(Customer) knowledge is power

Talk about the customer has never been more predominant than it is today. Customers, it seems are more than kings or queens; they are at the heart of business in a way they may not have been a decade ago. But historically, the focus has always been the customer, so what's driving the difference?

The neighbourhood store and its little pool of fidel customers has not been effaced but large business conglomerates carry more than just a little customer book. Managing relatively large amounts of data is in itself a challenge. Moreover, handling this data in a way that is advantageous to one's business brings another set of challenges. And data may no longer be the most appropriate way of describing valuable customer information a company uses to identify, understand and retain its customer pool.

This information helps companies build customer relationships, nurture them and achieve business growth over a period of time. All these methods have existed under a rather broad term called Customer Relationship Management or CRM. Whichever way one sees it, on a simplistic level Customer Relationship Management is "a collection of tools and infrastructure that enable a company to recognise and remember customer behaviour".

CRM is also "lots and lots of data" and has often lost its other meanings to the purely database aspect of its character. But data does serve its purpose. "True CRM provides a single, holistic view of each customer in real-time by consolidating data across the organisation," Earl Allan, managing director of earth9 says. Surprisingly, not all companies know how to use data, Frederic Moraillon, marketing director of business objects Asia Pacific says. This could mean datamarting before data analysis.

Initially, CRM may have enabled database marketing but since then it has evolved to become a combination of both database management and relationship marketing, Danny Condecido, product manager of Microsoft Dynamics CRM says. But managing director of Carlson Marketing Group Nik Laming says, "There are drawbacks in mixing up CRM tool delivery with relationship marketing". Pure database marketing may not send timely or relevant messages to the customer, calling for a broader application of this data for targeted marketing and relationship marketing.

So CRM could be a set of tools and processes, which when orchestrated with intelligent business strategy, enables companies to make relevant and timely marketing decisions. While it is primarily about acquiring customers, it is also about effectively managing or understanding them through cross selling, up selling and ultimately preventing customer churn. "Historically there's been an emphasis on retaining the customer because of the costs of acquiring a new one", Pete Wermter, marketing director of Genesys Laboratories, Asia Pacific says.  

CRM is definitely one way of enabling customer retention by providing consistent customer experience across a host of channels. Changing customer profiles are adding to its diversity, making it a more complex business processes system. "Back in the 1990's, there was talk about one-to-one marketing", Ben Kiker, senior vice president and chief marketing officer of Interwoven says. "Making it a reality became cost-prohibitive. So the focus shifted from personalisation to segmentation or breaking up of customers into groups and delivering targeted content to these groups". Today, it is about a more wholesome use of data to provide more focused marketing messages. From the era of pure technology, CRM has moved to exploiting technology and people to maximise customer value. 

Condecido of Microsoft traces its evolution: Personal Information Management came first, followed by Content Management Systems (CMS) and these in turn became Sales Force Automation (SFA), he says.

SFA is a cornerstone of most modern CRM but "CRM tools are just the enabler. They will be as successful as the underlying strategy and business planning allows them to be", Laming of Carlson Marketing Group says.

As the customer is "elevated" across businesses, companies are beginning to explore a more disciplined approach to customer relationship management, Ben Nottle, business development manager, CRM, SAP Asia says. From being product centric, businesses and marketers are becoming customer centric, creating the need for a more customised offering. This could also signal a break from purely operational CRM that used to be the main focus of companies some years ago.

Content management systems, campaign management systems and call centre systems facilitate operational CRM. And content management tools are an equally complementary technology to CRM, believes Kiker of Interwoven. Amongst Interwoven's numerous clients feature Hilton Hotels for whom they work on creating a very targeted online experience. The Tesco Direct Online store is another website powered by Interwoven's CMS.

Operational CRM works on the front-end but the core of customer relationships is on honing data, to not only increase operational efficiency but to also provide predictive models on the future of customer behaviour. "Most of the early investments companies made were in operational CRM", Colin Shearer, senior vice-president of market strategy for SPSS says. This marked the streamlining of certain business processes but companies "lacked the intelligence behind the information". Data mining tools and predictive analytical applications sift through such data and build models marketers can work with to target their offers.

Asked about the ROI of traditional CRM tools, Shearer explains most of it has actually been "very low" and this is where analytical tools may have a role to play. Analytical CRM or more precisely, predictive analytical tools lead to predictive marketing, enabling "non-analysts to build and apply models for in-bound and out-bound CRM interactions". One of SPSS's major data mining tools is ‘Clementine' that "pulls together information an analyst needs to get at data and how to use it. If one wanted to sum up the beauty of data mining, it would be: "looking at historical data, getting the analysis and applying this analysis to new cases to predict the future".

The analytical model can also be combined with offshoring and outsourcing to increase ROI. Knowledge Process Outsourcing is a core business of Meritus and global partner Deena Lawrence says, "Outsourcing and offshoring is the cost-efficiency part and the ROI is definitely led by the analytics but I think the ROI gets better when its hand-in-hand with the offshoring and the outsourcing". 

Moving up the value chain would not only be about applying analytics to data, but in acting on the knowledge it brings to take high-end business decisions. As Lawrence explains, "What we do is enable businesses in how they make their decisions".

Business Intelligence is also about transforming information into knowledge. "Knowledge is something you can act on", Moraillon of Business Objects says. BI works along with CRM, extracts data pertaining to one's business objectives (from CRM), creates customer segmentation and does analysis forecasting. Moraillon says it would feature on top of the value chain, ahead of middleware, ERP and CRM software.

Analytical and statistical models and business intelligence help companies use customer data to chart a long-term marketing plan and help define business goals, but what some call lower-end processes are indispensable to the CRM life cycle.

The traditional call centre is becoming a very diverse and competitive space with a variety of sophisticated software and customer solutions. Genesys Laboratories is one such contact software company whose software is "the intelligence layer that sits on top of the customer structure", Wermter says. But while they offer advanced self-service interactive voice response platforms, the agent is key in preventing customer churn.

It is about "connecting the right customer to the right agent". While self-service systems may prove cost-effective, human interaction continues to fuel customer relationships. Most of the agents are trained to serve as proactive contacts and not just selling mechanisms.

Telstra exploits Genesys's solutions along with Siebel's CRM tools to manage the workflow of more than 800 consultants dealing with customer queries on telecommunications services. The introduction of the Interactive Voice Response (IVR) platform means customers are routed to the most appropriate agent, utilising agent resources in an effective manner. "We've got much more control of consultants' activities, how they route calls and how they service customers - and we know exactly where we're at all the time", Joe Di Sisto, technology manager, customer contact solutions, Telstra says.

Based on customer information provided by the agent, Telstra is able to do decision processing and make targeted offers to its clients. But how can companies measure returns on such campaigns? It is "absolutely measurable", Shearer says, and it is all about targeting the valuable customer. What CRM can do is to filter that customer layer that is not adding value to one's business. It can also define which customer the marketer should target.

In principle, this should seem pretty straightforward for marketers to implement, but the large amounts of non-targeted marketing efforts prove otherwise. This has even led to "Do not call lists" in the US, soon to be adopted in Australia.

CRM tools are many but marketing management software can ensure faster marketing through operational efficiencies and the streamlining of certain business processes. Many businesses are held down by day-to-day business process inconsistencies and "more than 80% of marketing people don't have marketing tools to work with", Condecido says. While Excel is a great tool, one needs more than just Excel to deal with marketing planning for example.

Knowledgeable in the marketing space is how country manager Adrian Berger describes Orbis, a creator of global enterprise marketing software solutions. One of the main challenges is the manual face of marketing and Orbis Marketing creates a more automated marketing approach eliminating product inconsistencies and creating visibility through the business life cycle.  

A web based application, Orbis Marketing also enables efficient decision making as information is accessible to all key members of an organisation in real-time. It can also be broken up into parts, with companies choosing the area of the software most relevant to their business. Sony Australia is one of the companies to adopt Orbis Marketing to create visibility across multiple product groups. Having implemented the full Orbis Marketing Solution suite, Sony is now able to plan, track and manage marketing activity across all groups.

Siebel8 is another full-bodied CRM solution that impacts every aspect of one's business. A task based user application, it provides real time analytics for targeted timely marketing and is absolutely measurable in terms of revenue and customer satisfaction, Prasad Rai, senior director of CRM for Oracle Asean says. Like some CRM applications, it can be implemented either ‘On premise' or ‘On-demand' with ‘On-demand' installation taking just a few weeks to put together. Hewlett Packard for one has seen over 31 million dollars savings in call-centre costs with Siebel8, Rai says.

When it comes to e-CRM, the web can be used as an additional marketing channel or sole marketing channel, Allan of earth9 says. "CRM applications in the pre-internet era were more for internal use", but the internet allows customers to have a more wholesome experience with an organisation. "It is not dissimilar to dating someone", he continues but not everyone may be keen on conducting this sort of dialogue. "Very rarely do we see businesses leveraging chat", Genesys's Wermter says.

But what are the challenges companies face in implementing CRM, business intelligence, relationship marketing or other terms one can find to describe the way business is conducted with a customer?

It all starts with defining what CRM is for an organisation and it needs to be integrated into key business processes not just sales, service and marketing but also channel management and back office processes, Nottle from SAP says. The flexibility and usability of these solutions are other key factors alongside costs and integration with existing infrastructure. No longer do companies invest in the software alone, but in the processes and people behind them.

"Technology is only an enabler and relationships are the only way to stay ahead in business", Laming says. Lynette Low, manager of customer delight management for Canon spends a large part of her time trying to read customer feedback and in finding ways and means of improving customer satisfaction. "Consumers are our biggest responsibility", she says, adding that customer delight management is about the people and what they have to say.

In any industry, poor customer service can either make or break a relationship and well-deployed CRM can help sustain this relationship. It can also bring in new customers and help one speak better to one's existing customers. CRM can be both back-end and front-end, operational, collaborative and analytical. It may be a set of advanced software and work alongside business intelligence and data mining tools. But most importantly it is about the people using it within business and the people it targets.

However sophisticated one's technology might be, the beauty of the human interaction is timeless and it seems fitting that the customer or the person is at the forefront of business again. The ROI or ROMI (Return on Marketing Investment) is measurable and across a host of categories. As companies invest in the customer, ROC (return on customer) becomes the only measure. As the customer is more solicited, it is important to make sense of CRM and marketing technology that help shape customer decisions. This may seem elementary but the "Elementary Watson" may well be at the heart of the puzzle.

QuotableQuotes

Marketing has evolved from a one-way dialogue (broadcast media and advertising), to a two-way dialogue (direct marketing) and has now arrived at a three-way dialogue (social networks).

Nik Laming, Carlson Marketing Group

All areas of the business can benefit from increased enterprise visibility. Therefore, CRM is not designed to better address the needs of any one aspect of an organisation, but rather, customises the solution in various ways to meet specific user, cross-functional and industry-specific needs.

Ben Nottle, SAP Asia

The technology is only as good as the business process and the effort and the investment the company makes in implementing it.

Ben Kiker, Interwoven

The ROI stretches across various aspects of the business. From an operational perspective, the focus will be on cost savings. From a marketing perspective, the focus will be on increasing customer retention.