Customer Relationship Management has put on a new face in the few short years it's been around. In the mid-1990s, bridges began to be built between back-office and front-office systems, enabling, for example, a customer service rep to find out the status of an order or a salesperson to check inventory while talking to a customer.
But even though that made life a little easier, it was still a relatively minor improvement in the business process. "The problem was," says Barton Goldenberg, president of ISM Inc. in Bethesda, Md., which annually publishes The Guide to CRM Automation, "that it was all internal-facing."
Traditional CRM systems helped the employees who deal with customers to do their jobs. But a new breed of CRM systems, sometimes called customer-facing applications, helps customers more directly. A large subset of this new breed falls into a category called eCRM, with the 'e' standing, as it usually does these days, for electronic - which really means online.
The idea is to let the online customer - who almost by definition is a relatively sophisticated customer seeking convenience and quick service - go straight to the source to verify product availability, place orders, check order status or have other questions answered quickly and accurately. "It extends the enterprise out to the customer," Goldenberg says. In the process, the technology can give customers more information and more control.
eCRM in Action
Vancouver-based IntraWest Corp. operates a string of skiing resorts across North America. Last year the company started allowing its customers to book their ski trips through its Web site. But Matthew Dunn, IntraWest's Chief Information Officer, felt IntraWest would be missing an opportunity if it kept the online booking service separate from other operations, so IntraWest takes information from the Web booking system and uses it to improve customer service in other ways. For instance, when a customer books a visit to an IntraWest resort online, the system asks for information about the customer's skiing plans, and what equipment that individual or family will need to rent during the visit. Staff at the resort's rental shops use this information to prepare necessary equipment. When customers arrive at the rental shop, what they need is ready and waiting.
"It's more efficient for us to put together a vacation for someone when we're informed about the details in advance," Dunn says. "It costs us less, and more importantly it's a better experience for the guest." Experience with the one rental shop that did a lot of pre-booking last season shows that labour costs are reduced, guests are more satisfied, and - interestingly - staff also are happier. Dunn says employees who worked in that shop asked, when coming back this season, to work in the same shop again.
However, he admits, there is one "significant gotcha." Once you collect information from customers online, he says, "they now assume that you know [that information], which means the service expectations are now higher. As long as you can deliver on those expectations, great." If guests are asked for the same information again, however, they will feel the company has wasted their time. That's a common problem, Austin says. "Customers are becoming more aware of some of the potential out there, and it's changing their expectations."
Customers use e-commerce sites for one or more of three reasons, Goldenberg maintains. They are looking for lower prices, faster and more convenient service, or improved quality. Different customers have different priorities, but all have serious expectations when they do business online, and if you fail to meet those expectations the competition, as the cliché goes, is just a click away.
To compound the problem, businesses also have serious expectations from e-commerce, one of which is that they will be able to do business more economically on the Web than through bricks-and-mortar stores or offices. And management and shareholders continue to look for more and more profit. So even if throwing more resources at the problem would meet customer expectations, it probably is not an option.
So eCRM tools try to address customer expectations in two major ways: make it easy for customers get what they want on their own; and for those things customers cannot easily do for themselves, make the process of helping them as efficient as possible.
An example of the first case is the customer who wants to know the status of an order. A link from the Web page to an order-tracking system can make that information available any time the customer wants it. Some organizations are even linking their own systems to those of shipping companies such as Federal Express, so customers can find out where an order is even after it leaves the loading dock.
To 'E' or not to 'E'
"For both the old economy and the new economy, if you're going to be successful you're going to have to do things better - and you're going to have to do better things," says Rod Austin, president and chief executive of Atlanta-based Foresight Software, Inc., a maker of customer interaction software. "The company that succeeds is the company that knows how to provide the service the customer wants, profitably."
Serving customers more efficiently depends a lot on offering them a choice of ways to communicate with the company. That means realizing that customers sometimes want to use the Web, sometimes the telephone, sometimes e-mail, and sometimes they want to do business face to face. As Goldenberg puts it, "sometimes I'm 'e' and sometimes I'm not 'e'." They expect to be able to choose the method that is convenient at the time, yet be treated the same and even recognized as the same individual, whatever means of interaction they choose.
When e-commerce first began to appear, says Matt Duncan, vice-president of corporate and solutions marketing at Pivotal Corp. in Vancouver, many businesses saw it as something quite distinct from their traditional ways of doing business. They developed their e-business strategies in isolation from the rest of the business, while at the same time continuing to implement customer relationship management technology in their traditional businesses. Now, companies are beginning to realize that "there is no e-business and regular business - it's just business," says Duncan.
That means, for one thing, that e-business systems ought to be integrated with back-end systems that can provide information customers want - like the status of orders and the availability of goods or services. It also means that in understanding their customers, organizations would like to recognize when the person who enters a store on Tuesday and the person who visits a Web site on Friday are actually the same person, and act accordingly by tailoring the "customer experience" - such as what appears on the Web page - to that customer's needs and interests.
"Customers expect you to be able to personalize services based on their particular needs," Goldenberg says. And they expect this to happen easily. "The onus is on the company to get its act together."
Understanding that 'e' and non-'e' businesses are really two sides of the same coin also means realizing that customers may want to change horses in midstream. A customer may find it convenient to log on to a Web site and look for a product, but if she can't find that product - or has a question the Web site doesn't answer - she then wants help. An increasingly popular option is the ability to launch an online chat session or even a telephone call, sometimes conducted using Voice over Internet Protocol technology, straight from the Web site.
Uniglobe finds in fact that most customers still prefer the telephone. In 60 to 70 per cent of cases, Dauberman says, customers make contact by phoning. But, he adds, "during our busiest time of the day, when we might have hold-times of five to six minutes or more, some customers will hold for three minutes or so, then hang up and go back to the Web site, where they fill out that customer contact piece." That's good news, because those customers might otherwise be giving up or calling a competitor.
Of course CRM is not just about answering customers' questions. No CRM vendor can talk for more than 10 minutes without mentioning cross-selling and up-selling, which essentially means selling the customer something he or she didn't set out to buy. Those who do it and those who sell tools for doing it like to describe it as anticipating the customer's needs. Sometimes it is that, and sometimes it is more like convincing the customer of a need that didn't exist before. But there's no denying that it's a way to boost sales, and it captures a lot of business people's imagination.
Don't Waste My Time
If businesses must send marketing messages to their customers, it does help to understand those customers as individuals. "If we do our job right," says Dunn at IntraWest, "we shouldn't be pestering those well-known guests with irrelevant messages in the future." Most consumers are being bombarded with e-mail, he admits, and are glancing at it very quickly, if not ignoring it or even setting software to filter it out automatically. "The companies that don't provide some value in that five to 10 seconds attention they're asking for might get shut out." CRM proponents maintain that if technology allows consumers to see marketing messages that really interest them, and spares them the rest, everyone benefits.
And how are Canadian businesses doing at meeting increasingly demanding customer expectations? There is no single answer, because performance varies widely. According to Goldenberg, the dot.coms "absolutely, positively are using customer-facing systems, and the reason is that that's the business they're in."
Clicks and mortar companies - those with both traditional and e-business strategies in place - have at least made a start on CRM. They have begun to learn more about their customers, but in many cases they are not yet good at making information available to those customers through customer-facing systems. And then there are the real traditionalists, those that in many cases have not even moved into e-business, who also have done little or nothing about CRM - "because they haven't understood the value that CRM can have," says Goldenberg.
Those companies will have to walk before they can run. First they need to put basic CRM capabilities into place, developing some knowledge of their customers and the ability to find information that customers may want quickly. Then they can build on that base by making more information available directly to customers.
Meanwhile the growing role of technology in keeping customers happy is changing the CIO's role. "If your business model isn't possible without technology enablers," says Dunn, "you can't make technology a plumbing department for whatever the business dreams up." IT and the CIO must take a much more central role in the business. That's an exciting prospect for CIOs - and maybe for customers as well.
Uniglobe Puts eCRM on Cruise Control
Selling cruises is a face-to-face kind of thing. There are many differences among cruises and among customers, and it takes a lot of information to find the right fit. So travel agents tend to spend a lot of time with customers who buy cruises. But at Canadian-owned Uniglobe Travel (International) Inc., a small but growing number of customers research and sometimes even book cruises through the company's Web site, Uniglobe.com.
Does that mean those customers are getting inferior service? Quite the contrary, says Michael Dauberman, executive vice-president of Uniglobe in Seattle. By offering those customers access to large amounts of information about available cruise packages, Dauberman believes the Web site can actually serve them better than a live agent.
In the fall of 2000, Uniglobe launched an online service it calls Cruise Control. Instead of offering Web site visitors information on a few hundred cruises, that number multiplied. "It's almost impossible for a person to have all that data at their fingertips," Dauberman says. So travel agents tend to sell the few packages they know best, which may not be best for all customers.
"When we launched Cruise Control, we decided we were going to pull down, every day, all of the inventory that's available from nine cruise lines. That means we're providing information on 12,000 sailings instead of a few hundred. We're pulling down price, information on all the cabin numbers that are available, dining availability, and things of that nature. We allow customers to sort through that data in fifteen different ways, depending on what's important to them," explains Dauberman.
"When they're interested, they click through and continue the process of picking a deck they want, then picking a cabin, indicating whether or not they want insurance, or air travel included - with prices given along the way. If they wish, they can go all the way through the process, even as far as saying, 'I'd like to stay an extra day at the Ritz-Carlton on the day before.'"
Customers can also choose how to make contact with Uniglobe. One option is to call the company's toll-free number. Another is to click a button on the Web site that requests that an agent call the customer. A third is to submit inquiries by e-mail. Or a Web site visitor can initiate an online text "chat" with a customer service agent.
All this is about one thing, Dauberman says, serving customers better in order to get ahead in a competitive business. "The Internet is really just a tool for us to better service our customers. We happen to be what most people would call an Internet company, but the reality is, we're a travel company."
The way Uniglobe applies Internet technology to the travel business is an example of how customer relationship management (CRM) is coming to mean something more than cross-selling and up-selling.
Grant Buckler is a freelance writer specializing in information technology and IT management. He is based in Kingston, Ontario.