You don’t need me to tell you times are a bit tough right now. Buyer confidence is low, and that means that keeping the customers you have is even more important—let alone attracting new customers.

Can a customer relationship management system be the way to do this?

A white paper published by VendorGuru.com claims it is.

While everyone’s avoiding the R-word (recession), most businesses as well as consumers are tightening the purse strings. Customers are suddenly more valuable than just a short time ago.

CRM systems can help a company of any size ensure these customers keep returning—and it’s common knowledge that existing customers are cheaper to retain and more likely to buy than new customers.

“Businesses could find an effective CRM approach will give them an important competitive advantage under recessionary conditions,” states the white paper.

With an effective CRM system in place, businesses may retain profitability and grow even during a recession. Some view recessions as a bit of “natural selection” in the business world, allowing the fittest to survive and paring away those without the strength to weather tough times.

The white paper highlights three strategies for surviving—possibly prospering—during a recession.

Increasing customer penetration is the first. Customer relationship management tools can work to boost profitability as much as 70 percent, according to the white paper. Acquisition costs for new business tops the cost of servicing current customers; there are also opportunities for cross selling. CRM software guides your sales force by offering scripts for cross selling and showing the customers’ order histories.

Achieving efficiencies is second in line; streamlining a business from within is key during lean economic times, and unproductive salespeople can be identified and helped. In fact, CRM can help a company automate processes and develop greater efficiency throughout the entire sales cycle.

Finally, the white paper says CRM can help to use resources effectively. During slower times, keep your staff busy by trying new CRM strategies and solutions.

 

The summit will offer attendees information and seminars on hot topics in the world of customer relationship management today, including:

• The creation and measurement of critical business processes in marketing, sales and service.
• Emerging capabilities and best practices in the contact center, field and e-commerce channels.
• The collection, management and use of customer data.
• The impact of on-demand and outsourcing on the provision of IT solutions.
• The disruptive innovations that enterprises need to start planning for now.

The CRM summit is an opportunity for discussion and networking opportunities with analysts and guest speakers, executives and leaders from technology providers in the CRM arena, and other CRM professionals.

In an industry with as much rapid growth and change as customer relationship management, the chance to share with and learn from other CRM professionals is valuable. Gartner, a provider of research and analysis on the IT industry, describes the event as offering “offers marketing, sales, and service decision makers independent; realistic understanding of how their business strategies will be influenced by, and can take advantage of, the evolution of IT.”

Keynotes and guest speakers include:

• Chip Conley, Founder, President and CEO, Joie de Vivre Hospitality: Peak – How Great Companies Get Their Mojo from Maslow
• Dan Gilbert, Harvard College Professor of Psychology at Harvard University: Stumbling on Happiness
• Ed Thompson, VP Distinguished Analyst, Gartner: Improving the Customer Experience
• 2008 Customer Awards & Users Choice Award Finalists Presentations

More topics include data integration and analysis, systems architecture and business process alignment, and vendor selection and negotiation strategies.

Another Gartner event will be held immediately following the CRM Summit. Gartner’s Business Process Management Summit, Sept. 10-12, will focus on “creating and sustaining an agile process-powered organization and explains how to align business strategy and IT to maximize operational agility, providing new opportunities to expand revenues and productivity.”

Keynotes for the BPM Summit include:

• David Osborne, Author & Senior Partner, The Public Strategies Group: Beyond Bureaucracy: Transforming Government in an Era of Permanent Fiscal Crisis
• Dan Roam, Author & Founder, Digital Roam Inc: The Back of the Napkin: Solving BPM problems with Pictures
• Sara Roberts, CEO and President, Roberts Golden Consulting: Organizational Change Management 2.0: Transforming Your Organization for Innovation
• Janelle B. Hill, Research VP, Gartner & Michele Cantara, Research VP, Gartner: BPM: Transforming Your Business
• Yvonne Genovese, VP Distinguished Analyst, Gartner: User Interaction and Empowerment Disrupts Business Application Transformation
• Daryl C. Plummer, Managing VP & Gartner Fellow, Gartner: BPM and SOA: When Grand Plans Collide, Chaos Ensues

Nearly 35 companies will be exhibiting sponsors at the two summits.

Software applications that can be accessed via the Internet are growing in popularity, and it’s not hard to see why. With the applications available on a pay-per-use basis or even free, businesses—especially small and medium businesses—can find a cost solution that fits.

Businesses can take advantage of the provider’s secure server and avoid buying software and installing it on company servers.

“Already, more tools and applications, such as office software, e-mail and customer relationship management are being served from such centres, and we can expect the range of applications and services available to grow,” says David Mitchell Smith, vice-president and fellow at Gartner Research.

The market may grow to nearly $19 billion globally in just three years, according to Gartner. The company estimates that 25 percent of all new software will be software-as-a-service, though some applications may stay in-house.

E-mail is one of the applications most likely to become hosted increasingly on a service provider’s server, driven by storage requirements as much as the boom in telecommuting.

Gartner predicts that by 2012, “at least a third” of business software will move toward software-as-a-service rather than in-house applications, and Oracle, SAP and Microsoft are positioning their businesses and products to cater to this shift.

Many providers already offer full-service online software applications, including Microsoft with its Office Live Workspace which offers a free, hosted, online file sharing service that allows users to store, access and share documents. Google Apps features Gmail, Google Talk, Google Calendar, Google Docs and Google Sites. Google’s applications are available as a free, basic version or a fee-supported version with more features and functions.

LucidEra, NetSuite, Callidus Software, Ketera Technologies, RightNow, Salesforce.com and Coghead are just a few of the companies offering online solutions for analytics, sales, marketing, finance, ERP, CRM, e-commerce, sales performance management, electronic procurement and more.

These online offerings give smaller businesses the ability to “play with the big boys,” by having access to applications and functions that would be too costly to buy and run on in-house servers. Fees can range from $5 per month up to $200, depending on the complexity and features needed. These fees often include upgrades, maintenance and customer support, but users are advised to check for “hidden fees.” These charges most often relate to storage capacity or customer support.

]]> http://www.crm-guru.com/software-as-a-service-provides-affordable-solutions-for-small-business.php/feed 6 http://www.crm-guru.com/should-you-add-a-customer-module.php http://www.crm-guru.com/should-you-add-a-customer-module.php#comments Tue, 24 Jun 2008 18:56:37 +0000 ssikes http://www.crm-guru.com/should-you-add-a-customer-module.php By Sharla SikesIt may seem like we’ve talked about Web 2.0 ad nauseum, but that’s because it’s a hot topic in the world of customer relationship management. And there are a lot of ways it can benefit businesses of all sizes, too.

Today’s question: Should you add a customer module to your CRM system?

First of all, what is a customer module? Denis Pombriant at DestinationCRM.com calls it a “single place within the CRM system to capture and analyze relevant customer data.”

If you don’t have a method of doing this, consider the advantages. With CRM 2.0, social networking and media have built a relationship that becomes closer every day. Pombriant says we’re seeing the “leading edge of a movement to shift the focus from the transaction to the customer.”

Data is the key to success for such a movement. And finding out who the customers are is the key to building that data. To date, analytics have been superficial and spotty, making the available data less than outstanding.

“The fact that CRM has been rather successful despite this deficiency says more about the market lifecycle than it does about our ability to know the customer,” says Pombriant.

So far, most data is generated by early-lifecycle companies, or new companies working to get started. Market share was the top priority. However, as both markets and competition grow, it’s wise to offer the customer something others aren’t that goes beyond mere products: customer intimacy.

Sounds a little naughty, I know, but think of your own buying habits. When you’re shopping, don’t the intangibles become just as important as the products themselves? Service is the name of the game today, and that holds true for online sellers as well as brick-and-mortar companies. Most consumers want to be more than a dollar sign or a faceless transaction. My favorite sellers both online and in “real life” are those who make a little extra effort to acknowledge me, and even the tiniest gesture can make all the difference.

It’s been well-documented that it costs more to attract new customers than it does to keep existing ones returning.

Thus, to make sure your customers return, a way to understand customers’ “needs, biases and desires” becomes imperative, and a customer module is key to building that understanding. A fully functional module should include the following, according to Pombriant:

“- A database for tracking customer demographic information that can be maintained by the customer as well as the vendor–much like a social networking site.

- A community interface through which the company could ask its customer base about product innovation, messaging, and anything else relevant to how the customer consumes its products and services. This interface, a kind of customer laboratory, would support typical bidirectional interactions with customers as well as one-to-many interactions. For example, a company could collect data while individuals interact to trade information about their use of that company’s products and services.

- Analytics to slice and dice the data generated by the community.

- A mechanism for rewarding good customer behavior (repeat purchases or contributions in the community).”

A customer module will perform these functions smoothly, rather than the haphazard manner in which each is done separately by many companies.

Pombriant cites statistics to justify the cost of such a module:

“In 2005, 36,000 new products hit the market and, by early 2006, 80 percent of them were projected to fail. I doubt it’s much different today,” he says.

Implementing a customer module helps ensure your product or service won’t fail, or at least has every chance of succeeding. Social marketing dominates most industries, and when properly researched and installed, a customer module can pay “big dividends.”

We’ve just taken a look at how simply being aware of possible threats to CRM system security can help foil phishing attacks, but there’s a lot more involved with the security equation.

Technological security measures will boost user awareness into a complete security strategy.

Many applications are written using Asynchronous Javascript and XML, or AJAX.

AJAX allows CRM vendors to provide “richer, more responsive” applications and more efficient CRM programs with more features to boost sales. However, it also provides more attack points into CRM system security, according to Cook.

AJAX applications aren’t always written from a security point of view. Being relatively new, AJAX is less understood than other application environments, and being written by Web developers rather than programmers, security may take a back seat to performance and features.

“I get kind of sad when I’m asked [about what customers can do to secure their CRM applications],” InsideCRM quotes Billy Hoffman, manager of HP Systems Security Labs, the Atlanta-based Web-security research department at Hewlett-Packard Development Company, L.P. “This is the part of my job where I feel bad because there are no good answers.”

While Hoffman mentions a few methods users can employ to protect themselves, it’s true that security should be addressed on the developer rather than the customer. However, like a “chain-link fence around the problem,” these methods can provide at least some protection.

Hoffman recommends choosing a CRM application with a high level of security, and asking about the application’s compliance with security standards that are appropriate to its use.

“For instance, OWASP (the Open Web Application Security Project) has a list of top 10 vulnerabilities [in Web applications],” said Hoffman. “One question you can ask is, ‘How are you in compliance about the OWASP top 10?’ How are passwords stored, what type of access rules do you enforce? Is there some kind of access-control system? Ask how granular it is. A lot of times looking at feature set of an application can give you an idea of how secure it is.”

Seek tools to boost the security of prewritten applications, such as the NoScript plug-in for Mozilla’s Firefox browser. NoScript can block JavaScript language on a user’s computer, requiring the user to specifically enable every JavaScript application he or she allows to run. Since many Web 2.0 attacks involve malicious JavaScript, the plug-in offers protection, at the expense of the user’s time to authorize JavaScript at each site he or she visits. NoScript also requires a user to have the knowledge to choose which JavaScript to allow, since it cannot distinguish between benign and malicious scripts.

For server protection, Hoffman recommends a proxy server, such as The Apache Software Foundation’s Module mod_proxy, with a whitelist of allowed addresses. The proxy server can filter sites that may be malicious or are restricted, but requires a time commitment to maintain the whitelist.

Application firewalls or intrusion-detection systems offer another layer of security. Firewalls are designed to “enforce protection policies for specific applications, such as CRM,” which can add security to a CRM application but aren’t as secure as a well-designed Web application, according to Hoffman. They do allow control of the traffic that can pass to and from the application—including downloads—as well as access to applications, however.

CRM security will remain incomplete until vendors begin to “get the idea,” which Hoffman says is beginning to happen. He predicts that in two or three years, CRM security will improve greatly.

Web 2.0 is so, like right now.

Rick Cook at InsideCRM.com calls it a “catchphrase that many new technologies use to make the Web appear a friendlier, more powerful place and help users be more productive.”

Productive, yes; but how about vulnerable?

“Unfortunately, the phrase makes identity thieves, crackers, phishers and other criminals more industrious as well. Web 2.0 does not so much introduce new kinds of computer crime as it exposes new vulnerabilities to old types of criminal activity,” Cook blogs.

Cook cites a 2007 incident where Salesforce.com, Inc. users and “tens of thousands” of their customers got hit with phishing attacks. A Salesforce.com employee’s online identity was stolen through phishing, and the criminals helped themselves to customer contact lists from Salesforce. While the lists didn’t have Social Security numbers or other extremely sensitive information, the phishers used the stolen data to launch more identity theft phishing attacks. The phishers posed as Salesforce customer companies and the Federal Trade Commission, and sent victims attachments that automatically downloaded password-stealing programs. Not only were thousands of dollars lost through the fiasco, but the crimes damaged trust between CRM users and clients.

Security is vital in CRM systems, and users must actively manage accounts to protect themselves. “Doing so takes some awareness and a certain amount of technical sophistication, but it is not difficult,” Cook says.

The Most Important Thing, according to Cook, is to simply be aware. Awareness and education won’t replace but will definitely enhance technical measures, which are useless when employed without awareness. The potential for security breaches should be on everyone’s mind who uses the CRM system. Users should be on the lookout for red flags, such as e-mail attachments and booby-trapped Web sites, called “social engineering.” Online criminals need this unintentional cooperation from those on the inside of CRM systems, since firewalls and anti-virus programs have improved greatly in recent years. This means attacks have become more sophisticated and sneakier in order to fool users into clicking infected links or opening dangerous attachments.

Targeted attacks such as the Salesforce incident is called “spear-phishing,” meaning the attack was targeted based on detailed information about the victims themselves and their business relationships. Spear-phishing can be far more effective since victims are fooled by e-mails with such detailed information.

The bottom line is that CRM users should treat all e-mails with a high degree of skepticism and all attachments as potential security threats, even if the sender’s address and email server may seem legitimate. A quick way to double check is to send a response to the sender at a known e-mail address. It’s also important to keep in mind that most legitimate senders do not send out e-mails requesting sensitive information or containing attachments or links.

Within the complex world of customer relationship management, categories have emerged to further define the concept.

The first, simplest form is traditional CRM. This is a customer relationship management system that focuses on a “unidirectional” approach, according to InsideCRM. The basis of this method is the 360-degree view of the customer, a complete record of that consumer’s information. Data and processes factor large in traditional CRM setups

“Traditional CRM is driven by data and loves process. Sales process to sell to customers is king, not the customer,” says Paul Greenberg on InsideCRM.

Consistency of message throughout e-mail, direct mail, phone calls, TV and magazine advertisements is key in traditional CRM. Its limitations include a “wall” between customer and company; the customer may buy for value, but doesn’t establish an emotional attachment or loyalty to the corporation.

Under a traditional CRM system, if a customer is unhappy with service he receives from a company and—for example—decides not to complete a purchase online, that data would be recorded in the customer’s file. If other customers abandoned a purchase for similar reasons, that data would be correlated and flag an automated response asking the customer why the sale was dropped. The problem is it’s a reactive response rather than a proactive one.

Vendor relationship management is a whole different beast, at least when it comes to point of view. VRM “is the actions taken by the customer to control the business environment that they are apparently in control of,” according to Greenberg. It’s CRM’s mirror image, placing the power in the hands of the consume—which indeed it is.

“VRM … is the reciprocal of CRM or Customer Relationship Management. It provides customers with tools for engaging with vendors in ways that work for both parties … VRM immodestly intends to improve markets and their mechanisms by equipping customers to be independent leaders and not just captive followers in their relationships with vendors and other parties on the supply side of the marketplace,” according to Project VRM, which is run by Doc Searls and Harvard University.

Under the VRM model, an unhappy customer will tell friends, family and the World Wide Web via conversations, blogging, message board posts, e-mails and other conversations.

Enter CRM 2.0.

“CRM 2.0 is a philosophy and a business strategy — supported by a technology platform, business rules, processes and social characteristics — designed to engage the customer in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent business environment. It is the company’s response to the customer’s ownership of the conversation,” says Greenberg.

CRM 2.0 is the proactive approach to customer relations, recognizing that customers are ultimately in control of buying decisions and therefore the company’s future, and presenting to them an environment at least partially shaped by customer decisions and preferences.

In the event of an unhappy customer, when CRM 2.0 is in place a more immediate response would be generated by an abandoned sale. The company would enlist the customer’s feedback and work to eliminate the problem causing the dropped sale, while offering the customer some “leeway” to compensate him for his participation.

“If successful, CRM 2.0 helps the company and customers work together to use resources to benefit each other. When CRM 2.0 is done successfully, advocates are the result,” says Greenberg.

While such a collaborative effort seems like an ideal solution for both business and customer, the reality is a little more difficult and costly to achieve. With today’s increasingly interconnected world however, where a negative customer experience might be communicated to thousands, I see it as an imperative.

Today’s tough economy has made it more important than ever that businesses build close relationships with their customers.

Some companies haven’t caught on yet, though. 

Dimension Data announced in a report that customer relationship management tools in the $130 billion global contact center industry were of a lower priority to improving operational efficiencies, reducing costs and improving services. The information, taken from the 2008 Dimension Data Contact Center Benchmarking Report, includes responses from 300 contact centers in 36 countries.

“Minimal progress has been made in adopting a more customer-oriented, CRM- based approach within the contact center over the last 10 years since the Benchmarking Report was initiated,” said Alex George, Dimension Data spokesperson for the Benchmarking Report. “When we compared this year’s findings with those from our inaugural report, the picture is not positive.”

Report results show that ten years ago, almost 40 percent of participating businesses had the capacity for establishment of a single view of the customer, and 45 percent planned to soon. The current study, however, found a 13 percent decrease.

The report details declines in other areas, such as companies able to measure or actively employ customer metrics, such as ways to gauge customer lifetime value and profitability.

“These findings indicate that the development of a more holistic and sophisticated approach to customer management is less of a priority today than it was 10 years ago, and there is a back-to-basics trend with contact centers focusing more on basic performance efficiencies and cost reduction,” George said. “This is also reflected in the commercial drivers of contact centers. Only 16% of participating centers ranked ‘creating direct customer relationships’ among their top three commercial drivers, compared with over 50% 10 years ago. This underscores that there has been a major shift away from the tenets of CRM over the last decade.”

Why the move away from a focus on CRM initiatives? It’s possible that contact centers may have been unhappy with CRM packages’ performance—and the underlying question there is, were the systems faulty? Or only improperly managed?