Saturday, April 30, 2011


The call centre industry is not the same as many other industries and it can be argued that it is not an industry in the accepted meaning of the term. This is because it does not operate in isolation for its own ends, but rather supports the operations of specific organizations. Call centres are to be found across a wide range of industry sectors and for this reason their role varies significantly depending on where they are located.
One factor that has been used to distinguish call centres is employment size and elsewhere it has been argued  that call centres have three essential elements:
  1. a customer service function;

  2. employees use telephones and computers simultaneously;

  3. there is automated call distribution.
However, all these factors have limitations. There are call centres ranging in size from just one person in a small room to vast centres employing several thousand people. Furthermore, not all employees use the telephone to communicate with the caller or customer. Traditional mail correspondence is still significant and although communication by fax is declining this is more than offset by the increasing growth of e-mail communication and video links.

The term ‘call centre’ is popularly understood but it is slightly inaccurate because the telephone is not always used. ‘Contact centre’ is a more accurate description because it incorporates the various forms of communication between organizations and their users. Both terms will be used interchangeably throughout this book and we can define them as follows:
Call/contact centres are systematically organized facilities that enable distant communication between the organization and the customer/client.

Wednesday, April 27, 2011


Supporting learning and development is important for a number of reasons:
  • The industry is increasingly competitive and any centre (commercial/ public/not-for-profit) that does not support learning will find itself trailing behind more enlightened organizations.

  • Call centres employ approximately 1 to 2 per cent of the working population in many countries and consequently are an important part of their economies. In some regions as much as 4 per cent of the population are employed in call centres.

  • There is a significant local, regional and national economic imperative to ensure that the contact centre industry is successful and this can only be achieved through well trained, skilful and knowledgeable staff.

  • The call centre industry has become a major part of economies worldwide and if they are not functioning effectively the impact will be felt widely across each economy.

  • Call centres are frequently at the centre of organizational restructuring. Without educated and knowledgeable staff all efforts in other parts of the organization will be severally hampered without a well functioning call centre.

  • Learning and development provide a key competitive advantage for organizations.

  • There is insufficient information about the nature of learning and development with which to make an informed assessment and evaluation.

  • A holistic picture is needed regarding learning and development.

  • Inbound calls are increasingly viewed as an opportunity to cross-sell and up-sell. The competencies for selling are sometimes quite different to handling regular inbound calls.

  • Call centres need further information with which to benchmark themselves and identify best practice in learning and development.

  • Training helps retain and motivate employees.

Sunday, April 24, 2011

Call/Contact center: driving force behind CRM

The call/contact center plays a crucial role in developing and fulfilling corporate CRM strategies. Companies whose main channel to their customers is through the telephone or e-mail, cannot become truly CRM-focused without putting the center at the heart of any operational enhancements to their CRM strategy. It is both the recipient and disseminator of information, relating to customers and to the business. CRM is about increasing revenues and growing the business aggressively. Industry sectors such as retail, banking, and communications were among the first to implement CRM, and their profit-focused approach toward their call or contact center operations is a model for other sectors.

When incorporated into a CRM strategy, the multimedia "customer contact center" brings both opportunities and problems. Customers still need to be served, no matter what the communication medium is; however, managers may initially encounter problems running a multimedia center in a CRM-focused business. There are a number of channels to manage, training is more complex and diverse, and new CSR skills are required described the key issues involved in moving from a telephony-only call center to a multimedia contact center as part of a larger, enterprisewide CRM process. As this shift takes place, the call/contact center becomes less of a cost center and more of an integrated, strategic, and profitable part of the enterprise and a key component of a CRM strategy.

CRM support mechanisms

CRM is not a technology, but few companies can reengineer themselves to be truly customer facing without providing their business and staff with the necessary tools. As for any major corporate project, there should be a defined business need for the technology first, along with a measurable goal. Almost any technology can legitimately be said to provide support for CRM implementations if the wider aim is to provide a superior level of customer contact based on knowledge of that specific customer.

Successful CRM depends as much upon attitude as it does upon technology, however. CRM is primarily an enabler of growth for optimistic, aggressive companies wishing to expand. Business trends bear this out. Consider these two approaches to CRM:

IT-focused CRM

Many first-wave CRM implementations focused very much on putting in technology solutions and improving efficiency. Business processes and employees may not even be affected by IT-focused CRM, and in many cases, the solution is CRM in name only—it may in fact be only a series of point solutions rather than a true CRM implementation.

Business-focused CRM

Business-focused CRM involves a fresh look at how customers and prospects are actually dealt with by the enterprise and focuses on discovering and solving commercial problems, changing the culture of the enterprise as a whole to serve customers more effectively and profitably. Business-focused CRM encourages enterprises to understand the value of an individual customer and to customize interactions to build loyalty and profit.

Much of the difference between these approaches concerns attitude. The solution may end up being the same, but the problem needs to be understood before it can be addressed.

The impact of each of these CRM approaches is quite different on the call/contact center. In the IT-focused CRM approach, a nontechnical customer who contacts the call center and who is likely to be amenable to upselling might be pushed to a Website, which would be counterproductive. In this case, simply employing more sales agents or increasing training would increase profitability. On the other hand, business-focused CRM may use a low-tech solution for the customer—it does not simply look for ways to squeeze new technologies into the existing structure of the enterprise. When considering the impact of each approach on the call/contact center, the following should be taken into account:
  • Two-thirds of a contact center's running costs are CSR salaries.

  • Customers do not care about the IT department or business workflow—they decide whether the company is a good one by the quality of its staff and the services they provide.

  • The common perception of the contact center is that it is a necessary evil.
This latter point is at least as big an issue as anything related to technology. It is possible to run an adequate contact center with a large proportion of semiskilled, inexperienced staff, and this is happening in many organizations. However, the message for those organizations is that it is not possible to provide outstanding customer service across all channels, increase profit per customer, and grow the company's market share—some of the key goals of CRM—without having an experienced and empowered call/contact center team.
Technology and business processes can provide powerful solutions that enhance a center's productivity; however, it should be remembered that one of the most important reasons customers call a center rather than use a Website is that they prefer talking to real people. One of the primary objectives of CRM is to provide customers with what they want. If customers decide they want to talk to real people, then that is what the customer-oriented company has to provide.

CRM plays no favorites

Every company that wants to increase profitability, reduce customer churn, gain market share, provide an outstanding level of customer care, and foster customer loyalty needs to have a CRM strategy. True CRM implementations are complex by nature and also require significant investment. However, because CRM is a long-term strategic goal, a gradual rollout of supporting technologies is possible, as long as the company is aware of where it is heading overall. Otherwise, the organization is just implementing a series of point solutions, which do not have the value of an integrated solution.

At first glance, CRM implementations seem to follow a pattern similar to most projects: analysis of requirements followed by detailed design. After actual implementation comes postproject review. CRM is different not only in the details but in the important role taken by the review stage. For many projects, a successful review is the end of the story. Not for CRM—it is just another stage. CRM is an ongoing process, and so the review stage is fundamental to the success of the project as a whole. For this reason, it should never be undervalued.

Feedback should be given both in the analysis stage (for example, target metrics have been achieved, the overall target is still viable) and also in the design stage, especially on any unforeseen technical issues that may require changes in dependent subprojects. And while the expertise of external suppliers and consultants can be relied on in the actual design and implementation of solutions, reviewing the business analysis stage in more detail can be beneficial, because this is where complex CRM projects can fail through lack of planning or even through failure to set specific targets.

CRM success factors

To sum up, when planning and implementing a CRM strategy, such as the 12-stage strategy described previously in this chapter, the following key CRM success factors need to be considered:
  • Complete the business analysis stage before the design phase begins.

  • Pass on experience from the design and implementation stages in order to integrate it into major changes in company direction and operation.

  • Choose at least one senior company member to drive the CRM initiative both from a commercial and cultural perspective.

  • Get buy-in from senior members of all departments in the organization and establish a steering committee.

  • Benchmark operations before implementing any technology.

  • Consult customers on how they would like to see the business change.

  • Specify quantifiable improvements to the aspects of the business that are most important.

  • Work only with suppliers who have a proven track record and who will be reliable partners for the foreseeable future.

  • Measure the impact of each subproject and feed the results back into the overall analysis and dependent design phases of the CRM project.

  • Consult, inform, and train employees at every stage of the process to move the business culture more toward a customer-focused organization.

Thursday, April 21, 2011

CRM solution: the value to the business

A CRM solution that bridges service, sales, and marketing initiatives enables businesses to resolve problems quicker, increase sales, achieve customer acquisition more effectively, and greatly enhance customer loyalty.


It is an axiom of the marketplace that satisfied customers tell their friends about a supplier who maintains good customer relations. One of the most powerful ways to acquire customers is word-of-mouth referral from a friend, colleague, or family member. Businesses can harness these referrals when one of their customers adds personal comments to an alert and forwards it to others who may be interested in the information and/or opportunities the alert presents.


The CRM analytics model has evolved to meet modern-day requirements. Although the concept hasn't changed much from its early days, the process certainly has become far more scientific. Analytical CRM is the mining of data and the application of mathematical, and sometimes common-sense, models in order to understand the consumer better. By extrapolating useful insights into market and customer behaviors, companies can adjust business rules and react to customers in a relevant, personalized manner.

Because business is conducted with fewer face-to-face exchanges, getting to know and understand the customer has become more complicated. The rise of e-business has driven the demand for more comprehensive tool sets for data mining and knowledge interpretation. For an effective CRM initiative to accomplish its goals, CRM analytics need to be incorporated into the process. CRM analytics provide the comprehensive insight necessary for pinpointing revenue opportunities, enhancing sales channels, and mitigating cost risks. By providing meaningful insight into data as well as transactional predictions, CRM analytics enable businesses to ensure that rules and workflow are in step with customer demands. Analytics can be derived through several different channels, including
  • The Internet

  • Retail point of purchase

  • Direct marketing activities
The challenge is to make sense out of the data gathered from customers from the multitude of customer touchpoints into the organization.

Analytical data mining solutions are a significant component of most CRM system packages, and call center personnel should have some understanding of the relationship of data mining to their own call/contact center roles. Data mining provides insight into corporate data stored in the data warehouse by using a variety of analytical techniques to isolate causes and correlations within the customer interaction model. Data mining analytics can perform predictive modeling of customer behavior, customer segmentation grouping, profitability analysis, what-if scenarios, and campaign management, as well as personalization and event monitoring. These functions take advantage of a customer's interactions with a business in real time. (see Figure 1) Strong analytics are necessary to give a functional view of data relationships in today's extremely complex business processes. By means of analytics, CRM can model future transactions, predict the interests and behavior of individual customers, and translate data into more traditional channels within the enterprise, such as the supply chain.

Figure 1: Elements and processes of data mining.
CRM is a highly iterative process. When data from any source are harvested and fed back into the system, the personalization capability of every customer transaction or e-mail campaign is improved. More traditional marketing techniques such as direct marketing often have months of lag time between a campaign's execution and its results. With each loop of the cycle, Internet-based CRM analytics are updating, tweaking, and improving delivery of personalized, relevant sales opportunities, all in real time. They also help build a more finely tuned relationship between a business and its customers.

In addition to the personalization that benefits a customer's purchasing decisions, CRM analytics can provide useful data to benefit enterprisewide processes and can also be integrated into the general operational workflow of noncustomer systems, including financial systems and manufacturing, to provide a more focused, single and collective view of customer-centric data than do the traditional, departmentally segmented views offered by a legacy CRM.

When all of this data is applied to a variety of systems, transactional decision making and enterprise planning—from cross-selling opportunities to supply-chain and just-in-time inventory control—become more effective. But it is good to keep in mind that CRM analytics is more of a process than a technology and so it demands a degree of human interpretation for the data to yield the most beneficial results.

CRM and the customer experience

Automation streamlines internal processes, but technology can also quickly depersonalize the customer's experience. CRM analytics offer insight and personalization that can go a long way toward improving that experience and building customer loyalty.

When they first start, all businesses have to focus on the needs of their customers. As businesses get larger and more complex, however, they become more inward-looking as they try to cope with their internal issues. Often, the customer gets treated as an afterthought. One goal of CRM is to make the individual customer become important once again at an acceptable cost to the company. Until relatively recently, it was impossible for large companies to form relationships with customers. With a customer base of millions, how can a company know their preferences or dislikes? This is where technology can help businesses. Realistically, businesses do not implement CRM because they have had a change of heart and decided to be nice to the long-suffering customer. Loyalty equals profit, and both customers and businesses can gain from it. The "management" part of CRM demonstrates that it is the business which ultimately controls the relationship with the customer. It provides the right information at the right time, it offers the right price to keep the customer happy enough to stay, it anticipates what else the customer would like to buy, and understands why. Thus, the business objective of CRM is to maximize profit from customers as a result of knowing them, treating them well, and fulfilling their needs.

Salesforce automation, customer contact solutions, multimedia routing, and data management tools—all have been claimed as the key to a CRM solution. All are useful and reliable aids to a business, but none of them on their own is a CRM solutions. They do, however, contribute to meeting CRM objectives.

A CRM checklist

Answers to the following questions can provide an organization with insight into its current customer-related practices:
  • Is there a single view of the customer across the enterprise?

  • Do employees fulfill customer needs regardless of where in the company they are working?

  • Do customers receive a high level of service no matter which channel they decide to use?

  • Does the organization proactively and intelligently inform customers about products and services they will be interested in and yet keep marketing costs under control?

  • Does the organization know who the most profitable customers are?

  • Are the strategy and tactics in place to keep them?

Sunday, April 17, 2011

Managing the CRM program

Management may be loosely defined as the art and science of getting from here to there. Most large organizations have more than one CRM project touching many parts of the enterprise. And these projects are managed by many different players, some in call centers, on Websites, or run by salesforces or different business groups. Pulling all this activity together into an enterprisewide program is a major challenge. CRM program management guidelines offer a sound approach to program and project management. Developing CRM program guidelines brings managers back inside the enterprise to the starting point.

Program manager guidelines

The following guidelines provide an overview of the practical steps that can be taken to ensure that the CRM program (or programs) will work at all levels, from strategy articulation to software installation and training. The goal of these eight guidelines is to improve the success rate of CRM programs and to enable an organization to measure success through clear linkages between program initiatives and desired business results. Each of the following eight steps matches a phase of CRM program design and implementation:
  1. Program diagnosis

  2. Strategy review

  3. Enterprise architecture

  4. Enterprise application integration services

  5. Package selection and implementation

  6. Application outsourcing assessment

  7. Implementation review

  8. Program and project management

Each step and its associated activities have been proven effective in previous large-scale change and improvement programs, such as business process reengineering and enterprise resource planning (ERP). The hard lessons learned in implementing these projects also apply to CRM programs.

The eight steps recommended in the program management guidelines are described next in more detail.

Program diagnosis

An organization needs to assess its business objectives against current CRM programs to highlight the areas of needed improvement and to identify where it can get the biggest bang for its investment. The diagnosis can examine CRM approaches, conversation design, relationship styles, organizational structure, and IT infrastructure. Understanding how these compare with other organizations and with best practices and how they fit into the enterprise's business strategy will help identify areas for improvement.

Strategy review

An organization needs to review and assess its CRM strategies. The aim of this review is to develop an understanding of the conversation designs and spaces that make its customer relationships profitable. This forms the basis for a CRM game plan that is right for the organization and for the joint development of business and IT strategies.

Enterprise architecture

The program diagnosis and strategy review steps will highlight the benefits of pulling all the CRM-related initiatives that may be scattered across the company into a comprehensive, enterprisewide strategy. A CRM enterprise architecture will help create new conversation spaces; transform customer information into a strategic tool to profile, segment, target, and retain valuable customers; organize sales, marketing, and customer care in a consistent way; and integrate back-office and front-office processes. The architecture should integrate all elements of a CRM solution—people, processes, technologies, and organization.

Enterprise application integration services

One key to success in enterprise architecture development, and in CRM overall, is the seamless integration of channels, people, and technologies into conversation spaces that deliver value to customers. Seamless customer experiences, in turn, depend on the seamless integration of enterprisewide CRM application packages, legacy applications, and Web-enabled systems. Meeting this challenge is the purpose of an enterprise application integration (EAI) game plan.

Package selection and implementation

An organization needs a system for navigating through the crowded marketplace of CRM packages and assessing the effect of changes on its business. Expert assistance is often required both for package assessment and for implementation. Packages must be integrated into the IT environment and attention paid to process design and change management. The aim is to develop a game plan for managing package selection, implementation, and testing through multiyear life cycles. Beyond technical installation, the transformation of business processes must be managed so that new software packages deliver maximum value.

Application outsourcing assessment

Like other software packages, CRM applications require support, maintenance, and enhancement over a period of years. An organization needs to assess whether it would benefit by outsourcing responsibility for this technology-intensive side of the CRM program. Outsourcing may help it evolve and maintain its CRM application portfolio—call centers, e-commerce, and so on—in a logically phased, cost-effective manner. All such contracts need to define clearly the service-level agreements. The aim of this activity is to allow the enterprise to focus on customer relationships, not the supporting technology.

Implementation review

An organization may need to get an overview of all CRM implementation activities to help it focus on the game plan for building the complete set of business and technical solutions, whether in one area of the company or across the enterprise. The aim is to ensure a coordinated approach to the design, redesign, or consolidation of CRM programs—e-commerce initiatives, call center operations, integrated customer information systems, and campaign management.

Program and project management

CRM involves a multiplicity of initiatives. Each initiative needs to be well managed. Just as importantly, all need to fit into coherent CRM programs. Often advanced program and project management methods are required to accomplish this. Program or project management offices (PMOs) can be created to ensure that CRM-related projects deliver value and fully support strategic business initiatives.

Wednesday, April 13, 2011

Customer input to CRM

Businesses can maximize the effectiveness of CRM systems in creating more intimate, intelligent, and profitable customer relationships by using a new approach: giving customers control over a subset of the information stored in CRM systems. A customer-directed layer in an existing CRM system allows the customer access to important, account-specific information when, where, and for whatever reason the customer specifies. This further reinforces the development of one-to-one relationships with customers, a major objective of CRM, as noted previously. By incorporating a one-to-one approach, the CRM system can deliver actionable response options tuned precisely to a customer profile and related specifically to a company's call/contact center infrastructure.

An additional benefit in extending CRM systems to provide proactive outbound customer service from its call/contact center and relevant inbound response options is that unnecessary inbound calls will be reduced and customer satisfaction and revenue increased—without increasing staff. When customers are forced to place a call or e-mail to a company about their account, they most likely have a problem with a product or service or require information. Providing an outbound CRM resource helps save customers' time and effort, eliminating or reducing the voice mail syndrome that has become a fact of everyday life. (see Figure 1) When a company proactively or preemptively provides information that is relevant to and frequently requested by an individual customer—monthly account balance, shipping status, itinerary changes, and so on—the company solidifies a positive, helpful image in the customer's psyche. Customer surveys reflect the fact that consumers appreciate doing business with companies that provide personalized attention and service.

The alert platform

An alert platform provides, as the name implies, an alerting mechanism that enables customers to communicate with supplier companies about their products or services, for example, to place or change an order or to advise of problems, defects, or other aspects of the supplier's product or service. To provide adequate coverage of alert/response applications to the widest market, an alert platform must support a broad range of communication media, including
  • High-quality voice via land-line telephone and cell phone
  • Properly formatted text and interactive applications for e-mail, pager, Internet, fax, and wireless devices
Proactive communications from companies to customers need to be through their existing preferred communication devices. Offering only one contact mode is not adequate for the media-diverse and mobile customer base that is characteristic of today's marketplace. This is not to say, however, that the land-line telephone should be neglected. Voice alerts governed by detailed customer preferences are mandatory in every system. Although the use of wireless text devices and e-mail is rapidly accelerating, voice is and will be the dominant communications channel for delivering timely alerts that require immediate response and interaction. An alert formatted for voice delivery reaches the broadest audience and enables the business message to rise above the flood of e-mail. Voice formatting adds a human quality and time-sensitive value to a message. Voice alerts are also the most conducive to eliciting a customer response because of their familiarity and simplicity ("press 1 to speak with a customer service agent" or "press 2 to buy"). Given the option, customers will select voice delivery for many of their alerts, and the responses associated with these alerts will be higher than any other media.

Although voice will serve the broadest customer base, some customers will insist on other media formats. With a call/contact center platform that supports mixed-media alert/response applications, a business may decide to include chat or call-me-now functionality as a feature of an outbound e-mail alert. The business could decide that certain outbound voice alerts will offer the customer options linked to a variety of services, for example, two-way messaging or wireless text messaging. An alert/response platform should continue to evolve to support the latest consumer devices when the volume of customer requests justifies it.

Implementing alert/response applications

A sophisticated alert/response platform is the perfect companion to a company's existing call/contact center systems to augment and integrate with the CRM system. The recent evolution of CRM to supporting outbound customer contacts may mean that traditional CRM hardware and software cannot support the new applications, however. The typical CRM system does not have the built-in capability to enable companies to anticipate customer calls and to reach out to customers with information tailored specifically to them before they call.
If a CRM system is capable of being integrated with alert technology, the alerts typically do not contain the customized, deep-enterprise data that customers want. For example, they may offer only limited syndicated content that is individually addressed and broadcast, making the alerts more like generic spam messages. Or, if the information is deep and customer-specific, these systems typically support delivery via a single medium only, usually e-mail. Moreover, those companies that have already made the initial foray into alert systems rarely table an integrated approach to managing responses to alerts. There is a critical void when it comes to delivering customer-specific information in a variety of mediums, enabling intelligent two-way interaction, or making the most of a company's existing data to serve customers better and successfully involve them in one-to-one outbound interactions.

Integrating with existing systems

Armed with their existing customer systems and the right outbound alert/response platform, companies can learn from their customer interactions how to offer a continuously higher level of successful customer service, adding customer input to enhance their CRM system. Existing customer contact systems need to be integrated with an alert/response program. With a touch of the keypad or a click of the mouse, customers must be able to connect easily to the business, talk to a live agent, transfer to an automated transaction system for purchasing, or add personal comments and forward the alert to others who may be interested in the information.

For customers to find alerts useful and to respond to them in a positive way, the alerts must be triggered on detailed, account-specific information and governed by the preferences of each customer. The data that trigger these alerts could be stored in a variety of different databases or even in multiple databases within the same organization. XML, one of the newer computer languages and one that is rapidly becoming a developer preference, can handle this problem. XML-based technology seamlessly integrates many disparate back-office, call/contact center, and database systems, including computer telephony integration (CTI), voice processing, collaboration, legacy, CRM, and Web-oriented systems. An XML-based extraction platform is a powerful, flexible way to trigger alerts.

Configuring the alert/response content

Alert content must be dynamic, easy to create, easy to manage, and appealing to the alert recipient. To maximize the application and create the highest value for the customer, administrators must be able to change alert content and create new alerts as business conditions change—via a packaged management solution, not via customer development. Contact center management and nontechnical administrators need to be able to "tune" alert/response systems on an application-by-application basis. The administration components should include the following:
  • Prerecorded voice content
  • Rules for conditional use of text-to-speech, retry frequency, and logic
  • Links between alert behavior and call center hours and real-time load
Given these requirements, companies strapped for IT resources will look to vendors to provide graphical user interfaces that incorporate easy-to-use, drag-and-drop alert development and maintenance.

Preemptive alerting has both operational and strategic benefits for the business. It eliminates unnecessary, costly, non-revenue-generating inbound customer contact, resulting in increased customer satisfaction, dramatic cost-per-call savings, call elimination, and better service levels, as well as a reduction in the number of agents required in call centers. On a strategic level, proactively giving customers the information they want increases customer satisfaction and gives companies a competitive advantage. In addition, offering alerts with intelligent response options enables companies to combine sales and service initiatives that increase revenue, generate highly qualified inbound traffic, and make the most efficient use of both customer and company time. Companies are recognizing that their call/contact centers are a vitally important part of their overall business strategies and operations and are particularly critical to CRM strategies. As noted elsewhere in this book, customer service has become a major competitive differentiator in many business sectors. By using an enterprise alert/response platform to leverage existing legacy systems, CRM systems, and Web investments, large businesses with many thousands or millions of customers, can now engage customers in an intimate, trusted, two-way dialogue that creates measurable improvements in customer loyalty and profitability.

Saturday, April 9, 2011

CRM issues and tactics

Companies assessing a CRM strategy or in the process of implementation have many issues to consider. For example:
  • Deciding how and where to start
  • Minimizing costs
  • Reducing risks
  • Generating tangible returns quickly
  • Accelerating implementation and maintaining momentum
  • Minimizing disruption to the organization
  • Establishing a foundation for continuing gains
Although there is no one "right" CRM framework for every business sector, eight areas of capabilities and operations are the core components of the required infrastructure for most companies. More details about these specific areas are given in the paragraphs that follow.

CRM workshops

Holding CRM workshops can be extremely valuable in bringing together management groups to establish an in-depth understanding of the concepts, methods, and implications of the new strategies as well as conveying a common viewpoint. Senior management should play a prominent leadership role in this process by providing a supporting member to the CRM project team, as noted earlier in Stage 5. It is also very important for senior management to meet separately in the initial planning and objective-setting stages with key managers and groups to establish an understanding of why the transition to CRM is needed as well as to examine the implications and opportunities for each group's area of responsibility. The leadership role remains critical throughout the implementation process, both to provide a compelling vision, driven by senior management, of where the company is going and to instill a sense of urgency and commitment to the changes that are needed.

Exact transaction analysis

The next step in developing a CRM program retraces the retail sector's original roots, when neighborhood store owners knew their customers and took special care to serve their interests and needs. The megastore and a reduction in customer service came next. But now CRM technology is allowing retailers to rebuild customer relationships and keep customers coming back, the same way the neighborhood store did in a bygone era. Over the past decade, CRM has evolved from being a relatively small part of marketing operations at a few forward-thinking retailers to becoming a core corporate strategy of many retail businesses as well as of businesses in other major sectors. Customer purchase history and demographic information are now used not just in marketing programs, but in every facet of a retail business, including real estate sales and acquisitions, store locations, e-commerce, and merchandise selection. Despite its detractors and the failure of poorly designed and/or poorly implemented CRM projects, there are numerous testimonials to the success of the effective application of CRM strategies in organizations from every major business sector.

As the term exact transaction analysis implies, it is a process of analyzing every customer transaction exactly. It is the ultimate method of deriving the full benefit of CRM, because CRM can only be successful if an organization has the capability to interact with each and every customer on an individual level. Only when a complete, one-on-one relationship is achieved can an organization realize the goal of lifelong, profitable customer relationships. Access to extremely detailed customer information, down to the level of individual transactions, is the key to the full realization of CRM's potential.

Relationship technologies

Four factors are key elements in the application of relationship technology to managing customer relationships:
  • Selecting the technologies that will meet customer needs
  • Teaming up with the right partners to implement them
  • Applying relationship technologies to customer transactions
  • Implementing a CRM strategy in stages
Relationship technologies make customer transactions more personal, more individual, and more exact. More than ever, they have become important elements in the way an organization manages its customer relations. A well-defined customer relationship management (CRM) solution, based on a data warehousing system, enables businesses to capture and analyze customer interactions and transactions and reduce customer churn, which may be defined as the constant and continual movement of customers from one organization to another.

Properly aligned with customer needs, CRM can also help companies better understand customer requirements and changes in buying patterns and lifestyle and build long-term relationships of value to them. Various customer surveys have shown that people want businesses to keep in touch with them, to be responsive to their purchasing needs, even to anticipate these needs. In short, they expect a relationship that has value. This relationship may well begin with the call/contact center, and it is important that every customer contact point—a phone call, a click on a Website, a response to a direct mail campaign—be used to establish and maintain this relationship. 

Organizations that achieve high ratings for customer relationships are those that make the relationship of value to the customer. This factor has become a significant differentiator among organizations.


Another element of customer relationships that has become a significant issue in the consumer marketplace is privacy of personal information. As organizations build large data warehouses of customer demographic and transactional information, protecting the privacy of this information becomes very important in developing and retaining customers and in fostering customer-centric relationships. In short, customers expect organizations to respect their privacy. If they do not, customers can use their purchasing power to register their dissatisfaction, or in some jurisdictions where there are legal statutes in place to protect privacy, they can resort to the law.

A rationale for CRM

Clearly, transforming customer information into customer value can create a significant competitive advantage. High-value customers are identified, their needs anticipated, and new value created for them where it did not exist before. The end result for a customer-centric organization is customer loyalty, which translates into higher profitability. Product-centric values—delivering functionality and quality on time and on budget—should be augmented, not replaced, by a CRM solution. In a customer-centric organization, the traditional product-centric values become more meaningful when supported by effective CRM strategies.

The importance of assessing the company's current capabilities and plotting the many dimensions of the business along the continuum from product-centricity to customer-centricity cannot be overstressed. Comparing corporate attributes with what is happening in the marketplace should also be a part of this assessment. This process will enable the organization to benefit from the potential of CRM processes and technologies by building on an objective assessment of the company's customer-oriented capabilities, based on a defined set of projects, including investment estimates and business cases.

Tuesday, April 5, 2011

Applying the CRM strategy

The goal of CRM is to evolve from a marketing model that was based on a product-centric marketing structure to one based on dealing with each customer as if that customer were the only customer. Managing customer relationships successfully means learning about the habits and needs of customers, anticipating future buying patterns, and finding new opportunities to add value to the relationship.

Customer behavior patterns

In the financial sector, for example, banks—early beneficiaries of successful CRM strategies—are using data warehousing and data mining technologies to learn to anticipate their customers' needs from the millions of transactions and interactions they have with their customers. The patterns of customer behavior and attitude derived from this information enable the banks to effectively segment customers by predetermined criteria. Such detailed customer data can provide answers to the following questions:
  • Which communication channel do customers prefer?
  • What would be the risk of their leaving the bank to go to the competition?
  • What is the probability the customer will buy a service or product?
With this knowledge, the financial institution can develop marketing programs that relate logically and psychologically to each customer segment, provide valuable customer information to the call/contact center, support cross selling and customer-retention programs, and assist the staff to maximize the value of each customer's interaction.

Maximizing individual customer experiences

How does an organization manage each customer relationship individually? Several fundamental changes in business functions can be made on the way to a complete CRM solution. Marketing departments need systems that allow employees to track, capture, and analyze millions of customer activities, both interactions and transactions, over a long period of time. This knowledge helps the organization to create promotions, develop new products and services, and design communication programs that attract, reward, and retain customers. Two other fundamental concepts behind a successful CRM strategy are operational and technological excellence. Attaining leadership in these areas enables an organization to predict and maximize the value of each customer relationship.
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