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CRM's Last Mile
Even well designed CRM initiatives often overlook a crucial element of the customer relationship. Closing this gap can improve CRM results.
Posted May 2, 2005
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The customer is always right...The customer is king...Customers come first...We listen to our customers. Most business leaders would agree with these well-worn customer relationship maxims and actually live up to them by embracing proven CRM business methods and technologies.
Until recently, however, many CRM implementations have failed to go the distance, whether as a technological implementation or an organizational discipline. They focus on the front end of the customer relationship--prospecting, customer acquisition, customer service, technical support, and customer fulfillment. But they nearly always run out of gas on the last mile of the customer relationship cycle, which is bland and boring billing. It's the missing link in the CRM chain. Done wrong, billing is merely a necessary evil that debits or credits customer accounts, facilitates e-commerce functionality, spits out invoices, and provides basic record keeping. Done right, billing can deliver virtually all of the benefits companies are striving for with traditional CRM efforts. These include revenue enhancement, increased customer loyalty, brand promotion, improved customer communication, cross-selling and upselling. EXPANDING CRM'S REACH Extending CRM thinking to the last mile of the customer relationship is what we at Aria Systems have dubbed 'BRM', for 'billing relationship management'. As with traditional CRM approaches, BRM's benefits can improve the fundamental economics of any business by leveraging the billing system to manage customers individually. This gives customers a truly personalized experience, with measurably more profitable relationships. And when dealing with recurring relationships, such as subscription-based publications or services, BRM can provide an even bigger kick towards an organization's CRM goals. At the broadest level, a BRM system generates an invoice and collects money. That's no different from any ASP that provides an online shopping cart or enterprise billing system. But BRM goes much farther, deeply integrating the billing function with components of the vendor's service.
That opens real opportunities to up-sell customers, boost revenue, increase customer satisfaction, promote brands, and strengthen customer loyalty. For example, an ISP might be selling broadband Internet access, but also have a menu of other services they could upsell customers, such as additional email addresses, Web hosting, firewall, spam filtering, antivirus, antispyware, VPN, VoIP, and wireless. All of these extra services are complementary to the core broadband offering. A normal billing system would simply generate the monthly invoices. With BRM, an ISP can analyze a customer's existing services, and promote new, personalized offerings with every invoice. A broadband customer might be offered a discount on a firewall in 30 days, a security pitch for an antivirus filter in 60 days, and an antispyware package in 90 days. At six months a Web hosting package is offered. As the customer's account comes up for renewal the BRM system can proactively market, say, an extended term contract, to boost renewals. GETTING BILLING INTO THE GAME Online gaming is another arena that offers compelling examples of BRM boosting revenues by seamlessly integrating with all service dimensions. For example, instead of canceling a role-playing account due to non-use or nonpayment, a BRM system can keep the account alive by locking the player's character in a room, and requiring payment to rejoin the online universe. The BRM system can monitor a player's progress in real time, upselling them tips, secrets, power-ups, weapons, more time, all as part of the game universe's continuity. BRM can also reduce churn by monitoring credit card limits and expiration dates. Gamers can be alerted to upcoming credit card problems, and get redirected to the billing platform's self-service interface to make the appropriate changes. Customer churn can also be prevented by allowing gamers to put accounts on hold when they can't logon due to vacation, illness, or a tight budget, and perhaps retaining them as customers. Even the loyalty of parents can be engendered by a gaming platform with integrated BRM, by letting parents set billing limits for their children. The up-sell, churn reduction, and loyalty-building possibilities for marketers are endless when the billing system is smart enough to understand the customer's profile, and dynamically market new services or resolve potential issues. BILLING GONE WILDAbout the Author Edward Sullivan is founder, president, and CEO of billing relationship management (BRM) software firm Aria Systems LLC, in Drexel Hill, PA. He can be reached at ESullivan@AriaSystems.net
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