PROFILE  AZHAR ABBAS HASHMI
 COLUMN  FOR THE RECORD
 POLITICS & POLICY 1. RESTRUCTURING THE NAB
2. MANAGING COST OF BUREAUCRACY
 SOCIETY  1. HUMAN DEVELOPMENT
2.  MANAGEMENT BY WANDERING AROUND
3. THE CRM LANDSCAPE

 

THE CRM LANDSCAPE

 
Technology has changed the speed and volume of customer data that is now available

By HINA SAEED
Sales Support Specialist
Teradata Division, NCR Pakistan
Aug 05 - 11, 2002

 

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 etc.

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.