Customer Relationship Management - Key Terms

Contact management

A part of the CRM process that is at the heart of all effective

sales and marketing efforts. Contact Management involves

contacts to customers, forecasting deals, calendering and

scheduling, and expense reporting. Marketing concentrates

on personalizing customer preferences and offering them

satisfying experiences.

CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

Encompasses sales, marketing, customer service, and

support applications. It includes all the tools, technologies

and business procedures used to attract and retain customers,

prospects and business partners. CRM is a combination of

Contact Management, Sales Force Automation (SFA),

Opportunity Management, Relationship Management,

Marketing Automation, Company Web sites, Telesales and

Telemarketing Systems, and evolving eBusiness

technologies.

E-BUSINESS

The transformation of key business processes through the

use of Internet technologies. It is the buying and selling of

goods over the Internet (e-commerce) and the use of Internet

technology to impact all areas of businesses.

ENTERPRISE RESOURCE PLANNING (ERP)

A collection of applications used to manage the whole

business. It links back-office computer systems including

manufacturing, financial, human resources, sales-force

automation, supply-chain management, data warehousing,

document management, and after-sales service and support.

ERP allows all company divisions to share a common

database and business analysis tools.

MARKETING ENCYCLOPEDIA SYSTEMS (MES)

Used by marketing departments to store all product and

customer information and information about competitors

and collateral to assist in the sales cycle.

OPPORTUNITY MANAGEMENT SYSTEMS (OMS)

Provide users with the tools to track opportunities and

forecast potentially profitable deals. It is used to advise

sales force on the best sales method(s) to use through the

entire sales cycle. OMS is integrated to the CRM processes.

SALES CONFIGURATION SYSTEM (SCS)

Used to organize complex products and services to reach effective

performance level. Sales-force automation software (SFA)

CRM's predecessor.

SFA provided information technology to the sales people to

facilitate the sales process. It included marketing database

applications for promotional activities, lead generation and tracking

applications, contact management to manage actions required to

initiate and maintain customer contact, and remote order entry with

varying degrees of integration to the host system used to collect

sales orders from the field.

TELESALES AND TELEMARKETING

Companies calling consumers to sell their goods or services,

or consumers calling companies to make purchases in

response to mailings or other forms of advertising.

TECHNOLOGY-ENABLED SELLING (TES)

Used in relation to CRM.

Customer Relationship Management - Key Players

E.piphany, Inc.

E.piphany strives to lead the customer management software industry

by providing intelligent customer interaction software for the customer

economy. Incorporated in this is a single enterprise-wide view of the

customer across all touch points to cement customer loyalties and

drive profitability.

Kana Communications, Inc.

Kana believes that the winners in the digital economy will be the

businesses who create a compelling experience while building long-

lasting relationships with their customers, partners, and suppliers.

Onyx Software Corporation

The mission of Onyx is to help businesses achieve a competitive

advantage by enabling anytime, anywhere interactions between their

employees, customers, and partners.

Siebel Systems, Inc.

Siebel was founded in 1993 to address the growing need to better

serve the customer. They are highlighted by many experts as one of the

hottest CRM companies around. Siebel helps companies gain an

advantage through e-business strategies enabling them to manage all

customer touch points, including person-to-person contact, the

telephone, email, and the Internet.

Synchrony Communications

Synchrony is a systems integration and development company that partners with e-manufacturers, institutions, municipalities, and government agencies to provide fully-integrated, turnkey solutions.

Customer Relationship Management - Products and Services

For a business to succeed, it must provide customers with excellent

products and services through effective Customer Relationship

Management. Solid CRM systems provide fast responses to customer

inquiries, boost sales, and show customers that the business is actively

satisfying their needs. Some of the best CRM systems have

comprehensive account management functions, automated quotes and

correspondence, and instant access to specific account history.

Siebel Systems is widely considered to be the leading

company in the CRM industry.

Siebel software allows companies to understand customer

behavior and buying patterns. Users of the software can view

order status, part numbers, shipping types, and retrieve

revenue information about current customers in seconds.

Using a rapid, structured methodology, Siebel helps

organizations create, integrate, and optimize their sales,

service, and marketing.

Onyx Software Corporation offers a company - wide

customer centric e-business solution for succeeding in the

Internet Economy. Through three audience-specific, Web-

based product lines, Onyx consolidates critical relationship

information and makes it available to employees, customers,

and partners. This process helps companies share information,

analyze the health of their business, build customer loyalty

and gain a competitive edge. The software enables companies

to improve customer relationships and increase revenues

through higher productivity.

Kana Communications

Enables companies to manage high volumes of e-mail and

Web based communications while delivering specific,

personalized information to each customer. Kana ties

together marketing, sales, and service to maintain long-

lasting customer relationships. Companies can monitor

interactions with their customers through a variety of

effective methods using Kana's software.

Synchrony Systems

Develops hardware and software solutions that help

companies increase productivity and profitability.

Synchrony integrates customer interaction across various

channels of communication-phone, fax, e-mail and Web

chat. Synchrony's goals for each of its customers are the

reduction of implementation costs and time and elimination

of the risks involved with traditional CRM investments.

E.piphany

is the only Web-based, intelligent CRM solution to

coordinate and unify, in real time, all inbound and outbound

interactions with customers, regardless of whether they fall

into the business-to-consumer or business-to-business

category. E.piphany prides itself on being flexible,

customizable, and responsive.

Customer Relationship Management - Market Trends

The Evolution of CRM

In the late eighties, CRM began to emerge as the successor to Enterprise Resource Planning (ERP). ERP had a traditional, product-centric approach to marketing a company's products and services. CRM developed because ERP lacked the personalization sought by today's companies and to provide basic communication, contact, and analysis tools. In CRM's early days, these tools and the three areas of CRM - service, marketing, and sales - were poorly integrated and marketing databases could not fully utilize their potential.

CRM lacked good automation and advanced technological applications.

As the nineties progressed, CRM systems changed rapidly, and two factors

significantly affected CRM’s success. First, global competition increased

tremendously, causing products and services to be more difficult to

differentiate. The product-centric view of traditional marketing changed to a

more customer-centric view, offering customers more personalization. The

second factor was advanced technology, which gathered customer

information from all over the enterprise into a single system. New

technologies enabled greater processing power and data analysis capabilities.

In addition, data architectures became more integrated and consistent.

Currently, as CRM becomes a more integral component of the modern

business enterprise strategy, many companies are turning to wireless devices

to deliver market-differentiating customer service. CRM is used with data

warehousing, data mining, and other intelligence-based applications. The

market continues to develop as many ERP vendors try to respond to the

competition by integrating front-office applications with back-office systems.

CRM still has many downsides. Product maturity and cost-effectiveness have

not always reached the desired results. There is frustration among end users

about the performance and capability of the CRM solutions. Clients are not

convinced that CRM performance measures up to the market and vendor hype

and label CRM systems as overpriced. CRM is a fast growing market and

prices are positioned to decline.

There is great competition between vendors to differentiate their

products and services along functionality, integration with existing

systems, ease of use, and the range of target markets. Currently, CRM

offers faster response to customer inquiries, increased efficiency

through highly developed automation, and a deeper understanding of

customers through advanced analysis systems. CRM tools are

developed continuously and more sophisticated applications enter the

market rapidly.

Future of CRM

During the last few years, globalization in the field of e-commerce has challenged companies to make customer communication truly interactive. The new customer relationship management strategy is moving away from one-to-many mass-communication philosophy to a more individualized one-to-one communication. Real-time, automated marketing communication regarding personalized sales and services will make companies’ communication with the consumer more relevant and timely. New electronic channels are developing continuously, making CRM’s existence in companies’ strategy even more vital. It is estimated that the CRM market will grow from $3.7 billion (US$) in 1999 to $16.8 billion by the year 2003. According to a recent study from AMR Research, the CRM segment is expected to grow at a compound annual growth rate of 49% through 2004, which is more than double the overall expected increase in the IT services market. Stronger front-to-back office integration and wider concentration on CRM business processes are the key reasons for CRM’s notable growth.