decisions and attempt to waylay customer service overloads before they begin.

Conquering their own individual demons will not mean the end of the road for CRM and knowledge management leaders, as they must join forces to realize even more value from the spheres of customer and product knowledge.

· Regain Management

“The cost of acquiring a new customer is 9 to 12 times that of holding on to an existing customer.” - Philip Kotler

Goal of customer regain management is to reinitiate valuable customer relationships, which have beenalready terminated. Regain management has to detect such ‘lost’ customers, select valuable relationships and attempt to regain them in an effective and effic ient way, for which a systematic process is necessary. Addition to this process structure, there is an information base needed, which enables the exchange of collected information along the customer regain process.

- An incentive strategy tempts to regain business relations by offering customers some form of incentives like for example tickets for events, gifts and discounts.

- A compensation strategy aims to compensate some (real or perceived) disservices, which as the motive for termination. For example the company could offer some form of vouchers.

- A dialogue strategy tries to regain trust through a dialog (e.g. personal call).

- A convincing strategy aims to persuade customers by means of use argumentations and

explanation of some product advantage.

· CRM in Supply Chain Management (SCM)

Supply Chain Management (SCM) is a business system of enterprise strategies, business processes and information technologies for improving the planning, execution and collaboration of material flows, information flows, financial flows and workforce flows in the supply chain. SCM is supported by modular software applications that integrate activities across organizations, from demand forecasting, product planning, parts purchasing, inventory control, manufacturing, product assembly to product distribution. In the context of SCM, where alliances and partnerships are keys to success, CRM plays an important role in building long-term relationships. The success of relationships depends upon sharing of savings from the supply chain, which may be reinvested to further enhance its efficiency, and sustain the competitive advantage.

The supply chain of tomorrow will look like a virtual organisation, seamlessly integrated through sharing data and savings as well. The bonding between partners will be closely held by CRM practices.

Goals of SCM

- to reduce inventory cost,

- to increase sales

- to improve the coordination and the collaboration with suppliers, manufacturers and distributors.

· CRM-ERP Integration

ERP’s foundation (which evolved from either manufacturing-based manufacturing resources planning (MRP) applications and its later incarnation, MRPII applications), it is based on creating internally stable business functions and predictable process control. The concept of ERP was the integration of all back-office functions so that the basic problems responsible for interruptions and breaks in the processes were smoothed out and the incompatibilities of the best of processes were smoothened and the incompatibilities of the best-of-breed applications were eliminated or reduced. This doesn’t work with CRM, which is external. How can you be in command of the processes when they are based on your customers’ behaviour? Conceptually, one important reason for CRM is real-time response to the constantly liquid-shifting of customer demands, which is not controlled internally at all. It also means the psychology of the front-office is quite different from the psychology of the back-office.

The simplest option is to hire a systems integrator to come in and integrate the systems. However, the obvious hazard here is that they are not only dealing with ERP and CRM applications they may not know much about, they are also dealing with your legacy systems, which they know nothing about. But integrating all of that is what you could hire the ERP vendor for and implement the ERP vendor’s CRM solution. But many of the solutions remain vapourware or poorly integrated. The third solution is what many companies are increasingly turning to Enterprise Application Integration (EAI).

EAI applications, previously known as middleware, can be the most cost-effective way of integrating the back and front offices. EAI’s purpose is mainly to integrate data between disparate applications that don’t natively speak with each other.

What is eCRM?

In simple terms, eCRM provides to companies a means to conduct interactive, personalised and relevant communication with customers across both electronic and traditional channels. It utilises a complete view of the customer to make decisions about messaging, offers, and channel delivery. It synchronises communications across disjointed customer-facing systems. It focuses on understanding how the economics of customer relationships affect the business. Advocates of eCRM recognize that a comprehensive understanding of customer activities, personalization, relevance, permission, timeliness and metrics is a means to an end optimizing the value of your most important asset: your customers.

For Fortune 500 companies, evolving to eCRM requires process and organisational changes, a suite of integrated applications and a non-trivial technical architecture to support both the eCRM process and the enterprise applications that automate the process. Mid-size companies may benefit from less sophisticated and easier-it-implement (and affordable), hosted solutions offered through Application Service Providers. But regardless of the size of the firm, you have no choice but to evolve to eCRM quickly.

eCRM v/s CRM: The Differences

Being able to take care of your customer via the Internet, or, customers being able to take care of themselves online: That’s the difference between CRM and eCRM. It implies a myriad of issues, questions, approaches, technologies, and architecture that are different from client/server-based CRM. Many of them are issues general to the Internet. Others are issues related to the creation of applications for the Internet. The third group is related directly to eCRM and its actual value to business.

Companies agree that eCRM is critical to their business, but unfortunately very few understands exactly what it is or how to evolve from their existing database marketing practices to an eCRM solution.

Basic Requirements of eCRM or Six “E” of eCRM

• Electronic Channels

New electronic channels such as the Web and personalised eMessaging have become the medium for fast, interactive and economic customer communications, challenging companies to keep pace with this increased velocity.

• Enterprise

Through eCRM, a company gains the means to touch and shape a customer’s experience across the entire organization, reaching beyond just the bounds of marketing to sales, services and corner offices – whose occupants need to understand and assess customer behaviour. An eCRM strategy relies heavily on the construction and maintenance of a data warehouse that provides a consolidated, detailed view of individual customer behaviour and communication history.

• Empowerment

In this new age, eCRM strategies must be structured to accommodate customers who now have the power to decide when and how to communicate with the company and through which channel, which ability to opt for or out of. Consumers decide which firms earn the privilege to “talk” with them.

• Economics

Too many companies execute communication strategies withlittle effort or ability to understand the economics of customer relationships and channel delivery choices. Yet customer economics drives smart asset allocation decisions, directing resources and efforts at individuals likely to provide the greatest return on customer communication initiatives.

• Evaluation

Understanding customer economics relies on a company’s ability to attribute customer behaviour to marketing programs. A company should evaluate customer interactions along with various customer touch point channels and compare anticipated ROI against returns, through customer analytic reporting. Evaluation of results allows companies to continuously refine and improve efforts to optimise relationships between companies and their customers.

• External Information

The use of consumer-sanctioned external information can be employed to further understand customer needs. This information can be gained from sources such as third-party information networks and Webpage profiler applications, under the condition that companies adhere to strict consumer opt-in rules and privacy concerns.

The Need to Adopt eCRM

Companies need to take firm initiatives on the eCRM frontier to

· Optimize the value of interactive relationship.

· Enable the business to extend its personalized messaging to the Web and e-mail.

· Co-ordinate marketing activities across all customer channels.

· Leverage customer information for more effective eMarketing and eBusiness.

· Focus business on improving customer relationship and earning a greater share of each customer’s business through consistent measurement, assessment and “actionable” customer-contact strategies.

Chapter 6:

Problems and Drawbacks

There are several reasons why a customer relationship management (CRM) solution might not have the desired results.

There could be a lack of commitment from people within the company to the implementation of a CRM solution. Adapting to a customer-focused approach may require a cultural change. There is a danger that relationships with customers will break down somewhere along the line, unless everyone in the business is committed to viewing their operations from the customers' perspective. The result is customer dissatisfaction and eventual loss of revenue.

Poor communication can prevent buy-in. In order to make CRM work, all the relevant people in your business must know what information you need and how to use it.

Weak leadership could cause problems for any CRM implementation plan. The onus is on management to lead by example and push for a customer focus on every project. If a proposed plan isn't right for your customers, don't do it. Send your teams back to the drawing board to come up with a solution that will work.

Trying to implement CRM as a complete solution in one goes is a tempting but risky strategy. It is better to break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones. Consider starting with a pilot project that incorporates all the necessary departments and groups but is small and flexible enough to allow adjustments along the way.

Don't underestimate how much data you will require, and make sure that you can expand your systems if necessary. You need to carefully consider what data is collected and stored to ensure that only useful data is kept.

You must also ensure you comply with the eight principles of the Data Protection Act that govern the processing of information on living, identifiable individuals. For more information, see their guide on how to comply with data protection legislation.

Avoid adopting rigid rules which cannot be changed to be more flexible to the needs of individual customers.

Reasons for CRM Implementation Failure

An understanding of the challenges and critical success factors is paramount to project success. In this way, the organization is aware of those factors by which success can be measured, and will ensure the CRM system is implemented in a manner to satisfy all stakeholders. The main reasons for CRM failures include:

§ Customer focus

Organizational culture is not customer focused, with limited involvement of customer facing personnel in the design and implementation phase

§ Organizational Management

Lack of support and understanding form senior management, lack of CRM understanding, lack of communications and changing business needs

§ Project Management

Misalignment between project and business requirements, with unrealistic goals, timelines, coupled with a lack of planning and insufficient reporting and control

§ Team Members

Lack of support, incentives, and lack of technical knowledge

§ Data & Warehouse Requirements

Poor quality data, inconsistent data between different systems

§ Technical Factors

Short term solution focus not aligned to long term architectural infrastructure growth, no prototyping or testing, misunderstanding technical requirements.

CRM is failing because the correct capabilities are not being built at the enterprise level. The requisite changes in organizational culture, behavior and attitude are not being implemented. Overall, in failed projects, there is little or no alignment between stakeholders on success criteria, critical success factors, performance metrics, project drivers, nor on the dynamics of how these parameters may change over the project life cycle. The requirements of the customer are either misunderstood, or not taken into account. The result is an inconsistency in focus, with less than optimum system design and implementation.

Hence CRM is failing due to two primary reasons: a) technical; due to the size, complexity, and lack of knowledge of technology, and b) human behavior; due to general change management issues in the organization. What is required is a coherent, all encompassing strategy that focuses on key stakeholder requirements. Companies underestimate the complexities of CRM projects, lack clearly defined business objectives, and tend to invest inadequately in the provision of CRM software.

Chapter 7:

CEM: Future Concept

Customer experience management (CEM) is "the process of strategically managing a customer's entire experience with a product or a company"

Marketing research has shown that about 70 to 80% of all products are perceived as commodities that are, seen as being more-or-less the same as competing products. This makes marketing the product difficult. Marketers have taken various approaches to this problem including: branding, product differentiation, market segmentation, and relationship marketing.

Relationship marketing, (also called loyalty marketing) focuses on establishing and building a long term relationship between a company and a customer. There are several approaches that have been espoused including customer experience management, customer relationship management, loyalty programs, and database marketing.

CEM's critique of traditional marketing

The development of customer experience management originally started with a critique of three existing marketing concepts. It concluded that the following three concepts do not go far enough:

• Marketing concept--Since the 1970s there has been a gradual shift from a product-, technology-, and sales-focused orientation towards a customer- and market-oriented approach by determining the wants and needs of customers and satisfying them more efficiently or effectively as compared to competitors. However, the approach is still mostly functional, with similarities and differences between competitors being defined mostly by product features and customer benefits. In addition, the customer is perceived as being rational, which is in most cases not the case, as e.g. Kahneman and Tversky's Prospect theory has proven. Also, it is asserted that market research is mostly analytical leaving little room for qualitative assessments of customer relationships towards products, services, or brands. It is claimed (by Shultz) that traditional marketing, in practice, takes an inside-out approach (starting with internal variables like production capabilities and available capital then moving to external variables like customer needs), rather than taking an outside-in approach as marketing theory requires.
• Customer relationship management is claimed to be deficient because it primarily consists of database and software programs used in call centers and thus, focuses too much on quantitative data. By doing this, it is led by transactions rather than a desire to build lasting relationships with customers.
• Customer satisfaction is an outcome-oriented attitude deriving from customers who compare the performance or value of the product with their expectations of it. It is claimed that the customer satisfaction approach depends too heavily on outcome oriented measures like satisfaction and too superficially on direct experiential measures. A customer is said to be satisfied when a product's performance is above the customer's expectations. Thus, traditional customer satisfaction techniques are deficient if they don't help firms to understand and manage customers' experiences, experiences that lead to the following equation: good experience = satisfaction.

CEM recognizes, as does all of marketing since the early 1970s, that customers are a company’s most valuable asset. What makes CEM different from traditional marketing is that it claims that marketing theory has seldom been implemented adequately.

Although all marketing management and strategic management does all of these, CEM supporters claim that they have a methodology that will yield better results. Being convinced that the marketing concept is too product-centered, Customer relationship management too focused on quantitative data, and customer satisfaction too functional, CEM looks for another perspective on the relationship of a consumer with a product or service. And what's key? The experience linked to it is the key. This enables companies to strategically manage a customer's experience with a brand and by doing so, achieve a truly customer focused management concept.

The CEM Framework

Schmitt's book "Customer Experience Management" offers the following five step framework that should help managers understand and manage the "customer experience":

Step 1: Analyzing the Experiential world of the customer

• analyze socio-cultural context of the customer (needs/wants/lifestyle)
• analyze business concept (requirements/solutions)

Step 2: Building the Experiential platform

• connection between strategy and implementation
• specifies the value that the customer can expect from the product.

Whereas steps 1 (Analysis) and 2 (Strategy) form the basis for CEM, steps 3, 4, and 5 are focusing on Implementation.

Step 3: Designing the Brand experience

• experiential features, product aesthetics, “look and feel”, e.g. logos

Step 4: Structuring the Customer interface

• all sorts of dynamic exchanges and contract points with customers
• intangible elements (i.e. value, attitude, behaviour)

Step 5: Engaging in Continuous Experiential innovation

• anything that improves end customers' personal lives and business customers' working lives

And finally, to bring all pieces together, a holistic approach is required that provides a linkage between the different steps and connects them with the organization.

How Does CEM Technology Work?

CEM Technology captures customer experience information across all customer touch points and feeds it back to the organization so that action can be taken to improve profitability. At the beginning or end (or both) of an interaction, and within context, the customer is invited (automatically or manually) to provide their perspective via four or five short questions. Done properly, this process will result in better than 80% customer participation and have a measurably positive effect on customers.

Whether phone, email or Web channels, the experience information is collected within context of the interaction. The questions that are delivered to the customer are specific to that interaction type; the people, products, and processes that were a part of the interaction; and the customer. The questions are also conditional in nature and facilitate both quantitative as well as qualitative experience information.

CEM Technology accesses existing CRM data, productivity metrics, and incorporates key information related to customer behavior and profitability. Information such as retention rates, average purchase amounts, store sales, complaint and resolution rates, customer segments, etc. are all combined with customer experience information and analyzed/reported in real-time. The strength of a CEM system is in its ability to continually align company performance with customer needs and behaviors, enabling companies to make effective, correct, and critical day-to-day adjustments in resource allocation and execution — as well as enterprise-wide shifts in strategy.

Customer Experiences can be categorized into three unique states. The state of the customer experience has implications on the type of information to communicate with and collect from customers. The three states of Customer Experience are: Normal Experience, Critical Experience, and Unique Experience.

Fig. Managing Customer Interaction

CEM Versus CRM

Managing customer experience is a subject of lip service at many companies; contact centers learning that it's about more than efficiency

Despite some confusion and marketing spin though, customer experience management (CEM) is emerging as a way companies can look in their own back yards to leverage CRM for qualitative as well as quantitative insight into interactions that improve opportunities for customer loyalty and new sales.

CRM starts with vision and strategy. The next layer down is collaboration and valued customer experience. You can't have CRM unless the organization works well together, and you can't have CRM unless you create a great customer experience. So CEM is a part of CRM, it's not separate and distinct.

Caching the Experience

If you've ever heard a voice say, "This call may be monitored for quality assurance." you've been part of the CEM experience. As it applies to the contact center, CEM is about capturing (recording) interactions between agents and customers and applying business rules to them.

Initially, CEM was used as a coaching and training tool, game film of how we did and how we can improve. It's more multimedia now. CEM is still important to trigger gap-training or e-learning sessions for agents, though newer goals of up-selling, cross-selling and surveying are also at work. CEM solutions like Witness or NICE integrate with CRM applications like Siebel, or with case management products like Remedy. Contact center agents listen to a call and appropriately enter keywords like "cancellation" or a product name into the CRM system; business rules trigger the CEM system to digitally record and file the conversation for specific owners like product or marketing managers. Alerts can be sent, or files can be listened to at their owners' leisure.

Toni Portmann is president of Spectrum Contact Services, a Texas-based outsource service provider that manages one million calls per month for large software firms and ISPs. Spectrum uses CEM technology from NICE Systems. While the contact center might deal in hundreds of products, a query lets managers tap a single point of interest and monitor the recorded calls. Training and supervisory review of calls helps team leaders spot opportunities for agents to use the inquiry to increase loyalty. While some customers are reluctant to be up-sold or surveyed, indicating interest in another product or service. That means relationships should be built on a proper foundation that brings the customer into the discussion. "He doesn't want to be polled every day, let's start with listening. When he calls, he's the best consultant you can get and it's free."

The Reluctant Customer and Self Service

Cost management benefits of CEM are clear, but when customers call a contact center about a problem with a product or service, do they really want to be polled or up-sold? It's funny, there are almost two major groups of people, one that doesn't mind being interviewed, and the other that just wants to get off the phone.

Having figured out that CEM is a process and not just technology, companies are doing a better job of fusing marketing automation with CEM. "Imagine if you called upset, and your problem was resolved and now you are pleased, At that point, if a supervisor says, 'We really don't want this to happen again, would you mind if we ask you a few questions?' they might get valuable information they'd never get from self-service."

Meanwhile, in the name of efficiency, companies are increasingly offering voice and Web self-service, which by definition involves no agent participation. This may be fine for checking a balance or buying a book or plane ticket, but often enrages customers faced with deeper service or product needs.

BMW just started charging $5 to people who preferred to talk on the phone rather than use self-service. Efficiency is a strategy, but don't then expect the customer to pay a premium for your service. Efficiency equals customers judging you on price and it will take you downhill. If customers escalate the problem, it just goes to the more expensive contact center channel anyway.

Chapter 8:

CRM in India

Software is to India what oil was to Gulf. It is therefore no surprise that the Indian companies are jumping into the CRM bandwagon to seize a chunk of the global market, both products as well as services.

With is vast talent pool; India is fast becoming an important development base of major CRM companies. This trend is likely to increase in the future. Call centers, catering primarily to the American and European markets are coming up in and around the metros. With the easing of infrastructure constraints, India is likely to emerge as a significant player in this segment.

Companies in India are realizing the need for RM and some of the forward-thinking ones have been strategically investing in CRM initiatives and relate activities. Even though, some industries like steel, aluminum and cement could get by without any active customer management, they realize that is now all history and that they have to do something to create and build relationships.

So the awareness of CRM there. The first steps have been taken by many. The question is whether you want to compare CRM programs of Indian companies with the standards and best practices of players like Ikea and Marriott who have been torchbearers in this field. India has a long way to go. Indian companies would do well to realize that CRM cannot be delegated to the marketing department.

It has to be whole revolution within the entire organization. The entire organization from the chairman to the doorman has to be galvanized to become a customer-oriented organization. It’s about training, learning, reskilling and the ability to adapt that will distinguish the laggards from the winners. It needs a CEO who walks the talk, in other words CRM is an absolute necessity now for the smallest kirana store to a large player like Ambuja Cement. One has 200 customers and the other 2000 customers. But both can’t afford to lose even a single of their customers, because the cost of creating a new customer is 5 to 10 times more than the cost of retaining an old, good customer. CRM is now an integral part of organizational strategy and overall business objectives.

Has CRM in India been reduced to an empty buzzword that’s tossed around so that a company appears to be keeping up with the industry? Not entirely, because organisations like Standard Chartered Bank, ICICI Lombard, BPL Telecom and Air-India have successfully used these tools—and benefited. The difference lies in the way CRM has been deployed at these organisations. It is a combination of technology and process change that has worked.

Adoption of CRM by Indian companies is at an infancy stage. The CRM enabled companies include Modi Xerox, Tata Telecom, TVS Electronics, HP India, Tata Infotech, Carrier Refrigeration, Tata Teleservices, Satyam Infoway, Planet M, and Epicenter Technologies among many others.

India even has a CRM Foundation in New Delhi, founded with the purpose of assessing and improving CRM practices. Founding members include Tata Telecom, Escotel, Modi Xerox, Global Groupware, AC Nielsen, Carrier Aircon, and Motorola India, among others.

Outsourcing CRM back offices. India is growing to be the back office of the world, and many Indian companies are managing CRM operations for Fortune 500 and medium-sized companies in USA and Europe. Now that the outsourcing market is mature, Indian companies may also begin to outsource for cost reduction.

BPO’s in India

The business process outsourcing industry in India has grown by leaps and bounds and as its size increases so does its competitive advantage. Compared with 1996 when this Industry had started inroads into the United States with Outbound Telemarketing campaigns, today the vehicle for these calls-the internet has become cheaper and more reliable for the average Indian business.

The business has boomed to the extent that many people are now running BPO’s out of their cyber cafes and houses in New Delhi.

The sector witnessed considerable activity during 2004-05, including a ramping up of operations by major Indian and MNC players and stepped up hiring. The domestic BPO market, catalyzed by demand from the telecommunications and BFSI segments, matched the growth of BPO exports. The market experienced maturity and consolidation, a result of numerous mergers and acquisitions taking place within the sector. There were over 400 companies operating within the Indian BPO space, including captive units (of both MNCs and Indian companies) and third-party services providers.

The Indian BPO industry remains on a growth path, emerging as one of the key investment markets in the country.

BPO is one of the greatest global forces for improvement today. CRM outsourcing providers alone have a $30 billion market opportunity, and businesses that capitalize on the potential cannot only reduce cost, but also increase productivity and raise revenue significantly.

BPO began as a way to significantly reduce labor costs for low-value or transaction activities (e.g., help desk calls, bill payments), but now, it's emerging as a way to deal with higher complexity, value-added activities. However, few companies have realized the full range of benefits that BPO offers. To capture these benefits organizations need to do two things: outsource to improve productivity (not just costs) and cost-effectively identify emerging revenue opportunities.

Chapter 9:

Case Studies on CRM

1. Hewlett Packard – Computers and IT sector

Traditionally, HP would begin implementing a new CRM system by starting with a strong focus on systems design and functional specs. But when they set out to implement in Japan as part of their efforts to make the company's CRM systems operate globally, they recognized it wouldn't work that way.

The sales support operations manager, Kozo Sekino, who was their local eyes and ears with the sales and marketing groups in Tokyo, pointed out that the Japanese work better by being included in the business process definition early on. If HP strongly involves management and multiple audiences along the way, it ensures that in the end they have maximum buy-in to the true business changes that need to occur. And then they realized that they needed to do the same for other countries—without sacrificing the global standards HP aims to institute based on their long-term strategy.

Resistance
Globalization meets resistance in many ways. For CRM, it usually arises through the local sales and marketing organizations such as their Japan country teams, who, for good reason, are concerned that their ability to meet customer needs may be hampered by an overzealous and globally-driven standardization effort. Oftentimes, highly customized, local solutions make the implementation of globally consistent business processes more challenging.

HP, where Mike Overly has been for more than 20 years and Johannes Beirmann has been for 10 years, has overcome some of the unique challenges an American-based company regularly faces when aiming for global standardization of business processes and IT infrastructures. As a whole, the company has always been intent of reducing cost to stay competitive. In today's landscape, that requires trade-offs between global standardization and local needs. The IT infrastructure has become the notable beneficiary of the CRM effort: Global standards allow for much simpler IT environments and the retirement of a vast number of dispersed assets.

What is so unique about being an American-based company and how does this affect a CRM implementation outside the United States? Consider these three problematic characteristics and how HP handled them:

· American companies are not anxious to spend much time on planning and implementing an agreed-to business process or solution. They want to see immediate results pertaining to the defined change, particularly from a financial perspective.

Yet, when you're implementing a solution in another country, you must be adaptive and culturally sensitive. In Japan, they recognized that all due diligence to the point of "pushing the button to be online with CRM" had to be done prior to the meeting with the top sales executive. Their usual order of implementation began with executive meetings to launch the effort. They reversed that in Japan.

It took them about nine months to agree on the roadmap for Japan and set the "go-live" day—a real challenge for their deployment team. The benefit, however, was an explicit statement by the leaders that committed all management levels to the importance of utilizing CRM once they did deploy.

Since January 2006, they have seen a tremendous business being managed through the new solution environment, using global standard processes in sales across field and inside sales. Every sales rep in Japan now uses the CRM system, both for field and inside sales, which was not the case before.

· American companies tend to struggle to find the right regional balance for common standards. One example is the stricter and varying customer privacy standards in different countries. But you can find this struggle in business processes as a whole. For example, should HP follow the same selling methodology in Japan that it does in Canada?

To address this, they gathered feedback from top executives, specifically including the regional sales and marketing managers in this process, something that had not been the case in earlier efforts. They also formed a permanent governance structure with and strong regional representation.

A global team at HP designed the future-state global business processes. They developed a common account planning and selling methodology by including as many regional people in the planning as they could.

Japan team members from sales and marketing took part routinely in key global workshops well before they even made it to the hot implementation phase in Q4 of 2005 by adding their valuable inputs into the business process design. High personal buy-in proved the case—although it was not an easy achievement, given the continuous involvement of hundreds of decision-makers and subject matter experts. "Global Process Consistency" was initially just the project name. It has since become the unspoken and guiding principle for the effort. Go to Japan, and you will find that "GPC" is almost like a "rallying cry." The end result was considerable cost reductions in the IT infrastructure, as they consolidated and eliminated redundancy and increased productivity for both sales and marketing.

· American companies don't integrate non-technical resources consistently. Despite the fact that American-based companies know the importance of managing the organizational and people-related transitions associated with a changed—and usually more integrated—CRM environment, there is often a false focus on technical deployment.

HP put a real focus on process adoption. It led them to have task forces dedicated by region—and in some cases by country—to securing not just technical deployment but also adoption of the CRM system. In Japan, they formed an extended task force that dedicated substantial time to the implementation. It included representatives from their call center in Fukuoka, field sales personnel in the local enterprise group and marketing managers from three business groups. They complemented these with resources helping the prospective end-users with the organizational readiness.

Top-level executive commitment is a must-do, but the real work is to engage first-level sales and marketing users in regions and country field organizations; explain the business value of CRM in simple terms; and engage them through workshops, posters or video messages to their staff. That is exactly what Hewlett Packward did in Japan—and what they do in other countries across the world.

Hewlett Packard: Enterprise-Wide Solutions on a Global Scale

While the company set out to improve a variety of business issues with CRM, its overarching goal is to provide a best in class customer experience. With customers ranging from the largest companies in the world to small mom-and-pop operations, HP has a lot of customers to satisfy. Combine this with the fact that the company is rolling out its CRM program worldwide, and the program's magnitude only begins to hit home.

What They Did:

Mike Overly and his HP CRM team weren't naïve. They knew that in order to deploy a global CRM solution, they needed to influence the entire organization. Reporting directly to the President of HP's consumer business unit provided the team with the clout and visibility it needed to gather consensus from a range of different corporate functions, from the sales organization to marketing to the company’s myriad call centers. The mantra sung by each organization is the same: To manage the total customer experience.

HP's initial CRM effort focused on the organization that touches the customer most: The sales force. Its goal was to provide the company's global sales force with an automated—and standard—way to perform contact management and account planning. While the initial functionality was classic sales force automation, the hurdles were high. Everyone had their own rules and guidelines about managing their customer activities, but what makes a customer happy is pretty universal.

The company chose a CRM solution from business partner Oracle, and has deployed the Oracle Sales Online product to customer-facing employees around the world with more on the way. By integrating customer activity data in an Oracle "customer master" database, HP can provide a remote salesperson with the ability to track a customer's activities across organizations. For instance, a salesperson can find out which of his customers have contacted the company's help desk, or call up information about the latest marketing campaign and its primary channels. Indeed, Overly's CRM team has made the ability to share information about customer touch points across organizations a key CRM success measure.

HP is gunning for even bigger improvements, such as dynamic personalization for Web visitors and automatic lead routing from marketing to the internal sales staff and HP partners. Over time, both headquarters and field staff will have access to a range of customer information and history on both corporate and local Oracle databases. The goal is to establish an ongoing dialog with customers so that customers will gain greater control over their relationships with HP.

Standardizing CRM corporate-wide has meant phasing out numerous legacy systems. Data, business processes, and technologies that are customer-related will slowly be merged with the current CRM program, driving cost savings in the millions of dollars.

The Challenges:

Deploying CRM worldwide has its trials. No matter where they are in the world, sales reps share the goal of being as productive as possible. However, every sales person has a preferred way of getting the job done. Overly and his team have had to surmount habits and assumptions that are often not only organizationally entrenched but cultural. They were no longer talking about a personal productivity tool, but about an HP solution.

Since Oracle's CRM environment is based on portal technology, sales people can customize their interfaces to include client information and contact activities as well as data from external news sources and the global financial markets. The company is delivering Web-based CRM training in order to educate staff on how to use the Oracle CRM technology and apply it to their specific job functions. While most of the training is conducted in English, the company offers localized Web courses in native languages to several countries including Korea and Japan.

Another challenge has been rendering ongoing management sponsorship and involvement as painless as possible for HP's busy executives. Besides establishing ongoing CRM performance measures, the Change Manager is chartered with developing and tracking all project communications, including internal communications across HP such as guiding executives in communicating new customer-focused policies.

Good Idea:

From the beginning of the CRM initiative, Overly’s team shrewdly steered away from the point solution approach, preferring instead to expend the extra time, money, and internal education necessary to deploy enterprise-wide CRM. This meant organizing CRM development around so-called "vertical silos" representing various corporate functions such as internal sales, marketing, and customer service. The CRM team members for each vertical silo work with the executives in related business organization, as well as with a CRM manager who's responsibility is to integrate each independent effort into the corporate-wide CRM program.

This approach of uniting vertical efforts with horizontal standards not only avoids development in a vacuum, it ensures that CRM business processes, technologies, data, and implementation methods are consistent across the company.

Overly advises others who may be deploying CRM on a similar global scale to be mindful of three success metrics:

1: Obtain sustained executive presence, meaning that executive leadership must be engaged throughout the CRM lifecycle.

2: Always keep one eye on today's problem, and the other on tomorrow's problem.

3: Ensure change leadership, with emphasis on the word leader. "Every day there's a new challenge—you need someone who has a good understanding of the problem and the authority to fix it."

The Golden Nugget:

While HP has committed to three primary measures—increased revenue, decreased costs, and improving the total customer experience—measurement, like the CRM program itself, is ongoing. Measurement results might dictate a range of business changes, such as changing sales compensation levels to rely less on customer revenues and more on customer satisfaction. The CRM team considers customer survey data to be a primary measurement source.

For a multi-disciplinary technology conglomerate like HP, deploying a global and interdisciplinary CRM program could take years. With such a high-visibility commitment, not to mention the complexity, executive involvement, and process changes, it’s noteworthy that it took the initial SFA application months, not years, to be released to its global business users.

How can a company of HP's size be so nimble, yet so visionary? HP Team would politely reiterate: "We're in the solutions business."

2. Bharti Tele-Ventures – Telecom Sector

Bharti Tele-Ventures is one of India's leading private sector telecom operators. Its cellular business, AirTel, is a leading mobile telephony brand. Like any Telco, Bharti considers information technology a key business enabler. For telecom, IT is like bread and butter. Bharti believes it plays two significant roles-it works as a support system, and it can also be a business driver. Thus IT is very important to Bharti. It had a WAN in place with a mix of leased lines and E1 and E3 lines. The company also has an extranet in place through which it extends different applications to its dealers and partners. Bharti have an extremely large infrastructure based on products from multiple vendors. This includes a range of high-end servers from Sun and HP. In the telecom business volumes are very large. They have millions of records and process them everyday, so for them storage is in terabytes.

Bharti also has a storage area network (SAN) in place. The main data centre is located in Gurgaon, Haryana. As far as software is concerned, some of the applications that are running on its network are billing, fraud management, revenue assurance and data warehousing. They also have some internal-facing applications like Oracle Financial and Oracle HRMS.

The case for CRM

Initially, when Bharti started operations, the whole system was run manually. At that point of time only 40 percent of their customer issues were getting resolved-this has now gone up to about 90 percent.

It is vital for them to manage the expectations of their customers and provide them with innovative products and services in a manner which makes them loyal. To achieve this, Bharti needed the right tools. It is this need that made them opt for a CRM (customer relationship management) solution.

Cherrypicking a solution

Today Bharti is using the Oracle CRM platform. As part of their vision, they intend to provide AirTel services anywhere and at any time. A customer should get the same quality of service no matter which of their call centres he contacts. This has been their vision, and because of that they have gone in for a centralised application like CRM.

Before choosing its CRM tool, Bharti evaluated many options. It considered factors like proper workflow automation, facilitation of knowledge sharing, and integration with the billing system. After a thorough evaluation exercise, it decided to go ahead with the Oracle CRM platform.

Roll it

After starting its services in Delhi, Bharti acquired many circles and sought new licences in other circles; whenever they got a new licence, they implemented the CRM tool immediately. But they had to put in a migration strategy in those acquired circles which had an existing subscriber base. The migration had to be done in such a manner that the existing customer base did not suffer. The goal was that all the circles would go live by the first quarter of 2004.

The biggest challenge for Bharti was to have a unified process in place. Once this was done they faced the challenge of imparting training. When they went in for such a large-scale implementation they faced problems. They also had certain technical difficulties during implementation, but they were able to overcome them.

The CRM strategy at Airtel revolves around two aspects: operational CRM and analytical CRM. The first is about helping their call centres in the workflow part, helping them in their day-to-day activities. The second provides staff with the required information on customers; this is used for business development activities. Together they help Bharti provide better services to its customers.

Tailor-made schemes

One of the primary things that Bharti has done with CRM is segmentation of customers, which has helped in providing customers more value for their money. It was important to understand and segregate customer needs depending on the product and services he is buying. One of the primary things that Bharti have done in this solution is the segmentation of customers. With this, AirTel is now able to give its customers more value for money. With the help of CRM, they are able to provide customers different schemes and services depending on airtime usage. If the customer is a heavy user then they have some specific schemes; for normal users they have other schemes. Apart from this, they have also managed to segregate their workflow with the help of the CRM tool.

3. Pfizer – Pharmaceutical sector

Competition is forcing pharmaceutical companies to look at marketing as a key differentiator. Pharmas are working at maintaining an active field force that targets doctors one at a time as the most economical means for creating awareness.

While most companies have a scientific approach to this activity, some who have automated it to a large extent have found that their IT systems have brought substantial returns to them. Pfizer is one of the few pharmas to adopt a home-grown Customer Relationship Management (CRM) software solution to catalogue all data pertaining to its sales force.

.Net Platform

In 2001, the Indian wing of Pfizer perceived that the deployment of a sales reporting system would ensure structured documentation of information collected by its representatives. It will also help in cases of attrition where if a sales representative quit another could take over easily with the help of the information available online.

Each representative has about 200 doctors on his list. The doctors are classified by priority. However, being an A-class doctor does not mean that the representative will make 10 calls to him every day.

The nine-member IT team at Pfizer designed Optima to fulfil this need. Over the past four years, the system has been overhauled considerably, and today it is a full-scale CRM solution coded on the Microsoft .NET platform. The CRM application runs on Windows 2003 and SQL Server that is primarily accessed over the Internet and is hosted at a third-party IDC.

One-Stop-Shop

The first step to any CRM implementation is collection of extensive and clean data. At Pfizer that is taken care of because all data input is checked as per predefined business rules before it is entered into the system.

Basic information captured in the Pfizer CRM includes doctors’ and chemists’ profiles. In the case of doctors, based on the data entered into the system, the sales team can determine what kind of prescriptions the doctor generates, the profiles of the patients that he treats, whether or not he is price-sensitive, and how quickly he prescribes new drugs. In addition to that the system captures data with regard to the associations or societies the doctor is a part of, and the events he attends. If the doctor participates in public forums the Pfizer CRM captures whether or not the doctor is an opinion leader. The information in the system is reviewed on a regular basis to check for new entrants as well as pattern changes in different areas.

Similarly for the chemists, the CRM captures the profile and buying power of a chemist’s customers. The system has two advantages. Since it is based on the combined information on the doctors and chemists in a particular locality, it is easy to identify markets that will have good returns.

The second benefit is that the CRM helps predict the stock requirement pattern. The company can therefore manufacture, stock and transfer the right amount of drugs to the market just-in-time so as to minimise storage space and lessen the chances of wastage from damaged or expired products. Improved response to customer queries is another advantage that is derived from Optima.

Different people have different requirements from the system, so the information the CRM returns is based on need. If a representative works in North-east Mumbai, he has to know which doctors can be targeted. The system generates a list of doctors in the area with ratings and the expected frequency of visits.

The CRM system also helps provide market intelligence on competitors. For example, if a Pfizer representative pays a visit to the doctor, while waiting he may meet his counterpart from another company and can feed in the information he collects. Or if sales personnel come across schemes being run by Pfizer’s competition, the information is keyed into the system. The product management team can then start using the information to provide business intelligence. Planning and reporting the key Sales Force Automation features have improved analysis capabilities with regard to field force activities.

Regular Updation

As part of technology upgradation, the system is updated every five to six months with a clear business objective. Perhaps that is why Pfizer has not invested in a system that allows input on the fly.

The information gathered needs to be consolidated and analysed for business decisions. Hence, whether the sales force feeds in information at the end of the day or every few days does not make any difference. According to the company, the system is yielding good returns in the present format, but may not be feasible for mobile devices.

Pfizer has reserved its CRM for the sales force. One section on the Pfizer India Web site has been enabled for doctors to log in and post queries and concerns. Even so, the company has noticed that instances of Indian doctors approaching the company via the Internet is limited. In most cases it is the company representative who has to be on his toes and deliver to the expectations of the doctors.

For adverse reports, Pfizer has manned telephone numbers on which doctors can call. The call operators or representatives who gather the adverse report feed it into the system and the problem is highlighted till it is resolved. The entire process is documented in the CRM.

User Buy-In

At Pfizer, the IT budgeting has provisions only for the infrastructure. To ensure that there is business and user buy-in, the company works on a model wherein the department that requires IT budgets for it. For example, the marketing department pays for CRM and HR buys software to automate salary calculations. Even the maintenance budgets for IT are taken care of by the respective departments. This ensures that the systems installed are used to the maximum.

To ensure that every solution caters to a specific business need, Pfizer maintains a small IT team comprising mainly project managers (with experience in the pharma business) and technology specialists. The in-house team that architects the solutions is limited to nine people. A large part of the technical work is outsourced.

To ensure that there is business and user buy-in, Pfizer works on a model wherein the department that requires IT bud gets for it. For example, the marketing department pays for CRM, and HR buys software to automate salary calculations

Looking For More

Most problems with regard to the CRM deployment were technical in nature and could be resolved easily. However, the company wants to maintain the users’ faith in the system; it believes in conducting training, and communicating via e-mail. Champions in the technology are identified, and asked to pass their skill-sets to their colleagues. People continually expect improvements in the system and want their suggestions to be incorporated. Thus, managing expectations is a continuous challenge.

The first version of Optima, exclusively meant for reporting, took 10 to 15 minutes to complete a task. Now employees want the system to do much more—but within the same time-frame.

4. Wockhardt – Hospital and Health care sector

When you aim to build a world class hospital, you need world-class processes in place. Keeping this goal in mind and to give patients better value for their money, WHHI was looking for a solution that would allow the hospital to manage its patient and staff details' database efficiently. It also needed to connect specialists to the hospital network such that the doctors could monitor the patient remotely.

The WHHI IT team, which consists of four people, found that the most suitable solution was to put in place two inter-linked systems. The foursome considered a CRM solution custom-made to the hospital's needs and a network linking that they termed eICU. This system connected the patients' monitors to an RAS accessible over the internet.

The CRM system WHHI put into place not only helps identify the right doctor for the right occasion, it now also generates reports. Plus it can sort categories of patients such that the hospital has now been able to start clubs of people with similar experiences.

The beginning

To develop and maintain a special relationship with doctors, patients, and corporates, WHHI required an easily manageable system that would catalog all the required details. Moreover, with the narrowing difference in service level at hotels and hospitals internationally, Vishal Bali, Vice President Operations, WHHI, believed that such implementations are required to create an ambiance of efficiency. The implementation was also required to track feedback to generate a patient satisfaction index.

The solution

To meet these requirements, the hospital approached an outfit called Think Ahead, which conceived, developed and implemented a CRM application to specifically meet the demands of WHHI. The implementation generates feedback reports, occupancy reports, average length of stay, waiting and discharge reports. While all these reports were being filed even earlier, the solution has helped maintain and update all the reports on a daily basis, obviating any chance of delay. The accuracy rate of the reports has seen a new high as a result.

More importantly the CRM solution has automated relationship management. It has resulted in the creation of the Happy Hearts' Club, a group of people who have undergone similar heart surgeries at WHHI. At the forum, patients share their experience and sometimes also learn from each other.

The CRM solution also automatically forwards newsletters and relevant information to keep in touch with doctors and patients. Vishal Bali, Vice President Operations explained the importance of this routine task: "Hospitalization should not be seen as an episode but as a patient hospital relation, it is not a one time transaction." And the CRM solution has helped with just that.

e-Hospital

Besides the CRM system, WHHI has developed an eICU. The eICU consists of ICU monitors on the side of the bed. These are connected to a Windows 2000 Server that is linked to Remote Access Servers (RASs). The RASs can be accessed over the internet via a 2 MBPS line.

The eICU allows doctors to consult specialists in life and death situations. A resident doctor can consult a senior consultant while at the operation table and the CRM solution helps retrieve the most suited consultant for a given case. This way all decisions can be collaborative. Furthermore, in case of a smaller problem the doctor is not required to rush to the hospital. The remote system also means that every patient has 24x7 coverage from his/her doctor.

e-Visit

WHHI's association with Think Ahead led to other creative initiatives. The first is the Virtual Family Visit. Relatives and friends can visit any patient online in a virtual patient room. The system is capable of transferring audio, video, text, and images.

Similarly, WHHI was also able to initiate a tele-medicine program. These are video links established at medical colleges in the relatively less developed parts of India. The doctors at WHHI use this link to address classes in these colleges as well as to make routine follow-ups on chronic patients.

Security issues

With so much data available over the internet it is natural that information security would be a concern. To secure its network, the WHHI IT team has set up a hardware and software firewall. The hardware blocks unauthorized access and the software firewall acts as an active state packet filtering firewall. The Total Internet Security Suite scans inbound and outbound network traffic.

Cost factor

Overall, the implementation cost WHHI close to Rs 2 million, according to Bali. Perhaps, the level of automation and improved efficiency due to this system could be used to establish the system's ROI. However, Bali does not look at it from a profit perspective, but rather as a 'Staying in Business' investment. According to him, as the standards for hospitals improve the world over, Wockhardt must set a standard in India.

5. HDFC – Banking and Financial Sector

Owing a Home still remains to be the single most cherished dream for many Indian households and one need to be treated with great care while assisting people realize their dreams. At HDFC, the element of care not only reflects in the very vision that prompted its inception, but also in the manner in which the company relates to its customers. To HDFC, providing finance for housing is not merely about earning profits, but a way to provide an essential and valuable service to the society.

It all began with a thought that took shape in the mind of HDFC’s founder, Late Shri H. T. Parekh, who built the organisation on the core values of integrity, transparency and trust. Though HDFC enjoyed a monopoly when it started out, the company’s firm focus has always been on customer care and satisfaction. It believed that the best strategies are established with long-term commitment and relationships with the customers.

Since the company has always been dealing directly with its customers, this has helped it keep in touch with the changing trends and customer expectations. Its experience and in-depth knowledge of the sector is a boon for its customers. HDFC understands that buying a house is an event which happens once in a lifetime for most and is the single largest investment; hence buying the property with the fullest knowledge is vital. While buying a property, where except in few cases the developers have established a brand, most builders are local and relatively unknown, there are a number of issues and concerns a customer has when he deals with any developer.

With over 28 years of experience in the real estate industry and business relations with the developers, it has a thorough understanding of the market and this is passed on to the customers. It provides counseling through its property services on how and where to buy a house in India, the real estate prices and trends in the real estate market and any assistance that may be required at various stages of property dealings. HDFC aims to bring creditability and trust to the property deals.

It has from time to time tied up with developers to bring special packages to its customers and reach out to them. It conveys the properties to the customers by visiting companies to put up special counters displaying new projects of builders, so they don’t have to move out to locate a home and make presentations to address their financial concerns. This approach is also used in colonies with a large number of families. The company also arranges property fairs where customers can visit, select the property and seal the deal immediately.

At HDFC, product innovations are based on customer feedback and are aimed at customer convenience. It was the first company to offer floating rate loans when the interest rate scenario turned conducive for customers and introduce a part fixed part floating product enabling customers to hedge their risks in an uncertain interest rate environment. It was also the first to launch repayment option that supported housing loans on the basis of age and customer needs. As the first company to computerize the home loan process, technology has always been a focus area for the company in its endeavour to simplify transaction for customers.

All in all HDFC is a brand, which not only offers Housing Finance but “Total Housing Solutions”. Given the diverse portfolio of customers that HDFC caters to, the counselors at HDFC are trained to understand customer requirements and structure the loan to match individual concern. Departing from the usual norm of providing just loans, it offers customers a personalised counseling service to help customers encash on the vast pool of knowledge that comes with its experience.

It follows a single window concept where customers get legal and technical approvals by its experienced in-house counsellors. This usually saves a lot of time and efforts for customers of obtaining these clearances from other authorities and saves money as the processing and administrative charges cover all these expenses. Customer service at HDFC goes beyond process handling, with counsellors taking out time to understand the applicants’ needs, the demands of their growing families, the necessity to ensure savings for emergencies and then arriving at the right amount for them to borrow.

HDFC’s philosophy of care also engulfs its interaction with customers who have defaulted in repaying the loan. From the beginning it followed a different model and setup a “follow-up” department to deal with delinquent borrowers instead of a “recoveries” section, believing that individuals were basically honest and would pay back in time. Its debt collection policy emphasizes on fostering borrower confidence by understanding their crisis; discussing their repayment capacity – considering their income, number f dependents, he nature of their expenses etc; and after ascertaining the facts and the reasons for default work out a solution, even reschedule the loan if required. Though the policy deals with a negative situation, it has a strong value-based premise that ensures that the implementation will not be unduly coercive. Infact, the policy is built on courtesy, fair treatment and persuation.

The Home Loan Protection Plan (a product of HDFC Standard Life) that HDFC offers to it home loan borrowers provides the customer the comfort of knowing that in case of the unfortunate death of the borrower, a sum of money depending on the insurance cover will be made available towards repaying the housing loan.

For HDFC, its strength emanates from its intrinsic value of customer orientation and care. They are the basis for all growth and development. The task at hand is to bridge the gaps and to provide the common man access to resources to fulfill his basic dream. In its 28 years of operations it has assisted 27 lakh families own a home through loan approvals of over Rs. 1,00,000 crores. As it moves along taking small steps in this direction what makes the effort truly worthwhile is when it ultimately benefits individuals and the society at large.

Who’s in the CRM game?

About 50% of the CRM market is currently divided between five major players in the industry: PeopleSoft, Oracle, SAP, Siebel and relative newcomer Telemation, based on Linux and developed by an old standard, Database Solutions, Inc.

The other half of the market falls to a variety of other players, although Microsoft’s new emergence in the CRM market may cause a shift soon. Whether Microsoft can capture a share of the market remains to be seen. However, their brand-name familiarity may give them an edge with small businesses considering a first-time CRM package.

PeopleSoft was founded in the mid-1980’s by Ken Morris and Dave Duffield as a client-server based human resources application. In 1998, PeopleSoft had evolved into a purely Internet based system, PeopleSoft 8. There’s no client software to maintain and it supports over 150 applications. PeopleSoft 8 is the brainchild of over 2,000 dedicated developers and $500 million in research and development.

PeopleSoft branched out from their original human resources platform in the 1990’s and now supports everything from customer service to supply chain management. Its user-friendly system required minimal training is relatively inexpensive to deploy. .

One of PeopleSoft’s major contributions to CRM was their detailed analytic program that identifies and ranks the importance of customers based on numerous criteria, including amount of purchase, cost of supplying them, and frequency of service.

Oracle built a solid base of high-end customers in the late 1980’s, then burst into national attention around 1990 when, under Tom Siebel, the company aggressively marketed a small-to-medium business CRM solution. Unfortunately they couldn’t follow up themselves on the incredible sales they garnered and ran into a few years of real problems.

Oracle landed on its feet after a restructuring and their own refocusing on customer needs and by the mid-1990’s the company was once again a leader in CRM technologies. They continue to be one of the leaders in the enterprise marketplace with the Oracle Customer Data Management System.

Telemation’s CRM solution is flexible and user-friendly, with a toolkit that makes changing features and settings relatively easy. The system also provides a quick learning environment that newcomers will appreciate. Its uniqueness lies in that, although compatible with Windows, it was developed as a Linux program. Will Linux be the wave of the future? We don’t know, but if it is, Telemation’s ahead of the game.

The last few years…

In 2002, Oracle released their Global CRM in 90 Days package that promised quick implementation of CRM throughout company offices. Offered with the package was a set fee service for set-up and training for core business needs. .

Also in 2002 (a stellar year for CRM), SAP America’s mySAP began using a “middleware” hub that was capable of connecting SAP systems to externals and front and back office systems for a unified operation that links partners, employees, process and technologies in a closed-loop function.

Siebel consistently based its business primarily on enterprise size businesses willing to invest millions in CRM systems, which worked for them to the tune of $2.1 billion in 2001. However, in 2002 and 2003 revenues slipped as several smaller CRM firms joined the fray as ASP’s (Application Service Providers). These companies, including UpShot, NetSuite and SalesNet, offered businesses CRM-style tracking and data management without the high cost of traditional CRM start-up.

In October of 2003, Siebel launched CRM OnDemand in collaboration with IBM. Their entry into the hosted, monthly CRM solution niche hit the marketplace with gale force. To some of the monthly ASP’s it was a call to arms, to others it was a sign of Siebel’s increasing confusion over brand identity and increasing loss of market share. In a stroke of genius, Siebel acquired UpShot a few months later to get them started and smooth their transition into the ASP market. It was a successful move.

With Microsoft now in the game, it’s too soon to tell what the results will be, but it seems likely that they may get some share of small businesses that tend to buy based on familiarity and usability. ASP’s will continue to grow in popularity as well, especially with mid-sized businesses, so companies like NetSuite, SalesNet and Siebel’s OnDemand will thrive. CRM on the web has come of age!

Chapter 10:

Conclusion

CRM is basically the collection and distribution of “all” data to “all” areas of business. The data can then help market the company, help up sell to existing customer, understand customers better so that customers can be given better service and allows them to interact with the company by whatever means they wish. Customer Relationships are achieved by the whole company working together to give customers what they really want. CRM is a business strategy to create and sustain long-term, profitable customer relationships. Successful CRM initiatives start with a business philosophy that aligns company activities around customer needs. Only then can CRM technology be used as it should be used—as a critical enabling tool of the processes required to turn strategy into business results.

CRM is now an integral part of the business vision/strategic roadmap of companies in virtually every industry domain and feeder-linked sectors. It is the various stages that lead to better understanding of all aspects of customer behavior; interface points, transactional issues and “intangible” benefits proffered that helps a company differentiate itself from others in terms of leadership and market dominance in a particular space. The “We Care” principle has to be embedded in the very vitals of the organisation for long-term benefits to accrue and for “delighted customers to keep coming back.

Clearly, it is a matter of being in synch with customers’ changing needs that shapes business success stories. Companies that continuously align and re-align their brands, products and services have a better chance of understanding their present as well as future consumers. Total customer orientation centered on customer understanding is bound to provide long-term customer value and by inference superior company and shareholders value in terms of sustainable growth and profits.

Customer Relationship Management is a prerequisite for maneuver strategy as it provides customer information proactively for making swift moves. When there is a strong info-structure available for the firm through greater access of customer information that can be manipulated with changing time and market dynamics, it allows the marketer to make calculated judgments as to where and when to move. Tools of customer relationship management like data warehousing help in realizing optimal results when the manager understands the strategic paradox. Customer Relationship Management helps in developing the most important competitive advantage in the form making the desired consumer information available at the fingertips of the decision makers for taking optimum decisions.

It has been said that the most successful companies of the future won’t be the big ones; they’ll be the fast ones. The power of the emergent social network will undoubtedly increase as global companies make their impact known, and you can bet that social networks will try to keep up with even the fastest corporation. The Internet will be the lens used by social networks to monitor bad corporate behavior, and the wallet will be the stick to whip corporations into shape.

CRM applications will increasingly mimic the way our social environment works in the years ahead.

Finally, concluding about CRM in the following points:

§ A strategy defined around producing value to fulfill business meeds.

§ A collaborative value chain of all institutions and processes needed to fulfill business needs.

§ A set of measurements that reflects how successful (or unsuccessful) the collaborative value chain has been in fulfilling customer’s needs and the ability to adjust the processes to improve the rate of success.

§ A system that provides insight into customers so that improvements can be made.

§ Access to all the services customer need for news, information, purchases, business, delivery, and on to infinity, from wherever customer are in whatever circumstances.