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From Knowledge@Emory, January 29 - February 11, 2003.
Why Some Companies Succeed at CRM (and Many Fail)
What makes some companies so much better at managing customer relationships than their competitors? Put a different way, how are companies like Enterprise Rent-A-Car, Pioneer Hi-bred Seeds, Fidelity Investments, Lexus, Intuit, and Capital One able to stay more closely connected to customers than their rivals, in ways that significantly influence the profitability of the firm? It’s a question that Wharton marketing professor George Day answers in a new paper. His research offers, among other things, three distinct approaches to customer relationship management (CRM), each with dramatically different results.
http://knowledge.emory.edu/articles.cfm?catid=4&articleid=637
From IntelligentCRM Email Bulletin, Volume 2, Issue 2, January 22, 2002.
I-CRM FEATURE:
CRM RESURRECTION: Five golden rules for revitalizing moribund initiatives in a glacial economy January 14, 2002; by Jill Dyché
This feature takes a long, hard look at CRM and obtains input from IT strategists on the front lines of CRM implementation. However, instead of just dwelling on what's wrong with CRM, this article offers advice on how to recognize CRM problems and fix floundering initiatives. Visit the Web version for exclusive Web-only content on the five steps for revitalizing CRM, seven CRM warning signs, and five techniques for jump-starting a CRM project.
For more detail, view online story.
FEATURE: "Failsafe: 10 Steps to CRM Payback": Focusing on these goals during implementation can save your organization a lot of time and money in the end December 5, 2001; by Jay-Louise Weldon http://www.intelligententerprise.com/011205/418feat3_1.shtml.
TAKING ON B2B EXTRANETS FROM Transform Magazine:
December 2001 by Lowell Rapaport http://www.transformmag.com/db_area/archs/2001/12/tfm0112cc.shtml.
TAILOR CONTENT FOR A PERSONAL TOUCH FROM Transform Magazine:
November 2001 by Michael P. Voelker http://www.transformmag.com/db_area/archs/2001/11/tfm0111f2.shtml.
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From eBizStrategies, January 17, 2002:
1. CUTTING THE FAT FROM CRM IMPLEMENTATION: Station Casinos Inc. and other companies are seeking to
reduce implementation costs for customer relationship management systems. Analysts say that implementation charges--payouts for integration, customization, networking and training, among other things--can easily spiral to four times the cost of the CRM software itself. That reality has become difficult for enterprises to swallow, given the limp economy and the well-documented fact that about half of all CRM implementations fizzle. To read the story, click here
2. STANDARDS MAY FIX CRM INTEGRATION: Software customization, training, maintenance and license
fees aren't the only things that raise the cost of CRM deployments. Integration, experts say, can also be a major, costly challenge. That's because, in most large enterprises, customer information is captured and stored in multiple systems. Bringing it all together for analysis in a customer resource management system usually involves time-consuming integration using proprietary APIs provided by CRM and other enterprise software vendors. To read the story, click here.
3. BARTON GOLDENBERG: CAPPING CRM IMPLEMENTATION COSTS: Until recently, implementing CRM software meant either
engaging an implementation company that has been trained and/or certified by the vendor or using internal IT
resources. Neither choice is optimal. To read Barton Goldenberg's column, click here.
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From eBizStrategies, June 15, 2001:
CRM FORCES E-BUSINESS TO GET SERIOUS ABOUT DATA QUALITY
After years of neglecting data quality or investing millions
of dollars and hundreds of man-hours to manually clean up
and rework data in a stopgap fashion, many companies are
finally getting serious about data quality. And for many of
them, CRM is the driver. Unlike with earlier generations of
back-office systems where inconsistent data merely drove up
costs, in e-business, where you're dealing directly with
customers, miscues resulting from faulty or incomplete data
can drive away business in an instant, experts say. It's not
surprising, then, that data quality is starting to command
the attention of top management instead of being passed off
to IT. Many e-businesses today are putting board-approved
data management and quality strategies in place.
To read the story, click here:
http://eletters1.ziffdavis.com/cgi-bin10/flo?y=eIhe0Bf5ip0DSr0I110Ad
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Exploration Warehouse
CRM by the Slice.
HARRAH'S PLACES ITS CRM BET (from eBiz Strategies [eBiz_Strategies@eletters1.ziffdavis.com], April 5, 2001):
Customer relationship management technologies are paying off
like a loose slot machine for the Harrah's casino chain,
delivering increased gaming revenues and customer loyalty.
While many competitors are relying on extravagant rooms and
entertainments, Harrah's is using CRM to track and analyze
the behaviors and preferences of its customers as they rove
the casino floor in search of a hot slot machine--or even as
they travel from one of the company's 21 clubs to another.
Harrah's has expanded its Total Rewards program, which uses
coded ID cards to collect information about gamers'
preferences, into a full-blown CRM initiative by adding
information from other sources such as the company's hotel
reservation systems to get a more complete view of
customers.
To read the story, click here:
http://eletters1.ziffdavis.com/cgi-bin10/flo?y=eHbR0Bf5ip0DSr0CLb0AN
Crm Market to Grow to $11.9 Billion by 2005, Report Says
CRM VENDORS PULL STRING ON SPEECH, by Gina Fraone -- (from eBiz Strategies [eBiz_Strategies@eletters1.ziffdavis.com])
When toy manufacturer Mattel Inc. decided decades ago that
little girls would love dolls that could talk, they were
right. The company's Chatty Cathy doll, first produced in
1959, was an instant success with baby boomer girls.
Subsequent generations were equally enamored.
And remember Texas Instruments' Speak and Spell, the toy
that spoke to kids as they practiced their spelling? Most
consumers in 1978 probably didn't care that this was the
first toy to use integrated circuits to create a replica
of the human vocal tract. It was just cool to have a toy
that talked.
Consumers have historically shown a natural affection for
devices that speak like humans, so it's no wonder that
several CRM (customer relationship management) product
vendors at DCI's annual CRM conference last week were trying
to seduce attendees with the power of speech. Some were
showing products that allow salespeople to interact with CRM
applications by talking to them. Others were touting
applications that allow Web sites to interact with consumers
using speech.
Although the idea of applying speech to CRM in this way
makes sense, many of these new products suffer from two
problems: Speech recognition technology still has holes, and
speech-driven applications require more bandwidth than many
networks and Web sites can muster.
Two products being demonstrated at the DCI show illustrated
these shortcomings. JustTalk, of Ann Arbor, Mich., offers a
product that integrates with CRM software so that traveling
sales folks can capture, access and share data using speech
recognition technology over any phone.
And LipSinc, of Morrisville, N.C., helps businesses create
"virtual agents" that can interact with Web site visitors to
provide one-way automated voice responses or give live
two-way visual communication. LipSinc can even create a
digital image of an employee or other character that will
interact with Web site visitors.
Gimmicks aside, I found performance lacking in these new
applications.
The JustTalk application is a bit slow and awkward. Although
I think JustTalk is onto a great idea, the company's
speech-recognition technology has trouble understanding
regional and ethnic accents. The software seems to work best
when the speaker uses only certain word patterns and short
phrases. The problem is that such speaking patterns are
unnatural, and many users won't take the time to get the
hang of working with JustTalk.
I also visited a few sites employing LipSinc's digital
character technology. Yes, I was completely charmed when a
digital, multidimensional-looking Kermit the Frog greeted
me at one site. However, despite the fact that I was
accessing the site from eWEEK's office using a robust
corporate network, Kermit lost his voice in the ether and
was unable to tell me more about the wonders of his site.
Maybe the little frog creature wasn't adequately motivated.
(What are they paying you, Kermie?)
The application of speech recognition to CRM will certainly
work once the kinks in speech technology and network
bandwidth are ironed out. In the meantime, however, most
users will get more out of a pull on Chatty Cathy's string.
To read more about JustTalk, click here:
http://eletters1.ziffdavis.com/cgi-bin10/flo?y=eGzT0Bf5ip0DSr0B4H0Av
To read more about LipSinc, click here:
http://eletters1.ziffdavis.com/cgi-bin10/flo?y=eGzT0Bf5ip0DSr0B4I0Aw
Two statements about User Interfaces found at Creative Good Experience.
"Making It Personal" by Dennis Callaghan, eWeek (11/27/00) Vol. 17, No. 48, P. 1:
- Personalization software has become a popular addition to retail Web sites, with
vendors vying to sell collaborative filtering and artificial intelligence applications.
Lands' End, a catalog apparel retailer, launched a relatively simple
personalization application on its Web site last month, called My Personal
Shopper. The program guides customers to an outfit they might like by
comparing two styles side-by-side, or by asking their preference in fabric or
colors. Meanwhile, SmarterKids.com is using an interactive forms system to help
parents shop for their children. Parents of the 170,000 children profiled at the
site have spent 60 percent more than parents who do not use the guide. Many
companies are also using customer dialogue to guide their recommendations; a
common approach is to ask customers to fill out questionnaires on their
interests. Letting the customer control their experience at the site is a more
effective use of personalization, says Laurie Windham, CEO of e-business
consultancy Cognitiative. "Effective use of personalization is about building a
better relationship with the customer, not trying to fool the customer into doing
something they don't want to do." Online superstore Buy.com has seen a large
conversion rate increase since implementing collaborative filtering personalization
software from E.piphany. Vice president of customer support Travis Fagan says
that customer dialogue is important to the company as well, depending on the
product sold. For items like notebooks and PCs, a questionnaire is better to
personalize an offering, but for entertainment categories, suggestive selling
applications and engines prove more useful.
http://www.zdnet.com/eweek/stories/general/0,11011,2657469,00.html
INGRAINED BUSINESS BEHAVIORS WORK AGAINST CRM, by Jeff Moad
- (appeared in eBiz Strategies [eBiz_Strategies@eletters1.ziffdavis.com], March 2, 2001)
Who doesn't want to get closer to customers? In an e-world where your competitor is just a click away, cozying up to your best customers and offering personalized information and services online that make it hard for them to leave may
be the quickest path to sustainable competitive advantage.
Indeed, in a recent survey of 800 IT and business executives by Meta Group, of Stamford Conn., 55 percent said "improving customer intimacy" is one of their company's top three business priorities. Another 36 percent placed that goal in
their top 10.
If the statements by CIOs and other IT execs attending Meta's annual Metamorphosis West conference in San Diego this week paint a true picture, many enterprises expect to achieve their customer intimacy goals by investing in new
CRM (customer relationship management) applications and business processes. CRM strategy sessions were packed with executives, many of whom said they have large, active CRM initiatives under way. Dow Chemical Co., in Midland, Mich.,
for example, has launched a large, enterprisewide CRM initiative, said Erwin Tien, senior systems architect.
But new research by Meta indicates those enterprises have a long way to go to reach the nirvana of customer intimacy, even if they've already begun deploying a CRM application package from one of the many vendors jockeying for position
in the marketplace. Why? Many organizations have a lot of old organizational barriers to break down and new integration work to do in order to make their CRM efforts truly customer-driven, Meta researchers reported.
The goal of CRM at most enterprises is to produce a single, unified view of customer behavior, preferences and profitability by integrating customer data gleaned from every distribution channel and customer touch point across
the enterprise. But, reported Meta, most CRM efforts today are driven by a single function within the enterprise, such as sales, marketing or service. That, analysts said, is partly due to organizational politics. Functional groups at
many companies are often uncomfortable sharing customer information with other functional groups. The result, Meta research found, was that many CRM efforts are, in fact, failing to produce a single, unified view of the customer
and are not, in fact, customer-driven.
One answer to this problem, said Meta Group Executive Vice President Aaron Zornes, is to create a dedicated cross-functional organization to drive CRM efforts and to have it headed by a high-level executive--perhaps with the
title of Chief Customer Officer--who reports to the CEO. In fact, said Zornes, 40 percent of Global 2000 companies are planning to create what he called a dedicated CRM project management office.
Another major CRM challenge that most enterprises will face revolves around integration, Meta officials said. Compiling, analyzing and acting on a unified view of customer information will require that existing customer systems and
databases be integrated. At the same time, because no packaged application addresses all of the CRM features and functions that will be required by most enterprises, integration between packaged applications will be a major
feature of CRM. In fact, Zornes said, Meta research shows that 60 percent of CRM project costs will be attributable to integration. And, for most companies, the cost of deploying CRM will exceed the cost of implementing notoriously
expensive enterprise resource management applications.
But, according to Meta research, most enterprises have only begun to integrate customer information. In the survey, 67 percent of the 800 executives said their companies do not effectively integrate customer data from multiple touch
points.
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Some articles on CRM
- The E-Business of Operational CRM
- The Customer Relationship Management Ecosystem
- Compaq's Customer Relationship Management
- MetaGroup CRM
- Best Buy to Use Net Perceptions' In-depth Reporting and
Analysis to Help Drive Merchandising Decisions
The CRM Ecosystem
CRM: SOLUTIONS DRIVE ANALYTICAL APPS MARKET, by Gina Fraone
- (appeared in eBiz Strategies [eBiz_Strategies@eletters1.ziffdavis.com], January 29, 2001)
The tentacles of customer relationship management are numerous and far-reaching. The latest market segment to feel
its strong prodding is analytical applications.
Revenue for the analytical applications market was expected to grow from $2 billion in 1999 to more than $6 billion
in 2000, according to International Data Corp., in Framingham, Mass. Of that $6 billion, more than $2 billion was
expected to come from the CRM segment.
The driver? A major component of CRM is collecting and analyzing data from across the enterprise to improve
customer relations. As a result, the study says, both new and established companies are in need of analytical
applications that will perform those tasks.
Ford rebuilds its IT engine for e-business: After taking a hard look at its IT organization, Ford realized it
wasn't ready for customer-focused e-business. So the company launched a top-to-bottom overhaul of its IT engine.
For more information, see the article in PC Week.
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