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Customer Relationships Are an Enterprising Affair; CRM Solutions Should Tap Into All Business Segments
By Anthony Birritteri
Senior Editor, New Jersey Business
June 2003
 From the many to the one special individual — this is how sales, marketing, and customer service have evolved over the last several years due to the development of computer database applications and networks. Technology, mixed with business intellect, has found ways to nurture the individual relationship on an ongoing basis via a number of communications mediums, or touchpoints. Information from these touchpoints — whether it's input received from dialing into a call center, filling out a form on a Web site, responding to an email, or sending back a questionnaire via snail-mail — goes to appropriate databases, is categorized, gleaned over, and put to good use to enhance the bottom line. This is the world of customer relationship management (CRM), an industry that is expected to reach $10.4 billion in sales this year and $18.8 billion in 2008, according to Jupiter Research.
CRM was once called "contact management," says Thomas R. Buckley, chief executive officer at StayinFront, the Fairfield-based provider of CRM applications, decision support tools, and e-business systems. The CRM concept is one in which every manner that a customer or prospective customer touches an organization gets recorded into some type of database. That information is then "actionable," says Buckley.
There are different ways CRM can be delivered. In the Amazon.com model, it takes the shape of online self-service channels, where the shopper does not interact with a live customer service representative, but the solution attempts to deliver interactions that people come to expect from a sales assistant.
In another model, one in which StayinFront specializes, is the gathering of customer information, so that a salesperson can better interact with an existing or prospective client.
StayinFront technology users include pharmaceutical companies such as Organon, and Merck, Sharp & Dohme, medical technology companies such as Cytyc International, electronics firms such as Ricoh, and food companies such as McKee Foods.
Many of these companies have implemented StayinFront's flagship enterprise-wide CRM product, Visual Elk. This technology manages and integrates all points of customer interaction, including sales, marketing, customer support applications, and the Web.
Giving an example of how CRM can work, Buckley begins with a prospective customer's phone call into a business' call center. That information is electronically "pushed" to a sales representative who turns that information into a proposal. The proposal is tracked through the various stages of the sale and, eventually, it turns into an order, and that information is then pushed into the accounting system.
Successful CRM processes, however, do not end with the completion of the sale. Rich customer information is now in a company's central repository, and given the adage that 80 percent of a company's business comes from 20 percent of its existing customers, it is important to nurture these existing customers with better relationship management.
Drip irrigation is one way Debra Taeschler, President of Chester-based GráficaGroup, describes this continual gathering of customer information. "In the CRM environment, you need to continuously get data, you seed your communications with one to two questions and an incentive. With the continuous flow of information, communications with customers is made more relevant and relationships made stronger," she says.
GráficaGroup, an integrated marketing and communications firm, created the first full-service eCRM advertising agency, Gráfica.eCRM Corp. As an integrated marketing agency, one of the strengths Gráfica delivers in providing its clients with eCRM solutions is that it knows how to use the data that is collected and employ it with the correct medium for further communications, whether it's direct mail, Web communications, email, print advertising, or radio.
At LPS Consulting, Fanwood, President Patricia Sigmon says, "CRM is about extracting the information a company needs to stay in business."
Customers can be categorized by the quality, quantity, or frequency of purchases. Systems can be monitored to recognize patterns such as a buying gap. "You start to notice trends, like a sales slowdown, and you try to build from that," says Sigmon.
LPS is a computer consulting company specializing in CRM, Enterprise Resource Planning (ERP) systems, Electronic Data Interchange (EDI), bar coding, financial management, and security systems for clients involved in manufacturing and distribution.
The first step in the door for CRM solutions at its client companies is usually for the implementation of a financial system. Then, perhaps, a shop floor or warehouse management system. When a CRM solution is recommended, it must normally integrate with these other systems.
"CRM software ties into other systems. It is an enterprise-wide solution that can tie into financial and production. That is where the real value is," says Sigmon.
There are differing opinions regarding the term eCRM. StayinFront's Buckley stresses that true CRM should not entail just the "e," or the electronic element. In today's business world, the "e" automatically signifies a Web-based application, he says. CRM isn't all done on the Web. "About 60 to 70 percent of our client work has a Web element to it, but none are totally Web-based," he says.
Currently, Visual Elk does not have a Web feature. Sales representatives in the field using the software upload or download customer information via Wide Area Networks (WANs), whether it is from a laptop, desktop, or mobile devices, via direct phone links.
StayinFront is now preparing to integrate its online e-business configuration technology, called Web Works, with Visual Elk for the creation of Visual Elk Version 9. This will allow users to communicate with their office databases via the Web.
Taeschler says that the "e" in eCRM signifies enterprise, since the technology should integrate data across an entire organization.
"A CRM philosophy must make the 'whole' company revolve around a customer — it goes across many departments, including sales, marketing, IT, and customer service," she says.
Mark Devaney, director of public relations at GráficaGroup, explains that one of the challenges companies face in implementing an enterprise-wide CRM system is integrating the front-end CRM technology with the back-end systems, existing ERP systems, and older legacy systems.
When asked what the technological problems are, he says it's more a matter of lack of communication within companies. Businesses and their internal divisions normally think and operate in silos. "It's one group of people doing one thing, and another group doing another thing," he says.
Buckley agrees. When implementing a CRM solution, a company's IT people need to speak with sales and marketing people. "Those groups usually don't see eye to eye. Then you need to empower one person or group of people to make decisions. In short, a lot of perseverance is needed," he says.
At Incurrent Solution, Inc., Parsippany, a leading provider of eCRM solutions to credit card issuers and transaction processors, Bill Kinnelly, chief marketing officer, says one of the company's goals is to bring Web technologies to the entire relationship between cardholders (members) and issuers. He adds, however, that e-commerce and Web technology aren't magic in and of themselves. "These technologies only help with business goals that already exist," he says.
Incurrent's leading product is CardSite, an Internet-based account acquisition and service ASP (Application Service Provider) solution in which cardholders can enjoy real-time access to account information, online statements, bill presentment, secure email, interactive sessions, and other service-enhancing tools for Web, wireless, and voice channels. Some of its clients include Equifax Card Services, Fiserv, Sears, MBNA Business Lending, Fleet Credit Card Services, and Alliance Data Systems.
Not all customers should be pushed to the Web for CRM, explains Kinnelly. "I think a company should deploy a solution, so that there is choice," he says. "If issuers segment their credit card base of customers by profitability, they may have a strong push to send the least profitable people to the Web for self-service and the most profitable customers to a human representative."
The cost for CRM implementations can be based on a number of factors, including transaction volume, the size of the company, and number of employees.
At Gráfica, Devaney says the cost of outsourcing an eCRM solution can run from $25,000 to $45,000 for a small business.
At StayinFront, which targets middle-market companies that have between 100 to 750 sales representatives and $500 million to $2 billion in sales, the average implementation is between $4 million and $5 million.
According to Sigmon, a small company implementation would typically start at $20,000 to $30,000 for a financial system. Adding a CRM component on top of this would be an extra $5,000 to $6,000. For larger companies, prices can range from $320,000 to $420,000 for a financial system tied into the CRM system.
Whatever the cost, a CRM solution is vital in keeping the entire business enterprise in tune with the customer.
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