InformationWeek

September 18, 2000

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CRM Under Scrutiny

Lots of companies are thinking about customer-relationship management, but progress can be very slow

By Jeff Sweat

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Among businesses with immediate CRM plans, a high percentage, roughly three-quarters, say they'll deploy CRM across the company. That's a big shift from CRM's roots, observers say. "We've seen a significant change in our customer base away from spot CRM solutions," says Adam Klaber, managing partner for PricewaterhouseCoopers' global CRM practice.

CRM and its predecessors--sales-force automation and customer-interaction systems--traditionally have been delineated along sales, customer service, and marketing functions. That's starting to change as businesses seek a company-wide view of their customers. A bank, for example, might want to pull together customer information from all its businesses so that its retail banking operation doesn't treat a valuable credit-card customer poorly just because that customer doesn't have a large balance in his or her checking account.

MemberWorks Inc., a Stamford, Conn., membership marketing company that sells discount shopping, travel, health, and dental packages, is trying to create a customer-relationship management system using a data warehouse and Siebel CRM applications. The aim is to bring all customer data into a single place, regardless of which of MemberWorks' 15 products a customer is buying or whether the customer is contacting sales or customer-service personnel. That will help the company keep track of everything its customers do, says Trey Orta, MemberWorks' VP of IS strategy. "Our transactions work properly if all of our data is in one area," he says. "We're getting a total view of the consumer, rather than just one facet."

But achieving that goal isn't easy. One of the biggest challenges for PCH.com LLC, the online arm of Publisher's Clearing House Inc., is integrating customer data with that of its parent company. Like Publisher's Clearing House, PCH.com targets direct campaigns to customers, but it delivers them on the Web and via E-mail. It would like to be able to connect to the data stored by Publisher's Clearing House, adding an offline component to its campaigns. If a customer participates in a permission marketing campaign on the Web site, for instance, PCH.com could follow up with a direct mailing that draws on the customer's past interactions with the parent company.

But while PCH.com is using consulting firm Dialogos Inc. to build a CRM system linking various packages, it's not ready to link its applications with Publisher's Clearing House's legacy systems. "We're not going to tackle it on our first project," says Rory Cumming, VP of marketing for the Port Washington, N.Y., company. "We'll do some integration, but it won't be ready to connect immediately across the phone and Web." The process would simply be too difficult and time-consuming, he says. Although the resulting system will limit the breadth of PCH.com's customer data for now, the company has to worry about building up its own basic systems first.

Even if companies are getting better at reaching across departments, there are still gulfs between their sales, customer service, and marketing departments. Only 46% of active CRM users say all their customer-facing groups have access to all facets of customer information. And while it's not clear whether that situation is caused by attitude or technology, integrating different systems is a major challenge.

Few businesses are able to bridge that gap, although most are working on it. OpenText has already started to bring together customer-service organizations across its multiple divisions so they share a single record of the customer. Right now, it's deploying Clientele, which can be used to track customer interactions of many types, only in its customer-service organization. Integration with the sales force--which uses its own sales-force automation tools--is planned but may be two years away.

Clinton says the sales-force automation products the company ultimately implements, whatever they are, will be designed to work with Clientele. "We're trying to build a customer-management standard," he says. "The effects of not using it in an integrated mode can cost you millions more."

Photograph of Wilson by Alan Blaustein Officefurniture.com Inc., an online retailer that sells to businesses, has found a way to connect its sales and service information, though the two functions aren't served by a single application. Service and support are handled by Oracle Customer Care and Service application modules, while sales is handled by a custom-built app that manages leads and prospects. When a prospect becomes a customer, the system creates a link between the two applications, both of which are written on an Oracle database. Even though the data is in separate systems, says Eric Wilson, chief technology officer for the Danville, Calif., company, it appears to be coming from the same place. Any changes made to the customer-service database by service representatives show up almost immediately in the salesperson's contact file.

Regardless of what functions their CRM packages fulfill, the business and IT executives surveyed say they're collecting a wide range of data about their customers. Eighty-nine percent of those with active CRM deployments say they collect sales history data, while 88% collect data about customer-service requests. Other types of collected information include Web activity, at 74%, and demographic profiles, 71%. A third of companies are collecting psychographic information, data relating to customers' habits and preferences. But not all companies make full use of the data they get; for example, just 65% analyze the information they collect on Web activity.

Indeed, most CRM users say it's easier to gather data than to do something with it. But action is on their to-do lists. When asked what functions their companies' CRM program will add in the next 12 months, the top response, at 38%, is custom messaging--personalized E-mail and Web contact with prospects and customers. In addition, 36% plan to implement data analysis and segmentation of customer information, and 27% are looking at promotion and ad campaigns, both online and off. Marketing campaigns are a huge priority for PCH.com, which is trying to turn its sweepstakes players into paying customers. "We want to move buyers up the value chain," Cumming says.