Spending may be tight, but CRM is a must-have
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Whether stung by sluggish sales, as in the case of retailer Gap, or enjoying sturdy growth as a low-end software maker like Intuit, one thing is certain: CRM is a requisite technology. At least this was the key takeaway from a recent Silicon Valley CIO roundtable hosted by the Software Technology Forum.
Featured speakers included Beth Devin, senior vice president of integrated client technology at Charles Schwab & Co.; Ken Harris, CIO and senior vice president of Gap Inc.; and Bill Ihrie, senior vice president and CTO of Intuit. The goal of the discussion was to shed light on the state of CRM buying habits today and to peek into the crystal ball of CRM tomorrow. But first the speakers needed to define CRM among themselves, a difficult feat considering their use of CRM varied widely.
Charles Schwab, for instance, is using CRM software from Siebel Systems to gain a better view of customers. The goal is to find out which investors are serious and which ones are not, and then allocate resources accordingly. This means leveraging analytical software to look for key customer metrics, such as automated deposits from paychecks, which is a sign of the serious investor, and stagnant balances, a sign of the nonserious investor, Devin said. Nonserious investors tend to "talk up a storm. We're subsidizing them and losing money," she said.
Unlike Charles Schwab's cost-cutting CRM practices, Gap is betting small CRM projects can add up to big differences. As the fashion world speeds along with new products rolling out every month or so, Gap wants to be more proactive in its marketing efforts, Harris said. This means finding out which customers are trendy buyers, and then letting them know via email what products are coming down the runway.
Gap has taken a grass roots approach to CRM, Harris said, signing off only on bite-size projects that have a quick and measurable return on investment, he said.
Then there is Intuit, which is both using and selling CRM software and services. The challenge for Intuit is to capture customer information across many different product
lines and distribution channels using Siebel software, and then to look for cross-sell and upsell opportunities, according to Ihrie.
For Intuit, CRM is not as focused on cost-cutting or better marketing as it is on making money, Ihrie said. "We're growing fabulously, top and bottom line. If we weren't growing, [CRM] would be a harder thing to do," he said.
This, in fact, is the challenge for many companies: balancing a long-term CRM strategy with short-term financial objectives. Most CRM users are like Charles Schwab and Gap, which have been hit hard in the recession. This economy makes any technology a tough sell.
On the upside, CIOs said CRM leads the way in terms of technology spending. "We are doing some things with E.piphany that are very valuable and important to us," Gap's Harris said.
Schwab's Devin said her company continually allocates money to invest on client-facing technology, even in a sour economy. "Relationships are very important right now. Considering all the things that didn't get funded this year, that we still have funding for CRM says a lot," she said. CRM is a top priority at Intuit as well.
For cost-cutting, CRM is must-have technology today. Next year, given an economic recovery, might be the year of CRM's bells and whistles, CIOs said. For example, Devin had to push back a CRM project on predictive analysis from this year to next. Specifically, the project called for integrating technology that would make sure customers do not receive e-mail promotions on the same day they make complaints.
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