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ECRM: Select and manage the most valuable customer relationships
By Ashish Sinha

What is Customer Relationship Management (CRM)?
Customer is not new, Relations are as old as a buyer and a seller and so is not Management. The concepts of CRM have been there since the concept of buying and selling came into being. Then, what is creating waves in today's CRM industry? Is that small electronic 'e' changing the trend?

CRM is considered to be a software tool and a technology solution in this Information Technology industry. In fact CRM is a strategy towards achieving a holistic view of any partner engagement. CRM, which is a combination of marketing and business processes, is the basic understanding of customers and how organizations measure them. The mantra behind CRM is catering to customized needs "centrally".

As defined by "gurus" of CRM - Customer Relationship Management is a business strategy to select and manage the most valuable customer relationships. CRM requires customer-centric business philosophy and culture to support effective marketing, sales and service processes. CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy and culture.

Why CRM ?
Keeping in mind the pace at which technology is changing today, any company which is a step ahead of others because of some web product or service will not be able to hold on to that advantage for long. Key to stability in today's dynamic marketplace is forging long-term relationships with the customers.

Customers can be divided into three zones:

• Zone of defection where customers are extremely hostile and have the lowest level of satisfaction.
  
• Zone of indifference where customers are not sure. They have a medium level of satisfaction and loyalty towards the company.
  
• The third level of customers are in the zone of affection described as "Apostles". CRM focuses on bringing customers from level 1 to level 3 and retaining apostle customers.

Customer demands for customization are increasing with every passing day. This has made companies shift their focus from "mass production" to "mass customization". The present scenario of companies using "poorly implemented" multi channel strategies for living upto the expectations of customers is bringing both customer satisfaction and customer loyalty down the ladder.

Take the example of a small enterprise. Here hard work reaps high quality service and over the years develops a database of loyal customers. In this enterprise computers are optional. Then why is the CRM industry attracting investments of millions and billions of dollars? The reason is simple. The concept of "Seller's Customer" has just rotated 180 degrees to become "Customer's Seller". This simply states that, now the customer is more powerful than the seller. Options for customers have increased with the cycle of innovation-to-production-to-obsolescence gaining momentum. On the other hand companies are finding it difficult to differentiate themselves in the marketplace. These factors are pushing companies into taking a closer look at their customer relationships.

Today any company can copy products or services offered by other companies. If the new entrant adds features like less order turn around time and direct communication then established players are bound to have sleepless nights. Organizations that implement CRM and turn their business into e-businesses will find their competitors' customers ready to welcome them with a "smile". According to a study by IT Consulting firm Aberdeen - "The winners in this new economy will be those companies that can effectively leverage the internet to redesign, automate and integrate all business operations".

Organizing business to satisfy customer demands organizes/simplifies internal functioning of the organization. Implementing CRM brings to the front the "pits" that the organization had dug over the years, passing work from one pit to another. Workflows are reduced, cycle times become shorter, information flow of non-productive things gets eliminated and the most important thing - "pits" get covered automatically with all the positive features. Compact sized organizations get into a position of making more money. This in turn enables them to please more customers.

Major Players in the CRM Industry
To name a few - Oracle, Siebel, Pivotal, Vantive and Clarify are some of the major players in the CRM industry today.

Siebel has grown exponentially over the last year with more than 170 acquisitions and alliances taking its alliance partner base count to 700. Siebel has spread its wings to industries like Communications, Automotive, Financial Services, Hospitality, Entertainment, Life Sciences, Manufacturing, Public Sector etc. Siebel e-business applications have helped companies satisfy customers anytime, anywhere and through any sales or service channel.

Oracle is positioning itself as the single supplier of different modules required for e-business like Web Marketing, Web Sales, HR and Financial. Considering CRM in the Call Center, Oracle's is a one-source software provider with out of the box integration of Front Office Applications (such as Oracle Service) and Back Office Applications (such as Oracle Financials). This integration of technology and applications reduces the cost of implementation, ongoing service and support.

Oracle in itself is a good example of consolidating and centralizing. It is reducing its global IT expenditure by $200 million by consolidating 97 e-mail servers and 120 databases to four servers running four databases. By December 2001 it is expected that 32 back-office servers running 60 databases will be brought down to two servers running four databases and that its customer-facing applications will consolidate 27 support applications down to one worldwide instance.

Pivotal was rated by start magazine as one of the hottest companies for the third year in a row in 2000. Start magazine is the only magazine dedicated to educating manufacturing and engineering executives about the business of technology. Pivotal has kept its focus on manufacturing companies with Pivotal ePower 2000, Pivotal eRelationship 2000 and Pivotal eSelling 2000 which have set new industry standards in scalability, reliability and cost-effectiveness.

Vantive has been acquired by People Soft Inc. and Clarify has combined with Nortel Networks to drive the wave of customer focused business.

Stylus Systems Pvt. Ltd. is an Indian based company available to integrate exiting solutions or develop custom ECRM solutions. Please contact thomaspm@stylusinc.com.