Picking the CRM of the crop

Thompson's research revealed that an industry whose products are centred around customer relationships had a failure rate of over 50 percent, according to its end users.

What followed was a shameful litany of disaster stories, as CRM vendors and implementers desperately hunted for a positive spin in a predominantly hostile market place.

Following the simple public relations adage of -get it right, then tell people about it", CRM vendors began making their comeback. And thus was born the CRM anecdote. In the same breath, vendors humbly admitted to past problems, and announced victoriously that they now knew how these problems could be overcome.

Brett Kennedy, Oracle director of E-Business states the claim currently echoed throughout the industry.

-When people were looking at implementing CRM solutions 18 months ago, they were thinking of buying software, rather than focussing on the implementing the strategies which allow CRM to work," Kennedy said.

According to Kennedy, many of the difficulties associated with the earlier implementations of CRM stemmed from a poor understanding of the data required to make the implementations work successfully.

Meanwhile, analysts groups use serious-sounding terminology to describe sales bumps in a product cycle. Kristian Steenstrup, research director with Gartner Group, downplays the long-term effects of CRM's initial boom and bust.

-It is a classical hype cycle, which begins when the emerging technology triggers inflated expectations," Steenstrup said. -These expectations in turn result in a rush to the market before the whole implementation is properly thought out."

However, now that fingers have been burnt, a more cautious customers base is returning to the fold and looking to CRM to provide a range of efficiencies in a slowing market. Relationship counselling

Broadly speaking, CRM solutions should allow big companies to behave like little companies - by aggregating their customer information and providing its contact staff with easy access to information regarding its customers.

Technically speaking, CRM relies on a series of tightly integrated databases. But that is the easy part. In the real world, CRM solutions need to draw on information recorded at different times from different sources, sort their way through dirty data, provide an intuitive interface for tech-wary employees and become integrated into a company without its operations skipping a beat.

According to Jim Fisher, business development manager at software vendor Computer Associates, the early horror stories about massive CRM implementations going off the rails and over budget served at the very least to educate the next level of customers.

-When CRM wasn't successful, and companies were still throwing a lot of money at it, there were a lot of companies watching from the sideline and getting completely different pictures about what could be achieved," Fisher said. -Now those companies have a good idea of what CRM can do, and how they want to use it within their organisation."

A case in point is Peter Ffrench, retail group manager for sales and marketing at energy utility Energex. In the hunt for new revenue streams in an increasingly deregulated market Ffrench is looking for ways to improve profits through cross selling.

-I am not aiming for customers to wake up in the morning, roll over and say 'oh I'm so glad I buy electricity from Energex'," Ffrench said jokingly. -But when their hot water system breaks down, I want Energex to be who they call to fix it or to buy a new one."

Accordingly, Ffrench's own corporate take on CRM will result in an E.piphany solution implemented so as to indicate appropriate cross-selling and up-selling opportunities when they arise.

-We would make more margin selling and installing one heater, than we will supplying the electricity to run it for years," Ffrench said. -But to do that we need to know when such opportunities are going to come about, and that's where CRM comes into the equation."

This new level of customer understanding of CRM is also leading to an interesting market trend towards a renewed interest in customers.

Chris Ciauri, managing director of CRM software vendor E.piphany points out that as the difficulties and costs associated with CRM are ironed out, many more companies are opting to reclaim their customer relationships, rather than outsource them to a call centre.

-The reason a lot of these relationships were farmed-out in the first place, is that companies did not have a comprehensive customer strategy, to the extent that the call centres could offer," Ciauri said. -CRM implementation is now reaching the level where customers see the value in running their customer contacts internally, because they are able to achieve tangible results without a cost blow out." Making the Modules

One of the major lessons learnt from some of the earliest implementations CRM solutions was for vendors and integrators not to bite off more than the company could chew. Extensive company wide roll outs have virtually disappeared from the CRM landscape, as company's opt for a more gradual, module-based implementation.

James Granter, marketing manager for CRM vendor Multiactive, said the early CRM roll outs didn't leave time for either the technology to be properly tested, or for the staff to seatle in to the new system.

-Everything had to be rapidly implemented on a grand scale," Granter said. -CRM vendors were rolling out massive rigid systems, and customers were expected to work around them."

However, as the market has shifted towards a more modular approach, where the total solutions are gradually rolled out in phases, it has also scaled down its offerings, and increased selling to mid tier companies.

At the other end of the scale, a broader understanding of CRM has also seen new software vendors emerge.

Maryann Farrugia, managing director of Australian software developer Contact has carved out a niche market, targeting hosted CRM solutions to high-end and mid-tier companies.

-We did a lot of market research before developing the product, and basically found out that customers are wary of CRM because of the cost and the time it takes to implement," Farrugia said.

Proving that size is no barrier to innovation, Contact is rolling out an ASP sales model in a similar vein to its titanic counterpart Oracle.

Rather than buy the software outright, customers rent it on a monthly basis.

Oracle's Brett Kennedy points out that businesses are not only attracted to the spreading of costs associated with this model, but are also interested in being able to roll out any changes to the software quickly and painlessly.

-CRM rolled out through an ASP model is all about letting business pick and choose what they want to use, when they want to use it," Kennedy said.

However, CA's business development manager Jim Fisher points out that while the ASP model remains nascent, the modular approach to implementation essentially sees the technology return to its roots.

-CRM is a bit of a fad term really for a series of things that already existed," Fisher said. -It is a bit like a collective term covering everything from sales force automation to data warehousing, so in that sense we have been providing CRM solutions for a long time we just didn't know what to call it."