Customers become king for a day

Executives eager to learn more about customer relationship management (CRM) software had ample opportunity to do so on Wednesday, a day that saw the release of a national survey with CRM numbers and the opening of a high-level conference devoted to the issue.

An estimated 80 sales, marketing and business leaders gathered in Toronto at the two-day 2001 Customer Relationship Management Conference, hosted by the Conference Board of Canada, to hear industry experts discuss the perils and rewards of implementing CRM solutions.

Vito Mabrucco, group vice-president at Toronto-based market research firm IDC Canada and conference chair, said CRM seems simple on the surface, but warned attendees that looks can also be deceiving. “It’s about how do you interact with your customers,” he said. “This may sound like, ‘no kidding’, but for many years we focused on the product view of the world.”

CRM refers to the rapidly growing segment of Web-based or client software designed to automate the collection of customer data. It’s often pitched as a means to help organizations learn from their customers’ behaviour. By doing so, experts say companies can become more responsive to their clients’ needs, fattening their revenues in the process.

But Mabrucco warned that the technology should be considered only after business leaders look critically at the way they approach customer service, a task he defined as the most important and potentially rewarding. “CRM is made up of a lot of little things done right,” he said. “You have to have the right process defined in your organization before you even think about technology.”

That’s because migrating to CRM means dismantling what Mabrucco called the “product view” of the world. Under current business models, a widget maker, for instance, would likely divide its sales force according to its various widget product lines. In order for CRM to work properly, experts say that same company would have to instead divide its sales forces along customer geography or demographic lines.

“CRM is focused around an end-to-end customer relationship. That means a lot of things (must be done) before you get to technology,” said Mabrucco.

According to figures from IDC, most executives look to CRM to help boost their customers’ satisfaction levels and increase sales. The biggest barriers, IDC found, include cost concerns, lack of resources to get the job done and a general resistance to change, particularly among established sales staff.

“(But) I submit to you it’s executive ownership and support that’s the real reason why it’s not happening,” said Mabrucco. “It’s not a business imperative (for them).”

Lynn Anderson, vice-president of business marketing at Mississauga, Ont.-based Hewlett-Packard (Canada) Ltd., detailed her company’s massive worldwide CRM rollout, which has already seen 15,000 North America sales representatives adopt Oracle Corp.’s Oracle Sales 3i software. She concurred that sales staff, who often stand to benefit most from CRM, are also the toughest to win over. Many are suspicious about management’s motives behind the software, believing its role is to monitor staff productivity.

“Resistance was phenomenal,” Anderson said. “Initially we tried the carrot…then we found we couldn’t give them enough money to use it. Then we went to plan B,” which saw HP make use of the software a condition of employment. However, she said some of the biggest skeptics have since become the biggest supporters of the Oracle CRM tool.

Also on Wednesday, management consulting firm Accenture released the results of its recent survey of Fortune 100 executives, gauging what business issues they feel will loom largest over 2002. Ninety-one per cent of respondents said a greater focus on customer service and building customer loyalty is “critically” important.

It also revealed that CRM strategies are at the forefront of executive thinking, particularly among those in the communications and high tech sector. Thirty-eight per cent said it’s a top priority, followed by product development (26 per cent), enterprise resource management projects (17 per cent) and supply chain issues (15 per cent).

Twenty-seven per cent of respondents also plan to continue outsourcing their “non-core functions”, while 17 per cent said they will start exploring the option in 2002, according to the survey.

It also found that 71 per cent of executives plan on conducting information technology upgrades or consolidation over the next 13 months. According to Accenture, although IT spending is likely to remain steady next year, the purchases will be geared more to optimizing current tech investments rather than installing new tools.

The Conference Board of Canada is at

Hewlett-Packard (Canada) Ltd. is at

IDC Canada is at

Accenture is at