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Fueling your Move to becoming CRM-Enabled

  • June 15 1999, 1:00am EDT

In my on-line columns, I’m going to be covering a subject that is on everyone’s mind: customer relationship management (CRM) applications. The great thing about CRM applications is that their benefits immediately affect a company’s profits and revenues. Firms receive information they’ve never had before - and it’s actionable. In traditional data warehousing, reports become a work of art: they are fun to look at and admire, but something concrete does not always result. CRM, performed correctly, will allow creative marketing people to gain insights from information for new product ideas or new promotional campaigns and turn them into profits.

Most importantly, CRM is clearly the new foundation for competitive success. As companies go global, whether with a worldwide network of manufacturing facilities or a Web-based distribution center from a hub in Kansas City, they are seeing competitors they’ve never seen before. Likewise, the Web has made it easier than ever for a customer to price competitors and switch vendors before you even knew you were in danger of losing them.

With increased competitors, it’s more difficult to differentiate products and services. What is the substantive difference between one insurance policy and another? Between one long distance service and another? Traditional branding can’t carry all the weight. We hear from our clients that these days, the new battle lines are not going to be drawn by who has a superior product, but who understands the customers’ needs the best and who markets to those needs most effectively. This reality calls for branding that is much more customer-intimate.

There is no such thing as a "mass market." Consumers are sophisticated, demanding and plied with excellent choices. The answer to selling to these consumers is clearly to market directly to smaller and smaller subsets of buyers. The marketer’s job has never been more challenging; but, on the other hand, the marketer has never had easy access to this level of detailed information.

One-to-one marketing is a great catchphrase and a great concept. Everyone "gets" it. But getting from here to there is complex and generally involves a change in company processes and company culture.

Working in the data warehousing "space" for about a decade, I’ve seen tremendous advances in being able to provide marketers with the information that they have always wanted: transaction/customer/product/demographic-level information.

Companies today understand that combining business functions in an ERP system can streamline manufacturing processes as well as financial maintenance and order entry – integration is king. Since they have optimized their internal processes (the cost side), the focus is now turning back to external customer facing processes (the revenue and profit side). Companies are now doing the hardest work: thinking through all that’s needed to make these tools affect customers’ purchasing decisions. It won’t be long before honed, well-organized customer and market data is ample and accessible and the onus will be on marketers to generate new products and new sales from it. Ultimately, the responsibility for demonstrating ROI on IT expenditure is going to shift from the CIO to the EVP of marketing.

To get to measurable ROI, marketers will be dealing with basic questions. How will you determine the value of each customer? How will you retain that customer through his or her changes in income and life events? How will you identify the customers’ needs and meet them with your products?

The purpose of this column is to help answer some of these questions. I won’t dwell on the potential benefits of CRM, with which we’re all familiar. I’m committed to giving you practical guidelines for how to become a customer- centric organization. In each of the next six columns, you’ll get real-world advice, as well as a "hot link" to a useful tool to help you deal with some of the essential issues that you’ll face on a recurring basis. These tools will include questionnaires, checklists, decision trees and other documents for your files.

This series will cover how to utilize customer information and how to close the loop by getting feedback from your customer facing systems and customers themselves. We’ll cover:

  1. How to evaluate your current sophistication with customer-centric solutions. (Basically, rating your CRM- ness.)
  2. Understand how phased-approach data warehousing methodologies need to change for CRM solutions.
  3. Data quality has a different meaning in the CRM world than in the data warehousing world. This column will outline some early design issues and pitfalls.
  4. Currently, campaign management tools are receiving the majority of attention in the database marketing world. This column will discuss how campaign management acts as the traffic cop for CRM solutions.
  5. Action, not reporting, is the name of the game for CRM. We’ll talk about the users’ responsibilities during CRM implementations.
  6. CRM – the strategic weapon. This column will discuss how insights into customer behavior could produce radically new products and services for creative firms.

Each column will discuss technology issues, organizational issues and benefits.
My goal is to help you continue on your path to becoming the ultimate CRM-enabled company. I look forward to your questions and feedback at

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