In the run-up to Christmas, upmarket retailer Brooks Brothers promotes gifts on its Web site and through e-mail marketing. Like many retailers, the company is able to measure Web traffic as the holidays approach. But unlike many competitors, Brooks Brothers can monitor what shoppers spend, and why.
That's because the company uses a hosted customer relationship management (CRM) application, which collects data about customers' accounts and combines it with clickstream data for analysis. The result is knowledge that the company couldn't hope to achieve internally, says Nelson Sanchez, Brooks' e-commerce marketing director. "If we'd done this using internal software, it would have taken us years to develop the capability," says Sanchez. "This helps us measure the return on investment of our online promotions, and gives us a powerful advantage in a very competitive market."
Brooks Brothers' experience demonstrates just how far the market for hosted CRM applications has come since Siebel shut down sales.com, its hosted CRM service, in June 2001. Early hosted CRM packages offered 25 percent to 50 percent discounts over licensed software, but customers didn't like the throughput requirements and bandwidth constraints of hosting. Paying for the bandwidth to run hosted apps often wiped out the benefits of hosting in the first place, says Alex Kwiatkowski, a senior consultant with Ovum.
The latest generation of hosted CRM overcome many of these issues. For example, Siebel and IBM have joined forces to launch CRM on Demand, which is written in Java 2 Enterprise Edition (J2EE) and incorporates Siebel's Universal Application Network integration technology. This makes the application faster to run and simpler to hook up to third-party and legacy apps.
These services are aimed squarely at small and medium enterprises (SMEs) that don't have the resources or the expertise to roll out CRM software internally, says Annette Giardina, CRM business director with Aspective. Hosting is the only way for SMEs to achieve the levels of security and availability offered by top-end data centres, Giardina believes. "Hosting offers SMEs the ability to compete on a level playing field with companies using high-end software, because it is such a massive saving," she says.
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