Customer relationship management (CRM) is big business. It is if you’re software marketer specialising in CRM software, but it’s also big for, well, bigger businesses.
Despite the hype around the technologies, and the many mistakes made by companies on CRM learning curve, research shows CRM planning, strategies and initiatives remain high on the wish list of many sizeable companies. And small-to-medium-sized (SME) businesses are catching on fast.
For example, customer study by SME software specialist JD Edwards reveals that although less than five percent of SME customers have implemented CRM systems, nearly 30 percent will consider it over the next two years.
Quite simply, CRM strategies and technologies can provide competitive edge. If you can manage your customer relationships better than your competitors, you’ll not only keep your own customers, you’ll probably start to win some of theirs as well.
Further, CRM initiatives which have been properly strategised and coupled with careful internal change management almost always increase internal job satisfaction and company profitability.
Of course, achieving all of this is hardly about buying the right computer equipment and software. Companies that previously believed CRM was about smart software, preferably lots of it, have learnt the hard way. True CRM is perhaps best defined as: the bundling of customer strategies and processes, supported by relevant software, for the purpose of improving customer loyalty and eventual profitability.
Note the phrase “supported by”. Software is often essential to the success of an ongoing CRM strategy, but it’s not where CRM strategy should start.
It has been noted by CRM specialists that effective CRM starts with good old-fashioned segmentation analysis. In other words, knowing what you want to achieve, identifying which customers are important and what they want from your business, and then working out strategies to refine all internal business processes to meet and exceed those expectations.
The remainder of this article provides three case studies of New Zealand businesses which have managed to get their CRM strategies and projects right. This is no mean feat, with confusion surrounding CRM still high.
How these companies achieved CRM success, and the things they learned along the way, make valuable reading for any business interested in catching the CRM wave and ensuring its positive impact for customers and internal profitability into the future.
UBix: Early movers
In June 2001, document-imaging specialists UBix (a brand division of the company Onesource) decided radical changes to its call centre and service dispatch areas were required.
Tony Day, general manager of services for Onesource, says jobs were logged, queued and then dispatched by voice, one at time. The average amount of time it took for technician to get to customer was between four and five hours.
“That’s long time when you are standing over machine fuming,” he says.
The old system was also highly error prone. Not only would UBix technicians record customers’ names incorrectly and so incorrectly address the customer, 14-character part numbers were frequently confused between the technician and call centre staff. Information was handled up to three times before reaching UBix’s central database, which made it less reliable.
UBix began an overall CRM strategy by implementing business process changes in tandem with technologies. These included management discussions at which technicians were asked how they wanted to work, what would enable them to better service customers, and the information technology tools they thought would help.
UBix also talked to key customers (“Pick your toughest customer,” advises Day) then assigned each technician specific set of customers, thereby transferring the responsibility for customers to the technicians themselves.
“We needed dramatic improvement in performance for the sake of the company, its customers and for our employees. The technology we ended up employing, while quite bleeding edge at the time, was only small part of the overall strategy.”
UBix’s technology choices were certainly bleeding edge for 2001.
The company purchased automated call dispatch management software from Econz and had it customised to automatically assign jobs to technicians (and re-route jobs belonging to sick or absent technicians). Technicians received the jobs via Compaq iPaq PDAs, which had wireless mobile JetStream connections to the UBix system.
Yet in 2001, mobile JetStream provider Telecom had not made its wireless data service commercially available or even worked out how it would be charged. Subsequently, UBix New Zealand was one of the earliest companies to trial wireless data services in the world.
“There was no one we could talk to. We initially trialled the system with just six technicians and were quite surprised when it worked. It was crazy project at the time, it had high risk of failure,” says Day.
He says UBix’s entire CRM strategy initially cost around $750,000. But in addition to halving customer service response times to 2.3 hours, the technology and process changes produced return on investment within 12 months.
“There are measurable savings, like improved productivity, reduced mobile phone costs, fewer dispatches, and putting people in different roles. But there are many more benefits that can’t be measured,” says Day.
He says change management is an important part of any CRM success.
“If you give people the absolute end-to-end ownership of customer issues, they step up to the job tremendously.”
UBix also made changes to its call centre process and technology.
Day says UBix was one of the first “criminals” in New Zealand to use front-end automated call attendant 13 years ago.
“People didn’t like it. So now human beings answer the phones. Sometimes you get peak load and you need technology to give the customer options. But if they leave voice message, the technology doesn’t let it sit; it puts it in queue with other calls. If you’re going to use technology, you have to build trust in that technology.”
Kiwibank: small steady steps
New Zealand’s newest bank, Kiwibank, is not surprisingly in growth mode.
So when Jo Allison, manager of Telecom Advanced Solutions (TAS), began working with the bank on telephone banking and call centre system 12 months ago, she found an organisation seeking CRM solutions that would grow as it grew.
“A lot of companies come to Telecom and say ‘we have 50-seat call contact centre, help us’. But Kiwibank said ‘we have 50 seats, but in few weeks’ time it could be 200 seats’. Naturally, they didn’t want to pay for bigger system before they needed it. They wanted flexibility for themselves and leading-edge telephone banking solution for their customers.”
In conjunction with IT partner Cisco, TAS provided Kiwibank with telephone banking system, PIN verification system, and computer telephony application which, following verification via PIN, links inbound customer calls with information on each customer. That information is then passed on to the call centre before the call is answered.
Allison says Kiwibank used this technology as part of wider CRM strategy, which involved finding out when their customers were calling, and why they were calling. further requirement was that the phone banking system would track which telephone banking services customers were using.
“Getting that information meant Kiwibank could train their staff to better understand the kinds of things customers want to know and want to do. This helps them to tailor their marketing initiatives, which of course makes those more cost effective, and it also helps them to tailor their investments.”
While Kiwibank has yet to enter the world of internet banking, Allison says the bank is intent on moving in incremental CRM steps, ensuring what they do today is done well.
“The contact centre manager said to me ‘let’s get the telephone centre ri
