Mastering the Customer Experience

Focusing on the customer is not something new. Customer Relationship Management theories embraced in the 1990’s hold true today – the operational, collaborative and analytical aspects of the ‘CRM Ecosystem’1 still need to be adopted and adhered to. However, Customer Experience Marketing (CEM) is a subset of an organization’s overall customer experience management strategy and drive to become customer-centric. CEM is about managing every single part of the interaction and experience a customer has with the organization; from the visual experience of advertising, to the actual experience of interacting with a website, customer support line or physical layout of a branch office, even to the standard of the product or service delivered.

CEM tackles marketing at a human and emotional level, causing the customer to feel not only connected, but delighted and loyal and able to be a consistent advocate for the brand. This customer centric approach helps create the only true competitive advantage a company can achieve outside the commodity battle involving the features and price of their product or service.

There is much evidence to suggest that customers will take their business elsewhere after even one isolated bad experience, and CEM tackles this fragility of customer satisfaction and relationships. John McKean, Executive Director, Centre for the Information Based Competition, drives home this focus on customer experience, “70% of the reason we buy anything is based on how we are treated as a person during that experience.” Marty Brandt from Truebrand, concurs saying simply, “Everything you do or say affects your brand,” which underpins the importance and value of managing every aspect of your brand. Today the marketing department therefore must either lead, or be part of, the Customer Experience Management strategy so that when it comes down to the part marketing can play in creating and interacting with customers through marketing and sales processes, a personalized experience based on acknowledgement, trust and respect can be orchestrated for each customer.

To get to this advanced position on the customer experience journey, marketing, information technology and organizational competence must be developed, or else this capability will never be achieved. There are many potential points of failure in delivering a great customer experience, It is futile for marketing to do an excellent job if they are, for example, to be let down by the customer service team, billing system or an executive who drags the brand though the gossip columns of the newspapers.

The primary strategy to support CEM that marketing needs to implement is the generation of a core competence in Customer Information. This competency requires mastery of three components: data gathering, analytics and insight distribution. It is impossible to truly understand customers on a one-to-one human level unless we have the appropriate data, and also the ability to analyze, interpret and act on that data to improve the marketing and buying experience. These components all have data, technology, process, and skills implications for the marketing department.

First, to feed marketing analytics and deliver actionable insights, it is necessary to gather appropriate data. This means bringing data into a master repository, managing that information for accuracy and completeness, and making it available for analytical and execution processes. This doesn’t simply involve marketing data such as customer contact information and campaign history. To drive CEM the data must reflect everything the organization knows about a customer, their purchase history, behavioral information from their website and customer service interactions, financial metrics, and data enhancements from third party marketing service providers.

Once a complete picture of the customer base is prepared, marketing can set about to run processes that track the success of CEM efforts, identify new opportunities and predict customer responsiveness. Successful implementation of the marketing analytics capabilities will hinge on acquisition of appropriate reporting and analytics technology, as well as developing staff skill sets to create and interpret analytical insights for the organization. Building skill sets and a focus around the analytics of marketing will help drive the competence of the marketing organization.

The final step is to turn the intelligence generated by analytics into activities that drive CEM. In order to act on and execute this intelligence, and to ensure every aspect of a customer’s interaction with an organization is planned, monitored and nurtured, it is essential that marketing is able to intelligibly coordinate and integrate its processes with those of other customer facing departments.

Marketing needs to commit to building the right infrastructure. This may involve employing or training marketers with the right analytical skills, investing in a marketing technology platform which provides an integrated set of applications built on top of a single data architecture or sourcing a business partner able to add their domain expertise in data management. For example: the correct infrastructure is intrinsic to the success of marketing’s management of the entire customer experience process.

Marketing is a journey to master this fundamental, differentiating, intellectual property of an organization – Customer Information. So while marketing is on its competence journey the rest of the organization needs to be on theirs, from a leadership, culture, people, organizational, process, technology and information perspective.

1 METAGroup (Acquired by Gartner in April 2005), developed this conceptual architecture

Search engine marketing is a much cheaper alternative to direct mail, email, and telemarketing. Everyone seems to be shifting budget that way, but is

Media messages delivered across an ever-growing number of channels, from email to SMS to Tweets, surround consumers throughout the day. These have an undeniable impact, but the difficulty lies in combining these media in the unpredictable pattern that will lead consumers to make a purchase. It is the integration of all these media which has seen marketers busy spreading their advertising efforts across a variety of different channels.

Response One recently commissioned research aimed at discovering the effectiveness of different media at driving Web visits, and poinpointed the top four channels for driving consumers to a Web site:

1. Customer e-mail
2. TV and newspaper advertising
3. Direct mail
4. Search engine links

To look more closely at the role of online and Web site searches, Response One asked UK consumers whether they were able to satisfy the majority of their pre-sales queries online and found an unsettlingly even split: 49 percent of consumers were satisfied by the information they found on the company Web site; 51 percent were not. It is likely that a significant portion of the unanswered questions relate to campaign-specific information and could be satisfied if search were suitably integrated with the campaigns running at the time.

The way consumers interact with brands--claiming the information they want at the moment, reviewing, criticizing, and sharing experiences with other users across the globe--has developed at breakneck speed. Marketers are still trying to understand how to harness this constantly evolving touchpoint. How and when people access the Internet is an area that still requires exploration. Research earlier this year revealed that 70 percent of Britons go online while watching TV and 27 percent search the products advertised in commercials. These findings tell us that consumers can be driven onto a search engine by other media. The customer journey may involve more than one or two steps, so why has search not yet gained its proper status as an advertising medium at the planning stage?

The experience consumers have of a brand is holistic in that it is composed of experiences ranging from across channels. Nevertheless, advertisers and marketers still cling to an outdated and wasteful approach towards communications that is best defined as a “silo” approach. Sometimes a few elements of the campaign are integrated, such as email and direct mail, or follow-up direct mail on display advertising, but most organisations are happy to stand back and let each channel run its campaign independently of the other. The result of this behavior is that it is difficult, if not impossible, to track response and efficiently measure return on investment (ROI).

Search in particular is a victim to this mentality, as it is practically never taken into consideration at the media planning stage of a campaign. This is probably due to its lack of an established role in combination with other media. Generally speaking, when a cookie is put onto a landing page--informing the system that a potential customer has landed on a company Web site via a specific search engine--search engine marketing is then regarded as accountable for that acquisition. It is, of course, evident that the effect a television commercial has on footfall, for example, is much less measurable than other factors such as competitor campaigns. As a result, traditional media is concerned that a significant portion of the sales conversions derived from the single campaign will be attributed only to the last trackable medium, which is often search.

Integration of search at the early planning stage can instead prove that this is a revelatory medium that helps attribute uplift rather than polarize results. If keyword searches increase after television advertising is launched, sales conversions due to that advertising can be realistically measured. The same can be done with the subsequent rise in campaign-specific word searches after an item of direct mail or a promotional email is issued. Search can in fact prove invaluable in revealing which channels had the greatest impact and helping inform future broadcast channels, times, and dates.

Although search is already commonly optimised for the company e-commerce site and traffic is driven to it both organically and through sponsored search, this effort is rarely made for single high investment campaigns. Far too often, companies do not even extend the key terms they bid on to include those used in their campaign-specific advertising. Surfers cannot find what they were looking for and response analysis results skewed as it fails to register the impact of other channels.

Having spent the money to identify our online customers, how can we maximize that investment by knowing the best time to reach them?

One positive aspect of challenging times is that it makes us more open to change, to new ways of doing things. As marketers look to fight this economy by maximizing ROI, online retailers, in particular, have an opportunity to tap into potentially lucrative customer segments they may have overlooked. Instead of just spending their efforts and budget to reach customers with the most recent transactions, they can also focus on when customers are most likely to buy next.

In-market timing, linked to one integrated model, can guide more profitable marketing to the right target at the right time. E-tailers, because of the rich amount of data they can collect about customers, can use in-market timing more to their advantage than physical retailers.

In a store setting, we only know what an individual customer bought, not how many times they came to the store without buying or how much time they spent.

Here are four key shopping patterns online retailers can watch to learn when to reach customers and prospects more profitably:

1. Shopping Styles

A simple example of how to use in-market timing is to observe the shopping behavior of customers on site. For example, a good portion of online shoppers conduct fairly extensive research online, which may involve repeated browsing within a category, reading of user-generated reviews.

2. Action Indicators

A particular pattern to pay attention to is a lengthy session with intermittent bursts of page views, which may indicate an active shopper simultaneously viewing competitive sites. This is often a strong indicator of an impending purchase.

3. Considered Purchases

Not all buyers consider purchases as carefully. For those consumers making a “considered purchase,” we often see them come to the site, place an item in the shopping cart, and check out. Such customers completed their research before and have come back to purchase. In such cases, there is little need to use marketing to persuade them to buy; however, marketing “completer” merchandise (for example, cables, HDMI switches, etc. for a large-screen TV) to such customers, either in-session or post-purchase, can be profitable.

4. Inter-Purchase Periods

The internal patterns of an individual’s past purchases are also important to understand. One of these patterns can be described as their “inter-purchase” period: the average length of time a consumer goes between purchases. Depending on the product category, these periods can be relatively short or quite long. Most retail marketing kicks into high gear immediately after a customer has made a purchase and gradually tapers off with the passage of time. For those with a longer inter-purchase period, timing offers closer to their next expected purchase can provide higher lift.

How do I boost results with my loyalty program by better tracking my customers’ value?

Loyalty programs are primarily designed to concentrate spending (share of wallet) and lengthen the customer relationship (retention). On average, most of them are successful at achieving these goals to some degree.

Then again, on average most loyalty program results are, well, average. But what else would you expect when objectives are set and results are measured to the average?

This is what we call the Mercury Law of Averages: if you define success in terms of average performance targets -- “On average, we want to bring in X members per month and have them spend $Y per year” for Z years”-- you are very likely to achieve average performance.

Breaking out of this “average” trap requires a strategy shift in enrolling better customers: understand the differences between customers and then use that insight to develop customer strategies based on where they are in the lifecycle and the potential value they represent. Once you have done this segmentation, you can begin to track how customers are moving from one segment to another over time.

For example, here is a simple customer migration report that shows how customers are shifting from segment to segment over time:

2008

2007

Very High

High

Medium

Low

Lapsed

Very High

50%

23%

13%

9%

5%

High

15%

30%

30%

19%

7%

Medium

4%

14%

35%

36%

11%

Low

1%

4%

17%

48%

30%

Lapsed

2%

6%

22%

69%

N/A

Here’s how to read this chart: of those customers who were in the “Very High” value group in 2007, 50 percent stayed in the “Very High” group in 2008, 23 percent slipped to “High”, 13 percent fell to “Medium”, and so on. Conversely, 15 percent moved from “High” to “Very High”.

The percentages provide focus as to where the largest shifts are in terms of the number of customers, but overlaying revenue onto this chart (average annual revenue by segment) will reveal where the large ROI opportunities lie.

For this client, the most obvious place to start was with customers who lapsed in 2008. In total, this group represented over $130 million in potential revenue that was not realized. This information could possibly lead to the development of a new retention strategy or a lapse/recapture program.

Customer Relationship Management: Coping With Budget Cuts

It is hard enough for individual businesses today to cost-effectively manage multiple brands and differentiated customer service propositions.

Add that to the further complexity of large number of mergers and acquisitions currently taking place in many sectors, and it is little wonder that companies struggle to deliver a consistent level of service.

The following reflects what typically happens as a result. Example one: if you look at a company’s website for a particular product and then ring the call centre with a related query, you will almost certainly have to start the conversation from scratch, as there will be no link between the two parts of the seller’s operation.

By contrast, in a true multi-channel environment the call centre agent would be able to see the stage which the customer had reached on the web and pick up the interaction from that point.

The issue is one of visibility. Until now, different customer communications have been managed by separate parts of the business in a typically siloed way, with no transparency between say, the phone, website, email, SMS, text or individual retail outlet.

Example two: historically, standard customers have been serviced by a pool of agents providing a generalised service. Here, top clients have received a much more personalised service, with individual wealth managers providing a dedicated contact.

Over time however, as banks and other call centre operators have looked to cut costs, the benefit of this higher level service has become marginalised and the tiered approach to service stripped out. The resulting problem however is that it is almost impossible for a pool of agents – in, say, managing a number of car marques and insurance providers - to acquire the skills and knowledge to operate a multiple service proposition strategy.

In a best-practice, truly integrated multi-channel response, there must be full visibility of data gathered across all channels, to ensure that the end-to-end customer interaction is as seamless and as easy as possible and with the same SLA turn rounds - regardless of how the process is started or concluded.

Enter intelligent, process-centric CRM. By implementing an automated 3D layer of product and service propositions to be handled by the agent, the software recognises and manages the process of determining the relevant proposition in real-time and instantly displays to the agent only that process and data which is relevant in each case.

The result is that, for the first time, a single resource pool can effectively manage multiple service and multi-channel propositions. That’s good news for the vendor in driving down costs and good news for each customer in getting the level of service they deserve.

Though few businesses have as yet got anywhere near this level of integration, the technology to achieve it is available today. Further, by adopting a ‘wrap and renew’ approach to technology development, existing IT investment is maximised.

And, at a time of economic downturn when companies are under unprecedented pressure to contain any expenditure, delivering unrivalled customer service in this way will not break the bank.

arketo Releases eBook on Lead Nurturing

Early last week, marketing solutions provider Marketo released its “Definitive Guide to Lead Nurturing” (the word “definitive,” however, may refer to its aim to be exhaustive rather than a finite solution — the vendor plans on updating this guide at least biannually, according to Jon Miller, vice president of marketing at Marketo).

The guide may be accessed for free — no registration is necessary — if you’re willing to wait for each part as Marketo releases one each week throughout the month of August. Marketo customers received a full copy of the eBook last Wednesday (August 3rd), and Part One of the report went live the next day — Part Two will be available for download tomorrow, August 11th. If you’re too anxious to wait a month for the complete book, fill out a simple registration form and Marketo will email the guide to you immediately.

This 40-page guide is broken down into four parts:

1. What is Lead Nurturing;
2. Lead Nurturing Basics;
3. Advanced Lead Nurturing; and
4. Calculating the ROI of Lead Nurturing.

The need for a guide like this, Miller explains, was evident in the amount of traffic his company was getting just from the keywords “lead nurturing.” After conducting some research, Miller and his team found that while the industry agreed on the value of lead nurturing (i.e., the WHY you should do it), understanding the HOW to lead nurturing was missing. Moreover, most of the resources Marketo was able to identify focused more on implementing lead nurturing practices based on “common sense and intuition,” rather than “hard ROI.”

“We’ve talked to our customers about doing this before,” Miller says, “but the reality is that we had never taken the time to bring this together and we hadn’t seen anyone else do this either.”

As a result, Marketo embarked on this research-intensive project to build a guide that would mesh the vendor’s, as well as its customers’, best practices in lead nurturing.

The report focuses on the pros and cons of four types of lead nurturing campaigns:

• Incoming Lead Processing Campaigns;
• Stay in Touch Campaigns;
• Accelerator Campaigns; and
• Lead Lifecycle Campaigns.

Along with each type of campaign, Marketo adds a “How Marketo Does It” box to explain how the vendor itself practices what it preaches. For example, here’s a an explanation of how Marketo approaches permission marketing, which typically begins in Incoming Lead Processing Campaigns:

At Marketo, we use single opt-in for any lead that comes in by filling out a form on our Web site, since these leads have already shown some interest in our content. We use a double opt-in approach for leads that come from any other source, since we think it’s important to explicitly establish a relationship with our brand. The single opt-in leads automatically receive a welcome email a few days after registering, while the double opt-in leads receive a multi-step program that makes two attempts to establish permission. Leads that do not respond are marked as suspended and are not counted as part of the database.

Marketo reported 800 percent revenue growth from Q2 2008 to Q2 2009 and approximately half of that, Miller says, can be attributed to lead nurturing. He says that of Marketo’s 230 customers, half of them came through traditional sales cycles (meet the prospect — hand them off to sales — slaes people engage — customers sign up), the other half came in from what Miller calls “non-traditional” or “non-linear” cycles (prospect is met through marketing but not yet ready for sales — they are nurtured — if it looks like they’re ready, they’re sent back to sales — if they’re still not ready, they’re sent back to marketing for more nurturing).

“Most companies,” Miller says, “are really bad at that.” In fact, 9 out of 10 times, he says, leads that are handed off to sales when they’re not ready are lost completely.

The guide comes with worksheets to help marketers articulate and plan our their own strategies and approaches, which Miller says is perhaps the most resourceful component. “This lets [marketers] sit down, use [their] own numbers, and define what it’s going to be worth,” he says.

Miller assured me that just because someone downloads this eBook, Marketo isn’t going to be jumping for the phone. “We’re not going to bug them unless they show the signs that they actually want to engage in sales cycle, not just learn best practices,” he says. Customers cretainly will be nurtured, and it doesn’t hurt to be the name associated with a “definitive guide.”

Coming up next, Miller says there’s talk about coming out with a guide to lead scoring, but nothing’s definite.

CSRs face everyday ethical choices

In recent years, the news media have been full of reports of business professionals with unethical behavior. Sometimes ethics is defined as "principles of moral conduct." Another definition says that ethics are "patterns of acceptable behavior to society as a whole and among your peers." These are really two different concepts. Just because everyone is doing it doesn't make it right.

Statistics from the Josephson Institute reveal that a high percentage of high school students, for example, admit to stealing from a store, cheating on an exam, or lying to parents. I don't think many kids spontaneously decide to lie or cheat or steal. Chances are, they see a manifestation of it in their parents or some other adult and conclude that it's okay. We get upset that our kids don't develop into exemplary human beings, but we set the stage for their breakdown by being so inconsistent ourselves. This is true in the workplace also.

The concepts of ethics

The values of honesty, respect, responsibility, caring and fairness are common to most discussions of ethics. For example, we all understand what it means to be lied to, and no one likes it. In a book titled Lying, author Sissela Bok says, "If I lie to you, then I deny your right to know the truth."

Agents have duties to the insurance company including loyalty, good faith, reasonable care and contractual duties. Agents have duties to the client including providing adequate coverage, proper legal notification - cancellation or non-renewal, placing business on the best possible terms for the client, investigation of carrier stability, giving correct advice related to insurance, and in today's society, other duties as determined by the courts.

People who respect others are going to respect their right of privacy. Everyone in the organization must take responsibility for the privacy of others. Caring people are going to be guided by this value. The concept of "fairness" is something to build on when preparing ethics guidelines.

When considering ethical choices, some questions to ask are:

* Is it legal and ethical?

* Is it legal but unethical?

* Is it illegal?

* Does it involve a core ethical value?

* Who are the stakeholders?

* Do I have enough information to make the decision?

* Am I rationalizing to justify what I really want to do?

* Could I defend my actions before the board of directors, the media, or my family?

Sometimes, unethical acts are the result of "ethical lapses" by otherwise ethical people because of business pressures and time pressures. A CSR who believes that she doesn't have enough time to verify the information presented on an application may rationalize that it's okay to go ahead and submit it to the carrier since "they will ask if they need more information." The duty owed by the agent to the company to present complete, accurate information is often breached in the rush to get to the next task.

Ethics and privacy

From an ethical viewpoint, we understand that everyone has some right to privacy. For example, the CSR who learns that one of his clients has had a DUI conviction is ethically bound not to share this information with others.

Agents are the first step in the information-gathering process. An agency has two initial exposures: the application and its own database. The extent of most safety precautions in an agent's office is locking the file drawer. Information on computers is secured through passwords and other security devices. Portability is what everyone is trying to protect against. Outgoing information is much easier to steal.

Accuracy of information involves making sure incoming information is complete. In terms of incoming information, for example, the Josephson Institute says that between 25% and 33% of résumés have material misrepresentations.

Each situation is unique and there are no overriding principles or general business guidelines that will give you the answers in every case. Honesty is a guideline that can be used in ethics. However, there are "shades of honesty" not lying and complete openness. (Do I give information I "know" that isn't "asked" on the application?)

It is easy to be ethical if it doesn't cost you anything. The ethics of a new agent just starting and needing to sell to feed his family might be different from those of a more established agent.

Do as I say?

The entire character of a business is dependent upon its management. The CSR listens to the rhetoric but hears the actions. If a manager says we must use extreme care to keep our clients' information private, but the CSR overhears the manager sharing private information with others inside or outside the office, the CSR is likely to find it easier to bend the rules and share with others also.

Walking the talk is critical. What values does management reward? Do they match what is said? All of us have an obligation to take corrective action if incorrect information is going out. If an organization sets unrealistic sales and profit goals, for example, the employees may get the message that it is okay to commit dishonest or unethical acts as long as the goals are met.

CRM on Twitter

Do you know what your whuffie is? More to the point, do you even know what whuffie itself is? The short answer is that whuffie is the sum total of your social capital, but check out page 20, where we discuss the subject in more detail, including a Q&A with Tara Hunt, author of the new book The Whuffie Factor. Hunt can be found on Twitter as @missrogue, where she and the notion of whuffie have become massively popular, as you can see below. CRM magazine, on the other hand, can be found at www.twitter.com/CRM and our online content resides at www.twitter.com/destinationCRM. Reach us directly by starting your tweet with @CRM.

missrogue:

Use the medium for what the medium is intended for: social interaction. That's what builds trust, whuffie, relationships, opportunities, etc

chadnorman:

I'm digging how Trent Reznor is using his whuffie and 500k Twitter followers to raise nearly $1m for a fan in need.

tenzochris:

That mindset is appealing to folks who are measurement-oriented. How do you help them "get" Whuffie, without numbers attached?

derekmassey:

I asked for and received muffins. Got charged for munchkins. Saved some money. Lost some whuffie?

realtyman:

"whuffie" n: Reputation currency. Coined by Cory Docto row in "Down and Out in the Magic Kingdom."

SerenaRenner:

Jeff Jarvis killed Dell's whuffie! -Tara Hunt

CyberHomes:

5 ways to raise whuffie:

1. Turn the blow horn around

CyberHomes:

2. Become part of the community you serve

CyberHomes:

3. Create amazing customer experiences

CyberHomes:

4. Embrace the chaos

CyberHomes:

5. Find your higher purpose

How to choose the right CRM software solution for your business?

Customer Relationship Management (CRM) is a business philosophy involving identifying, understanding and better providing for your customers while building a relationship with each customer to improve customer satisfaction and maximise profits. It's about understanding, anticipating and responding to customers' needs.

To manage the relationship with the customer a business needs to collect the right information about its customers and organise that information for proper analysis and action. It needs to keep that information up-to-date, make it accessible to employees, and provide the know how for employees to convert that data into products better matched to customers' needs.

The secret to an effective CRM package is not just in what data is collected but in the organising and interpretation of that data. That's where computers come in handy (apart from the Solitaire you can play on them :-)) Computers can't, of course, transform the relationship you have with your customer. That does take a cross-department, top to bottom, corporate desire to build better relationships. But computers and a good computer based CRM solution, can increase sales by as much as 40-50% - as some studies have shown.

An example of a CRM application would be in a car manufacturing business (assuming they sell directly to end users). If they maintained a database of which customers buy what type of product, and when, how often they make that purchase, what type of options they choose with their typical purchase, their colour preferences, whether the purchase needed financing etc., the manufacturer knows what marketing material to send out, what new products to promote to each customer, what preferences/options may swing the sale, whether a finance package should be included in the marketing material and when would be a good time to target each customer. They could use the information to build a relationship with the customer by reminding customers of service dates, product recalls, and maybe even to send the customer a birthday card.

A solid CRM suite is a must-have in today’s business environment if you wish to develop, manage, and grow your business. CRM helps you retain customers and at the same time grow your customer base. All businesses, big or small aspire for a CRM solution that is the perfect fit for them. However, given the not-so-impressive rates of successful CRM deployments it is crucial that you know what you are getting into when you decide to deploy a CRM solution.

As a generalization, most businesses, whether enterprise or SMBs have similar expectations from a CRM solution. There are certain factors that you should consider when selecting a CRM so that it is in alignment with your business practices and customer approach. These factors should cover the people, processes, and technology that will play a role in the successful deployment of your CRM solution.

1. Know your requirements – Your CRM software purchase decision depends heavily on your awareness of your business requirements. You can shop around only if you have a clear idea of what your company needs. Your need analysis enables you to be in control and ask prospective vendors the right questions instead of being swayed by their salespersons. It forces the vendors to put forth realistic quotes without glossing over costs that get added on to your bill at the time of payment. Targeted marketing, richer customer data, integration of applications, centralized database, generating more leads, leads conversion, efficient reporting, mobile connectivity are some of the factors that you need to consider. Of these some factors could well be overarching business requirements and some not so pressing. Your need analysis should factor in your state of preparedness for deploying a CRM solution as well as your growth plans.

2. Cost – Your financial capabilities are an important consideration. The size of your business, present number of users, and future plans will have a bearing on the cost of the software and the total cost of ownership. Compare vendors for the one-time cost of software and the TCO over a period of time. In most situations small businesses are much better off with the SaaS option where they pay only for what they use; however it is also possible that the TCO over a period of time can go beyond owning an on-premise CRM solution. You can bring the deployment and maintenance costs down if you have the requisite IT infrastructure.

3. Usability – This is a factor that can make or mar CRM adoption within a company. A CRM system that facilitates intuitive navigation, entering of data and access to information with minimum number of clicks ensures user acceptability. Employee training is a cost and the process can drag if your CRM system of choice requires that your employees have to grapple with tabs and functions. Check the extent of training support provided by the vendor; how many staff personnel is it willing to train and for how long. Find out if there are any extra training costs involved. Will the vendor provide training support at the time of upgrades?

4. Vendor analysis – Once you have your requirements sorted out, you can compare vendors in an objective manner. Armed with a prioritize list of requirements you can assess, select or eliminate vendors without wasting undue time on the process. The vendor should be assessed on two counts – technology and fitness for long-term business relationship. The technological must-haves are dictated by your requirements. The vendor’s experience in your vertical is important. A CRM solution pre-customized to your specific needs will work out cheaper than a generic CRM that you are forced to customize later. Select a vendor who you feel fits in nicely with your business environment. Your staff and the vendor will have to work together for a successful deployment and it’s only possible if you and the vendor see eye-to-eye on key issues. The vendor’s standing in the market, his history of innovation and vision for the future are also important considerations.

5. On-premise or on-demand – The deployment method depends on your finances, whether you are a first-time CRM user or making a move to another vendor, your in-house capabilities and other factors. On-demand is cheaper for the short term and allows your field staff to stay in touch with their counterparts behind the desk. It is a better alternative if you wish to deploy mobile CRM. On-demand CRM is also far easier to deploy, you can have it running in a matter of days. On-premise CRM offers greater control of data and better results for your customization efforts. However, it’s an expensive proposition and well nigh out of reach of SMBs.

6. Integration of data – Compare vendors for the ease with which their product can integrate with legacy applications in your enterprise. The prime objective of CRM is to provide users with a single truth about the customer and eliminate the use of multiple silos of data. This can be achieved only if the CRM software integrates smoothly with existing applications. It is also important from the point of view of achieving an ROI from applications that already exist within the company. Integration capabilities are important as protect you from vendor lock-in. You reserve the option of building your systems with products and services of different vendors. Also check if the vendor is capable of cleaning the dirty data that is invariably generated during the course of the initial data integration.

Conclusion

Selecting a CRM solution can be a difficult task but given the benefits that follow the successful implementation of a correctly chosen CRM, it is well worth the effort. So, do your research, be informed, compare and ask questions. You will surely find a vendor who is the perfect fit for your business.

Choosing a CRM software solution?

Using a consultant could save you time and money. Software resellers are often good first line advisers as they have experience and feedback from selling competing CRM packages. Some resellers offer wider packages including strategic planning and process management.

Want to do the research yourself? Most of the big CRM software manufacturers have extensive advice, pdfs and guides on their sites that reputedly hold your hand through the choosing process. They are likely to be biased, of course, but can be good sources of ideas anyway. Sage, in particular, has a pretty neutral sounding Adobe document download.

For the DIYers another good place to start would be to make a list of your objectives and the benefits your organisation hopes to achieve. When looking at CRM solutions you want to check the features and functionality "out of the box"

- customisation is all very nice but it takes time and may not be as easy as you think

- supported platforms in terms of hardware, operating systems, databases, online activities and online ordering systems etc., (not just your back office systems but third party software you use too)

- integration with those systems

- global perspective

- price - preferably a one-off purchase price with no annual licence fee.

And look for references, preferably from companies in a similar industry as you. Test their customer service and look for unbiased reviews of the same.

When you've narrowed the field down you can ask each supplier to provide you with a full cost (including mods), time frame for implementation, likely downtimes in your current operations during implementation, breakdown of further costs (including training and licencing).

CRM Privacy and data security System

Privacy and data security System

One of the primary functions of CRM software is to collect information about customers. When gathering data as part of a CRM solution, a company must consider the desire for customer privacy and data security, as well as the legislative and cultural norms. Some customers prefer assurances that their data will not be shared with third parties without their prior consent and that safeguards are in place to prevent illegal access by third parties.

Market structures

The following table lists the top CRM software vendors in 2006-2007 (figures in millions of US dollars) published in a Gartner study.[12]

Vendor 2007 Revenue 2007 Share (%) 2006 Revenue 2006 Share (%) '06-'07 Growth (%) '06-'07 Change in share (%)

Oracle 1,319.8 16.3 1,016.8 15.5 29.8 +0.8

SAP 2,050.8 25.3 1,681.7 26.6 22.0 -1.3

Salesforce.com 676.5 8.3 451.7 6.9 49.8 +1.4

Amdocs 421.0 5.2 365.9 5.6 15.1 -0.4

Microsoft 332.1 4.1 176.1 2.7 88.6 +1.4

Others 3,289.1 40.6 2,881.6 43.7 14.1 -3.1

Total 8,089.3 100 6,573.8 100 23.1 0

The following table lists the top software vendors for CRM projects completed in 2006 using external consultants and system integrators, according to a 2007 Gartner study.

Vendor Percentage of implementations

Siebel (Oracle) 41%

SAP 8%

Epiphany (Infor) 3%

Oracle 3%

PeopleSoft (Oracle) 2%

salesforce.com 2%

Amdocs 1%

Chordiant 1%

Microsoft 1%

Metus Technology 1%

SAS 1%

Others 15%

None 22%

CRM Strategy and Implementation Issues

Strategy

Several CRM software packages are available, and they vary in their approach to CRM. However, as mentioned above, CRM is not just a technology but rather a comprehensive, customer-centric approach to an organization's philosophy of dealing with its customers. This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management. Hence, it is important that any CRM implementation considerations stretch beyond technology toward the broader organizational requirements.

The objectives of a CRM strategy must consider a company’s specific situation and its customers' needs and expectations. Information gained through CRM initiatives can support the development of marketing strategy by developing the organization's knowledge in areas such as identifying customer segments, improving customer retention, improving product offerings (by better understanding customer needs), and by identifying the organization's most profitable customers.

CRM strategies can vary in size, complexity, and scope. Some companies consider a CRM strategy only to focus on the management of a team of salespeople. However, other CRM strategies can cover customer interaction across the entire organization. Many commercial CRM software packages provide features that serve the sales, marketing, event management, project management, and finance industries.

From this perspective, CRM has for some time been seen to play an important role in many sales process engineering efforts

Implementation issues

Many CRM project "failures" are also related to data quality and availability. Data cleaning is a major issue. If a company's CRM strategy is to track life-cycle revenues, costs, margins, and interactions between individual customers, this must be reflected in all business processes. Data must be extracted from multiple sources (e.g., departmental/divisional databases such as sales, manufacturing, supply chain, logistics, finance, service etc.), which requires an integrated, comprehensive system in place with well-defined structures and high data quality. Data from other systems can be transferred to CRM systems using appropriate interfaces.

Because of the company-wide size and scope of many CRM implementations, significant pre-planning is essential for smooth roll-out. This pre-planning involves a technical evaluation of the data available and the technology employed in existing systems. This evaluation is critical to determine the level of effort needed to integrate this data.

Equally critical is the human aspect of the implementation. A successful implementation requires an understanding of the expectations and needs of the stakeholders involved. An executive sponsor should also be obtained to provide high-level management representation of the CRM project.

An effective tool for identifying technical and human factors before beginning a CRM project is a pre-implementation checklist. A checklist can help ensure any potential problems are identified early in the process.

Types / Variations of CRM

There are several different approaches to CRM, with different software packages focusing on different aspects. In general, Customer Service, Campaign Management and Sales Force Automation (SFA) form the core of the system.

Operational CRM

Operational CRM provides support to "front office" business processes, e.g. to sales, marketing and service staff. Interactions with customers are generally stored in customers' contact histories, and staff can retrieve customer information as necessary.

The contact history provides staff members with immediate access to important information on the customer (products owned, prior support calls etc.), eliminating the need to individually obtain this information directly from the customer. Reaching to the customer at right time at right place is preferable.

Operational CRM processes customer data for a variety of purposes:

Managing campaigns

Enterprise Marketing Automation

Sales Force Automation

Sales Management System

[edit]Analytical CRM

Analytical CRM analyzes customer data for a variety of purposes:

Designing and executing targeted marketing campaigns

Designing and executing campaigns, e.g. customer acquisition, cross-selling, up-selling, addon-selling

Analyzing customer behavior in order to make decisions relating to products and services (e.g. pricing, product development)

Management information system (e.g. financial forecasting and customer profitability analysis)

Analytical CRM generally makes heavy use of data mining and other techniques to produce useful results for decision-making. It is at the analytical stage that the importance of fully integrated CRM software becomes most apparent. Logically speaking, the more information that the analytical software has available for analysis, the better its predictions and recommendations will be.

[edit]Sales Intelligence CRM

Sales Intelligence CRM is similar to Analytical CRM, but is intended as a more direct sales tool. Features include alerts sent to sales staff regarding:

Cross-selling/Up-selling/Switch-selling opportunities

Customer drift

Sales performance

Customer trends

Customer margins

Customer alignment

[edit]Campaign Management

Campaign management combines elements of Operational and Analytical CRM. Campaign management functions include:

Target groups formed from the client base according to selected criteria

Sending campaign-related material (e.g. on special offers) to selected recipients using various channels (e.g. e-mail, telephone, SMS, post)

Tracking, storing, and analyzing campaign statistics, including tracking responses and analyzing trends

[edit]Collaborative CRM

Collaborative CRM covers aspects of a company's dealings with customers that are handled by various departments within a company, such as sales, technical support and marketing. Staff members from different departments can share information collected when interacting with customers. For example, feedback received by customer support agents can provide other staff members with information on the services and features requested by customers. Collaborative CRM's ultimate goal is to use information collected by all departments to improve the quality of services provided by the company.[8] CRM also plays a role of data distributor within customers, producers and partners. Producers can use CRM information to develop products or find new market. CRM facilitates communication between customers, suppliers and partner by using new information system such email, link and data bank.

Consumer Relationship CRM

Consumer Relationship System (CRS) covers aspects of a company's dealing with customers handled by the Consumer Affairs and Customer Relations contact centers within a company.[1] Representatives handle in-bound contact from anonymous consumers and customers. Early warnings can be issued regarding product issues (e.g. item recalls) and current consumer sentiment can be tracked (voice of the customer).

CRM software?! What is that?

CRM software helps organizations implement effective Customer Relationship Management (CRM).

CRM itself is not a software application, but is instead a strategy for doing business.

CRM methodologies are focused on building individual customer relationships for the purpose of creating and maintain a loyal customer base.

CRM software works across all corporate departments to help harmonize customer-centric thinking in the entire organization.

This interdepartmental cooperation also reduces cost, increases efficiency, and improves customer satisfaction.

CRM Software

Many commercial CRM packages are available on the market.

These open source CRM packages represent an alternative to the commercial CRM software offerings.

The open source CRM software packages are highly rated by their users and compete quite well with the commercial products.

opentaps

opentaps Open Source ERP + CRM brings you the advanced features and power of Tier 1 ERP and CRM software with the flexibility and low cost of ownership that only open source can deliver. You can use opentaps as an alternative to expensive and inflexible commercial ERP solutions, as a replacement for in-house solutions that are difficult to maintain or extend, or as a starting point to build your unique business model and processes.

Key features of opentaps Open Source ERP + CRM include:

A complete suite that deliver a 360-degree view of your business, from customers to orders to inventory to accounting. opentaps is one application running on one unified data model with over 700 tables, so you'll never have to do messy integration again.

Compatible all major open source and commercial relational databases, including MySQL, PostgreSQL, Oracle, Sybase, and Microsoft SQL Server.

Runs on Linux, Unix, and Windows operating platforms.

Service-Oriented Architecture for easy interoperability with external or legacy applications.

Modular and tiered architecture allows for easy modifications or additions. An add-on application could be unzipped into a directory and start running.

Remote and local synchronization for scalability and high availability.

Workflow for adapting to unique business processes.

Tunesta

Tustena CRM OS (OpenSource) is a free, web-based Enterprise-Class Customer Relationship Management server written in C# for the .NET platform.

Tustena offers many advanced features like:

Company and Contact Management

Lead Management

Calendaring

Tasks

Notes

Messages

Opportunity Management

Activity Management

Advanced Search

Charting

Case / Solution Management

Reporting

Internationalization

Companies, Contacts, leads and activity Import

Advanced Reporting

Product Catalog

Email Marketing and Mailing Lists

Mobile/WAP Access

.Net WebServices

Forecasting

POP3 email manager via WebMail

Voip Integration

Microsoft Outlook Email Integration

Desktop Alerter

Quotes

Knowledge Base

Dynamic Databases

Trouble Ticket Management

Business Intelligence

Compiere

Compiere is an integrated Enterprise Resource Planning (ERP) and Customer Relations Management (CRM) software solution that combines the power of point of sales (POS), distribution, inventory, e-commerce, accounting, and workflow systems within one robust application. Compiere is fully customizable to your enterprise and was created to handle the challenges of global commerce.

vtiger

vtiger CRM is an enterprise-ready Open Source CRM software mainly for small and medium businesses. vtiger CRM is built over proven, fast, and reliable LAMP/WAMP (Linux/Windows, Apache, MySQL, and PHP) technologies and other open source projects.

vtiger CRM leverages the benefits of Open Source software and adds more value to the end-users by providing many enterprise features, such as Sales force Automation , customer support & service , marketing automation, inventory management, multiple database support, security management, product customization, calendaring, E-mail integration, add-ons, and others.

vtiger CRM software installation is very simple as all the necessary software, such as Apache, MySQL, and PHP are integrated and executables are made available both for Windows and Linux (RedHat, Debian, SuSe, Fedora, and Mandrake) operating systems in SourceForge.net. You need not concern too much about setting up database, Web server, and other software.

vtiger CRM also provides, enterprise grade business productivity enhancement add-ons, Customer Portal , Outlook Plug-in for Microsoft Outlook users, Office Plug-in for Microsoft Word users, and Thunderbird Extension for Thunderbird mail users. All these add-ons are part of the vtiger CRM Open Source project in SourceForge.net

XRMS

XRMS CRM is an extensible Customer Relationship Management (CRM) system that enables your organization to successfully become customer-focused.

XRMS is a fully-integrated suite of web-based tools for Customer Relationship Management (CRM), Sales Force Automation (SFA), and Business Intelligence (BI) tools.

Use it to integrate and manage your sales, service, and marketing data in a single information store. XRMS has the enterprise capabilities to become a single system of record for storing activities, files, and other interaction data with your customers, employees, partners, and prospects. And, it is easily extensible to support your own processes and procedures for interacting with and supporting your customers.

Why does XRMS make sense for so many businesses? Here's some of the features that our community likes:

Low infrastructure requirements

Community-driven Open Source

Enterprise-friendly licensing terms

Clean data model for easy integration and migration

Configurable, integrated workflow engine

Configurable look and feel (themes)

Translations for more than 20 languages

Role-based security

Database independence

Shared calendar

Plugin architecture for seamlessly integrating add-ins

Extensive search

Document management

CTI and email integration

Relationship tracking

Customizable views

Business intelligence

SugarCRM

Sugar Open Source enables sales, marketing, and support organizations to manage their customer interactions more efficiently and profitably and is intended for both large and small companies worldwide. Platform agnostic, Sugar Open Source is the least complex, most portable, and most cost-efficient customer relationship management (CRM) solution. Natively built on the LAMP (Linux, Apache, MySQL and PHP) stack, Sugar Open Source can be deployed in virtually any environment.

CRM is a mature and cost-effective endeavor, but traditional, proprietary applications are still expensive to buy or rent. It's not because it's costly to build great CRM applications, but because those who provide proprietary CRM are required to market and sell them. When you build a commercial grade CRM application based on the combined ideas and resources from CRM developers across the globe, you simply produce a better, more revolutionary product than any proprietary software or hosting company can think-up and build on its own. We believe the SugarCRM open source business model is far more efficient than the classic approach to building proprietary CRM software. We do not believe in the notion of hiding access to code in order to lock-in customers.

Since the open source project is such an effective marketing mechanism, open source companies can keep their sales and marketing costs low. Revenues are invested back into product development. Our prices are substantially lower than what CRM vendors charge today - the majority of your subscription costs goes back into product development, not into marketing and selling the solution. Download and install the freely distributed Sugar Open Source application. If it works for your company, we ask that you participate in the SugarCRM Community through forum discussions or code contributions. If you need the functionality in Sugar Professional or Sugar Enterprise, give us a call. We want you to become a customer once we have proven we have generated value for your company, not one minute sooner.

Ohioedge

Ohioedge CRM Server is an online CRM application designed for $2-500M organizations requiring centralized, multi-functional, enterprise-wide coordination of sales generation (contact management) & fulfillment (business process/workflow management) activities.

openCRX

openCRX is a professional CRM solution (customer relationship management) deployable to all major platforms. openCRX is multi-entity enabled, scalable, a real enterprise-class CRM-solution.

Enterprise Groupware System

EGS is the leading, commercially supported, Open Source integrated web-based business system - offering a single sign-on to all your business applications it carries on where other CRM tools stop.

EGS offers modules that allows businesses to develop outstanding communication channels; collect vital customer data; track order histories; view pipelines and build individual customer profiles. It integrates an Enterprise Resource Planning (ERP) accounting solution enabling the management of all the business' accounting requirements. EGS can track orders; log invoices; enable on-line purchasing and monitor distribution channels.

Books on CRM Software