NEW DELHI (ZDNet India)--Enthused by the latest CRM technology, companies are scrambling to implement CRM solutions and integrate all their customer contact points.
The objective? Leverage information about customers to build a personal relationship with them, formulate better customer retention strategies and more importantly, drive marketing.
Sure, companies can achieve this with the help of a good CRM system. But for the CRM solution to work effectively, companies need to pull together vast amounts of data about customers, their preferences and their transactions into a data warehouse that call center operators can access while attending to customers. Populating the data warehouse is therefore critical.
However, most companies find capturing customer data or feedback the most difficult part of implementing their CRM strategy.
Why is data needed?
Customer data can be collected at various levels: at the point of sale and during various interactions between the customer and company representatives. It can be collected through various channels--call centers, feedback from Web sites, contacts by salespeople or the customers' visits to various retail and wholesale operations.
Typically, populating a data warehouse involves undertaking a data audit to identify where customer records are held as well as their condition and accuracy. This data needs to be extracted from legacy systems, standardised, rationalised (for example, identifying duplicates) and consolidated before being loaded into a data warehouse.
Once in the data warehouse, company representatives can centrally access data to instantly update a customer about the status of a shipment or ensure that he or she receives mailings, calls, email or Web site advertising tailored according to preference.
Companies can analyse the data collected to make inferences about what customers want and cross-sell initiatives. They can also use the data to find out who are their more profitable customers and who aren't. A good CRM system alone can use this data, along with information on employee workloads and the cost of providing various services to maximise company resources.
Organisations are generally poor at documenting how data is held and assembled, making data transfers a complex process. There will be gaps in the data held and this needs to be filled through external processes such as call centers or through the Internet.
The issue of how companies are going to capture this customer data and fill in the gaps was a major concern among CEOs and CIOs of prominent Indian companies at Businessweek's e.biz Forum at Mumbai. Participants at the conference ranged from CEOs and CIOs of companies like Godrej GE and BPL, to providers of software solutions and services.
This process of collecting data might not pose a big problem for businesses with a relatively smaller customer base but it assumes monumental proportions when it concerns an organisation with thousands of customers scattered all over the country.
Speaking at the session on CRM, Vijay Crishna, MD Godrej-GE whose existing customer base in the white goods sector spanned over 30 years, said that most companies don't have complete customer profiles. The main reason being that most companies in India sell products or services through sales channels or dealer networks scattered across the country that also provide after sales service for the product.
In most cases, dealers don't collect information from customers. Another problem is that dealers stock multiple brands and products, often of competitors. This makes installing CRM software at dealer locations not very feasible. For new customers, capturing information at the point of sale is the answer.
Here, dealers are the key factors in ensuring that customers fill out the relevant information. But how do they update data from their existing base spanning over a decade? How does one get information about them into a CRM datawarehouse?
In India, call centers seem to be the ideal solution to collect data and get immediate feedback from customers. But other obstacles to doing this are plenty. Firstly, customers often just don't remember details about a product (like the model number of a fridge they own or the hotel they stayed in a while ago) when called.
In most cases customers aren't interested in giving feedback. General observations were that just 10 percent of customers contact manufacturers to give them feedback. The other ninety percent are either happy with the product or have given up trying to contact the company to give them feedback about a product. In some cases, customers feel their privacy is being invaded when called and asked for feedback or information.
When you examine the success rates of many CRM efforts, the low numbers may shock you. Some analysts predict that up to 70 percent of current implementations are failing.
Dazzled by the latest CRM technology, many CIOs invest in solutions and then try to force-feed processes and people into the way the technology works. Before setting out to collect data, it's imperative for CIOs to figure out a clear strategy what to do with the information collected and how to put it to use. Many aren't clear about what their systems will really have to do to build profitable relationships with customers.
The key factor is selecting a CRM system on the basis of what the company wants to achieve and how effectively the system will aid data capture.
Apart from ensuring that data from existing channels like call centers gets looped into the database, strategies constantly need to be evolved to harness information from new channels. Segmentations of customers and markets need to be dynamic in order to respond to changing conditions and newly acquired data.
"Apart from gathering feedback at various stages, companies also gather feedback about different aspects of customer service, hence different sets of questions at different interaction points with the customer," says Ramesh Anand MD Global eConnect, which helps companies identify outsourced customer feedback.
"Most companies outsource this function. But it is imperative that the company designs the feedback questionnaire and determined the different stages of customer interaction for customer feedback," adds Anand. Julia Choi, methodology manager, Satmetrix Systems, which helps companies in the data capturing and customer feedback says that by outsourcing the functions of customer feedback and data collection, an organisation can tap into a pre-established source of expertise and resources to help identify business objectives, determine which mode of data collection best suits needs, design research study, enhance response rates, and provide a medium for accessible reporting and charting capabilities.
"Companies need to identify different classifications of people and what would motivate them to fill out customer feedback" says Michael De Lio, director, Esolutions/CRM, Marchfirst in CRMguru, a prominent CRM portal. "Many customers refuse to spend additional time evaluating service in an impersonal manner, such as a survey and are more apt to describe the level of service offered (good or bad) to their friends and family. There is a different classification of people that fill out surveys if there is an incentive," adds De Lio.
Julia Choi, Satmetrix Systems agrees. "Understanding your customers is crucial to the success of your organisation in today's fiercely competitive marketplace. A comprehensive view of your customers, however, requires that you obtain accurate and actionable information from your customers, who may or may not be willing or motivated to provide this data."
"Self-reported data--quantitative or qualitative--can be obtained directly from the actual customer using focus groups, face-to-face interviews, telephone, postal mail, or online surveys depending on the objectives of the survey and the overall business need."
"Behavioral/transactional customer data, on the other hand, can be collected via CRM systems, which are put into place to manage interactions and relationships between the company and its customers."
"Customer data can also be purchased from external companies that sell such information. Typically, demographic, psychographic and lifestyle data are matched to your own customer database via a home address field and then appended wherever a match has occurred. Such data can be useful in helping to round out your view of your customers," says Choi.
Satmetrix Systems recommends using a multiple contact strategy (pre-notification, reminders, re-sends and thank-you follow-ups) as the primary method and offering incentives to increase response rates.
Ramesh Anand of Global eConnect agrees that the only additional thing for companies to do is to offer an incentive to give feedback in the form of products or services or free gift certificates as an appreciation to giving feedback.
Satmetrix has observed that it has obtained excellent response rates without employing incentive strategies. They however recommend offering an incentive particularly when the survey population is large (greater than 10,000 for example).
In addition, the survey should appear relevant to the potential respondent, easy to understand and simple to complete. This increases the probability of achieving higher response rates particularly in the case of online surveys.
"The information gained from either approach should be shared with your customers along with what the approach will be to resolve any identified issues," says De Lio. "This reinforces your commitment to the customers that their input was taken seriously and was valuable in creating a much more satisfactory user experience with your company."