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A typical business client today is relentlessly demanding, undoubtedly complex, perpetually price-sensitive and often worth millions of dollars in revenues for the firm that can provide consistent customer-centric service.

Such stakes are the driving force behind a not-so-quiet revolution in customer relationship management (CRM) for many b-to-b companies. Spurred by a fiercely competitive marketplace, they’re leveraging technology across all channels to get much closer to their customers’ needs. The ultimate goal, of course, is to increase customer satisfaction and, thereby, increase sales.

These CRM strategies are maturing at Internet speed. Across a broad swath of industries, from banking to communications, conversations about CRM involve marketing, sales and financial divisions, as well as the CEO. In short, it’s a customer-driven phenomenon too important to ignore.

"Touch-point management is so critical in interacting with business-to-business customers,’’ says Arin Brahma, director of product marketing for Nexgenix Inc., Irvine, Calif., an e-business consultant and CRM integrator. "You need to make sure all the pieces of the puzzle come together into one channel … so that you’re focused on providing relationship-centric solutions.’’

These b-to-b customers tend to demand much more technologically robust communications than the average person who interacts with, say, an online bookstore. Hence, many firms are overhauling their traditional call centers and creating multi-channel "customer interaction centers’’ that integrate phone, mail, fax, e-mail, live chat and artificial intelligence.

Effective CRM solutions seek to catalog every bit of information about how customers interact with a company and use its produces and services. That knowledge base is especially valuable to b-to-b plays that are trying to build highly targeted marketing and sales campaigns, and improve organizational efficiency and overall profitability. For instance, companies can use data gleaned from disgruntled customers to create marketing strategies aimed at winning back the business.

According to research firm International Data Corp., companies can expect an average revenue boost of 8% after implementing CRM technology.

Growing trend

It's no wonder that a recent survey sponsored by the Direct Marketing Association and PricewaterhouseCoopers L.L.P. found that companies are increasingly turning their b-to-b marketing efforts toward CRM models. More than 20% of the 159 senior marketing executives polled said their companies have developed an enterprisewide customer database, while nearly 33% said they plan to build one soon. And about 55% said their firms at least have begun to integrate customer information across sales channels.

"Effective business-to-business CRM is more than just a matter of calling into a call center and speaking to an operator," says Steve Robins, director of product marketing for Boston-based ServiceSoft Inc. "You really need to give people lots of points of contact. And you want to give different levels of service to different customers: For premium customers, you offer live service; for others, you may just want to give more automated service."

ServiceSoft makes e-CRM software that uses artificial intelligence to quickly organize and retrieve information within a customer's knowledge base, and send it over a variety of communications channels. Cisco Systems used ServiceSoft's e-CRM product to deflect some 77% of its live customer service calls to the Web, according to Robins.

"What we're finding out is that the majority of customers use multiple channels at multiple times," adds Adam Klaber, the managing partner at PricewaterhouseCoopers in charge of its North American CRM practice. "It takes an enormous amount of complexity to make the experience seamless."

Klaber notes that even the purest dot-com plays, such as, need huge call centers with live operators to handle customer inquiries and, hopefully, close a sale.

But CRM can help a company by handling well more than customer service calls. Indeed, a very robust and comprehensive CRM strategy will involve virtually every department in the firm. Today's CRM users, especially b-to-b clients, want to know that every conversation they have with a customer will be referenced against all previous contacts, whether through phone or fax or a Web-based interaction.

"What's needed is for the company to have a common history of the client and a set of rules for dealing with the client," says Brian A. Johnson, a partner and CRM expert at Andersen Consulting in Chicago. "We think of CRM as the ability to have various conversations with a customer and remembering what the customer has said to you in the past."

"The key is being able to provide a single view of the customer to anyone in the company," adds Geoff Baird, director of e-commerce at Chicago-based e-business consultant Expedior. "This is where a lot of people miss the boat. In just about any business-to-business transaction, one of the parties is a customer. That's forgotten a lot."

 Chris Martins, an analyst at the Boston-based Aberdeen Group, says marketing is a part of CRM solutions. "They are a way for companies to express their marketing strategy and deliver it," he says. "Given that definition, CRM has always been a part of business-to-business transactions."

Maximizing 'ROR'

Eric Carrasquilla, group manager for product marketing at Nortel Networks' e-business unit, says that one of the most important advantages many Fortune 500 companies have by implementing CRM applications is the ability to measure and maximize "return on relationships," which accounts for all the potential costs and profits associated with any one customer.

"They're looking for a metric that lets them be more strategic about allocating their resources in marketing, sales and even engineering," says Carrasquilla. "It really becomes a competitive advantage for them to know this information."

The white-hot demand for CRM solutions has created an explosion in the number of service providers, application makers, integrators and consultants specializing in customer care. Most of the Big 5 firms, including Andersen Consulting and PricewaterhouseCoopers, offer a CRM practice. Established e-business solutions providers such as Cisco Systems, Oracle and Nortel Networks all offer CRM software. In addition, Web architecture firms such as Kana Communications Inc. and i2 Technologies Inc. are creating very robust CRM solutions for Global 2000 companies.

Analysts have seen significant growth in this area. Forrester Research Inc. estimated that between 1996 and 2000 corporate investment in CRM technology grew at a compound annual rate of 54%. Meanwhile, Boston-based AMR Research estimates that customer management software sales will jump from $1.9 billion in 1998 to $11.5 billion this year.

A CRM package for a Fortune 1000 company may cost anywhere from $200,000 to several million dollars. Nexgenix, which helps companies integrate and customize off-the-shelf CRM technology to fit into their existing customer care operations, prices its work into three major components: initial assessment, strategy engagement and build-out. Together, the process typically costs between $2 million and $3 million, says Nexgenix's Brahma.

Early adopters

Although any large company would probably benefit from a comprehensive CRM strategy, the industries where the technology has had the biggest impact are high technology, financial services and communications, says PricewaterhouseCoopers' Klaber. PricewaterhouseCoopers, for one, has seen an 87% increase in its CRM-consulting sales from last year and hit $17.3 billion in global revenue in 1999.

With all of the gee-wizardry spurred by the CRM boom, including digital voice recordings of customer inquiries that can be stored, spliced and data mined, some experts caution that customer service cannot be done all online.

"Especially in the b-to-b space, buyers are used to picking up the phone and screaming at someone, which is hard to do with a Web site," says Andersen Consulting's Johnson. "There is no substitute for the human voice as a way to close the sale."

Phat X. Chiem, a former business reporter for the Chicago Tribune, is a free-lance writer based in Los Angeles.and services.

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