The Benefits of Building Customer Relationships

Now that the Y2K bug is behind us, IT is looking to newer, more invigorating, worthwhile and worthy challenges for application development.

The infrastructure represented by the Internet enables all of our businesses to conduct new, hitherto impossible, levels of collaboration between employees, partners and customers. The development methods to support this collaboration, are much newer than the 3GL, proprietary ways of old.

CRM, or Customer Relationship Management, is one of the leading attention-grabbers this year—and it falls exactly into the above space. CRM has a close cousin called SCM or Supply Chain Management, which extends business relationships to suppliers as well.

Using CRM, a business collaborates with its customers in new ways made possible by sharing knowledge and processes over extranets and the Internet. During the performance of these processes, the business collects information about customers and their needs and wants, about employees and other internal resources, and about suppliers and their capabilities. This information is analyzed and provides business intelligence to adjust the company and its business processes.

The world of marketing and sales is changing. It used to be that products and brands were all-important and customers were attracted through product marketing and price. But in a global marketplace, product development and manufacturing have become so specialized that product features are indistinguishable. It’s become a game of constant “one-upmanship.” And when every business has an ERP system implemented and all the internal processes have been re-engineered to be most cost effective, product cost and consequently prices are indistinguishable as well.

So how do we differentiate in the new world? With CRM.

CRM recognizes that the customer is the center of our enterprise and that we must focus on the things that improve our relationships with customers. We must understand our customers. We must focus all of our marketing and sales efforts. We must provide superior customer service. We must reward loyalty.

 
And how do we characterize today’s customer?

  • Customers increasingly want customized products (lot size of 1), even if they are mass-produced.
  • Customers increasingly want immediate focus on their needs—and not just 9 to 5 Monday through Friday.
  • Customers will not exclusively use specific channels, no matter how often you try to force them.
  • Customers can do business with multiple units of an enterprise—they want different contact points for different reasons.
  • The barriers for a customer to switch vendors can be high—think of frequent flyer rewards.
  • Electronic channels must offer additional value for customers.
  • The Internet offers increased opportunities for the customer to compare and shop transparently.
  • Information overload can be a general challenge for maintaining a customer relationship.
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    CRM is so interesting to businesses because the innovations provide solutions to many business units. These are some samples:

    Sales—CRM offers contact management profiles and history, account management including activities, order entry, proposal generation.

    Sales management—CRM includes pipeline analysis, forecasting, sales cycle analysis, territory alignment and assignment, roll-up and drill-down reporting.

    Telemarketing/telesales—CRM includes call list assembly, auto dialing, scripting and order taking.

    Time management—CRM includes single user and group calendar/scheduling, and e-mail.

    Customer service and support—CRM can provide incident assignment/escalation/tracking/reporting, problem management/resolution, order management/promising, and warranty/contract management.

    Marketing—CRM includes campaign management, opportunity management, Web-based encyclopedia, configurator, market segmentation, lead generations/enhancement/tracking , customer contribution and profitability, and loyalty rewards.

    Executive information—CRM can identify strategic trends.

    Data synchronization—CRM includes mobile synchronization with multiple field devices, and enterprise synchronization with multiple databases/application servers.

    E-commerce—CRM manages procurement through EDI links and Web servers and includes business-to-business as well as business-to-consumer applications.

    Field service support—CRM includes work-order management, dispatching and real time information transfer to field personnel via mobile technologies.

    Integration of CRM (and SCM) to existing ERP (or back-office) functions creates the new heart and soul of a company. It’s becoming increasingly obvious that CRM will help retain more customers, identify profitable customers and create strategies to convert more customers to profitability. It will help with sales force automation, it can help make existing customers happy and it will increase revenue and profitability.

    What are the most productive tools available for AS/400 customers to help develop a CRM solution? While packages are available for those who not want to develop, the most visible offerings to create CRM solutions on an AS/400 are Domino and WebSphere.

    And now just when would you use Domino and when WebSphere? Now that’s a topic for the next article! But in any case, what may be quite interesting, and different from the past, is that customers may choose different development tools and technologies for different parts of their CRM solution. No one-size-fits all. In an open and highly specialized application development world, customers use whichever tool fits the job.

    Mark Buchner is president and founder of Astech Solutions Inc. (Aurora, Ontario). mbuchner@astech.com

    Related Editorial:

  • CRM and Data Warehousing

    Related Information:

  • ITtoolbox Portal for CRM (new window)