360[degrees] view of CRM: Web-enabled CRM offers operators impressive functionalities but true CRM success depends on channel integration and a 360[degrees] view of the customer - The IP Element

The ubiquity of PCs, and growing confidence with which people interact with the web (look at online banking and shopping), has driven the inevitable growth of online, or web-enabled, CRM (customer relationship management). It introduces specific functionalities to engage and retain customers, such as personalisation and self-service, but its greatest strength lies in integration with other CRM channels to generate the so-called 360[degrees] view of the customer.

Understanding and addressing the needs of customers is the basis of any successful service. Information from customer interaction with all CRM channels -- the 360[degrees] view -- equips operators with a broader appreciation of the individual user. Translating this information into proactive troubleshooting solutions and appropriate service suggestions for customers is vital in reducing churn and increasing ARPU.

Wonders of the web

A report by research firm, Ovum, explains that 'the goal of web-enabled CRM is to personalise the experience for customers who are using self-service channels to ensure they experience a consistency and quality of interaction that they would expect from the best 'traditional' channels. It must analyse knowledge gathered about customers to make sure information and offers are personalised to their needs.'

Self-service and personalisation are distinct benefits that web-enabled CRM provides operators, in comparison to other CRM channels, to create a better experience for their users.

"The web as a CRM channel provides easy access to information. It is also a richer medium, and environment, for personalisation and tailoring solutions to specific customers," observes Scott Nelson, VP and research director at analyst firm, Gartner Group.

Personalisation benefits operators on two levels. First, it allows them to provide an improved service to individual customers -- identifying and then addressing their unique requirements -- in favour of the less effective broad-brush mass market approach.

Second, it allows them to determine who their high value customers are, and at a time when increasing ARPU is all-important, ensure that they retain their most valuable customers in particular.

Web-enabled CRM also enhances the concept of 'self-service' -- providing customers with a greater level of control and autonomy over their interaction with a service provider.

Research from Netonomy, a self-service e-care and e-commerce solution provider, reveals self-service CRM enables customers to undertake basic account management tasks for themselves through the web. It points to online activities including selecting the most appropriate tariffs and rate plans, viewing, paying and analysing bills, changing payment information and configuring value-added services.

Self-service -- better service?

The online world has created a degree of self sufficiency and DIY (do-it-yourself) mentality amongst users -- online banking and shopping are obvious examples.

"We are proponents of the client managed relationship -- that is putting the customer back in charge," says Andy Holcombe, director of worldwide product marketing for Netonomy. "The idea is to present information to the customer to deal with and let them act on it as they see fit."

He points to mobile operator, Vodafone, who uses the 'client managed relationship' concept as a web-enabled CRM strategy for its large enterprise clients.

"They [Vodafone's corporate customers] can view mobile contracts, add or unsubscribe them, and negotiate special rate plans. They are taking on more responsibility themselves but are happy to do so because it saves them time and money," he claims.

Netanomy's research indicates the cost of call centres should fall as less staff are needed, while in addition, churn amongst customer service agents (which is traditionally high) is reduced. However, operators shouldn't be too hasty -- or optimistic -- about cutting contact centre costs.

"Self-service will become a dominant trend because of the cost savings but it will also change the dynamics of other channels," explains Gartner's Nelson. "Operators might think with the increase of self-service they can cut the number of agents in their call centres. But the typical call to the contact centre will change as customers ring with more complex issues when they get stuck on the web. This means the length of the average call will become longer, which may require a greater number of agents available to deal with them. Costs might also increase with regard to training for agents who have to deal with more complicated issues.

Another point to bear in mind is that self-service shouldn't come at the expense of customer choice. Despite being a clear advocate of self-service CRM through the web, Netonomy's Holcombe admits, "We shouldn't eradicate contact centres altogether -- users will want to use different channels depending on their preference. Operators must provide a number of channels for their users and do it well."

He adds, "The conventional misconception about the contact centre is that it is regarded as the CRM hub -- it is important to provide customer facing services and integration across all CRM channels."

Integration is key

Despite its distinct benefits, there is general consensus that web-enabled CRM is not a full strength CRM business strategy if viewed in isolation.

"The web [as a CRM channel] is effective in terms of cost reduction and enhancing 'anytime, anywhere' CRM capability but it is not everything," argues Mikko Hietanen, director of industry sales (EMEA) at application software provider, Siebel Communication. "The customer will always come to a point in their web interaction when they need another channel of help."

He believes implementing a standalone web-enabled CRM solution is a gamble (considering the likelihood of a customer needing to interact through another channel). The operator faces the challenge of enabling that integration seamlessly -- including front and back-office applications with a single customer face -- thereby providing a consistent experience for the end-user.

"Poor level of service leads to high churn rates," observes Gartner's Nelson. "Operators need to ensure good execution of web-enabled CRM and an effective level of integration with the broader CRM environment. If the right level of integration does not exist operators risk alienating their customers altogether."

According to Craig Probert, managing director (UK and Ireland) at software vendor, Chordiant, this is still a hurdle for operators to overcome today. He claims many of them are still not providing this holistic view with consistency of experience and quality across CRM channels. The churn of customers is not due to any one channel but the overall quality of service," he says.

Preventing churn

Unfortunately for operators, integration of web-enabled CRM with other channels is lust one of a series of issues they face in successful CRM implementation. Criticisms at the Gartner CRM Summit at the end of last year included lack of process redesign, disappointing e-mail management and failure to provide any real customer benefits. One worrying conclusion summit participants reached was that, from a customer's point of view, more than 50 per cent of CRM implementations would be a failure because of the problems highlighted.

Gartner's research suggests operators need to adopt more customer-centric CRM solutions in order to improve service quality and prevent churn, and, in order to do this it identifies three key areas for operators to focus on:

* product leadership -- driving the market on the strength of their products and giving customers a unique product or service offering;

* operational excellence within the back-office, operational systems and processes; and

* being customer-intimate -- operators must establish strong relationships with their customers so they have no desire to churn to competitors.

Injecting some optimism, Gartner's Nelson believes there is noticeable progress in the market but adds a word of caution. "The worst trap is buying and installing a technology and believing that is the end of CRM implementation. It is important to identify the underlying issues -- what customers want and how to provide that," he says.

Netonomy's Holcombe agrees: "In the past, CRM success was measured by what solution was implemented and not what target or improvement was actually achieved. The successful operator understands the difference between strategic CRM (understanding the customer) and transactional CRM (how to make the customer's life better)," he stresses. "Operators must know the difference and necessity of both."

Creating the '36o[degrees] view' of customers through CRM channels -- such as web-enabled CRM and its unique attributes -- is one step, but for operators to reap real benefits in today's competitive environment, it is using that all-round view effectively that will differentiate the ones that lead the market and those that fall behind.

RELATED ARTICLE: Making web-enabled CRM work

* Ensure the whole online experience is of a consistently high-quality service throughout, for example, personalising all interaction.

* Provide a clear user experience which makes sense and is easy to navigate.

* Enable real-time validation letting users know instantly that their choices and entries are correct and provide guidance to correct mistakes if they aren't.

* Allow a site to react in real-time to end-user selections, actions and entries. For instance, content changes instantly based on previous user selections with only relevant questions presented to the user and help messages in direct response to user actions.

* Make sure the user is truly web-enabled with the ability to interact with the back-end system -- developing an efronted CRM system where customers can contact you via e-mail is not enough.

* Do not simply take existing technology or applications, and try to make them work on the web, implement solutions designed and created specifically for the web environment.

Source: Chordiant, Gartner and Netonomy (April 2002)

COPYRIGHT 2002 Horizon House Publications, Inc.
COPYRIGHT 2002 Gale Group