Creating master profiles is a must to realize true ROI.
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There are many paths to CRM hell. Here are two: not creating a standardized view of the customer, and ignoring the need to leverage that two-way communication.
"This is the boring and basic stuff that everyone has been saying forever," says Paula Puleo, a partner at management consulting firm Peppers & Rogers Group, adding that four or five years after the emergence of CRM software, however, companies still do not get it.
So, a refresher: A standardized view of the customer creates a master profile of information accessible to all, and is culled from such operational sources as marketing, inventory, and sales. These profiles are integrated across all communication channels--email, fax, direct mail, and call center. Otherwise, CRM software is underutilized and ROI is minimized.
Consider the American Heart Association's national headquarters in Dallas. It faced the age-old dilemma of having data of its constituent groups--patients, scientists, and donors among them--scattered across Excel spreadsheets, custom applications, and outsourced vendors holding direct mail lists. On the heels of an investment in Siebel's SFA and service applications two years ago, the association migrated data on six "customer" groups to Oracle for its data repository.
Clearly there is benefit in having a universal profile of the customer available across every communication channel. "Customers expect you to know what's going on regardless of what channel they are interacting with you," says Michael Wilson, AHA's executive vice president, technology and customer strategies. But the AHA went one better by including important data about the propensity to donate.
The AHA sponsors the "Jump Rope for Heart" a fundraising and educational initiative targeted to some 80,00 elementary schools across the country. The AHA began scoring schools based on their past giving patterns and their potential to give more. "Because of the consolidated view of the customer in the Siebel application, we could begin segmenting the income value of each school. It was a reallocation of staff resources to work with schools that have either demonstrated that they bring in higher levels of income or had the potential to bring it in," Wilson says.
Historically, field staff across the United States would register all schools and shepherd their participation in the event. Now, field staff devotes its on-site efforts to that 10 percent of schools the association has identified as having the most growth potential--an identification process nearly impossible without data management practices that not only standardized customer profiles, but was shrewd in what data to include. Puleo says companies believe they need every piece of customer data ever collected. Not true.
By virtue of this redeployment of staff, the AHA has seen an average 25 percent increase in giving from its highest priority schools--an incremental revenue increase driving the ROI of the CRM implementation, Wilson says.
This strategy also shows the importance of building an effective two-way communications infrastructure. Most schools now register through the Web. It is essential that all channels are integrated, so event registrations go smoothly and questions get answered promptly. Call center conversations are documented so future emails from the same school about the same issue are handled consistently.
Wilson believes that school customers' satisfaction with this new way of doing business will serve as another driver of ROI; satisfied customers stay customers and give again. "The data I have seen is that the higher the satisfaction you have the greater the loyalty you have," Wilson says. --John Berry
5 Reasons Why CRM Fails
1 Unrealistic expectations CRM is not going to automate the hard work of winning customers and keeping them. Real CRM is a management strategy that IT supports, not vice versa.
2 No management buy-in The true value of CRM applications is derived when senior management is fully committed to the investment, because many management and organizational processes must be reengineered to support the strategy.
3 Poor customer data A customer focus supported by CRM software must include clean, comprehensive data about customers. Data is often incomplete and is not available across internal channels.
4 Lack of a customer-centric vision True CRM means a company evolves into having a customer-centric focus rather than a product or service focus. This includes two-way communication flows. The company is organized around segments of customers rather than organized around what it sells in the marketplace.
5 Swinging for the fences Instead of taking a piloted, incremental approach to CRM investment, companies try to hit a home run with their initial investment. Often the management vision isn't in place and the subsequent ROI is negative.
Source: Peppers & Rogers
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