Customer Relationship Management, the term and the
technology, is a fairly recent phenomenon. The concept however, is not.
For decades companies have talked about customer satisfaction, customer
loyalty etc. However, the means by which they attempted to impact that
loyalty or satisfaction has changed dramatically in the past few years.
For example, in the 70's and 80's the concept of database marketing
gained popularity. Giant companies used data that they owned or
purchased from large list brokers. These companies, who were actively
involved in Database Marketing, attempted to segment these lists mostly
by demographics such as income level, region or sex. Unfortunately this
type of segmentation did little to reduce the carpet-bombing effect of
their mailings as they spent huge amounts of money trying to reach the
"right" people for their offer.
Perhaps they attempted to use their own customer
database to contact their customers, but the outcome, from a customer's
point of view was not much better. In most cases, they simply lacked the
intelligence they needed to make communications to their customer-base
truly targeted and meaningful.
ROLE OF TECHNOLOGY
Technology has changed the speed and volume of
customer data that is now available. However, as companies begin to
gather the vast information that can now be gathered by vehicles such as
the internet, loyalty programs, operational systems etc, they are
struggling to understand how best to use this data.
Furthermore, and probably more importantly, customers
are demanding behaviour out of companies they do business with like
never before. Patricia Seybold, wrote in her book "The Customer
Revolution", points out that it is the customer who are changing
the landscape by demanding things such as real-time information, the
ability to negotiate prices, convenient access to a variety of channels
This fact, combined with more and more companies'
strategically re-aligning objectives to increase customer retention,
decrease the cost of customer acquisition and increase profitability by
customer are driving the CRM Industry upward.
EARLY CRM FAILURES
In the mid 1990's, CRM was gaining momentum. Most
companies reported that they were either actively involved in some stage
of a CRM Project or at least considering implementing some CRM
technology in the near future. CRM companies that offered a full suite
of customer facing technologies dominated this era. Today, most of those
companies have been purchased by other companies and rarely show up on
any analysts' radar screen.
The Economy was soaring, there was a great deal of
venture capital funding and companies were willing to spend millions on
a CRM application. So, CRM vendors such as those mentioned above, were
happy to "help" and thus offered full suite implementations;
most times costing well over a million dollars. Unfortunately, there
were many errors in planning and a lot of bad judgment in this era. For
example, IT taking lead on purchase decisions, which lead to problems
such as trying to bolt technology on top of bad processes. Without
high-level commitment from business side, many projects did not get
resource commitment. This combined with very long implementation times
caused many costly failures and thus the industry began to change.
In a research study by Metagroup the author
illustrates this point well.
"....taking a "big bang" approach to
installing a large, backbone CRM system advocated by global vendors can
bog an organization down in the same species of multiyear,
multibillion-dollar installations fiasco that many Global 2000 companies
experienced with ERP installations a decade ago."
THE "THINK BIG START SMALL" APPROACH
To coin a phrase from Peter Heffring, President of
Teradata CRM Solutions Division of NCR Corporation, "Think Big
Start Small", companies should no longer sink huge fortunes of
money into projects that have no end in site and no foreseeable ROI. The
industry has evolved, market dynamics have changed and past failures
have all lead to the "Think Big Start Small" philosophy so
prevalent in the industry today.
Teradata CRM is a best of breed solution that focuses
on Customer Retention, Customer Loyalty and Customer Acquisition.
Teradata CRM now offers a product called Industry Express (IE) that
takes advantage of Teradata's extensive knowledge in industry models. IE
offers an out of the box, pre-mapped sub-set of modules to get a company
up and realizing ROI within four to six weeks. Tune in at
www.teradata.com to learn more about Teradata CRM IE and more.