QuickStudy: Customer Relationship Management (CRM)

Customer Relationship Management (CRM) strategies have been around since the first bazaar, but products designed to automate CRM efforts are among today's hottest new computer applications. Companies are rushing to automate and better manage all the ways they deal with customers, including people who might not consider themselves customers yet.

In a perfect world, CRM marshals marketing materials, tracks customers' histories and coordinates a company's multipronged interactions with its customers.

But the vendors that are rushing to offer CRM applications haven't quite achieved this level of integration, says Wendy Close, an analyst at Gartner Group Inc. in San Jose.

Because CRM's tentacles reach into so many areas of a business, a CRM system isn't something that can be implemented out of the box. Automating CRM is an ongoing process, says Close, adding that no single vendor is able to supply all the pieces.

"I think customers have to understand that CRM is a business strategy, and these business strategies don't happen overnight," Close says.

"A lot of clients think they can go to a vendor and get CRM. . . . Instead, they get a few components. They buy a suite of front-office applications. But do they have all the channels and the technology, all the functionality and the services to really enable CRM?" she asks. "It takes multiple technologies and multiple vendors to pull this off."

When integrating a CRM system, a company must first review the business processes, applications and technologies it uses to deal with customers. It should also consider its schedule, its budget and what it hopes to gain from a CRM implementation.

It's also worth noting that CRM used to focus on the telephone as the primary means of contact, with little attention paid to e-mail or the Web. However, electronic messaging is overtaking voice as the most common form of communication. Corporate call centers aren't going out of business, but they need new people and equipment to deal with e-mail and Internet inquiries.

The three main areas that CRM systems focus on are sales, customer service and marketing automation.

Sales, also called sales force automation, includes the following five areas:

• Field sales.
• Call center telephone sales.
• Third-party brokers, distributors or agents.
• Retail.
• E-commerce, which is sometimes referred to as technology-enabled selling.

Customer service and support includes the following:

• Field service and dispatch technicians.
• Internet-based service or self-service via a Web site.
• Call centers that handle all channels of customer contact, not just voice.

Marketing automation differs from the other two categories because it doesn't involve customer contact. It focuses on analyzing and automating marketing processes.

Marketing automation products include the following:

• Data-cleansing tools.
• Data analysis or business intelligence tools for ad hoc querying, reporting and analyzing customer information, plus a data warehouse or data mart to support strategic decisions.
• Content-management applications that allow a company's employees to view and access business rules for marketing to customers.
• A campaign management system, which is a database management tool used by marketers to design campaigns and track their impact on various customer segments over time.

Depending on a company's goals, the tools it chooses would be integrated across the main areas of sales, service and marketing. The technology includes databases, data warehouses, servers and other hardware, telephony systems, software for business intelligence, workflow management and e-commerce, middleware and system administration management tools.

Integration Is What Counts

Putting all these facets into one coherent, organized presentation to the customer could require the services of a systems integrator. It would most certainly require training everyone from webmasters to call center workers to field sales technicians, Close says.

There are CRM success stories, she says, but success in a CRM implementation may best be measured by the restraint an organization shows in its goals and expectations.

"They don't go out and say 'I'm going to do it all.' They pick. They don't try to tackle all of CRM at once," Close says.

For example, a pharmaceutical company might integrate its database marketing with its field sales automation, a traditional problem in that industry, she says.

She notes that small and midsize companies have been able to implement more complete CRM systems because they may not operate globally and may be newer organizations that have fewer business processes to contend with.

"So they may be willing to implement an application and willing to use the package to drive the processes, as opposed to larger companies, which try to make the application fit into their processes," Close says.

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