2.1.5 Customer Relationship Management CRM Applications and Technology
According to Barton (2002) there is a dynamic shift in today’s Customer Relationship Management CRM marketplace. He categorizes Customer Relationship Management CRM life cycles into two where he said a close butting head has been taking place.
The two life cycles are Client/ Server technology and Web-based, e-customer.
Client/ Server technology lifecycle predominately supports employee-facing CRM systems which are there in helping internal sales, marketing, and customer service personnel. Users of this type of Customer Relationship Management CRM systems may not have their CRM automation software to be web-based from the ground-up (Barton 2002). Example of vendors providing such service is Onyx.
Web-based, e-customer lifecycle is newer to Client /Server technology. This supports more customer-facing Customer Relationship Management CRM systems where customers use the web browsers to access company specific information and services. Barton claims that the increasing availability of these new Web-based tools has helped to accelerate the remarkable growth enjoyed by the Web-based, e-customer lifecycle. Example of Vendors providing this service is Epiphany.
There are various types of CRM solutions which have been shown in figure 2.2 below categorizing these solutions into three folds; Enterprise CRM suits, Midmarket CRM suites and CRM special tools.
Enterprise CRM suites are appropriate for firms with revenue of $1 billion a year or more and/ or 1,000 employees or more.
Midmarket CRM suitesare appropriate for firms with revenues less than $1billion a year and/ or less than 1,000 employees
CRM special tools are solutions for dealing with special tasks like Analysis of data, customer data management, customer service, marketing automation, partner channel management and collaboration, and sales force automation.
Figure 2.2. Various types of CRM solutions (Forrester Research, 2008)
CRM technology mainly entails IT designed for managing customer relationships (Desai et al 2007). Technology applications enable supermarkets to track purchases by individual customers through bar codes scanning and customer identification cards (Hawkes R. 2002). CRM technology components according to Greenberg (2001) include front-office applications, a data depository for supporting sales, marketing and service and a back-office applications that help integrate and analyse data.
Highlighting some basic technologies and their roles, Vikki Bland (2003) explain thus; telephony systems can “pop” customer information, websites can store customer preferences and provide access to account information, telecommunications services can be used to send customers a “happy birthday” text message and software can provide one integrated customer information source.
Goodhue et al., (2002) came up with a CRM Technical Architecture which they explain to contain many applications, performing both Analytical and Operational functions. The Analytical CRM side of the architecture contains those analytical tools and applications which can be used to analyze and plan captured data upon which implementation plans are executed. The Operational CRM part combines the interaction between the inbound touch points and outbound touch points and house the information obtained in the Operational data store. So the is a share of data from both ends of the Analytical CRM and Operational CRM from the Data warehouse and operational Data store. Figure 2.3 below shows this Technical Architecture.
Figure 2.3: CRM Technical Architecture (Source: Goodhue et al., MIS Quarterly Executive 2002)
2.1.6 Classification and Components
There are four classifications of CRM components according to Xu and Walton (2005). They are Operational CRM, Analytical CRM, Collaborative CRM and e-CRM. Operational CRM (contact centres, sales and marketing solutions) has enjoyed much implementation by most companies today (Xu and Walton 2005) than analytical CRM which have given rise to firms (Small scaled) having limited understanding on their customer knowledge contrary to their large counterparts. An effective CRM system should be designed not only to enhance a firm’s ability to attract and built a personal interaction with customers but to also gain knowledge about them.
Operational CRM entails collection of customer data through the different touch-points of contacts (Mail, sales force, contact centre, fax, web, contact management systems, etc) through which firms interact with their customers. These data obtained are then stored and arranged in a database-customer- this has been made possible when users have any interaction with the customers at the different touch points. Buttle (2004) affirmed that at a technology level, operational CRM entails the automation of customer-facing aspects of the business. Emphasis was made on marketing automation (campaign management, event-based marketing, and promotional management), sale force automation (lead management, opportunity management, customer contact management and sales forecasting) and service automation (inbound customer call centre, service call routing and prioritization, customer compliant handling, and customer self-service systems). Kotorov (2002) called a 100 percent customer focus as when a contact management system is provided for complete and detailed tracking of customer information at any contact. The advantage of operational CRM (Xu and Walton, 2005) is to enable a personalized relationship with each customer and also to make organizations more sensitive to customer’s needs.
Analytical CRM refers to firm-level processes involved in analyzing customer and market-level information in order to provide the intelligence and insights that guide the firm’s strategic marketing, CRM, service, and go-to-market choices (John et al., 2005). Data obtained through operational CRM touch-points stated earlier on and stored in the contact centric database is analyzed so as to generate customer profiles, identify their behavioural patterns, service level determination, and support the segmentation of customer. Analytical CRM is known for its 360 degree information about the customer (Kotorov, 2002). Information and knowledge acquired from the analytical CRM help to develop a comprehensive promotional and marketing strategies. Technology enabled analytical CRM systems (Eckerson and Watson, 2001) are CRM portals, data warehouses, predictive and analytical engines. The 360 degree customer view in which Kotorov 2002 explained about is about using the obtained and stored customer information to define the following questions:
Who are our most valuable customers?
Which customers are most likely to respond to a market offer?
What sales channels and effort levels should be used to access and interact with these customers?
So what this means is that analytical CRM is beneficial to both the customer and the firm.
Collaborative CRM is a hybrid of operational and analytical CRM. As stated by Kracklauer and Mills, (2004), the systems are integrated with enterprise-wide systems to allow a greater responsiveness to customers throughout the relationship units between them and the firm. John et al., (2005) in their enterprise-level CRM model and processes presented in figure 2.3, integrates the two processes (Operational and Analytical CRM) by embedding the sales force in the context of an organizational-wide focus while the customer is placed at the center. The model shows a mix in the core-values between each CRM processes. For each of the processes, the capability is targeted as to determining the Right;
E-CRM enables information on customers to be available at all touch-points between a firm and among its external business counterparts basically through Internet and the Intranet. In order words, the focus is emplacing a forum with which internal (firm) and external users can share customer information through the Internet or Intranet and to carry out other electronic commerce transactions.
CRM consists of several components that are essential to the organization. Each of these components offers different functions yet its importance cannot be overlooked. Present trends in the development of CRM have enabled users to combine these components for a better result. Barton (2002) categorizes these components as follows:
Time Management: This component includes a single user and group calendar/ scheduling as well as e-mail. According to him, Microsoft Outlook (also Lotus Notes) has become the calendar / scheduling standard within the CRM software industry. Furthermore, bidirectional integration with MS Outlook is also becoming standard such that one can enter a date-specific activity or a contact from within MS Outlook and the activity or date is automatically input within the CRM software application. Time management component also include the creation and management of task lists as well as e-mail.
Sales/ sales management: This component includes the management of contact profiles and history, management of account information including activities, and order entry. This component includes proposal generators, which permit sales personnel to create a comprehensive and detailed proposal as well as configurators that’s allows sales personnel to easily and quickly configure products and services based on customer needs.
Telemarketing/ Telesales: It includes functions such as call list assembly, auto dialing, scripting, call tracking and order taking.
Customer Contact Center: It includes customer service functions such as incident assignment/escalation/tracking/reporting, problem management/ resolution, order management/ promising, and warranty/ contract management. Furthermore, customer service and support software includes a web-based, self-service capability that customers can easily access using a browser.
E-marketing: This is a marketing component which facilitates one-to-one, permission-based marketing efforts. These marketing subcomponents often depends on customer data received from web sites, or from a data warehouse enhanced by data warehouse tools such as data mining engines.
Business Intelligence: The component includes extensive and easy-to-use reporting capabilities. Customer Relationship Management CRM software vendors also are offering executive dashboards and personalized portals to facilitate and enhance the business intelligence component within Customer Relationship Management CRM automation.
Field service support: It entails work order dispatching, part order/ reservation, preventative maintenance schedules, and real-time information transfer via mobile technologies. According to Goldenberg (2002), this component has not received a lot of attention in the past acknowledging it to be a large and growing market segment.
E-Business: This is primarily focused on the functionality for the exchange of products/ services via the web. This component has become important given the growth of web-based business-to-business (B2B) and business-to-consumer (B2C) e-commerce applications.
Multimodal Access: This component enables customers to reach a company through mail, phone, fax, e-mail and the web (including chat forums). This means that the CRM system has to support multiple modes of access from the customers while simultaneously giving the impression that regardless of which mode or modes a customer uses, the operator can maintain a holistic view of the customer at all times.
Data Sharing Tools: This component is a technical constituent. This enables customer service personnel, sales personnel, or the customer to know the state of the order(s) and also to know whether an invoice regarding the business transaction has been received. The integration to the web, legacy systems, and the third-party external information source is very essential for an effective CRM system. Data synchronization is very important for data sharing (Jaychandran, et al., 2005).
These CRM components defined above is a combination of the different classifications that has been stated earlier on. It consists majorly of the operational and analytical CRM, but the collaborative and e-Customer Relationship Management (e-CRM) are also not left-out but prominently involved. Looking at it from two ways, they could also be classified into front-end and back-end systems. Majorly, the front-end systems are customer facing side which is more of operational Customer Relationship Management CRM, here is where customer information are collected through the touch-points mentioned before. The Back-end deals with analytical Customer Relationship Management CRM where stored customer data are analyses so as to segment them and for taking strategic moves in order to offer the customer a valued-packed service.