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Getting Close To Customers: Leapfrogging With eCRM
Competitive advantage through CRM
European manufacturers have been slow in adopting customer
relationship management. Without explicit retention
goals, programs for improving customer loyalty go nowhere
with sub par business performance as a frequent result.
But while many companies have such goals in place, fewer
are achieving them.
The success of many non-European manufacturers in Europe
over the last two decades has a lot to do with their
forward-thinking practices in managing their customer
relationships. With customers embracing "imported"
brands like Nike, Procter & Gamble, and Colgate-Palmolive
in consumer products, Dell in personal computers, and
General Electric in appliances, many European manufacturers'
notions about customer loyalty are being called into
question. The impact of competitors that excel at anticipating
and serving customer needs is beginning to be felt.
Despite many European manufacturers' hesitation in adopting
CRM practices and principles to date, they now have
a unique opportunity to quickly take a lead position.
Having sat on the sidelines and let the first wave of
CRM initiatives pass them by; these companies can now
use the Internet to rethink their customer interactions
from scratch. Rather than getting on the traditional
CRM bandwagon, they can leapfrog the competition by
leveraging the more advanced capabilities of customer
relationship management in the digital world: eCRM.
Indeed, eCRM gives companies far greater opportunities
to improve marketing and customer satisfaction than
traditional CRM approaches.
Most traditional CRM initiatives predate the World Wide
Web and tend to be in silos such as customer service,
sales, or marketing functions. For example, many companies
installed CRM software in their customer call centers
to create deep databases on customers, repair and other
service records, and the company's product and service
information. By implementing CRM, these companies made
improvements in certain narrow areas of the business.
For example, their service reps became more knowledgeable
about each customer and better able to handle their
issues after the purchase. But the primary benefits
of the system were limited to the customer service function
often the call centre representatives. Sales people
typically did not gain access to the data, which they
might have used to help make a sale.
Traditional CRM rarely provided a consistent enterprise-wide
picture of the profitability and needs of individual
customers. In essence, while helping give a better customer
experience, those traditional CRM efforts did little
to help companies decide where to invest next or how
to improve their product offerings or sales process.
As we discuss later, without this holistic, integrated,
360-degree view of the customer, most of the value of
CRM efforts dissipates quickly as competitors have little
trouble in catching up. Flexible enterprise-wide eCRM
systems can create a "digital loyalty cycle"
across marketing, sales, and customer service. This
provides customers with the optimal price, quality,
quantity, brand, pre-sales and after-sales service experience.
This is becoming the benchmark for successful customer
relationship management in the digital age.
With eCRM, manufacturers have the opportunity to take
customer interaction to new levels of effectiveness
by integrating customer information otherwise hoarded
by customer service, marketing, and sales departments
and making it available across the organisation to improve
the overall customer experience. Traditional knowledge
and analysis of product and geographic markets are becoming
relatively less useful as the understanding of individual
customers, their purchase history, requirements, and
lifetime value is becoming the ultimate unit of analysis.
The battleground is moving from scale and market-share
to customer profitability and wallet-share.
Without investments in stronger eCRM capabilities, however,
a complete, actionable picture of individual customers
is often unavailable for most companies. This means
that strategic marketing decisions today are often founded
upon quicksand. As a result, customer loyalty is becoming
more and more a subject to the now infamous mouse click.
An eCRM system or Web-based CRM system is fundamentally
less cumbersome and less expensive to implement than
traditional CRM because eCRM can be extended more easily
to users everywhere in the company through the Internet .
As common standards for exchanging product, service,
and customer data emerge, such as eXtensible Markup
Language (XML) standards, partners in the sales and
distribution channels can be linked more easily to the
system and share in the benefits. The cost savings can
be sizeable. For example, GE estimates the cost of taking
a phone order at around 5 for simple products and as
much as 80 for its higher-tech offerings. In contrast,
an order placed online costs an average 20-cent. With
GE getting 20 million phone calls a year in its appliance
business alone, the savings from Internet -based CRM
technology could become immense.
But the value of eCRM goes way beyond cutting cost.
The technology allows companies to capture customer
feedback at more of the "touch points" between
a company and its customers across channels and functions
e.g. meetings with sales people, customer service inquiries,
purchases over the Internet , customer surveys, user
groups, and the like and use it to improve relationships
and value for individual customers.
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