Midway through the evolution of CRM, the industry realized that CRM had two very distinct yet dependent sectors of the paradigm shift. While operational CRM focused on managing customer interactions across multiple channels such as the Web, the sales force and customer service, analytical CRM focused on understanding the nuances in customer profiles and behavior.

Though we always acknowledged that the two sectors could positively influence each other, making it a reality has proven to be one of the largest challenges of CRM. Many organizations that have started CRM initiatives are now planning how to maximize and integrate the different aspects of CRM, while organizations new to CRM are integrating operational and analytical from the beginning.

How Did You Start?

In the early days of CRM, companies had a choice whether to invest in the analytical or operational aspects of the paradigm. Where to begin depended on who sponsored and paid for the project.

Customer service- and sales-sponsored CRM typically opted to start on the operational side. Capturing every single interaction at the call center in order to enable large call centers to solve more issues the first time and decrease call volume was an extremely alluring cost-saving measure.

Large sales forces could not implement sales force automation fast enough. The ability to track the life cycle of an opportunity, to understand sales representative productivity and activities, and to capture best practices was a sure-fire way to increase sales force effectiveness.

Likewise, marketing usually opted for the analytical route. The catchphrase 360-degree view of the customer made its rounds throughout the organization. The ability to know, analyze and strategize how to improve customer interactions became a battle cry.

Consequently, because both routes proved to be expensive endeavors, organizations became more proficient in one aspect or the other.


Figure 1: Combining Both Worlds

Combining Both Worlds

Over time, it became apparent that the CRM initiative would not make the envisioned impact on the organization or achieve the ROI by somehow integrating operational and analytical CRM. Both areas found deficiencies in an isolated strategy:

  • Call centers could not evaluate their performance without a strong analytical component. Though the promise of CRM stated that different customers would be treated differently based on value, call centers had no insight into what differentiated customers or what the exact tactics were.
  • Sales forces became frustrated very quickly. They were promised that if they entered reams of information, all of these great things would happen in the way of hotter, more qualified leads and better recommendations on how to pursue current clients. They came to the realization after the fact that if this information was not pumped into an analytical engine, there were no fruits of their labor.
  • Marketing winds up hitting a brick wall. Through thorough analysis, testing and evaluation, marketing starts to understand the different tactics that will entice customers to stay longer, buy more and buy more often. However, what are marketing's channels to act on their insights?

Though CRM's promises were always to interact with customers with the most relevant, timely information in order to differentiate treatment and service based on value and to understand a holistic view of customer behavior, organizations are only recently coming to market with programs that deliver these promises.
My next few columns will explore exactly how organizations are using analytics to drive customer interactions, to customize the experience or to manage customer-facing investments. The integration of analytics into the operations of the organization will help representatives in the trenches to react proactively and nimbly in the face of a customer crisis or, just as importantly, to encourage and support the momentum of customers doing more business with the organization.

As organizations understand their deficiencies regarding the operational or analytical side of CRM, action plans are being developed to remediate the issues. Likewise, those starting CRM programs are building the leverage they need between analytics and operations from day one; they will be able to take advantage of where the different sides of CRM are siloed.

Though discussed for almost 10 years, the last frontier is integrating the two worlds of CRM. In the next columns we'll describe the reality of personalization, alerts, business activity monitoring and real-time offer optimization. 

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