The changing face of CRM

CRM is changing from being just a customer-centric tool to encompassing sales force automation. It has also become a strategic tool as businesses plan their processes by examining a customer’s historical data and studying and learning from past transactions. Abhinav Singh reports

The role of a Customer Relationship Management (CRM) tool has indeed changed these days. While early adopters of CRM systems—mostly banks and financial institutions—used to capture every detail of a customer or prospect in trying to find cross-selling and up-selling opportunities. Today, looking at the rapid deployment of CRM along with Sales Force Automation (SFA) tools in the market, it seems that CRM is moving out of the hype stage of any technology’s life cycle. Nowadays the SFA component has become an inextricable part of a CRM system. Organisations are combining their accounting systems with CRM systems.

Gone are the days when SFA tools were restricted to SMBs. In the current context large MNCs with an Indian presence such as Cisco Systems, Citrix Systems and Symantec are using it to improve the productivity and efficiency of their sales teams.

At the same time, there’s been a growing trend of linking analytics to CRM tools as well. Now let us delve deeper into why this is happening and the reason behind organisations going in for integrated CRM tools.

Covering the customer life cycle

CRM covers the entire customer life cycle; identification of potential customers, acquiring them, fulfilling customer requirements by delivering products and services, and maintaining relationship with a customer for repeated orders.

Lawrence Chan, Senior Vice-president, Asia-Pacific, Infor Global Solutions explains, “CRM broadly starts with market analytics to identify potential customers’ demands by using data from within the enterprise (customer base) and market information (including demographics, buying trends, etc).”

Having identified a potential market, the next phase is to create a marketing campaign and execute and manage it. This process requires the identification of a need (pain), and how an enterprise offering, in terms of its products and services, can help alleviate that pain point. This involves promotion, positioning and pricing strategies. Once potential buyers are identified through these campaigns, the SFA portion is engaged to assist the sales force in the cold-to-close cycle.

SFA has always been a part of operational CRM but in the past, companies did not pay attention to capturing interactions between the sales force and customers. Efforts were concentrated on capturing the interaction between a call centre operative and a customer, which was more of a post-sales function.

"Due to an integrated CRM system, critical customer data is centralised and made readily available. It can also be used by the sales force in its campaign to win customers in a customised way" - Ashish Kamotra Chief Executive Officer Adapt Software

Ashish Kamotra, Chief Executive Officer, Adapt Software India comments, “The pre-sales stage in a business has become more strategic as it is the starting point of a customer relationship. Capturing the entire range of interactions especially when the sales cycles are longer and proposals are revised many times has been acknowledged as a ‘must-have’ feature by a company’s sales and marketing department.”

He adds, “The field sales force plays a key role in identifying a prospect and then converting it into a customer. Managing it through SFA and integrating it with CRM not only captures customer interactions but also helps companies do business in an organised manner.”

Now the information that is generated out of an SFA system is automatically linked to a company’s CRM system and then the company in its future interactions with the customer through the call centre agent and vice-versa uses that information.

Kamotra says, “Due to an integrated CRM system, critical customer data is centralised and made readily available. It can also be used by the sales force in its campaign to win customers in a customised way.”

For instance, a bank has a history of all the interactions that a customer has had with it (this includes interactions with the bank’s marketing and sales team) and when the customer calls up the bank then all the information of his past interactions is flashed on the agent’s screen thus making it a refreshing experience for the customer and helps in retaining him.

An integrated CRM system is the in thing these days because of the fast and free flow of sales and customer information across the organisation.

Sushant Dwivedy, Business Group Lead, Microsoft Business Solutions, Microsoft India informs, “In an integrated CRM set-up there is fast flow of information from the organisation to the employee and from the market to the organisation. This information flow can help an organisation in getting the latest market information and also about the customer behaviour in the market. This helps in crafting well defined marketing campaigns.”

An integrated CRM tool can go a long way in cases where the sales cycles are long and perseverance is required to work on market leads and turn them into actual customers.

"Having a better feel of sales cycles and their conversion probability at different stages is helpful as even if a sales person quits, an updated lead can be passed on to the one who comes in his place" - Thomas Abraham Managing Director, Sage Software India

Thomas Abraham, Managing Director, Sage Software India elaborates, “Having a better feel of sales cycles and their conversion probability at different stages is helpful as even if a sales person quits, an updated lead can be passed on to the one who comes in his place.”

CRM also extends to post-sales services for certain industries, including white goods, where service management in terms of equipment maintenance is a critical part of the customer relationship.

In certain industries, such as those pertaining to supply of elevators, many enterprises are forced to supply the goods at or below cost and make their profits on post-sales activities such as service maintenance contracts. Similarly, in the automotive industry, the bulk of profits are in the post-sales market.

Chetan Pathak, Vice-president, Enterprise Solutions, Ramco Systems says, “Most large businesses realise the cost of sales people and know for a fact that it is difficult to get them. In view of this, businesses want their sales people to be more productive and SFA is the right tool to invest in. Using SFA they can schedule a sales meeting.”

He states further, “Similarly, the SFA tool can be used in strategic areas such as after sales service. Businesses that are into spare parts would like to keep a track of warranty terms of spares that are supplied to the customer including the cost and billing date.”

Integration of analytics with CRM

CRM analytics is a specialised area of Business Intelligence (BI) software that focusses on analysing and maximising the lifetime value of a customer. Most importantly, CRM analytics help an organisation in improving its bottom line by giving it better insights into its customers.

When budgets are tight, organisations need to understand their existing customers in order to retain them and maximise the value of each customer relationship. This minimises the cost of attracting new customers that tends to be significant.

Cultivating relationships with customers and the holistic understanding of a customer’s behaviour over time—the ability to identify, analyse and predict changes in behaviour is being achieved by CRM analytics.

This technology also helps an organisation in discovering the right balance of promotional effort, cost, and support that will result in improved revenue and customer loyalty. It is an area, that is providing significant and rapid return on investment (RoI).

"Organisations are integrating SFA with CRM to ensure customer retention and give their customers a seamless experience by utilising customer-centric information" - Will Bosma VP, Oracle Asia-Pacific CRM Business

Will Bosma, Vice-president, Oracle Asia-Pacific, CRM Business says, “integrating intelligence and analytics with CRM will help extensively.”

Bosma cites a hypothetical situation wherein a call centre agent at a telecom company receives a call from a customer regarding a current tariff plan. In this case the analytical CRM system interprets the customers preferences and suggests a particular plan.

A combination of operational CRM along with analytics is being used by most customer-facing organisations to interpret customer behaviour and how it changes from time to time.

Analytical CRM is also helping businesses focus on their most valuable customers or high net worth individuals.

For instance, in a bank it was identified that up to 40 percent of its customers and products are unprofitable at any point of time. It is a trend that successful companies not only aim to acquire and retain more high net worth individuals but also focus on their most profitable ones.

Thereby analytical CRM helps a company prioritise, grow, and satisfy high-value customers in many ways. They can now rank and profile customers by critical dimensions such as revenue, lifetime customer value, and profitability, and segment and profile customers based on demographics, online session behaviour, and propensity to respond to marketing campaigns and help grow existing customers with up-sell and repeat business, online personalisation and cross-promotion offerings.

Anil Bakht, CMD, Eastern Software Systems says: “Businesses are looking at historical data of customers based on parameters such as pattern of order placed, which month / period, where the maximum orders were placed by a customer, the month in which the highest shipping volumes occurred and so on, so that they can plan their inventories and supply chain better and be proactive. It helps a business enhance its competitiveness.”

With analytical CRM it has become easy for organisations to track responses to marketing campaigns and profile target customers thus yielding significantly greater returns. The RoI is traced through improved response rates or click-through for marketing campaigns and advertisements.

SFA + CRM = Value

Business heads and CEOs have now started realising the importance of SFA tools and integrating them with their CRM systems. It is being realised that the customers are the most important assets even at the pre-sales stage and it is necessary for a company to comprehend the productivity of its sales force.

Bosma of Oracle feels, “Organisations are integrating SFA with CRM to ensure customer retention and give their customers a seamless experience by utilising customer-centric information.”

Organisations want to maintain a central repository of information for prospects and customers so that anyone can look at what is going on with regard to a particular lead. They also want to thoroughly evaluate the productivity of each sales representative through an efficient SFA system.

Companies want to use their prospects database for future marketing campaigns and manage the sales pipeline more effectively and do better sales forecasting. If done right, the results are great and this is helping many companies increase the sales force.

"Large enterprises want faster implementation schedules and as they have a larger sales team, they want faster scalability and upgrades" - Jeremy Cooper Vice-President, Marketing Asia-Pacific and Japan Salesforce.com Singapore

Chan of Infor says, “SFA tools are particularly important where a company has the opportunity to cross-sell and up-sell products and services to the same customers. Typical examples of these would be in the services industry, such as financial services and telecommunications.”

The hosted SFA model seems to have caught the attention of the large businesses. About 7,000 users at Cisco Systems and 4,500 at Symantec are using Salesforce.com’s SFA tools.

Jeremy Cooper, Vice-president, Marketing, Asia-Pacific and Japan, Salesforce.com Singapore says, “Large enterprises want faster implementation schedules and as they have a larger sales team, they want faster scalability and upgrades. Since every scale-up or upgrade takes place online it is a quick process. All this is helping organisations focus more on their core businesses rather than spending time upgrading their processes.”

SFA tools integrated with CRM systems are helping organisations define revenue per sales person and average sales cycle. It is now possible to accurately get the average deal size and a sales representative’s turnover rate.

Organisations are in a position to view the percentage of a sales representatives’s quota achievement over a period of time and the average number of calls taken by him to close a deal and the least number of presentations necessary to close it along with the average success rate. Accurate sales forecasts have become a reality with efficient collaboration of SFA and CRM tools.

As per market sources it is being felt that CRM systems will evolve as additional functions are subsumed into the core CRM tool. Foremost among these will be BI.