CRM: The cutting edge of servicing customers

While customer relationship management has existed as long as merchants have been doing business, technology is turning it into the driving force for marketing. This means a huge opportunity for IT pros who combine the right technology and business skills.

When a major airline announced two years ago that it would be departing American Express Co.'s Membership Rewards program, customer relationship management (CRM) technology flew to the rescue, recalls Dave Towers, who was the marketing manager for the program at the time.

The program awards customers points toward frequent-flier miles for the purchases they charge to their American Express cards. If the airline flew the coop, Amex feared its customers who used their points for travel on the airline would take off as well.

"It was a real challenge because the value proposition we were selling to those customers had the potential to disappear overnight," Towers says. "We had to take quick action to make sure the airline wouldn't leave and that customers wouldn't leave."

So Towers, who is now director of CRM at J. Crew Group Inc. in New York, piloted a multifaceted campaign using American Express' CRM systems to persuade the airline to remain in the program. From its databases, the company identified cardholders in each of the airline's hub cities, including frequent users of the airline. It extracted data revealing their overall spending patterns and air travel charges.

Then, via direct telephone surveys, Amex solicited customer reaction to the announcement and tracked it in a database. Coupling the feedback with the spending data, Amex was able to "prove the value of the partnership" to the airline, Towers says. "We showed them the benefits and convinced them to stay."

It's the kind of save-the-day use of CRM technology that careers are made of. Towers' combination of strategic business thinking and tactical technology know-how illustrates a new hybrid career path that's emerging as CRM systems become ever more critical to the way companies operate.

"CRM has been done since the beginning of time -- it's the shopkeeper remembering your name and saying, 'Hey,' when you walk in," Towers says. "But technology opens it up. Given the complex world we live in, it has evolved to be the driving force behind how companies market goods and services."

Dual Background

Towers, 30, joined American Express in 1995 after earning an MBA from the University of Texas, where the business marketing curriculum fostered a Web-centric focus. His initial marketing experience as an ad copy tester in Los Angeles and his exposure to technology-driven marketing at college paved his way into Amex, where he acquired technology project management experience. J. Crew hired Towers in August, based on his dual background.

He works one-on-one with J. Crew's director of Web development, Sundar Rajan, to coordinate the CRM IT strategy, which is largely Web-based. Towers' role is managing the technology partners and ensuring that the CRM strategy and applications fit with J. Crew's overall branding effort, mesh with what the company is doing in its catalog and retail channels and work for the customer.

He must have a fundamental understanding of what the technology can do, how it works and how it can be leveraged to improve CRM.

His first project, for example, was selecting an e-mail management vendor to develop a platform to improve J. Crew's ability to respond to customers' e-mails.

Next, Towers worked with Rajan to coordinate migrating the Web site to a Java-based architecture. Now he's involved in a project using CRM technology to personalize the Web site. By developing applications that track a shopper's page views, actions and transactions during each visit to the site, jcrew.com aims to get the right chinos in front of the right customer at the right time.

Knowing Your Customers

"On the Web, we want to be at a point that we know our core customers well enough that if you are a sweater buyer, the next time you come to the site, your home page will feature a sweater," Towers explains. "Then maybe you go to the product-selling page to look at the sweater, but abandon it. Two weeks later, we could e-mail you: "Remember that sweater you looked at? Now it's 20% off.''

His favorite part of the job, Towers says, is getting in touch with customers, understanding their point of view and using CRM technology to identify trends over a sample customer base. The most taxing part is dealing with external events beyond his control that have an impact on customers.

"When the business has a bad day, you have a bad day. You hear about it consistently," Towers says. "Being in CRM . . . I am the voice of J. Crew. If something goes wrong, you have to step up and take the blame. The last thing a customer wants to hear is, 'It's out of my control.' My team represents the company, and we have to take responsibility."

CRM: Just the Facts

CRM is: Capturing and combining customer data to pinpoint the marketing of products and services; creating a seamless, consistent experience for customers at all points of contact; providing customers with what they want, when they want it; tailoring customer marketing for a one-on-one interaction; knowing your customer.

  • Driving forces: Globalization, Webification, the ever-growing need to increase sales while lowering costs by putting the right product in front of the right customer at the right time

  • IT positions involved: Project managers; database architects, analysts and administrators; application developers

  • Types of IT projects: Anything that touches the customer -- including managing inbound and outbound call center applications and operations; generating customer profiles from information in myriad databases; devising and managing e-mail response systems; developing and integrating electronic-business applications; tying real-time inventory management to order-entry and fulfillment systems; creating data warehouses and data mining applications; coordinating customer marketing campaigns

  • Hot industries: With CRM, it's easier to talk about industries where it's not hot. Basically, any company that sells products and services can, and should, use CRM technology. But in segments like aircraft manufacturing and aerospace, the circle of customers is so small that CRM isn't as critical as in, say, direct marketing, retailing or financial services.

  • Skills/experience wanted: A hybrid of technical, creative and marketing skills. Integration and customization of software is critical because CRM involves tying together an array of systems, including a number of prepackaged applications. Experience is required in C++ and Java as integration development tools; database architecture, management and development; data warehousing and data mining; project management; Web-related development; and ERP implementation.

  • Key prepackaged software: Siebolt; Vantive (just acquired by PeopleSoft); Oracle CRM front-end package; Chordiant; SAP's related modules; Arriba; Commerce One; IBM MQ (message queuing) Series and MQ Workflow; Cognos Impromptu; Personify; and more

  • Personality wanted: The ability to think like a marketer and act like a technologist, and to interact with customers and co-workers across marketing and advertising, merchandising, call center management, inventory and IT; political savvy

  • Salaries: Anywhere from $60,000 entry level to $150,000 for someone with three to five years of related experience

    So where can CRM take your information technology career and how can you get there? Here's some advice from the experts:

    Robb Rasmussen, managing director of enterprise application services at Electronic Data Systems Corp. in Plano, Texas

  • Career outlook: "Because of the Internet, this is one of highest growth areas in IT. There's so much competition out there on a global scale for products and services, the big game now is being able to quickly get mind share with exactly what the buyer wants."

  • Advice: "Take some classes in the CRM modules of third-party applications like Oracle, SAP, PeopleSoft. Someone who has taken an SAP CRM certification class would definitely be ahead of other candidates. If you're an application developer, you need integration skills. I would focus on C++ and Java. While C++ is a language, it's really about connecting objects, and it gives you the dimension of how to integrate (different software). Get to know enterprise application integration tools -- technology that connects applications together."

    Michael Manis, director of IT marketing products at Harrah's Entertainment Inc. in Memphis

  • Career outlook: "There isn't a technology that you could be in now that can't be taken into CRM. You just need to find the right application. The Internet and data warehousing are the hottest platforms. There's a whole (software) engineering career path with how customer-facing applications interface with warehouses. Application developers have a range of (paths) -- if you know campaign-management tools, you can go into marketing, or if you can analyze customer data to find the 80-20 rule (80% of revenue comes from 20% of products), that can lead you to the business side. And if you can link how many people hit your Web site to overall customer behavior patterns, that's resume power."

  • Advice: "Have you dealt with an application that enables a worker to answer questions when the customer is standing right in front of them? A purchase order system that can also answer any question that comes up? If you've been in the batch world all your life, you won't make it here. On the data warehouse side, have you worked on a customer-centric warehouse based on customer ID numbers? If it's based on product IDs, that's not customer-centric. And if you've been working on a Web site, is it personalized? Would I get a special offer that wasn't offered to anyone else? If the Web site is the same for every customer, you're not what I'm looking for."

    Mike Levine, senior vice president of information technologies, national consumer services at The Chase Manhattan Bank in Garden City, N.Y.

  • Career outlook: "This is a burgeoning field. And if you're assembling customer-centric technologies, it positions you for marketing management, business analysis and senior business management and senior IT management. Early on, I was involved in linking customers to our data center on the wholesale side of our business; I was in IT, but I spent a lot of time in marketing and CRM, and that prepared me well for where I am now."

  • Advice: "Get some experience in marketing and statistical analysis to understand customer behavior patterns. On the technology side, get experience in databases, messaging systems and the Web. We look for people who have both specific software experience and a certain way of thinking, have good architectural backgrounds, are inventive and are good politicians, because you interface with lots of users who have different demands. It's a very unusual skill set."

    Dave Towers, director of CRM at J. Crew Group Inc. in New York

  • Career outlook: "This is definitely a growing field, a constantly changing field and one where IT plays a critical role in moving forward. It's difficult to separate technology and customer relationship management, because it's all very intertwined. We live and die by our customer databases, and the ability to make that work for us is critical."

  • Advice: "You need to be comfortable doing hard-core programming one minute and going into a marketing meeting to discuss the content of your next outbound e-mail the next. You should have a strategic view of the business."

    Goff is a freelance writer in New York.

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