Customer Relationship Management Strategies Part Four: Strategies and Case Study

Keeping in mind the three main components of CRM, the customer, the relationship, and management, we will expand on specific customer relationship management (CRM) system strategies that will help you realize your investment.

Some crucial strategies you must adopt are

* Develop specific, measurable goals
* Establish ROI strategy to achieve your goals
* Build the technical framework
* Identify explicit sales and marketing strategies
* Outline Internet strategies
* Develop and maintain customer satisfaction metrics

Develop specific, measurable goals

Vague, abstract mission statements were pervasive in the business culture of the 1980s. Companies sought to motivate their employees by posting "catchy" slogans and ambiguous corporate agendas all over their office spaces. Statements like "to provide the best quality" or "to provide quality customer service" are all positive goals that employees want to strive for. However, these mission statements are hard to live up to if there is not a substantial measure of standard to compare to. "Quality" and "Best" are all unquantifiable.

Create your catchy mission statements but find ways to quantify the results. Set specific and measurable goals. For example, increase your revenue by x percent, decrease product exchanges by y amount, increase profit margin by x dollars, decrease attrition by y percent. If you want to increase the quality of your product, consider what happens when your products are less than 100 percent quality. Do you spend more money replacing the product? More dollars are spent servicing products still under warranty. Does your call center experience more calls? Is there high wastage? Do you set out to decrease money spent on replacement products or parts by $100,000, or decrease call volume by 40 percent, or decrease wastage by half? These are goals your employees can understand and strive for.

This is Part Four of a four-part note.

Part One discussed new approaches to CRM implementation,

Part Two discussed implementation strategies, and Part Three described achieving and maintaining the competitive edge.

Establish ROI strategy to achieve your goals

It is no accident that CRM performance accounts for a large part of a companies profitability or lack there of. Once you've identified your goals, compare those numbers to the investment you've made in your CRM system. Create a return on investment (ROI) strategy that delivers the best return on your investment, and will provide more dividends in the future. Utilizing the analytical tools that your CRM applications provide is the key to understanding and defining a company CRM ROI. CRM analytics help companies to recognize consumer behavioral patterns and identify new opportunities in the marketplace. Mine your data to learn about customer's buying habits, their marketing profile, consumer risk thresholds, and segmentation.

The main objective here is to ascertain if your investment was worthwhile. Did it reach optimal return? If not, how much did it reach by? Can you make up for it in economy in size?

To calculate your ROI, estimate your per-customer cost of implementation. Add to it the cost of maintenance, including head count and overhead (of the employees you've added to support the system), hardware, storage, user education, and upgrades. Multiply this by the number of customers you have. This is the cost of your CRM initiative. Next take your number of customers multiply it by your gross profit, multiply that yet again by your success rate. Take the product and subtract from it the total cost of your CRM initiative. The result is your return on investment.

Calculating ROI involves numerous factors and the analytical tool in your CRM application will help you with the complex equation. However, you need to determine what elements need to be measured and how to measure them. Key elements include per customer cost for the implementation, maintenance (including any employees hired to maintain the system), user training, upgrades, and general overhead. Also include the gross profit and the success rate, which is normally expressed as a percentage. It is here were establishing metrics is crucial. You need to determine what factors will be included in the success rate, such as office efficiencies, sales growth, customer growth etc. and you need to establish how they will be weighed. Depending on your industry and your company's goal, the presence and weight of these factors vary. Remember, you need to establish that your CRM investment will not only pay back in time, it will actually make or save you money. Knowing where your company currently sits and where the CRM system will take it, will make the case for a CRM system.

Build the technical framework

CRM strategies are turned into action items by implementing innovative software and powerful databases. Your sales and marketing strategies have worked for you in the past—there is a reason why your company is a mid-market organization and not a small business. To continue on the path of growth, your organization needs to relate your sales and marketing actions to the technology at hand. The technology is there, take advantage of it. Why invest in the system and not exploit it to make your job and your employees' jobs easier?

Your CRM system can automate processes and provide data analytics. Before CRM, your marketing manager would storyboard a marketing campaign, hold meetings to discuss the idea, put together a spreadsheet of prospective customers, make multiple copies of the list, hand them out to each sales representatives, walk back to his office, and wait for his sales people to make the phone calls, and write up the order.

However, your CRM system can drastically reduce those manual steps. Collaborative tools are available to users for discussing ideas, getting budget authorization, obtaining concept approval, setting up meetings, and exchanging e-mails. Marketing tools can help you import lists, assign leads, qualify leads, generate quotes, and create sales orders.

Sales analytics can help you recognize patterns and track buying habits. Knowing how to use these individual tools is not enough. A successful CRM strategy encompasses the entire CRMBC. Integrate your sales and marketing functions with your customer service efforts, and circle around to your customer satisfaction evaluation. The CRMBC is a continuous feedback loop that integrates the application with organizational strategies to facilitate, gather, and process customer behavioral patterns in terms of discreet units of data.

Identify explicit sales and marketing strategy

How will you achieve your company's goals? What key sales and marketing strategies do you need to get your organization from point A to point B, from 10 percent profit margin to 30 percent profit margin, from 50 percent attrition rate to 25 percent, from 800 service calls a day to 500? Your plan must be specific and detailed. It should consider your customer's needs and how you react to those needs.

Sales and marketing strategies can utilize CRM to provide contact points with the customer to present product offerings. It is this interaction that your marketing plan must take advantage of. A sales person that makes an outbound call is an event that can trigger a step in your marketing strategy. When a customer calls into your service center, that is a contact point. How can your marketing department capitalize on this event?

Wrap your sales and marketing plans around these points of contact for opportunities to execute.

Outline Internet strategies

The World Wide Web has decreased the cost of doing business by enabling economy of scale. Nowhere else can you potentially reach billions of people, make millions of contact points, and create a fortune in opportunities, all with the luxury of mass communication, dynamic content, and instant recall. You can invest very little in Internet technology and receive a high return.

Mid-market companies seldom capitalize on this relatively inexpensive tool. Consider a mass mailing of 100,000 households. The list would cost you a few hundred if not thousand of dollars. The print and paper would cost you more, and postage, if mailing in the US, would set you back about $17,000 (USD). If you're lucky, you will get a 10 percent response rate. Most people will throw your mailer away. If it crosses their mind later, they won't remember what was on it and they certainly wouldn't have memorized your phone number.

Successful Internet strategies must have three characteristics:

* Facilitate user interaction
* Provide a benefit to the customer
* Add to value to your system

First, users will not stay long on your site if they cannot interact, whether they are reading valuable information they cannot easily get elsewhere, or they are engaging in an on-line game, or the visual aspects of your site fascinate them. Engage your audience.

Second, you must provide an advantage over traditional sales channels. An Internet strategy must meet a need your customer has but in a way that is timelier, more convenient, more accessible, or more economical. If your customer logs a request for service via the Internet, will it be completed more quickly? Can your customer register his product on the Internet easier than mailing in a postcard? If your customer purchased a product on your web site, can they get it for less than on the shelf? For example, Barnes and Noble sometimes offers their books for less on their web site than at their stores.

Third, take advantage of this channel to add value to your CRM system. Have your customers verify their address when they re-order a product. Ask your customers to take a survey. Capture your customer's interest by tracking their traffic through your site. Did they spend more time in the electronics section than in the book section? Track your customer's buying habits. Do your customers wait for a sale to purchase a product? How many items do they order at one session?

SOURCE:
http://www.technologyevaluation.com/research/articles/customer-relationship-management-strategies-part-four-strategies-and-case-study-17787/

A New Customer Relationship Management Framework

Simply put, the business ecosystem changed dramatically and for good about three years ago (five minutes in fashionista time). It shifted focus from corporate to customer, and the location of value changed with it. Where value had historically been located in the products and services produced by companies, it is now located in the value produced by the customer. The driver's seat is now occupied by that customer, whether the service is business-to-business or business-to-consumer or government-to-citizen. Ultimately, value now lies in the hands of the individual customer, and it is up to the company to both come to terms with that as the way the economy now runs, and to find ways of receiving that value from the customers through the provision of value to the customer.

Think I'm wrong? Look around you at what's successful these days. You hear tell of The Long Tail—niche markets that are successful over time by capturing the volume of individual responses through the creation of a highly specific market built around a personal desire of one sort or another. It's why you see a proliferation of successful mini-Starbucksian types of businesses. Some of the more colorful examples:

1. There are dessert-only restaurants in New York (US) and Barcelona (Spain), among other places, that have high-end desserts only on the menus.
2. There is a concept of fractional super car ownership that allows you, for some yearly sum at different levels, to use Porsches, or Bentleys, or Ferraris for weeks at a time, depending on what level you purchase for the year. It's the ultimate chichi car ownership model.
3. According to the author of The Long Tail, Wired's Chris Anderson, 25 percent of purchases at Amazon are from non-traditional booksellers who would otherwise have no chance of selling their books.

We can go on, but this is merely one representation of the transformation of the desires of the customer.

Peppers & Rogers have a different take on customer value. They call it "return on customer," which they see as a metric and set of performance indicators that are a true measure of a successful business. Their recent hit book Return on Customer makes it quite clear that whether or not you agree with their specific metrics, we now live in an age where the customer, not the company, determines the value.

What Is that Value?

The irony is that in the "old days" of CRM, you'd think that the value was determined purely financially. Bottom- and top-line stuff. Revenue, sales volume increases, margin and profit increases, number of products from your company owned by the customer, and so on. This is not the case in the age of the new customer. The customer's idea of what is valuable and the company's may be quite different.

What customers are looking for is "meaningful value." In other words, something that they think is worth it. Worth what? Something for which it's worth being advocates for your company. But we'll get into that in a short while. Customers are looking for a great experience with your company—an experience that is owned by them. They are looking to your company, not just as a manufacturer of products and services, but as an aggregator of experiences that they both drive themselves and co-own with you. This means they expect a certain level of transparency—also known as honesty—from you.

Don't underestimate this, because your underestimation of "truth, but not advertising" can be the deal-breaker that drives your customer from you. It is the reason that three years ago, no discernable percentage of companies were running business blogs, and that now 8 percent are, with 55 percent intending to, according to multiple studies recently released. Because honesty no longer lies (double entendre there) with the marketing department. Honesty is a corporate effort at conversation with a customer from all employees. Marketing in the way that we knew it is not as useful as it once was, which means that traditional CRM ways of looking at marketing (campaign management and the like) need some rethinking around the use of the new means of communication that customers are demanding, and around the new approaches to marketing taken by some of the big players like Procter and Gamble (P&G).

What do they do? They understand the value of intimacy with the customer—truth, and then some. For example, P&G has a network of 600,000 members they call Vocalpoint. Know what it consists of? Mothers. Yes, mamas, but with a unique twist. Each of the mommies has a social network of at least twenty-five other moms. Multiply that, readers, and what do you get? A minimum of fifteen million reachable targets that are living within trusted networks. So if Prime Momma in Network #33 says to Mommy #52 that they should take a look at this P&G product sample which Prime Momma thinks is really cool, Mommy #52 does and tells #53 about it too. Why shouldn't she? Prime Momma is a trusted friend.

This all works because P&G gets what the new customer demands and what this customer and potential advocate sees as value. Thus, they understand what the new CRM is. Read these quotes from P&G chief executive officer (CEO) A.G. Lafley real close, because they are an exact representation as to why we need a new framework for CRM going forward:

"We have to create a great experience every time you touch the brand, and the design is a really big part of creating the experience and the emotion. We try to make a customer's experience better, but better in her terms."

"I think it's value that rules the world. There's an awful lot of evidence across an awful lot of categories that consumers will pay more for better design, better performance, better quality, better value, and better experiences."

This latter comment was a direct counter to Wal-Mart's philosophy that "price rules the world."

Ultimately, what I'm saying here is that there is a new breed of customers in town who are both undeniable in their formidable presence, and who have demands that are non-negotiable. They are social customers who are as likely to trash your company as to be advocates for you. They are customers who are part of what Springwise likes to call "generation C"—creative, connected, and content-driven—regardless of which actual generation they belong to. It is the Blackberry users who use the device for personal stuff too and take it home at night. It is the kids who text message their buds, instant message (IM) them, or even call them. It is the people who look at what you do and think cool. But it is also the people who use the Internet to get the word out about what bad service a company provides. They get that "diss" to absolute strangers who automatically trust the bad comments and spread it to others—even though the only thing that you know about the person sending is that their e-mail handle is rabidbatman@robinzonked.com. To both counter the latter, and encourage the "cool" response and create an advocate, what you have to provide as a business is an experience with you, your products, and your services that distinguishes you from your competitors who can provide similar products and services as cheaply and as easily as you—something that your customer is fully aware of, by the way. Think about it. You're a customer too. Don't you know that? Don't you think—I loved that hotel? or I hated that hotel?—and that can color your perception of an entire vacation. Imagine that thinking going on about all products, services, and companies these days.

That means that you have to differentiate yourself by providing customers with a personalized experience that they can find some meaningful value in. And that meaningful value could just be the satisfaction of outright "coolness."

Think that's an overstatement? After all, it's not easily metrically determinable. Well, think of this. A study that was commissioned in a joint effort by Intel and Toray Ultrasuede found that 76 percent of the survey respondents not only looked at someone's technology, but at the style of it—and that style was a critical factor in technology choice. Now, while this study indicates something about the new customer, Intel and Toray Ultrasuede's answer to the results indicates something about uncreative thinking—an ultrasuede-covered laptop. Sigh and Ugh.

But the underlying research is both sound and important. What is meaningful value to a customer can be emotional. What these customers want are the tools to fashion and sculpt their own experiences with you.

Disney Destinations Marketing, the vacation arm of Disney, made what they call a small change in their CRM acronym a few months ago. They started calling it CMR—"customer-managed relationships." They made what that meant clear when their spokesperson said, "CMR is our version of CRM—just a slight nuance regarding our philosophy that our guests invite us into their lives and ultimately manage our presence/relationship with them." While I think that's a lot more than a slight nuance, it indicates that there are a number of companies that know the new business models and especially the customer strategies, and thus, the processes that are determinate in the execution of those strategies now have to be built around features and functions that have some engaged customer value embedded—whether the feature or function is internal or external.

So a new framework for CRM has to be built. One that says, "we recognize that customer demands are different than they were; that customers want to be more engaged in the creation of personalized experiences with the companies they choose to collaborate with." In order for the company to get value from the customer, they need to both create an advocate and not create a verbal terrorist. The company has to be both a manufacturer of goods and services, and an aggregator of experiences that provides the tools and environment for the customer they need to make those experiences excellent and "cool." That means that blogs and social networks and user communities and cell phones and mobile device platforms and podcasts and you-name-it are all part of the customer strategy that wins during this part of the twenty-first century. The new framework for this now needs to be created. If it's not time, it's too late.


SOURCE:
http://www.technologyevaluation.com/research/articles/a-new-customer-relationship-management-framework-twenty-first-century-necessity-or-blowin-in-the-wind-18726/

Amdocs Overhauls Its Marketing

Amdocs (NASDAQ: DOX), is a leading provider of billing systems, customer care, and support for the communications industry in North America, Europe, and the rest of the world. A global company with revenue of about $1.8 billion (USD) in fiscal 2004, Amdocs employs over 9,500 IT professionals and serves customers in more than 40 countries around the world.

Headquartered in Ra'anana, Israel, Amdocs has long been the leader in the world of telecommunications billing, by long supplying operations support software (OSS) used by telecommunications service providers to deliver voice, data, and wireless services to their customers. OSS is a generic term for a suite of software programs that enable an enterprise to monitor, analyze, and manage a network system. The term was originally applied to communications service providers (CSP), referring to a management system that controlled telephone and computer networks. However, the term has since been applied to the business world in general to mean a system that supports an organization's network operations. To that end, Amdocs' software includes modules for customer service, billing, sales, and audits, while it also offers sales and publishing software for developing print and on-line directories. It is a technology company that engages in the provision of product-driven information system solutions to major telecommunications companies.

The company's product offerings now include a library of OSS, whose core elements include customer resource management (CRM), order management, call rating, invoice calculation, bill formatting, collections, fraud management and directory publishing services, while its managed services include information technology (IT) outsourcing, application outsourcing, and business process outsourcing (BPO), particularly for customer service and data center operations. In fact, a large proportion of Amdocs' 2004 revenue came from managed services, where the company saw continued strength in its directory services business and enhanced relationships with important existing customers. For instance, following the completed acquisition of Certen from Bell Canada in mid-2003, Amdocs took over the managed services responsibilities for Bell, Existing managed services agreement with Bell extends through December 2010. Amdocs has also continued to develop an integrated billing platform to replace legacy systems built on a product-by-product basis. Thus it has further contributing to Bell's productivity improvement goals and enabling Bell to deliver on its one integrated bill commitment to its customers.

This is Part One of a three-part note.

Part Two will discuss market strategy.

Part Three will cover alliances, challenges and make user recommendations.

Amdocs Products

Amdocs Ensemble suite of products encompasses several key customer care, billing and order management systems (CC&B systems) application areas, such as customer care; order management; event processing; invoicing; and fraud management. Moreover, through the acquisition of a former CRM leader Clarify in 2001 (see Clarity of Vision: Clarify Sold to Amdocs by Nortel), Amdocs also became a noteworthy player in the CRM and call center areas, so that, in terms of the OSS side of a communication customer or a CSP, most data of any effect is captured and managed by an Amdocs solution. To that end, Amdocs ClarifyCRM product offers solutions that help companies better perform and manage selling processes across multiple sales channels. The major suite, Amdocs ClarifyCRM Service and Support, offers solutions spanning support centers, contact centers, and self-service solutions, although the product offers certain marketing and analytics capabilities too.

Another related product, Amdocs Enabler, provides flexible, real time rating and billing for all voice, data, content, and commerce services, by offering integrated on-line and off-line charging. It also provides a single product to support both prepaid-postpaid convergence and wire-line and wireless convergence. Enabler is pre-integrated with Amdocs ClarifyCRM, which will coordinate the integration of future product upgrades, since Enabler's functionality can be extended through pre-integration with value-added Amdocs products.

In 2003, Amdocs launched major releases of its flagship products. These releases introduced out-of-the-box, productized billing and CRM integration, enabling easier implementation of the products as well as with third-party and legacy applications. This functionality has provided customers with the potential to achieve integrated customer management regardless of their current operating environment, and these releases also provided additional functionality that allows Amdocs' customers to drive profitability within their businesses. For example, Enabler 5 supports new revenue streams and business models with advanced on-line charging capabilities and it supports multi-market and multi-national operations, all on a single platform. On the other hand, ClarifyCRM 12 introduced advanced user interface (UI) technology that delivers more real time, relevant, and actionable customer information to the service agent's desktop, thereby transforming a high-volume call center into a more efficient and effective multi-channel customer contact center.

Amdocs further evolved its CRM offering in 2003 with the acquisition of the technology assets the bankrupt Exchange Applications Inc. (Xchange, see Xchange Adds to the List of CRM Point Solutions' Casualties). Now re-branded as part of the Amdocs ClarifyCRM suite of applications, the campaign management and real time decision-making capabilities obtained through this acquisition complemented Amdocs' traditional strengths in operational CRM, thereby delivering a more complete, closed-loop customer management.

Even during 2002, while battling to secure new finances, Xchange surprisingly managed to build a real time engine to deliver targeted promotions-based capability to detect important customer events and behaviors from transactional data throughout multiple marketing channels within an enterprise. In early 2003 the company announced the release of its former Xchange 9 browser-based suite that enables marketers to automatically trigger an appropriate communication to the customer immediately after they exhibit a behavior representing a cross-sell, up-sell, or retention opportunity, thus answering the question "when" to initiate a marketing interaction.

Further, the Xchange 9 EDM (Event Driven Marketing) Option allowed users to observe data from multiple sources within the enterprise, look for changes to the "state" of the customer, and change direct marketing via the Xchange 9 platform. This development is in sharp contrast to using traditional data mining tools or writing complex structured query language -based (SQL) queries to leverage historical information and to produce predictive models long after the marketing opportunity has past. Nevertheless, the former Xchange applications have since hardly promoted Amdocs as an integrated OSS for CSPs. The reason being that within the marketing automation (MA) market, Amdoc's capabilities have, at best been, described as only "adequate", not "exciting" or "leading".

Amdocs Product Group

Principal among Amdocs' product highlights in 2004 was the formation of the Amdocs Products Group. This is a new department that should bring a more cohesive approach to developing and managing Amdoc's product portfolio and build greater integration into the software. Efforts planned for fiscal 2005 in product development and management will be another major step in enhancing the company's ability to help its customers implement their own integrated customer management strategy.

It appears that the Amdocs' acquisitions have been paying dividends as the company now intends to go to market with a more holistic message dubbed Integrated Customer Management (ICM). What appears to be a new corporate personality actually represents a fundamental shift in the Amdocs strategy. It is moving away from positioning itself as a vendor providing best-in-class CSP billing systems with a CRM suite on the side. Now the company offers an integrated business processes with the customer as the focal point.

Its portfolio now offers an appealing proposition with the built-in ability to help service providers move toward the ICM vision—one product at a time or all at once. With the acquisition of XACCT Technologies in 2004, Amdocs was able to add network data management capabilities to its product offering. By adding XACCT mediation system to pre-integrated components such as self-service, billing, CRM, order management, and partner relationship management (PRM), Amdocs owns possibly the most comprehensive portfolio currently available to telecommunications companies.

With increased investment in research and development (R&D) to $126.4 million (USD) in 2004 versus $119.3 million (USD) spent in 2003, 2004 product launches included new versions of

* Amdocs ClarifyCRM, which offers improved performance, scalability and availability, as demonstrated through recent benchmark tests using the HP-UNIX and BEA WebLogic platforms.

* Amdocs PRM, which enables CSPs to (relatively) cost-effectively deliver a selection of new products and services and to reduce the cost of managing multiple content and commerce partners in order to differentiate themselves in the marketplace and to promote new revenue streams.

* Amdocs Commerce Payments, which now has more advanced features to allow providers to monetize third-party content and commerce services and increase end user satisfaction and loyalty.



SOURCE:
http://www.technologyevaluation.com/research/articles/amdocs-overhauls-its-marketing-18092/

Customer Relationship Management: Evolution, Not Revolution

Choosing a new customer relationship management (CRM) solution can be onerous for anyone saddled with this task. But the process of choosing a solution doesn't have to be time-consuming and tedious. Nor should it cause major upheaval in an enterprise's operations, creating significant inconvenience for users. The last thing any manager wants is apathy—or even mutiny—from disgruntled employees “forced” to use an application that doesn't suit their needs or that is too complex to be adopted quickly.

Instead, a CRM solution should be implemented so that users are fully supported and feel that the tools at hand are helping them to get the job done, not adding an extra element of responsibility to their workdays. What you don't want is hand-to-hand combat when trying to encourage employees to use new applications, as lack of user buy-in is one of the most common reasons for CRM project failure.

The application you choose should, in fact, increase efficiency. And hand in hand with efficiency, you expect either a reduction in costs, or an increase in profit. Ideally, you'll get a quantifiable return on what can be a significant investment.

But First, What Is CRM?

CRM is a process of improving a business's relationships with its customers, using software applications that target the requirements of the business's processes. CRM can strengthen these relationships in a number of ways. Typically, CRM applications fulfill one of three key functionalities related to managing customer information: marketing, sales, or service. Software modules are generally broken down into four functional areas: sales automation, marketing automation, customer service and support, and a reporting and analysis tool. Some CRM packages are comprehensive, meaning that they incorporate aspects of all four functions.

So how do you know if you need a comprehensive package?

This partly depends on whether your enterprise is small-to-medium, or whether it is a huge national industry or multinational corporation. It also depends on how many aspects of your customer relationships you think could do with a little revolutionizing—or “evolutionizing.” And finally, it depends on your company's budget.

What Are the Features of CRM?

In order for CRM to effect positive change in your company, its features should speak to all activities involving customer interactions. But don't stop at thinking this means only face-to-face interactions. CRM should include features that take into account all ways the customer comes in contact with the company—before, during, and after a sale. Therefore, advertising campaigns and customer complaints are just as important as that friendly smile offered to customers when they take their purchases and walk out of the store. All activities should emphasize to customers how much the company values them—and, for a more personalized experience, how well the company knows them. So that when you thank customers and invite them to “come again,” there's a much better chance that they will.

CRM can include any of the following features:

* call management
* customer management
* service issues management
* knowledge exchange management
* sales force activities
* marketing campaign management
* sale lead tracking
* marketing analysis and forecasting
* database storage

Packages that are tailored separately for the sales, marketing, or service aspects of CRM have additional features. Customer service and support automation, for example, may have such features as call routing, contact center sales support, and tools for measuring customer satisfaction. Marketing features might detail sales activities and time management, and allow for analyzing and reporting on sales opportunities.

But How Are These Features Going to Benefit My Business?

One simple way to sum up the benefits of CRM is this: better relationships with your customers. But, this is likely self-evident from the very name of the software—though of course “manage” is not necessarily synonymous with “improve.” What you really need to know is how exactly the many features of CRM can restructure and improve your relationships with clients.

Here are some key benefits:

* Data management and analysis tools help you to track customer preferences and to anticipate needs based on individual purchase histories, over time and according to changes in the marketplace.

* Marketing automation helps you create targeted campaigns based on those anticipated needs.

* Costs are reduced as a result of more efficient post-purchase support and service.

* As a stable base of satisfied repeat customers is created, more time can be spent on expanding the client base.

* Profitability and revenue can increase as a result of improved relationships with clients both old and new.

* New software can be merged with a business's existing platform or with other previously installed software applications, such as enterprise resource planning (ERP), sales force automation (SFA), and e-mail programs.

* Operations can be streamlined to increase competitive advantage and to cut costs.

* Customer loyalty is boosted by making the enterprise customer-centric instead of product-centric.

* Customers are able to report on how they experience the enterprise.

And the Number One Benefit of Implementing a CRM Solution Is …

Quantifying all the benefits is the easy part, but the number one benefit is really up to you to determine. What exactly do you want a CRM package to do for your business? It is essential to perform a thorough comparative analysis to find the solution that provides the benefit that best meets your needs.

What Industries Can Use CRM, and What Are the Advantages?

CRM can be used by a broad spectrum of industries and enterprises. Applications have been designed for specific domains, including aerospace, automotive, call centers, real estate, telecommunications, financial and banking, energy, government, legal services, manufacturing, health care and pharmaceutical, retail, transportation, and travel.

* Financial and insurance markets
This solution includes features of comprehensive CRM packages, but is designed to help financial and insurance markets with their specific client bases. Among its features and functions are policy tracking and investment tracking in order to enhance client databases. Software from some vendors might allow customer data to be consolidated, permit better communication between branches, and reduce staff training costs.

* Real estate
CRM for this sector helps vendors to improve customer relationships by capturing online leads, increasing the volume of higher-quality leads, performing personalized electronic marketing campaigns, and automating various administrative processes such as prospecting, quoting, and financing.

* Telecommunications
Solutions specifically designed for this industry can help reduce churn rates, generate new sales opportunities, and increase customer retention. In an era when the number of competitors seems to keep pace with the number of services provided, CRM can allow companies to bundle their services, thereby reducing cost as well as preserving an evermore fickle client base.

* Travel and transportation
Among the many industry-specific functions of this CRM solution, automated campaign management and SFA can help businesses consolidate client data and improve passenger experiences. As a result, increased productivity, higher traffic volumes, and reduced costs become the benefits for this sector.

* Health care and pharmaceutical
For the pharmaceutical industry, a CRM application can facilitate improved sales presentations, better promotion of product information, and better collaboration with physicians regarding product market demographics.

* Government
Yes, even in a domain that is not profit-motivated and that prefers the word “citizens” over “customers,” CRM applications can provide benefits. Across the board, government departments are constantly striving to improve “customer service” and overall user satisfaction, and can do so with a CRM application that merges services and permits quicker response.


SOURCE:
http://www.technologyevaluation.com/research/articles/customer-relationship-management-evolution-not-revolution-19108/

Boosting the Bottom Line with Master Data Management

If you haven't heard of master data management (MDM) yet, you will. If you didn't realize that you use master data every day, you do. If you didn't know that MDM can help boost your company's bottom line, it can.

MDM is the process that organizes, unifies, and eliminates duplication of customer, product, and logistical records, as well as other key pieces of information that businesses have to track every day. And it does this across different departments, platforms, and systems. Simply put, master data is the core customer and operational data that gets used in virtually every significant process and transaction that a business conducts.

So what does this mean for an organization in practical terms? MDM enables companies to boost their bottom line by

* reducing the cost of mailings, marketing campaigns, and lead acquisitions
* allowing for faster sales lead processing
* improving the quality of service in customer service departments and call centers
* strengthening sales and marketing functions

Download this informative podcast featuring Lyndsay Wise, senior analyst at Technology Evaluation Centers (TEC), and Anurag Wadehra, vice president of marketing and product management at Siperian, a leading MDM and customer integration solution provider, today. You'll find out more about MDM, including how to get started, what strategies to bring to the table, and all the benefits you can expect.

Click here to download Boosting the Bottom Line with Master Data Management now!

This podcast examines the following questions:

* What is the importance of master data management (MDM) to your organization?
* How can you cut costs through the use of MDM?
* How can MDM help you improve your company's sales and marketing efforts?
* What should you be aware of from a technical point of view before implementing an MDM solution?


Podcast Transcript

Hi, and welcome to TEC Radio. My name is Lyndsay Wise, and I am the senior research analyst for business intelligence [BI] and performance management here at Technology Evaluation Centers. Today I have [with me] Anurag Wadehra, the vice president of marketing and product management at Siperian. Siperian is a leading master data management [MDM] and customer integration solution provider. I will be discussing with Anurag what the importance of master data management is, and how organizations can use MDM solutions to improve their sales and marketing efforts, and how MDM can affect the bottom line and increase profitability within an organization.

Lyndsay Wise: Anurag, thank you so much for taking the time to be with us today.

Anurag Wadehra: You're welcome.

LW: What is MDM?

AW: That's a very interesting question, Lyndsay. Today, there's a lot of coverage of master data management, and essentially what it is, is a management of a certain kind of data. It is a data that defines the core business descriptions of customers, products, locations, and other key entities that [businesses] have to track. That's a very simple way of saying that master data management is managing your key business entities.

LW: How do organizations use master data? Can you give us an example?

AW: What's interesting about master data and the management of it, and the use of it in companies is that nobody uses it exclusively. Nobody wakes up and says, "I'm going to use master data today." It gets consumed in every business process and every business transaction. Let me give you an example. If you go to the bank and withdraw 10 dollars from an [automatic teller machine] ATM, in that transaction is implied who you are: what's your name,... your account number,... your address,... your location. Those aspects of the transaction are attributes of master data, and they get used, derived, or accessed during that transaction. And that's true for other business processes that involve customers, products, the relationship among customers and products, or other classes of what is called master data. So, in a nutshell, master data gets used in virtually every significant business process and transaction.

LW: How can MDM actually help a company improve its sales and marketing efforts?

AW: That's a very tricky question because companies have been trying to improve their business performance, including their sales and marketing processes, for a very long time. And for sales and marketing, companies have been trying to reduce the cost of mailings, cost of marketing, to different segments of their customers.

In sales, the cost of acquiring the leads and processing the leads … is an area of focus for many companies to improve their effectiveness. Master data is critical because very often the reason why costs are very high is because companies do not have good control over their master data. And therefore by controlling the quality and reliability, and very often, very simply, the definition of master data around customer product accounts, companies can significantly improve the business performance and business processes associated around this data.

Perhaps an example will help. If you consider a mailing that is sent to 10 million customers by a large bank announcing either a credit card offer or some other product offer, a significant amount of money can be spent on incorrect addresses, incorrect duplicate names, similar names, multiple mailings sent to the same household, very often not recognizing that spouses might actually belong to the same institutions as customers.

All of these issues result directly in higher cost and lower profitability. The root cause of many of the problems I've just described was poor quality of master data, lack of understanding of the relationships among master data.... By improving the quality and control of master data, you can improve directly the bottom line of your sales and marketing processes by reducing the cost of mailings, by improving the quality of services at call centers, and by improving the time it takes to process leads for sales.

LW: What kind of strategies should organizations use to help them implement MDM?

AW: So, what we've discovered is that a lot of companies understand the importance of high quality master data and the management of it, yet struggle with getting started because master data is so pervasive and is part of every major transaction and business process. Therefore, our recommendation has been that you start by looking at one specific business problem, such as cost of marketing, or high cost of sales, or improving customer service levels, and then drill down within that problem to the root cause of high costs, and very often those are driven by poor quality of master data.

By limiting the business problem, you are trying to attack and [narrow] in on the master data issues in that area. You can actually implement a solution rather quickly, very often within 60 days or less. And therefore you can start getting the benefit of having fixed the master data issue in one particular business area, such as marketing or sales, very quickly.

That's what we advocate. Don't try to boil the ocean. Don't try to attack master data across the entire enterprise in a single project. Identify a business problem that is very contained, and solve the problem by implementing a solution for master data. The dark side of that approach is that if you solve the problem and then go on to address a different problem—let's say, with product data—and now you implement a completely different solution for that, how do you make sure that all these solutions are actually, in fact, connected, because your common definition of a customer for marketing needs to be the same common definition of customer for, let's say, tracking products that are being shipped to the customer.

Connecting the master data solutions and making sure that all the master data solutions in the company are based on a common set of definitions is a very important consideration as you attack master data problems.

LW: In your previous question beforehand about sales and marketing, you actually did mention some of the challenges that customers face when they are trying to implement or use master data management solutions for their sales and marketing efforts. But can you also describe some of the challenges that customers face who don't use MDM, either additionally within sales and marketing or other areas of the organization?

AW: I think what has happened is that people who don't think that master data management is a new problem that needs to be addressed in a new way, usually end up having to address the problem in the old way.

Let me give you an example of that. A lot of companies might say, “I have a CRM system,” whatever the back office application they have purchased for managing sales leads, or “I have a call center application,” whatever system they might use to train their customer service reps to take the calls and support them. They might believe that those systems are adequate for providing a coherent view of the customers—their addresses, their locations—and that might be true for just that narrow process. However, business processes and customer processes span across sales and marketing and support. So, it's very important that the customer service rep knows that a sales call has been made to this customer the day before, or what state of marketing offer might have been sent out two days before.

Business processes that span sales and marketing and customer service should acquire a common, standardized definition—a common, standardized view of your customer's core profile information, be it their address, their location, their preferences for e-mail, their privacy preferences, etc. And if companies do not have master data management or do not believe they need master data management, they end up spending a lot of time handling data inconsistencies, data quality issues. Ultimately, these are customer retention, customer loyalty issues because customers get frustrated; they say, “You, the company, do not understand me,... that I have already given you my new mailing address six times, and yet you keep sending me stuff to the old address,... that I've told you not to e-mail me at this particular e-mail address, and yet you keep e-mailing me back at this particular e-mail address”—these kinds of customer loyalty, customer experience issues stem from not addressing master data.


SOURCE:
http://www.technologyevaluation.com/research/articles/boosting-the-bottom-line-with-master-data-management-19117/

When Customer Relationships Meets Business Intelligence Marketing

Strategic moves by SAS Institute (see Part Two of this note) are a response to the requirement that modern business intelligence (BI) suites be able to access and present key business measures for sales, customer service, the supply chain, financials, purchasing, inventory, and many other areas. In addition to these functions, BI suites must also provide the ability to use information building blocks as the basis for comparisons, calculations, ratios, and metrics. Users should be able to dynamically combine business measures to derive key performance indicators (KPI), such as product profitability, margin analysis, book-to-bill ratios, return on investment (ROI), and other vital metrics. Typical data that manufacturing enterprises should know about, on a daily basis, include inventory situation, rejected items, throughput, booked sales, order status, on-time shipments, and warranty levels. In each of these categories, users may want to get behind the numbers and trends to discern the root causes or find out what items, regions, channel partners, or customers are involved.

Part Three of the SAS: Striving to Sustain Leadership series.

For many reasons, SAS's alliance with Amdocs (NASDAQ: DOX) and partnership with Aprimo might be one of the few vendor partnerships where both customers and vendors benefit. By including customer, supplier, and information technology-related (IT) intelligence, SAS has a product functional scope that moves well beyond financial BI solutions to espouse a holistic corporate performance management (CPM) vision. However, the company will still face strong competition in many vertical markets from other leading BI vendors, such as Cognos and Business Objects. We believe SAS could further strengthen its position and enter more vertical markets by espousing a stronger original equipment manufacturer (OEM) or independent software vendor (ISV) partner strategy, which enables third parties to add their vertical, industry-specific experience, and accompanying front-ends and tools to SAS' analytical engine. The resulting packages could be resold into large and mid-market companies in those verticals.

In addition to the ongoing competition from a plethora of traditional BI players, or from statistical package market players, such as Insightful's S-Plus and SPSS, SAS is also facing a new nemesis in Siebel. Siebel designed Siebel Enterprise Analytics from the scratch and with data integration in mind. In two years, this product has grown from a few early adopters to become one of the vendor's fastest-growing, and possibly the largest product lines in 2004.

Needless to say, Siebel has long been a customer relationship management (CRM) archrival to Aprimo in the realm of enterprise marketing management (EMM), but it has also posed challenges to Amdocs in the call center and customer service space within the telecommunication sector. Both Siebel and Amdocs the largest two remaining pure-play CRM vendors and the competition with Amdocs has only intensified after Siebel acquired the billing and customer self-service provider eDocs, in late 2004. Given Siebel's recent intrusion into the BI market, we might even stand to be corrected by calling it a "semi-pure" customer relationship management (CRM) player. In any case, discussion indicates an intrinsic link between CRM and BI, which is possibly best illustrated within the market automation (MA) and customer service and call center markets (see Marketing and Intelligence, Together at Last and Analyze This).

Despite the challenge posed by Siebel and other rivals, SAS' move to build partnerships, especially with Amdocs should meet the growing need of communications service providers (CSP) seeking to build more profitable customer relationships. Until recently, crucial information was locked in Amdocs' disparate systems, such as billing, CRM, orders management, mediation, etc. and given this, CSPs were questioning such systems value. Through the collaboration between Amdocs and SAS, CSPs should now be able to collect this information and derive useful analyses to gauge the climate of the market and the temperament of their clients, and adjust and build services accordingly. Likewise, if successful, the vendors will also find profitability. SAS will be able to strengthen its position in the telecommunications market and extend its functional CRM footprint and Amdocs will be able to drive its MA strategy forward, and justify its new direction to its current customers. For more information see Amdocs Overhauls Its Marketing series, Part Three.

This is Part Three of a three-part note.

Part One profiled SAS.

Part Two discussed alliances, partnerships, and acquisitions.

Challenges

To compete with leading BI and data warehouse companies and enterprise resource planning (ERP) vendors that are moving into these markets, SAS needs to further open its products to make it easier to employ third-party tools. Also, like Cognos, Hyperion, and Business Objects, SAS should also exploit the current, weaker BI technology position of many ERP vendors to foster relationships with them, rather than viewing them as the adversaries.

SAS may also have to further adjust its business model. Currently, it still primarily provides its software on an outdated mainframe licensing model, deriving over half of its revenues from annual license fees that amount to about one-third of the initial licensing cost of its products. This provides SAS with a steady income, but may not be an attractive option for many prospective customers. SAS should consider moving to a more common enterprise software licensing model with annual support costs in the range of 15 percent of license costs. With its new product, SAS 9, SAS may be showing signs of recognizing that the old model of selling a complex tool kit, and then training its customers' internal staff on the tools, needs to be extended to many levels within the user enterprise. Strong vertical tailoring, more consultancy, and more out-of-the-box functionality to all areas in a business process are other positive signs that should be further exploited by SAS.

SOURCE:

http://www.technologyevaluation.com/research/articles/when-customer-relationships-meets-business-intelligence-marketing-analysis-and-user-recommendations-18109/

Marketing Automation: Coming of Age Slowly

The debate about the future of the marketing automation and management market, as a stand-alone sub segment of the entire customer relationship management (CRM) market, continues, partly owing to mixed signals coming from relevant point solutions providers. On one hand, recent demise, and buyout of Xchange by Amdocs (see Xchange Adds To The List Of CRM Point Solutions' Casualties) was the last in the array of less-fortunate point players. At the time prior to Xchange's assets auction, allegedly over twenty companies expressed interest in buying Xchange's assets, and in maintaining its products and supporting its customers, including much better-performing direct competitors Chordiant Software, DoubleClick, SAS, and especially Unica Corporation. While the upbeat marketing management software vendor Unica (www.unicacorp.com) was initially marked as a very likely buyer of Xchange, the vendor, however, slightly surprisingly elected not to make a bid for the Xchange's assets. Rather, Unica has since announced a migration plan from Xchange's solutions to its Affinium platform, given it has already migrated approximately 15 percent of Xchange's customer base to Affinium, and the vendor touts that regardless of which company has taken ultimate ownership of Xchange's remaining assets, converting to Affinium will be the most attractive solution for Xchange customers.

The CRM market as well as its marketing automation sub-segment remains both the land of opportunity albeit with many sinister patches of quicksand traps for those with small footprint breadth in the field. While the biggest or the richest packaged suite CRM or enterprise resource planning (ERP) providers have been able to hang onto flat new sales, possibly modest declines, or in more rare cases possibly modest growth, only a lucky and more probably the most apt few with a true differentiation in a selected number of markets have even bucked the trend and have shown some enviable growth.

Every business cycle begins with the attraction of the customer through sales and marketing. This hopefully results in an order management and fulfillment process and ends with a customer service, which can involve anything from field installations through to enquiry and complaint management. All of these steps have to be executed well without exception, since otherwise, the customer will end up on a competitor's list of customers. The "64,000-dollar" question is how all business processes work together. In the electronic world, the degree of flexibility and efficiency of collaborative processes relating to the customer life cycle, product life cycle, and service life cycle, to name but a few, will be a big determinant of losers and winners. To that end, there seems to be a dichotomy between the marketing automation promise of benefits enterprise-wide and the way it has often been misused.

Appeal of Marketing Automation

The importance of finding and keeping customers has only increased lately amid diminishing new sales opportunities. The appeal of marketing automation has come from its ability to tailor marketing campaigns and to track their effectiveness and control marketing costs and to perform better-targeted, finer-grained, multi-stage and multi-channel campaigns. These applications thus aim at helping organizations segment their customer bases, identify specific customer needs that are not that obvious to a naked eye, and build promotions and personalized campaigns designed to meet those needs and thereby create additional revenue.

This is all done by analyzing large volumes of scattered data, and then by identifying patterns or trends that would not otherwise be apparent (particularly if one is to notice an opportunity from a non-event, such as a customer has not used the ATM in the last month). With this information in hand, enterprises can create custom campaigns and track their effectiveness, and they can also leverage it to drive other processes, such as real time, customer service interactions or cross-sell opportunities (for example, customer service agents recommend products ad hoc upon customer needs over the phone, or real time offers and promotions personalized to customers navigating a web site).

In a nutshell, marketing automation software should be able to capture, blend, mine, and analyze large amounts of customer data from multiple sources, including online registries or directories, customer databases, flat files, billing systems, and external customer lists. That data is then used to target a consistent message across multiple channels to specific segmented (profiled) customer sets. Theoretically, these applications may justify the ROI rationale through

* A more effective customer acquisition, owing to extremely focused campaigns that are personalized and tailored to specific customer segments

* Increased customer retention, owing to improved value for existing customers by continually presenting personalized product and service marketing messages to more profitable customers, and through effective cross-selling opportunities that leverages purchasing histories and increases the likelihood of repeat business

* Improved marketing strategies in almost real time, via the ability to examine many indicators such as customer response rates, conversion rates, web site metrics, abandon rates and general demographic data to continually fine-tune customer segments and profiles, and discontinue marketing approaches that are futile if not even counterproductive

* Cost reduction, via the ability to evaluate the effectiveness of campaigns and to identify successful strategies, to readdress ineffective campaigns and to manage the costs of all campaigns within the organization



SOURCE:


http://www.technologyevaluation.com/research/articles/marketing-automation-coming-of-age-slowly-17282/