Ever since the Harvard Business Review published that "company profits can be boosted by 100 percent by retaining just five percent more of their customers," technology vendors and businesses as diverse as banks and personal storage warehouses have been focused on customer relationship management (CRM).

AMR Research Inc. of Boston predicts that the total aggregate CRM market will grow from $1.2 billion in 1997 to $11.5 billion by 2002.

But, what is CRM really all about? And, how does it impact the adoption of business solutions?

Is CRM a single software product? Or, is it a vast array of technologies and applications for reaching customers via the convergence of the Internet, enterprise and legacy data? Then again, is CRM a strategy rather than a market or a technology?

"Customer relationship management is a strategy rather than a market, since no one vendor provides all the software to address the needs of marketing, sales and customer service divisions, as well as the links between front- and back-office systems." GartnerGroup

Most companies believe that CRM will lead to cost savings, revenue enhancement and strategic impact. But what is most important to remember is that the focus on the customer is the critical point of CRM and that technology adoption must be considered from the customer point of view.

I suggest that the significance of CRM is in the phrase, "every customer really matters." The new business mandate of CRM needs to start with the customer (those accessing our CRM systems), not the technology or the product being sold. Given the hype surrounding the Internet, e-commerce and CRM, we sometimes forget that not everything can be done via technology. We can't bypass the interaction with the customer.

This reminds me of an old Katherine Hepburn/Spencer Tracy movie called "Desk Set." It takes place in 1957, with three women in a research department who believe that their jobs are jeopardized by the arrival of a gigantic new machine ­ a computer. This "computer" is supposed to provide instantaneous answers to strange and unusual questions, thus making the department more efficient. Hepburn argues with the designer of the machine (Tracy) because she believes that she is being outsmarted and replaced by the "computer." It soon becomes evident that the machine makes mistakes just like humans but, more importantly, lacks the human touch required to keep the customers happy. In the end, technology is no replacement for customer interaction.

Ron Wrubel, CEO of AskJeeves, was interviewed on the Fox News Cavuto report (Tuesday, November 16, 1999) and said: "E-commerce has a secret, and it's that abandonment rates are huge and sales conversions are minuscule. The fact is people still like to talk to a person. Maybe over time this will go away, but probably not too quickly." To meet this challenge, AskJeeves is starting a new service to "intelligently" hook call center agents to Web sites.

The good news is that companies can leverage technology and involve the dynamics of human emotions, needs and interactions in order to get closer to their customers.

Understanding existing customers and their behaviors, measuring customer expectations and satisfaction, evaluating internal forces that affect service delivery and personalization of service are all areas that can benefit from the adoption of technology that starts from the customers' viewpoint.

Many people do not believe that it is possible to embed "people-oriented rules" or "intelligence" into technology to personalize the service that is provided. But, it is possible. For example, a rule-based tool can help companies provide better service to their customers while increasing internal efficiency. Laura Conklin, general director of business systems for Heritage Mutual Insurance Company says, "With Blaze (rule-based software) we can automate as much as we want. The software takes care of the mundane, tedious tasks, so our agents can focus on the real issues. Our loss ratio has decreased (from 72.7 percent to 60.2 percent). It used to take 14 days to get out a business policy, now we can do it in a day. We could do rules in COBOL, but we couldn't do it to this level without the object oriented software in Blaze." Blaze Software, Inc. is a California-based software vendor.

What is critical to remember is that a move to e-CRM must see things from a customer perspective:

  • What is the customer's perceived value?
  • Does the product or service address the customer's needs and wants?
  • Do you make it easy and convenient for the customer to reach you?
  • Do you provide the customer with the information they want and in a format they want?

Through regular interaction, a company can better understand its customers' needs and can customize its offerings to better fit those needs so that the customer finds it more convenient to remain loyal than to switch to the competition. And, the company becomes more profitable.

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