InformationWeek

November 13, 2000

http://www.informationweek.com/812/icrm.htm

Tools Help Personalize The Customer Experience

Interactive CRM options provide multiple channels for customer interaction

By Charles H. Trepper

oday's E-business customers demand instant access to companies with which they do business and expect each person they contact to have full knowledge of their account. Fully personalized service has become standard.

Traditionally, customer-relationship management has been used to describe the processes and systems that help companies better understand and, hopefully, service their customers. Interactive customer-relationship management brings this application segment into the Internet age.

ICRM is the integration of instant communication, including voice, chat, and messaging with E-mail, fax, and post, within a wide variety of business processes. To a large extent, ICRM has evolved to help customers over the E-commerce hurdles and to bridge the disconnect between the old way of buying and the new way of selling.

Research by many companies has found that effective businesses usually invest in general CRM packages to improve customer care, to build longer-term relationships, to improve user productivity, and to increase integration of sales and customer care. The fundamental goal of ICRM is to instill greater customer loyalty, sales, and satisfaction.

Companies must link ICRM software with back-end systems, resulting in a deeper understanding of customers that helps to identify the most profitable customers, leads to a richer product set, and improves sales opportunities. Customer acquisition and retention in E-business requires rethinking the most basic business relationship: the one between a business and its customers.

ICRM is most effective when companies deploy active strategies to support the whole sales process through acquisition, retention, and development. Online ICRM helps the person-to-person interaction so fundamental to many companies' sales and buying processes.

The real promise of ICRM is that consumers and business customers will get what they want, when they want it, and how they want it. The challenge is to use ICRM to develop strong ties with customers and provide excellent service. To reach this goal, companies must consider some strategic issues:

o Acquiring customers. Studies indicate that a majority of shoppers are looking for more human interaction before they shop online. ICRM lets E-commerce sites interact at the point of sale, turning browsers into buyers and increasing the size of orders. The ICRM tools can detect empty shopping carts and send an alert before the browser leaves the site.

o End-to-end customer care. Superior customer care means tracking a customer's order from the sale through delivery, including customer satisfaction follow-up. This is a difficult task. ICRM packages make it easier by providing an interactive "personal touch" at each stage. This personalized attention shows up in specialized sales suggestions, delivery notification, and built-in satisfaction surveys.

o Providing ongoing value to retain customers. Catering to individual needs and making sure to deliver what customers want and how they want it, via interactive means, is critical for success in today's super-fast, hypercompetitive market. Retention programs coupled with ICRM let companies use the power of interactive Web technologies to serve customers better, faster, and more economically than competitors can.

o Personalization. Creating a customer profile and using customer feedback for new or improved products and services is key to E-business success in an increasingly competitive environment. Keeping customers happy means meeting their evolving needs. ICRM products provide information that aims product assortment, pricing strategies, promotions, and loyalty campaigns at the individual customer.

o Making sense of customer data. ICRM tools must provide details of each interaction, purchase decision, question, and support need. These messages feed the databases that empower the customer-service representatives and drive the business marketing and sales programs that depend on knowing how price, promotion, and assortment influence customers.

Managing these strategic issues with ICRM implementation lets businesses leverage customer relationships in new ways. It also puts new demands on understanding the customer as well as the internal organization. The benefits of identifying and targeting the best customers, managing promotions, and generating new sales are clear.

There are two key business trends driving the adoption of ICRM. First, global competition has increased, and products have become increasingly difficult to differentiate. That means the focus has shifted to customer service as a differentiator.

Second, technology has matured to the point where it's possible to integrate the multiple ways a customer can contact a company. It's also possible to reach across a company's databases to access all of its customer information. It's no wonder that companies are turning to ICRM software to better compete for customers.

ICRM is no passing fad. International Data Corp. expects the CRM market to be worth $8.7 billion worldwide by 2003. Other research companies project double that estimate.

The top five CRM vendors--Baan, Clarify, Oracle, Siebel, and Vantive--together constitute 40% of the market. AMR Research expects the CRM segment to grow by 60% this year, with compound annual growth of 49%.

As a subset of CRM software, ICRM offers vendors plenty of room to grow. The ICRM marketplace consists of several new, more-nimble competitors that often use innovative, standards-based technologies, making their products easier to use and less expensive to install.

ICRM tools can be categorized according to product function or the business processes the products support. Within product function, two classifications emerge that are fundamental to the business decision about CRM implementation: ASP host and client install. These categories describe the primary function of a vendor's products and the way they support the client-service function. They also refer to the products or services the vendors supply.

ASP products provide a fast, easy way for clients to add ICRM to their Web sites. Clients simply add an icon to the Web page and get outsourced ICRM capabilities. ASP vendors can provide the call-center staff as well through agreements they may have with major call centers, or clients can use their own resources.

The deficiency of the ASP model is data integration. Clients can't easily integrate the product within their environment. This prevents them from fully using internal information they have about other clients or their products. Additionally, clients don't have access to customer data from ASP products because the data gathered during chat sessions is stored on the provider's site.

Another way to categorize ICRM vendors is to determine the business processes they support. This lets clients target desired features and functions. The variety of products is generated by the complexity of businesses, their traditional ways of interacting with their customers, and the speed at which they can incorporate new techniques.

Collaboration, the simplest form of ICRM implementation, lets customers and businesspeople communicate individually and in groups. Collaboration features include communication across groups and across technologies, including chat rooms and E-mail. Collaboration tools, such as Interact Commerce's SalesLogix suite and Lotus' Sametime, provide companies with the ability to interact directly with customers via the Web. Add-ons include metrics engines that let companies measure customer activity and study the reports to better understand customer behavior. Sametime provides meeting and community-building facilities, while SalesLogix adds metrics, sales-force automation, and target-marketing capabilities. SalesLogix is hosted by an ASP, while Sametime is installed at the client site.

Customer-service representative support software improves the productivity of customer-service reps. Features include routing of messages based on customer-service representative skills, agent-agent transfer, interenterprise transfer (from service to marketing), broad access to customer information, ability to push media while on hold, and instant messages for quick response. RightNow Technologies provides a tool that uses artificial intelligence to route customers through self-help capabilities, reducing customer frustration. RightNow Technologies also adds a metrics engine to capture and report customer behavior, as well as a survey engine for all customer feedback. It's also a hosted application.

Customer-service rep automation represents the next level of sophistication, incorporating artificial-intelligence engines and complex databases. Notable features include caller alerts, databases of frequently used information, prescripted messages, automatic responses to queries, and intelligent agents that support customers and customer-service reps.

PeopleSupport's Live Help, iContact's iContact, and Ask Jeeves' NetEffect are all hosted customer-service rep automation tools, while KnowEx's product suite is installed at the client. PeopleSupport provides E-mail management, voice communication, and live chat, including text-based chat and voice chat over the Internet. IContact adds filtering, Web-page push capabilities, and various alarm and notification features. NetEffect provides primarily text-based conversations but combines that feature with the power of the Ask Jeeves natural-language search engine. KnowEx provides live CRM services and unique wireless CRM capabilities, a fast-growing trend in iCRM software.

Call-center management supports very-high-volume call centers. Features include call monitoring, volume or incident alarms, and automated queuing of calls. There's also significant emphasis on analysis reports for management of the center. These include history, trends, productivity, profitability, quality assurance, and customer satisfaction.

Egain, Facetime, LiveAssistance, LivePerson, and Quintus provide similar hosted capabilities for large-scale call centers, while Brightware, Eshare, Kana, and ServiceSoft install those capabilities at the client site. Each of these vendors is constantly leap-frogging the others to improve the feature-function set. LiveAssistance provides some unique push capabilities. Quintus provides interactive voice response features that help customers sort through options more quickly. Kana offers a unique set of products that integrates its ICRM products with its E-commerce suite. This can speed development of an electronic storefront by incorporating customer service options not typically found in small online businesses.

Most vendors offer customer profiling, chat history databases, group or private chats, and content streaming, using standard technology and Web components. Add-on features typically include open database connectivity access to enterprise databases, mobile access, encryption, and foreign languages. Security varies among the products depending on whether they support sales or service businesses. Some dimensions that would be included in a full product evaluation include:

o Cost (purchase, license, equipment, maintenance, personnel);

o Technology (scalability, speed, reliability, standard components);

o Business fit (ease of use, install, user satisfaction);

o Company or vendor (stability, level of support, client satisfaction).

The delivery of a complete ICRM package usually requires the involvement of software, hardware, services, and strategic business consulting firms. In the ICRM market, effective partnering isn't just a technique for vendors to boost their business, it's the catalyst for companies that hope to command and retain leadership positions.

While there's a plethora of vendors and products, clients are often surprised to learn that there is no obvious leader in the E-service suite marketplace. What are the alternatives when the software is incomplete or the majority of offerings will be either obsolete or acquired by another company? These issues must be dealt with, but they can't drive your business decision. Instead, focus on the the need for a fully functional suite.

CRM and ICRM software must continue to evolve, as both business and consumer customers continue to raise their expectations of the fast-changing E-commerce market. Each trend has some specific gaps that are created as customers continue to expect more. Some areas in the current ICRM packages that could stand improvement include:

o Accurate "smart" databases that suggest answers to frequently asked questions;

o Tools that facilitate good response time to customer queries;

o Ability to interact smoothly, as though in person (e.g., voice-over-IP in addition to chat);

o Integrating existing applications with ICRM software;

o The need to form partnerships that provide front-end, back-end, interactive (i.e., chat), and secure chat integration.

Revenue opportunities associated with superior customer service will drive vendors and clients to close these gaps. So, in the meantime, what to do? There is a clear case for implementation. Companies will realize sustainable competitive advantages only after significantly altering their sales and marketing processes. Companies that lack a clear CRM strategy will be best served by purchasing ICRM software that has essential feature; is well-designed; is easy to deploy, use, and maintain; and can be discarded after a couple of years.