DSC Tech Library
This section of our technical library presents information and documentation relating to CRM Solutions and Customer relationship management software and products. Providing customer service is vital to maintaining successful business relationships. Accurate and timely information provided in a professional manner is the key to any business and service operation.
Telemation, our CRM software application, was built on this foundation. But the flexibility to change is just as important in this dynamic business environment.
Telemation call center software was designed with this concept from the very beginning.
That is why so many call center managers, with unique and changing requirements, have chosen and continue to use Telemation CRM software as their solution.
Our Telemation CRM solution is ideally suited for call center service bureaus.
Technology for Optimizing Customer Relationships
By Jean Berube
CRM presupposes the existence of an effective CRM strategy a solid way to manage customer relationships in the first place. Once a CRM strategy is in place, a customer-centric database provides the foundation. Next, enabling technologies such as real-time event management allow companies to customize customer interactions based on knowledge obtained from the customer. Then the entire organization and the marketing and customer service process must be aligned to support CRM. Finally, companies must apply this information in innovative ways to optimize customer relationships
Taxonomy for CRM
CRM is in its infancy, promising a new era in marketing and customer service. Yet many companies find themselves dangling in limbo as they wait for capabilities and technologies or practical CRM applications. While there is no one-size-fits-all solution to this dilemma, those companies able and willing to innovate will leapfrog the competition.
Let's examine the taxonomy of CRM. The starting point for an effective CRM strategy is a solid customer database. There is simply nothing to manage if your database is nonexistent or in disarray. And let's face it, a product-centric or account-centric design just doesn't cut it. Companies must capture customer data across the enterprise and consolidate this data into a central customer-centric database. The heart of CRM relies on solid database design, construction, and ongoing maintenance and enhancements.
CRM requires knowledge just having a database won't suffice. Companies must be intimate with their database and all of its gory details. This means that companies must know (not just be familiar with) the data and values, and how they are related. And since a database is not static, companies must commit to continuous improvements.
Companies should get the absolute most out of customer relationships without settling for the status quo. E-commerce can provide optimization across all enterprise touchpoints, but this, too, requires the existence of a solid way to manage the relationship in the first place.
CRM demands the ability to act on the knowledge gleaned from your customer touchpoints. What good is knowledge if you can't apply it to optimize your customer relationships? More about that later.
First, let's look at the capabilities and technologies required to both manage and optimize customer relationships. These technologies will allow you to tap CRM's ultimate potential.
CRM Technical Infrastructure
Figure 1.0 represents four major technology capabilities needed to implement a CRM infrastructure. Database construction is a foundational technology. The other technologies are enabling technologies.
The CRM Foundation Marketing Database Construction
Database construction is really at the heart of CRM. Most of your source data will come from internal operational systems and files, including customer files, transaction history, billing and accounting, fulfillment and shipping, promotions and responses, customer service, Web page visits, and leads. Sometimes called operational data silos, these source systems and files were initially built for specific applications, and the data in them is typically fragmented, inconsistent, and unsuited for your marketing purposes. Not only that, but you are constantly bombarded with significant changes to customer contact information, accounts, titles, and activities.
What does this mean technically? You'll need to apply software tools to handle the complexities of transforming your data and improving its quality. But there's another key area where the right application can assist with your major goal in building your marketing database: pulling together a unified marketing picture of your customer relationships. This is done by creating and maintaining multiple, hierarchical views of your customers, linked to their histories with your organization, and enhanced with external data on credit, behavior, lifestyle, and preferences. This cyclical, business-rule-based process called Relationship Continuity Management can be automated.
CRM Enabling Technology Data Analysis and Mining
Let's look at the kinds of questions that marketers need to answer. For example, "How many business prospects are located in the Western region, achieved more than $1 million in annual sales in both 1998 and 1999, and have NAICS codes beginning with 23, 31-33, or 42?" Quickly counting customers or prospects who meet a specific profile, and iteratively refining the segment criteria based on these counts, requires high-speed access to the marketing database. Marketers need a data analysis tool that bypasses the arcane complexity of SQL and gives quick answers without waiting.
"How do my top three customer segments contribute to total profitability, across product lines, channels, and months of 1999?" Answering this question and then drilling down into the details can't be done easily in a basic query and reporting tool. It requires interactive navigation through a multi-dimensional view of the marketing database, optimized for speedy calculations. So querying capabilities need to be augmented by online analytic processing (OLAP) tool functionality, which facilitates asking complex marketing questions and delivers quick responses to them.
"What is the best product to cross-sell my profitable households with a high risk of attrition?" Statistical analysis and other modeling tools help marketers build models of customer and prospect behavior. These models predict responses to promotions and lift from campaigns and marketing measures such as lifetime customer value. Depending on the experience of the user, some tools can automate part or all of the optimization process. Recently, marketers have been exploring new types of data mining tools that search for unsuspected but possibly significant relationships among customer attributes.
How does the proportion of affluent households within a six mile radius differ between my top- and lower-performing branches?" A tool for geographic visualization adds a new dimension to answering questions like this one. Through on-screen maps and graphical displays, your customer demographics and geography can come alive.
Enabling Technology Campaign Management
To act on the insights gained through analysis, modeling, and data mining tools, marketers need to continuously define and orchestrate campaigns.
In the past, this process was labor-intensive, especially in coordinating the many steps of a real-life, multi-cell campaign. But a modern campaign management tool frees its users from low-level production details, allowing them to concentrate on the marketing issues that go into successful campaigns.
A campaign management tool should connect to the same marketing database as your analysis tools. This lets marketers use any criteria to define cells, which are groups of customers to be targeted for particular promotions. It also means that model scores are immediately available in the shared database. For rapid campaign development, fast counts are important, as is the ability to easily refine cell selection queries.
After defining output formats (from mail tapes to e-mail), marketers then need support for production scheduling, updating marketing databases with promotional history, and reporting on the effectiveness of promotions.
Determining each promotion's return is critical. The marketer should be able to define what constitutes success, such as a specific product purchase within 30 days of the promotion. This allows for an integrated look at response behavior and the profit associated with it, balanced against promotion costs. Cell-level, campaign-level, and universal random control groups are used to distinguish real promotional results from overall business trends. Then the scene is set for further data mining and analysis, to optimize next steps for individual customers and new planned promotions.
Enabling Technology Interactive Relationship Management
The fourth major CRM process allows you to coordinate sales and service messages across customer touchpoints, based on customer interactions. For example, a bank might register an unusually large deposit in a customer's checking account. This represents a marketing opportunity for the bank's investment division, prompting a phone call to the customer. Or a customer of a recreational equipment company might be browsing camping product information at the corporate Web site. In addition to showing pictures of tents online, the company can follow up with a personalized email based on both the customer's history and the recent inquiry offering a "good-customer" discount on a new line of family-sized tents.
Campaign management uses historical business intelligence about your customers to craft contact strategies. Real-time relationship management complements this approach through the use of low-latency tactical intelligence from customer interactions.
A rules-based engine is needed to decide the significance of events and drive real-time relationship management. It responds to real-time interactions using pre-modeled customer predictions coupled with a recent snapshot of customer history. For example, you might want to predict the most likely product for the customer to buy next, put together a customized message and price for that product, and factor in the customer's recent contacts with your organization.
Depending on the recommended channel and action, this central tool may link to another, channel-specific tool to best communicate the actual message. On the Web, for example, there are a number of software tools that handle personalization, dynamic Web page construction, and interactive customer dialogs.
Optimizing Customer Relationships
In the brave new world of CRM the possibilities are endless and the source of these possibilities is our ideas. Ideas are driven by information gathered from all customer touchpoints, and they are constantly reshaping marketing and customer service possibilities. Yet many companies remain glued to a product-centric or mass-marketing model. A paradigm shift is required to move to a CRM model, especially one that not only manages but also optimizes customer relationships.
Let's examine some CRM possibilities
For most retailers, markdowns represent a paradox. For companies that embrace CRM, markdowns represent the ability to maximize profitable sales by maximizing initial price business. Typically, clearance sales come at the expense of regular price business. When the rate of sales on clearance merchandise goes up, the rate of sales on initial priced business declines. The challenge to the marketer is to minimize the amount of time clearance merchandise is on the floor.
There are segments of customers on any database that are motivated solely by price reductions. By isolating these customers, the marketer can target markdowns to the group most likely to respond and minimize the exposure of full-price shoppers to the discounted merchandise.
Assuming you have a solid CRM foundation, you can identify customers who do the majority of their shopping (or indeed, all of their shopping) at markdown. You can tailor a message to this segment. The result will be that markdowns will move more quickly, protecting your regular price business and ensuring the needs of each shopper are met.
Let's move to the world of e-commerce and the brokerage industry. Some brokers may be using online feeds from the trading floor to communicate buying opportunities to their clients via e-mail. Is this CRM? Perhaps it is. Is this customer optimization? I don't think so.
Customer Optimization presupposes that you have the foundation to determine the significance of individual customer interactions such as purchases, transactions, service inquiries, and Web requests and that you can filter and analyze high-volume data from all customer touchpoints. With this enabling technology in place you can isolate customers such as those who only purchase fixed-income securities and you can identify that they purchase them in a regular pattern perhaps on the same day every month.
Now instead of simply sending e-mails based on information from the market (which is, unfortunately, old news the moment you send it), you send an e-mail once a month promoting fixed-income opportunities. You also promote post-retirement investment planning to these individuals because you have determined that these individuals are over the age of 65. This is what customer optimization is all about
The credit card industry must constantly acquire new cardholders. In the past, one of the only weapons in their marketing arsenal was to flood mailboxes with solicitations and clog the phone lines with telephone calls. Don't get me wrong: this works, but it simply is not the optimal solution. So how can credit card issuers optimize their customer acquisition efforts and maximize the profitability of direct mail?
First, your CRM campaign management arsenal coupled with some statistical know-how will help you determine the optimal number of pieces to mail to generate your desired response rate (see Figure 3.0) . The right tool will also determine the optimal number of times to promote a given specific offer. Now, instead of spending your entire budget flooding mailboxes and clogging phone lines, you can redirect your marketing dollars to pull some optimal prospects to your Web site.
Many companies are losing money in e-commerce because the fulfillment process and the customer ordering process are out of synch. Many consumers are comfortable doing business online, but they may have some questions. Yet companies often welcome customers with the following greeting: Press the number one to speak to a representative or visit our Web site for special Internet promotions." And of course, if you want to speak to a representative you have to wait! Then if you check out the Web site and call back to speak to a representative, the individual on the phone knows nothing about the promotions on the Web.
Such integration challenges remain critical for most companies conducting business on the Web. Since aggregating and managing data from different systems is the single largest expense of e-business, it's important to spend your money wisely.
Your CRM campaign management arsenal coupled with some statistical know-how will help you determine the optimal number of pieces to mail to generate your desired response rate.
Technology for Optimizing Customer Relationships
Companies who can capture, analyze, synthesize, and integrate data from all customer touchpoints can transform this knowledge into a powerful CRM arsenal. Without it, they are stuck in CRM limbo.
The following is a framework that will move you out of limbo and help you optimize customer relationships:
Lay down a solid foundation. Remember that a customer-centric database provides a fundamental value a total customer view. The view should be vertical (multiple sources) and horizontal (longitudinal history).
Once you have the foundation, add the enabling technologies, including interactive relationship management. These technologies will provide the capability to optimize customer relationships. Ensure that your fulfillment process and your customer ordering process are in synch.
This means extending your e-business into your enterprise's core business processes. Commit to continuous improvement. Remember undertaking a relationship-centric solution is a journey, not an event. CRM is the beginning, not the end, of successful marketing automation. Plan on continued optimization across all dimensions. Align your culture, your infrastructure, and your entire organization to support your CRM initiatives. This is easier said than done. But if you don't do this you will be stuck in CRM limbo.
Finally, let your ideas and imagination open up the world of CRM possibilities. Remember the sky's the limit when you have a solid foundation and enabling technologies.
CRM is a journey and all journeys face perils. One of the biggest perils that companies can avoid is being stuck in limbo as they sit there and wait for tools, technologies, or applications. The time is now get your CRM journey started or back on track today.