Customer relationship management (CRM) is a process, not a technology, and like any new process it will take time and money to implement properly.
Marketers looking to implement any type of customer-contact system should know up front that it will take longer, cost more and likely do less than vendors will readily acknowledge.
That said, the long-term benefits for those implement it in stages will likely reap the benefits several quarters down the line. At “Tales from the Trenches,” a CRM technology session at the National Center for Database Marketing conference in Philadelphia, panelists offered insight into the implementation process.
Rob Epstein, president of Atlanta-based On-Site Database Consultants, offered a view of working with the various companies that make up Cingular, his company’s client (and his former employer). While he told of successes, the company still has work cut out for it: According to an independent study done by Harris/Telephia, a reduction in Cingular’s churn rates could add as much as $26 million to its revenue, Epstein said.
Cingular, and its 22 million customers, was brought together by mergers of nine different telecom companies, including Bell South, Southwestern Bell and PacBell, among others. There were nine separate billing systems, and each company was running its own marketing-automation processes.
When a manager decided that the company would send messages to its customers after the merger, gathering the information proved to be a challenge. Epstein himself, who had worked with Bell South, could only access 6 million at the time, for instance. It took months before the welcome message could be sent out.
Epstein recommends limiting initial post-database implementation efforts to three campaigns, and suggests that they focus initially on retention, followed by acquisition efforts and then cross- and upsell marketing. With a rueful smile he recalled his initial request for proposals. When vendors smelled money they deluged him with proposals promising that they could deliver exactly what he needed.
To date the company is in the process of bringing its systems together, and has started elementary customer contact programs. Future efforts call for reporting technology that delivers campaign results that are constantly updated to all levels of the company, based on the level of detail and focus desired. Epstein also hopes to implement event-based marketing programs that automatically trigger campaigns based on customer activity, or changes in customer demographics.
Epstein also plans to use analytics to prove that all customers aren’t alike – even those that look similar. The customer that uses 100 hours of high-bandwidth capacity during the day when demand is high is probably costing the company more than the customer who uses it at night, when demand is lower and rates are cheaper. Given the higher marginal value of these two customers–even though they may be using the same calling plan–Epstein will work to retain the off-hours user, while subtly urging the higher-cost user to defect.
While the new Cingular system has thrown off benefits–it’s faster, more integrated and marketing programs have become more sophisticated–the goodies have not come without costs. Cingular is still training its analysts to use the campaign management software, and has seen some reluctance within its employees to embrace the new system. And there has been scope creep–as managers have seen the benefits of the new system, they have begun to demand more capabilities from it.
Epstein cautions marketers wanting to implement CRM to be extremely careful in crafting their requests for proposals. “You get what you ask for,” he said, noting that implementing a data backbone system is not the place to be penny wise and pound foolish.
For Scott Beyer, the principal problem faced when implementing a new CRM system involved getting the high-tech employment services salespeople–whom he referred to as “entrepreneurial sales reps”–to buy into the system.
Beyer, vice president, marketing of Oxford Global Resources, contrasted his company’s past CRM strategy (arm the sales force with a contact management tool, track and report production activity) with its current operations. These include refocusing on the customers’ needs and potential requirements and pinpointing areas where CRM technology can add value to the company’s marketing communications and investing in those areas.
As part of its new CRM focus, Oxford has run a series of client satisfaction surveys; begun analyzing business trends, which will allow it to anticipate tech employer needs and position these needs in its pitches; and tested an e-mail lead generation campaign that feeds into its sales force.
There are still gaps: Oxford’s sales model is primarily built around the telephone, and it has limited ability to integrate information from other channels. Its sales force has not traditionally captured lead information with an eye toward data hygiene, meaning that entries have to be cleaned and standardized, even to the point of correcting capitalization on proper names. And its current system is not connected to its Web site operations.
Ed Miranda, senior vice president, business intelligence for Des Moines, Iowa-based Wells Fargo Home Mortgage broke the process for successful implementation into 10 steps:
1. Gain a strong level of commitment from upper management, especially when asking for large (and continuing) sums of money.
2. Set measurable project goals that don’t disappoint when the moon isn’t delivered.
3. Maintain a constant focus on the needs of, and benefits to, the customer. If a customer has to give an account number several times, a company does not have a CRM system.
4. Implement the system gradually, allowing small successes to foster continued buy-in from all levels of participation.
5. Make sure the implementation is driven by the business” needs, and across all departments (including accounting and analysis as well as marketing) as opposed to letting the tech departments set the guidelines for the system. “If you feel it is a tech process, you will have an expensive toy that is not going to work,” Miranda said. If you have a sales force, they better buy into it.”
6. Build the right team for implementation, as opposed to springing a system that doesn’t meet needs across all the departments it is supposed to enhance.
7. Bring organizational initiatives and customer objectives in line with each other. “Companies think that if they have great ideas, customers will come,” Miranda says. “Wrong.”
8. Differentiate offers to customers.
9. Create and reporting on key performance indicators, allowing participants and management to see the benefits – and areas needing improvement – in quantifiable terms.
10. Staff the project and roll out properly. Enterprises are willing to spend millions of dollars creating a system, and allow months for it to be implemented, while expecting employees used to different processes to adapt to the system in a matter of weeks, and with minimum training, Miranda said.
The conference runs through Wednesday.
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