Why CRM Is So Difficult And What to Do About It

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Seen from one side, customer relationship management helps big companies overcome the impersonal aspects of modern commerce by treating customers as the important individuals they are.


But seen from the other side, CRM is not about service at all. It is really about sales. But this two-way street reflects two distinct worlds of CRM -- operational and analytic. Operational CRM includes those systems that directly interact with customers: Web site, call center, sales force automation. Analytic CRM comprises the data mart and associated campaign management software.


The split gets difficult when one imperative, such as automating e-mail responses to reduce Web site management costs, conflicts with another, such as improving service center feedback. Great CRM is all of the moving parts -- call center, Web site, e-mail, print-based marketing, sales force automation system and service department -- working as one.


And why shouldn't they?


A successful print-based marketing drive immediately conjures images of a corresponding Web site or e-mail drive. The customer data from the print campaign is in the CRM system, so why not use it for an Internet-based promotion?


The reason is that the systems with the data are separate from the systems that would run the campaigns, and the permissions associated with the data may or may not be shared. Most firms would have to pay a third party to run such a campaign because the company's e-mail, Web and customer or prospect database systems will not work together.


What's more, the customer data does not reflect the results of the print-based drive. Each CRM campaign is an isolated event because the underlying foundation -- customer data -- is not accessible to the right systems in the right form. Also, the information is so haphazardly structured that it is virtually useless for marketing campaigns in its raw form. Marketers ache to improve their marketing performance through better targeting, through direct marketing activities or outbound telemarketing. But they are finding it nearly impossible to create a timely, integrated, operationally coordinated marketing promotion using such disparate customer touch points. What can be done about it?


Companies need to take a systematic approach -- at the level of data -- to making CRM work. All CRM systems need to recognize the same business events -- whether that is a sale on a retail Web site, a transaction at a kiosk or a change of address in a financial company's database. The method comes down to three imperatives:


• Gain control of all CRM information. The most important step to healing CRM is to ensure all points in the infrastructure understand the same key abstractions. All systems need to share common definitions: of such objects as "customer," "product," "household," "account" and so on.


• Understand what is happening - the key business events - at every point in the infrastructure. CRM architects need to ask what business events are most important to the company. Is it when a customer buys something, or signs a contract? Is the company most interested in potential selling opportunities when, for example, a customer changes its address or expresses interest in a given product?


• Coordinate the interactions so the system works as a unified whole. Using triggers, enterprise application integration, and/or custom code, the system needs to let all channels know what the customer is doing. The company's Web site should know, and take appropriate action, when a customer talks to a sales representative and receives an offer. There is no reason this can't happen, provided the right steps are taken.


Bringing it all together. Companies need integrated hubs of customer data to be available across all customer channels, from e-mail to printed service receipt. Extensible markup language and metadata are bridging the gaps between sales and service systems and CRM. But that in itself is not enough. Universal, reusable customer and product definitions let users define, build and reference a comprehensive customer snapshot that all can share. This allows the call center, marketing, parts and accessories, service and warranty departments, for example, to all work off the same constantly changing customer information through a simple graphical user interface.


Understanding who the customer is, and how the computing infrastructure manages the customer, are the primary imperatives of business in this decade. Today, the customer is virtual; islands of nonintegrated, uncoordinated data -- all about the same customer -- reside in any number of systems in the enterprise. Leveraging this data collectively opens up new opportunities for marketing and sales. Only then will companies stop alienating customers with poorly integrated CRM technologies that do more harm than good.

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