On one of those preternaturally warm spring afternoons, when many of their colleagues had forsaken them for the beach, around 500 conference attendees packed themselves into a hall at the Los Angeles Convention Center to hear about Customer Relationship Management. A group of high-profile experts was assembling to deliver a heralded panel discussion on the current and future state of the CRM market. Attendance swelled to standing room only.
On the panel were executives from both established and emerging CRM vendors. One panelist headed a company that sold an Internet storefront product. Another ran a sales-force automation company. A third represented a major database vendor. There was a call center system vice president and, to his left, a chief privacy officer. At the end of the line sat a renegade technology analyst.
As they began talking, it became clear that each of the panelists had a different perspective on CRM. The president of the database company talked at length about connecting databases to applications, after the privacy officer had finished weighing in on the risks of opt-in marketing. The call center executive discussed new advances in live chat. The analyst inveighed against CRM vendors who didn't offer sufficient analytics, making a few of his co-panelists shift in their chairs.
In fact, the discussion topics were so far removed from one another that the panelists might as well have been speaking different languages. As the moderator quickly learned, integrating the discussion in any meaningful way was a more significant undertaking than a mere hour would allow. As with the CRM marketplace, there was no holistic message--just different conversations. Shuffling out of the
auditorium, none of the attendees left with a clear CRM vision they could take back to work and begin promoting.
Nevertheless, we all have our eyes on the CRM ball. Aberdeen Group's "Customer Relationship Management: Year 2000 Edition" report predicts the CRM market will grow from $8 billion in 1999 to more than $24 billion by 2003. Such pronouncements--and there are many--represent sufficient ammunition for many companies to target CRM before thoroughly scoping it.
The problem is the noise. Companies worldwide are declaring themselves "customer-focused" and forking over millions of dollars on CRM-related technologies. Over-hyped vendor products clash with varied interpretations of CRM objectives, leading many companies to simply automate ineffective marketing and customer support processes. And because many of these processes rely on sporadically gathered data and shoddy business practices ("I can't help you; you'll have to talk to our billing department--and they're closed"), these firms were no closer to building solid customer relationships than prior to adopting CRM.
Likewise, customers have more choices than ever before, and a vendor's arch competitor is often--as the current sound bite goes--just a mouse-click away. Without customers, products don't sell and revenues don't materialize. And without establishing customer loyalty, a profitable customer can be as fleeting as a dot-com Web site. Suddenly, customers matter.
Thus, banks have succeeded in automating their marketing processes and calculating customer value. Communications companies are busy trying to reduce churn. Retailers and e-tailers alike are launching customer loyalty programs with alarming speed. And everyone has an Internet strategy for stimulating purchases. The only thing many of these forward-thinking companies have in common is their struggle to separate the truth from the hype.
This book seeks to mitigate the spin rampant in the CRM marketplace, first by defining CRM and its various components and then by providing a guide to successful delivery of a CRM program. It will serve both as a resource, defining and illustrating key CRM concepts, and as a field guide, directing you in the best approaches for adopting and implementing your own CRM solution. In the latter role, the Handbook points out mistakes as well as successes, allowing you to learn from those who fell too early for the hype ("We're your one-stop CRM shop!"). In the former role, it will help clear the clutter and provide straightforward explanations of the various types of CRM, as well as how they can work together.
And, like a good CRM initiative, the book revolves around the customer's experience. After all, no matter how informative the material or how knowledgeable the source, the message should always be geared toward the right audience. CRM conference panel organizers, take note!
How to Read This Book This book is written for a wide range of readers, from executives to practitioners. Part 1 is geared toward executives, project managers, and businesspeople interested in understanding the components of CRM and their definitions, as well as how those components are being used. Part 2 is for project managers, consultants, business analysts, and technical practitioners who need practical tips on CRM planning and implementation.
Readers with specific areas of interest can skip to individual chapters. Table I-1 briefly explains each chapter and its audience focus.
Table I-1: The Handbook's Chapters and Their Intended Audiences Part 1. Defining CRM Part 1 explains types of CRM--offering real-life examples of how businesses are using them--and explains how they fit together. Chapter Description Intended Audience Chapter 1: Hello, Goodbye. The New Spin on Customer Loyalty Introduces CRM's value proposition from a business perspective and explains why companies are rushing to jump on the CRM bandwagon. Any reader needing an introduction to CRM and its role in business strategy should read this chapter. Chapter 2: CRM in Marketing Explores marketing's recent history and transition from product focus to customer focus to the latest craze: improving the customer's experience. For executives in charge of planning and funding customer loyalty, acquisition, and retention programs and for marketing staff, including product, segment, and campaign managers. Sales management might consider starting here prior to reading Chapter 4. Chapter 3: CRM and Customer Service Covers why customer service is the locus of most CRM programs and how new customer service strategies and technologies promise to enhance customer loyalty--not to mention a company's revenues. Customer support staff members at all levels will enjoy comparing their company contact center environments with the best practices outlined in this chapter. Also of interest to marketing staff looking at other customer touchpoints. Chapter 4: Sales Force Automation The birthplace of CRM, SFA includes a variety of tactical and strategic functions. This chapter goes from managing customer leads and accounts to sharing customer knowledge via wireless media. Sales managers and sales reps alike can use this chapter as a benchmark for how they're managing their customer contacts and leads. Also valuable for field service personnel. Chapter 5: CRM in e-Business Given the challenges e-business presents, this chapter discusses where the customer fits in the supply chain for both B2B and B2C relationships. Managers and developers responsible for delivering e-business, particularly eCRM, as well as users and developers of ERP and supply chain management systems. Chapter 6: Analytical CRM Analytical CRM leverages the data gathered from cross-functional customer touchpoints to help companies make strategic decisions. This chapter covers the risks and rewards of analyzing and acting on new customer knowledge. For business people for whom decision support is a critical job function, as well as data analysts using sophisticated predictive techniques. Also helpful for marketing managers who rely on data analysis for launching new programs. Part 2. Delivering CRM Part 2 describes the key components of a CRM program and offers examples and checklists for ensuring they are performed thoroughly and in the right sequence to mitigate risk and ensure successful CRM delivery. Chapter 7: Planning Your CRM Program Explains how to evaluate your company against CRM critical success factors. This chapter also describes how to gauge the complexity of your CRM initiative and how that complexity determines a range of planning and development activities, including requirements gathering and ROI calculation. For business analysts and consultants who will be gathering and documenting CRM requirements, as well as project managers who will be charged with translating them into a working CRM system. Also helpful for CRM sponsors and end users who must understand the tasks and resources necessary in CRM planning. Chapter 8: Choosing Your CRM Tool Discusses CRM technology software features and explains requirements-driven technology selection. This chapter contains checklists and interview questions for both CRM software vendors and application services providers (ASPs). For IT executives and project managers charged with leading CRM technology selection efforts, as well as stakeholders who need to understand CRM technology-selection best practices. The vendor evaluation questions might help vendors better prepare for prospect and client presentations. Chapter 9: Managing Your CRM Project Describes how to delineate, prioritize, and staff CRM projects and highlights some common roadblocks to successful development. Discusses establishing success metrics and measuring against them, and includes a CRM Implementation Roadmap. Technical staff, CRM development team members, and project managers will be interested in the roles integral to CRM projects, as will CRM stakeholders who want to learn more about where to begin. Chapter 10: Your CRM Future This chapter introduces some of the main roadblocks known to sabotage CRM programs. It also covers some controversial CRM trends. Business sponsors and project managers interested in ensuring the success of their CRM programs, as well as business users who want a preview of CRM features on the horizon. Further Reading A compendium of books, magazines, journals and Web sites to aid readers in their CRM research. Glossary Definitions for the CRM-related terms used throughout the book, as well as coverage of some current business and technology buzzwords.
Toward the end of the content chapters, you'll find a "Checklist for Success," describing the best practices involved in achieving the objectives discussed in that chapter. (If you're underway with CRM, use this checklist as a tool to perform gap analysis against your current project.) In addition, because CRM is inherently a business management initiative, each chapter concludes with a section titled "The Manager's Bottom Line," summarizing the discussion for managers and executives who might be sponsoring CRM in their companies.
View Table of Contents
Acknowledgments. About the Author. Introduction.
I. DEFINING CRM.
1. Hello, Goodbye: The New Spin on Customer Loyalty. The Cost of Acquiring Customers. From Customer Acquisition to Customer Loyalty. . . . to Optimizing the Customer Experience. How the Internet Changed the Rules. What's In a Name? CRM and Business Intelligence. The Manager's Bottom Line.
2. CRM in Marketing. From Product to Customer: A Marketing Retrospective. Target Marketing. Relationship Marketing and One-to-One. Campaign Management. CRM Marketing Initiatives. Cross-Selling and Up-Selling. Customer Retention. Behavior Prediction. Customer Profitability and Value Modeling. Channel Optimization. Personalization. Event-Based Marketing. Customer Privacy--One-to-One's Saboteur? A Marketing Automation Checklist for Success. CASE STUDY: Eddie Bauer. What They Did. The Challenges. Good Advice. The Golden Nugget. The Manager's Bottom Line.
3. CRM and Customer Service. The Call Center and Customer Care. The Contact Center Gets Automated. Call Routing. Contact Center Sales Support. Web-based Self-Service. Customer Satisfaction Measurement. Call-Scripting. Cyberagents. Workforce Management. A Customer Service Checklist for Success. CASE STUDY: Juniper Bank. What They Did. The Challenges. Good Advice. The Golden Nugget. The Manager's Bottom Line.
4. Sales Force Automation. Sales Force Automation: The Cradle of CRM. Today's SFA. Sales Process/Activity Management. Sales and Territory Management. Contact Management. Lead Management. Configuration Support. Knowledge Management. SFA and Mobile CRM. From Client/Server to the Web. SFA Goes Mobile. Field Force Automation. An SFA Checklist for Success. CASE STUDY: Hewlett Packard. What They Did. The Challenges. Good Advice. The Golden Nugget. The Manager's Bottom Line.
5. CRM in e-Business. eCRM Evolving. Multichannel CRM. CRM in B2B. Enterprise Resource Planning. Supply Chain Management. Supplier Relationship Management. Partner Relationship Management. An e-Business Checklist for Success. The Manager's Bottom Line.
6. Analytical CRM. The Case for Integrated Data. A Single Version of the Customer Truth. CRM and the Data Warehouse. Enterprise CRM Comes Home to Roost. The Major Types of Data Analysis. OLAP. Where Theory Meets Practice: Data Mining in CRM. Clickstream Analysis. Personalization and Collaborative Filtering. An Analysis Checklist for Success. CASE STUDY: Union Bank of Norway. What They Did. The Challenges. Good Advice. The Golden Nugget. The Manager's Bottom Line.
II. DELIVERING CRM.
7. Planning Your CRM Program. Defining CRM Success. From Operational to Enterprise: An Implementation Scenario. Determining CRM Complexity. Preparing the CRM Business Plan. Defining CRM Requirements. Cost-Justifying CRM. Understanding Business Processes. BPR Redux: Modeling Customer Interactions. Analyzing Your Business Processes. CASE STUDY: Verizon. What They Did. The Challenges. Good Advice. The Golden Nugget. A CRM Readiness Checklist for Success. The Manager's Bottom Line.
8. Choosing Your CRM Tool. Maintaining a Customer Focus: Requirements-Driven Product Selection. Defining CRM Functionality. Narrowing Down the Technology Choices. Defining Technical Requirements. Talking to CRM Vendors. Negotiating Price. Checking References. Other Development Approaches. Homegrown CRM. Using an ASP. A CRM Tool Selection Checklist for Success. CASE STUDY: Harrah's Entertainment. What They Did. The Challenges. Good Advice. The Golden Nugget. The Manager's Bottom Line.
9. Managing Your CRM Project. A Pre-Implementation Checklist. The CRM Development Team. CRM Implementation. Scoping and Prioritizing CRM Projects. A CRM Implementation Roadmap. Business Planning. Architecture and Design. Technology Selection. Development. Delivery. Measurement. Putting the Projects Together. A CRM Implementation Checklist . . . for Failure. The Manager's Bottom Line.
10. Your CRM Future. Making the Pitch: Selling CRM Internally. CRM Roadblocks. The Four Ps. Process. Perception. Privacy. Politics. Other CRM Saboteurs. Lack of CRM Integration. Poor Organizational Planning. Demanding Customers. Customer Service That's Really Bad. Looking Toward the Future. The Customer as SME. The Rise of Intermediaries. Digital and Broadband Revolutionize Advertising. The Threat and Promise of Customer Communities. CRM Goes Global. The Coming CRM Backlash? The Manager's Bottom Line. Further Reading. Glossary.
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