Special Report: Revolution gives way to evolution

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Most companies spent last year waking up to the realization that all business is really e-business. That is to say, businesses of the future must create an online platform that drives Internet-based sales, service and marketing activities to be successful, and such success starts and ends with good customer relationship management.

But if most Web-savvy corporations now take customer management as a given, this year the smartest organizations will begin refining how they deploy CRM applications. They’ll begin to realize that CRM is not about a single domain—not just about sales or marketing, for instance—but creating an enterprise wide environment where every bit of information about the customer lives on forever.

In this data-rich world, customer-centric information will be pushed out more and more to new channels such as wireless devices, to evolving functions such as supply chain management and warehousing, and to burgeoning platforms such as e-marketplaces. CRM will encompass new tools like voice-over Internet protocol and Web collaboration that will gain ground as more companies become comfortable with the technologies. And marketers will be able to create highly personalized messages in real-time through automated processes.

In short, "the scope of what we mean by CRM has expanded now," said Eric Schmitt, a Forrester Research Inc. senior analyst who recently completed a survey of leading CRM vendors. "Customers are expecting more, and it’s getting harder to deliver on those expectations. There’s so much momentum in CRM because there’s a chasm between what companies can provide offline and online."

Recognizing that Internet-based technology can help shrink this gap, an increasing number of companies are buying into CRM applications. According to Dataquest, a unit of Gartner Group Inc., the worldwide market for e-CRM services reached nearly $20 billion in 2000, up 28% over 1999. On average, companies spent more than $1 million last year for CRM initiatives, a figure that will likely double this year, Dataquest estimated.

Getting personal

Most companies now see CRM as an integral component of their ability to track customer interaction across various channels, from e-mails to call centers. But increasingly, many businesses are going one step further. They’re relying on customer management tools to bring real-time intelligence to personalized marketing campaigns—allowing for product pitches to be created on the fly for specific users as they click around a Web site.

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"Now we can serve up campaigns to an individual who comes to a Web site at a particular point in time," said Harris- Gordon, a PricewaterhouseCoopers L.L.P. partner in its CRM practice. "So the context drives the campaign to essentially make ‘offers of one’ as a result of the interaction that is occurring."

One e-business vendor, Annuncio Software Inc., has concentrated on just this area of e-marketing. The company’s application allows businesses to dynamically serve up Web pages for different users, pre-qualify prospective leads as they interact with a Web site and automate processes for analyzing marketing campaigns. Annuncio’s b-to-b customers include Dell Computer Corp.’s small business unit, Charles Schwab Corp., Avaya Communications Ltd. and J.D. Edwards & Co.

According to Monica Nester, Annuncio’s senior VP-marketing, the company’s technology tracks customer information so it can be used later to create more relevant—and, hopefully, more profitable—messages. "Marketing is one of the newest components of CRM but also one of the most strategic," Nester said. "Unlike most customer service, which tends to be reactive, e-marketing allows companies to be more proactive in their customer interactions."

Beyond customer service

Such a multifaceted approach to traditional CRM is one reason why Siebel Systems Inc. dominates the market for CRM, and is ranked highest among seven leading providers surveyed in the Forrester report. Siebel views CRM as a combination of operational, collaborative and analytical technologies, rather than just one technology domain such as customer service.

Bill Murphy, Siebel’s VP-marketing automation, said that is also how businesses looking to best leverage customer management should approach their CRM software. As oxymoronic as it sounds, good CRM implementation should go way beyond customer service, he said.

"We clearly see movement from our clients to look for software suites to address the entire enterprise," Murphy said. For instance, information gleaned during customer interactions is fed back into Siebel’s analytics engine and spit out again as automated marketing messages that are more personalized than before. "So it becomes this continuous dialogue with the customer," he said.

Some e-business software vendors are taking CRM’s ability in capturing these customer transactions and broadening it to include conversations with external constituents such as suppliers, partners and other non-employees. Brisbane, Calif.-based Intraspect Software Inc., for instance, has developed an Internet-based application that it calls a "collaborative business platform" to help companies work together with people from outside the organization. Marketing agency Rapp Collins Worldwide uses the software to share e-mails, spreadsheets and other documents among its clients.

"Most CRM apps are focused on transactions and tracking data," said Bob Schoettle, Intraspect’s VP-marketing. "We’re also providing people-to-people collaboration to speed products to market."

Another emerging trend in CRM platforms, which companies such as Siebel are beginning to offer, is the ability for real-time queuing and routing of customers based on their profiles and how close they are to making a purchase. This automated process determines whether to send clients an e-mail, a direct mail flier or even a sales agent out to visit them. "If they’re a valuable customer, they might get routed to a customer rep more quickly," Forrester’s Schmitt said.

The next generation

As CRM software becomes more complex, it’s also being merged with other platforms, such as online marketplaces, to create the next generation of end-to-end e-business platforms. CRM vendor BroadVision Inc. and e-business builder i2 Technologies Inc. recently announced an alliance in which the two companies will integrate their e-CRM and b-to-b offerings. The merged application will allow companies not only to make automated transactions in the marketplace, but also access customer-centric information such as order fulfillment, said Craig Stevenson, senior product marketing manager at BroadVision.

Additionally, CRM vendors are employing a greater number of advanced multimedia technologies such as VoIP, live chat and e-commerce enabled tools to make the online customer service feel more like an offline experience. For instance, Cupertino, Calif.-based Lipstream Networks Inc. offers voice communication over the Internet to e-businesses such as Covisint L.L.C., Cisco Systems Inc. and Oracle Corp. Its voice over IP product helps these companies provide the benefit of human interaction within CRM, which can frustrate some customers with all of its automation.

"There is no better way to close a deal or make a customer happier than a real human voice," said Michael Buhr, Lipstream’s VP-marketing.

IBM is even experimenting with photorealistic, digital human faces that can interact with customers in real-time. The computer giant formed a partnership with LifeFX Networks Inc. to create virtual people, which will be incorporated into IBM’s existing e-business applications. LifeFX hopes to include the technology with other CRM offerings.

However untried the application, look for software developers to continue stretching the boundaries of CRM to create deeper and more meaningful relationships with customers—even in a virtual world.

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