Unified Communications and CRM

The whole point of CRM (customer relationship management) is to give each customer the best possible service at the margin that best suits the customer.

 In other words a low margin customer is directed to an internet website portal or IVR (touch "one" for this "two" for that).  A more valuable customer may be proactively contacted before s/he can call in with a problem.

 The biggest problem with CRM solutions have been integrating them with the back office systems that contain all the information on the customers and products and connecting the various departments with the information to the customer who needs help.

This is the beauty of unified communications (UC).  The idea is simple -- but the technology behind it is complex.  Microsoft plans to take over the world with its UC concept (OCS) and IBM is fighting back with a product called SameTime.  Cisco is in there, so is Avaya, Siemens, and a few others.

 Why does everyone care?

Why should you care?

 Well, I'll answer it by asking you a question or two.  Do you have an office phone number?  Are you always at your desk?

Do you have a cell phone?  A pager?  An email account?  An IM address? 

Just how many ways can someone reach you (or more aptly, NOT reach you)?

 Now put that in reverse.  Say you have a problem and you desparately need to reach a customer or spouse.  How many numbers do you have to try?  How many voice mails do you leave?

All that goes away with unified communications.  

 In the best of UC you make one call and UC reaches out and finds the person whereever they are.  You call the office phone and they are at the beach -- UC calls the cell phone even though you dialed the office.   

So you're at the beach and you told UC that only urgent calls (say from your boss) comes to you, all other calls go to the guy covering for you.   You can enjoy your day off.  But as you lay there basking in the sun you realize you expect an important email today.  You pick up your cell phone and call your UC message box which reads you your emails.

Cool, huh?

Now let's tie it back to CRM.  Some of the best UCs out there (like Siemens OpenScape) have pre-built connectors to leading CRM software like Microsoft Dynamics CRM, SAP, Salesforce.com -- and those that aren't pre-built can be done quickly with an easy to use SDK (software development kit).

A customer comes in through live chat.  Maybe you need to walk them through something.  Using IBM SameTime or Microsoft Live Meeting built inside your UC you can graphically show them how to do things -- or share documents with them.  You solve their problem! 

Maybe you need to call in a resource.  Perhaps you're a lawyer and you need to get another lawyer on the phone.  UC shows you who is available and you can set up a conference call (not just a 3 way call) easily and on the fly -- knowing that the person is there.  You can even IM them during the call.

UC brings so many of CRM's promises to fruition.   Now for the commercial.

Gartner Group says of Siemens UC product (OpenScape) June 2006: HiPath OpenScape. . .is the most mature and open UC (unified communications) product in the market today.  (It) offers desktop and speech communications interfaces with presence and conferencing and works in multiple PBX environments.  . .Of particular interest is the approach that Siemens is taking with vertical industry applications.

Mid Market is the fastest growing CRM Segment

Forrester Research (echoed by Access Markets International (AMI) Partners Inc.) issued reports showing that nearly 40% of CRM sales are happening in the mid-market.  This is an amazing shift since historically it is the big boys who implemented very complex CRM solutions (e.g. Siebel aka Oracle, Peoplesoft, and SAP).  That all changed with Salesforce.com and Microsoft CRM 3.0 (which rocks).

 One way that Salesforce.com "happened" was by turning CRM into a service rather than software.  These days users can choose to buy and implement their own CRM (ala the big boys and Microsoft Dynamics CRM 3.0) or they can pay as you go with SaaS (software as a service).  Gartner Group (another one of those thinktanks) says that software as a service which is today a $6.3 billion business (WOW) will grow to $19.3 billion by 2011 (super wow).  CRM is a big part of this move to SaaS.

If you are a mid market or even small player the guys to be considering are RightNow Technologies, Oracle Corp.'s Siebel CRM Professional edition, Salesforce.com, Microsoft Dynamics CRM, and Oracle's Siebel CRM On Demand.

 Microsoft has annoucned a version of their Dynamics CRM to run on the Office Live! platform which will give them a SaaS offering here, too.  Check out the details here.

 My current favorites in this space are Salesforce.com and Microsoft -- and I actually give the nod to Microsoft here.  They've done a great job of integrating the CRM offer with Outlook (their email product) and Office.  Since Microsoft Office is everywhere this gives them a big "look and feel" advantage.  The learning curve for sales people (always busy with little interest in learning a new system) an easy way to start using it.

Have fun, guys.  If you have any questions about the mid market CRM, partnering or any other topics of this blog drop me a cmoment.

CRM for Google?

The times they are a changing.    For years the only name in CRM that mattered was Siebel.  It was complex, often difficult to integrate (Siebel grew by acquisition so many of its apps didn't play well together) but thanks to strong integration partners like Accenture it took over the CRM world.

Don't count Siebel out since it is now part of Oracle, but Salesforce.com (an online CRM solution) has taken the world by storm growing at a much faster rate than its competition.  About a year ago Microsoft beefed up its CRM offer considerably and became a contender in the marketplace.

 Microsoft Dynamics CRM 3.0 provided the robust sales and marketing tools and tightly coupled the application to Microsoft Office including Outlook (the Microsoft email and contact management solution).  Microsoft CRM users get tight integration to Microsoft Office Excel spreadsheet software and Microsoft Office Word word processing software.  The product has taken off like wild fire with large companies adopting it as well as smaller firms.

 But the CRM world is about to change yet again -- or perhaps I should say it HAS changed.  Enter Google.   Google Apps is the company's first foray to try and topple Microsoft's dominance in the office.  There is a free version which includes a spreadsheet, word processor, calendar (sound familiar, Microsoft?) and for a mere $50 a year one can purchase the Premier edition which includes more online storage and support.

Third party vendors are offering very interesting add-ons to Google Apps and one is aimed squarely at Salesforce.com,  Microsoft Dynamics CRM and yes even Siebel. 

CRMforGoogle is offered by by a small company named Etelos so this is not a Google offering, but it is still an initial and low cost foray into the market using a Google "look and feel."

Just when everyone thought the CRM market was maturing and only a few major players would survive it looks like a whole new ballgame.   Let the moral of the story be that any CRM vendor wishing to survive and thrive needs to offer a wide variety of products that are easy to use, easy to find and ready when they are.  Stay tuned.

 

Analyzing your customers is key to profits

It seems as if business is always undergoing  transformation.  We've gone from TQM (Total Quality Management) and BPR (Business Process Re-engineering) to Six Sigma and ISO.

We're always trying to improve because quality = profits.  (This is a little like that old chestnut that time is money.  Time IS money and so is the channel and sales method you use in the time that you have).

In these times of a tight economy  -- caused partly by our global economy where things are made more cheaply in China, India and other countries,  this increased globalization means your competition is also global and can produce products more cheaply than you can.  They are targeting our top customers.  Think of Toyota compared to General Motors and now translate that to ALL industries.  It is happening and to stay competitive you need to become more efficient.

Add to globalization the leveling of the playing field thanks to the internet.  Now small companies can compete with large and reach the same customers.  Mom and pops are as much your competition as the global firms.  Add to the internet and globalization the ideas of cost management / reduction, restructurings, mergers, etc.  Change, nothing but change!   This dynamic world has changed the competitive landscape by:

• More competition for profitable customers,


• More demanding customers less likely to remain loyal,


• Customer sophistication requiring quick access to service via multiple channels.

All of the above makes it critical that companies understand their current and prospective customers from both an economic and behavioral perspective. Many medium and large companies think they have embraced customer relationship management (CRM) as an important element of their corporate strategy.  But have they?  CRM is not just a call center automation application or giving your sales reps a laptop with funnel tracking software.  If a company doesn't know which products are selling and which aren't they are losing money.  If a company is spending millions on automating the sales reps but don't know what the cost is to keep that rep in the field compared to the margins and revenue that rep is generating it is about as useful as throwing money out of a window.

To take advantage of CRM programs (Siebel, SAP, Microsoft CRM, ePiphany, Salesforce.com, Oracle (now owner of Siebel), etc.), companies have to do more than invest in customer-facing solutions such as sales force automation, customer service centers, marketing automation, business to consumer (B2C) Web sites and others.

While these applications help facilitate better service and more efficient interaction with customers through each respective channel they don't add much to the bottom line if they have been implemented as independent, non integrated solutions. As a result, they have yet to make several important CRM objectives, including:

• One view of the customer in a vacuüm (if that),


• No consistent and thus accurate customer information across the enterprise,


• Duplication of service and sales efforts (costly and possibly irritating to the customer),


• Islands and silos of information that is untapped.

If companies don't have integrated customer information that they analyze to interpret which customers are profitable and then leverage that information they cannot apply the customer analytics (e.g., propensity to buy, channel preference, churn analyses, segmentation, target marketing, etc.) required to deliver real value from CRM.

Duplicate Customer information or one view of the customer?

Whereas CRM was the great hope of the late 1990s now the bloom is off the rose.  There have been many articles published about the high failure rate of CRM projects.   Many companies bought front office CRM applications (like sales force automation) but it is like buying a horse without a saddle -- or a car and then neglecting to fill the tank with gasoline -- they didn't have an end to end CRM plan in place.

Far too many companies have implemented new CRM technologies without changing the basic processes for serving and interacting with their customers.   If you throw technology at a problem without doing basic TQM / BPR (or Six Sigma) to determine what is working and what is not you are doomed to failure.

If you throw technology at sales and customer service but your customer still can't get one answer about his or her account you are losing the battle for their loyalty.

If you don't know who is profitable and who is not you are losing money.

The companies who have failed with CRM have not truly understood what CRM is and can be.  They were sold point solutions rather than a continuous loop solution that manages the front end of sales and service and the back-end of analyzing how well it was done, how profitably and what can be replicated for others.

As a result nothing changes.

Well, something might change.  Your company may be less profitable.

Using business analysis to track your sales results  will tell you what your sales force is doing right and wrong) turns into revenue- and cost-drivers of the business, thus a user will quickly see if the sales force is spending too much effort on low-value deals, or if the revenue stream has high exposure by being composed of just a few very high-value deals. In other examples, a user could see what percentage of target his district has reached compared with the same time last year, or determine the impact lapsed customers will have on this quarter's revenues.

By the same token analyzing what your customers are buying (and aren't buying) enables companies to understand and optimize the value of their customers throughout the customer life-cycle. Using business intelligence companies can track and analyze key customer segments and loyalty metrics and use this analysis to create an optimal customer acquisition, development, and retention process. Once you know who your customers are, who is profitable and who is not business managers can  see critical changes within the customer base and quickly take action to improve the status of those customers. For example, a user might identify high-value customers who are spending less over several months, and feed that group of customers into a campaign management system to run a retention program.

CRM business analytics measure customer value at both the individual and segment level, at the current customer and potential customer based on demographics, too.  In the end it enables users to understand the changing behavior of groups of customers over time. Users can even drill down to the profile of individual customers to discover their signature, that is, the pattern of their individual behavior, segment membership, and value.

Analyzing your customers is the key to CRM and it is the key to profits.

Alliances and their role in managing your relationships

Today's world moves at a fast and ever changing pace.   Developing the right offer in time to meet a shrinking window of opportunity brings companies together as partners -- creating "joint go to market" products and services that bring value to both.

 At least that is the theory.

 In reality most partnerships fail. 

They fail for a variety of reasons, but the primary one is a lack of vision and planning.  Two big companies want to be linked -- but don't set quantifiable goals.  Or perhaps the goals are set, but the money and people are not put into place to make the vision a reality.

In the world of managing customer expectations and exceeding customer's wants this can be a serious blow to both the joint offer and each individual company.

 So step one is to determine WHY you want to partner.  This step needs to come prior to even consider WHO a potential partner might be.  In other words:  why do you need a partner?

 Do you need products or services that your company cannot provide (or cannot provide in a timely manner?).

 Do you need an additional sales channel in a market niche (ERP, healthcare, etc.)?

 Do you need a marquee name to give your company credibility in a particular market segment?

 Is this a tactical parter (I need a widget and the partner sells widgets) or a strategic partner (to make that quantum leap Microsoft needed IBM to endorse MS-DOS)? 

 Once you understand the "why" you want or need a partner the next step is to determine a short list of who can best fulfill the "who" in the equation.  Who can best supply the need?

In a very real sense a good partner is as much a customer as your end users.  You must nurture your partnerships and manage them (monitoring to revenue goals for example).   You must also determine when the partnership is over -- and have an exit plan in place so that both of you can move on without damaging either's reputation.

CRM doesn't mean all customers are created equal!

In recent years many jobs in the United States have been outsourced and off-shored with the thought that reducing costs results in higher profits.  You’d think that would make sense.  But it doesn’t.  Not all customers are created equal and the highest profits come from a handful of customers.  In the “old days” this was known as the 80/20 rule.  80% of sales come from 20% of customers is the old chestnut — and it had more than a kernel of truth in it. Businesses today can’t take a “one size fits all” approach to their customers had hope to be profitable.   Funneling everyone through a touchtone interface (press “1″ for sales, “2″ for service) and a contact center agent who doesn’t speak English very well is illogical and will result in a loss of sales.  With all the data at hand today we have the ability like never before to analyze who are profitable customers are and to target them.   CRM and “1 to 1 Marketing” are often mistaken as Communism — treating all people alike.    The opposite is true — you should spend more money on your profitable customers — and less on those who don’t add to the bottom line.  The secret is in using the data that you have and turning it into powerful, actionable revenue producing information.