HOT NEWS IN THIS REPORT:

1. Customer relationship management
2. Strategy: Leverage multiple points of presence on the Web
3. Alert: Domain name scam
4. Book review: Futurize Your Enterprise

Executive Technology Briefing (ETB)
Editor/Publisher: Jordan Ayan
Contributing Editor: Chuck Frey
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-- CUSTOMER RELATIONSHIP MANAGEMENT --

http://www.sap.com/crm
http://www.siebel.com
http://www.goldmine.com
http://www.act.com
http://www.saleslogix.com

One promising technology on the horizon is customer relationship management, or CRM. CRM uses technology and Web-based tools to help manage customer relationships and plan customer interactions in a highly organized and efficient way. CRM combines business operations data with business intelligence to enable companies to make strategic business management decisions about their customers. I believe it is a key technology that should be part of every company's e-business strategy.

At its most basic level, customer relationship management is a philosophy of customer service that encompasses all of a firm's online and offline interactions - or "touchpoints" - with its customers. The goal of CRM software solutions is to centralize all of the data about these interactions into a centralized database, which can be shared by all departments and functions that interact with customers. This allows everyone in your company to work from a common base of knowledge about each of your key customers, so your firm can provide them with a better level of service. CRM can help a company lower its customer acquisition and retention costs, target promotions more effectively and increase customer loyalty.

To help you understand the power and the potential of CRM systems, here's how it can be applied at each stage of a typical customer "life cycle":

- Prior to the sale: Acquiring sales leads, matching customer needs with product configurations and options, and providing a detailed comparative analysis of potential finance, lease and rental options.

- Point-of-sale: Using e-commerce to enable the sales transaction, and potentially setting up the logistics of product delivery.

- Post-sale: Providing your service, product support and parts marketing departments with detailed data on products owned and service requirements, reminding customers of product service intervals, and helping them determine when it's time to replace existing products with new ones.

In addition to maintaining an integrated record of all of your employees' interactions with key customers, CRM systems can track how key customers are using your Web site, the pages they're viewing and the products they've purchased. Most systems also include powerful data mining capabilities, which can help you to identify trends in your customers' historical data. These systems allow you to identify and target your best customers and then provide them with an exceptional level of service.

Customer relationship management software solutions can help your company to streamline several types of customer-facing business functions, including:

- Marketing: Target the right customers with the right offers, and then track the effectiveness of your marketing campaigns with surgical precision.

- Sales: Reduce the sales cycle time (from prospect to sale), increase the productivity of your sales reps and improve your account management.

- Service: Key benefits include lower costs (because customers can access many resources via the Web themselves), higher customer satisfaction and faster responses to customer questions. Many executives don't view service as a strategic business function, but it could be one of your company's most valuable hidden assets - because it can lead to more loyal customers, who tend to be more profitable. This area also includes Web-based self-service applications, which can reduce your costs and free up skilled service people to work on more complex issues.

CRM is already being used by some of the leading companies in the U.S., including Charles Schwab, American Express, Lucent Technologies, PepsiCo, MCI Worldcom, Dow Corning, Texas Instruments and Colgate Palmolive.

Colgate uses CRM to provide its sales representatives with an integrated view of its customer information and activity that spans both its front-office (sales) and back-end (manufacturing, fulfillment, warehousing, distribution) systems. TI is using CRM to tie its worldwide network of customers, distributors and sales representatives together into a seamless, efficient and responsive community.

Without some form of CRM, many companies may be missing a significant opportunity to cut wasted effort and cost from their business processes. In most companies, customer data is not centralized, but is trapped within each department, created to meet a team's specific short-term needs. These "islands" of data are not connected to each other, due to hardware and software incompatibilities, or because these departments don't realize the benefits of sharing the customer data they've gathered with each other. In some cases, functions like sales lead management and customer call centers - which generate reams of data about customer needs - are outsourced to specialized vendors, further fragmenting it in proprietary databases outside of your company's walls.

Because of these factors, you may not have a complete picture of your customers, which may make it difficult to determine which ones are the most valuable and which are unprofitable. This has obvious implications on how your company allocates its resources.

CRM costs

CRM systems represent a potentially powerful strategic advantage, but they can be costly and complicated to implement. Implementations for a full-featured CRM software system from one of the leading vendors like Siebel and SAP start at roughly $500,000 and may cost as much as several million dollars. They usually require a significant amount of customization to incorporate your company's business processes and rules. Implementation and investment time frames can stretch out for several years, in some cases.

A less expensive, but more limited alternative for smaller companies is sales force automation software from companies like Goldmine ($295 per user), ACT ($179 per user) and SalesLogix (approximately $1,000 per user). But these solutions are only focused on streamlining sales force work processes, not on other types of customer interactions with your company.

Key points to keep in mind

If your company plans to implement CRM, I urge you to keep in mind these these organizational cultural issues:

- CEO support: For a project of this size and scope, support from the corner office is essential. Your company's leader must build a shared vision for CRM among the managers and departments that interact with your customers, and consensus on how to handle the inter-departmental issues that will inevitably arise. Many CRM implementations have failed due to lack of CEO support or a shared vision.

- Where's your focus? Is your company customer- or product-focused? Most organizations are organized around products or technologies. In order to be successful in implementing CRM, you must first build a customer focus within your company - centered around customer needs rather than product features.

- CRM means saying "no": CRM involves segmenting your customer base and focusing on only 2 to 3 of the most promising segments. Is your company prepared to say "no" to many other customers who don't fit your target profile? Remember, the customers who don't fit this profile are only marginally profitable or unprofitable - let your competitors have them!

- Employee retraining: As part of the process of managing all customer "touchpoints" with your company, CRM will place more of your employees "on the front line" - in direct contact with your best customers. This will require training these key employees to move into more proactive, problem-solving roles.

- Level of IT knowledge: The technologies needed to create this level of data integration and accessibility have only recently become available. This means that many corporate IT departments are just starting to learn about the architectures and methodologies needed to do enterprise-wide CRM, which may hamper your company's ability to implement it quickly.

While all of these cultural issues may make CRM sound risky, I believe the potential opportunities far outweigh the risks. If your company is already customer oriented, you have a significant advantage over those that aren't, because you've probably solved many of these cultural issues. From a business strategy standpoint, I like the concept of using systems like this to enable customers to become dependent on your firm - it's a good way to increase customer loyalty and differentiate your company from its competitors.

CRM is one of those enabling technologies that will become more common in the next few years. The opportunities for competitive advantage are so large that most big companies will be implementing major CRM projects and systems within the next 1 to 2 years. CRM isn't just another e-commerce trend -- it's quickly becoming a way of life for savvy organizations. Chances are, one or more of your competitors are working on CRM initiatives right now. If your company doesn't implement some form of CRM in the near future, you may soon be at a significant disadvantage, as key customers start to gravitate to the competition (and, once lost, will be hard to win back!).

Where can you learn more about CRM? Here are 3 great sources:

http://www.crmassist.com (CRM information portal site)
http://www.crmcommunity.com (CRM information portal site)
http://www.dci.com (e-business and CRM seminars, including one in Chicago in 2/01)

If your company hasn't already started implementing some form of CRM, I recommend that you form an action team now, to begin developing a strategic plan for applying this technology to serve your customers!

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-- STRATEGY: LEVERAGE MULTIPLE "POINTS OF PRESENCE" ON THE WEB --

The proliferation of vertical market Web portal sites is creating many new opportunities for marketers, if you know how to leverage them. Two popular, fast-growing formats for these mega-sites are online marketplaces (such as Chemdex and e-Steel) and virtual trade shows (such as the Clean Show and the Consumer Electronics Show - CES). Although they may have different objectives, the bottom line is the same: both types of sites exist to connect buyers and sellers.

What does this mean to business and consumer marketers? You owe it to your company to make sure that your products and services are represented in as many of these portal sites as possible. As the Web continues its meteoric growth, it becomes harder to drive your company's target audiences to your Web site. Under these conditions, it's much more efficient to create multiple "points of presence" -- listings of your products on multiple Web sites -- to make it easier for customers and prospects to find this information.

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-- COOL TOOL: WIRELESS NETWORKING --

http://www.apple.com/airport http://www.intel.com/anypoint

If your company or department is experiencing fast growth, you're probably facing significant costs to run ethernet cable to connect the computers of new employees to your company's network. You may want to consider wireless networking systems like Apple's AirPort and Intel's AnyPoint, which allow desktop and laptop computers to quickly and easily connect to each other, without having to install new network cabling. AirPort uses a wireless base station, which communicates to receiver cards on each computer. AnyPoint is designed to be a home networking product, connects multiple PCs together and lets them share a single Internet connection. We expect that Intel will soon expand the AnyPoint product line to include small office versions.

In addition to reducing office networking costs, these wireless systems offer several other advantages: If you outgrow your current office space, you can take the wireless hubs and receiver cards with you to your new facilities. In addition, wireless networking enables laptop users to carry their computers anywhere in the office - without having to disconnect from your network e-mail and file servers. I installed the IBM AnyPoint system in my home to connect two PCs, and found the hardware and software relatively easy to install and configure. Configuring my laptop to work on our office network, as well as the Anypoint network proved a bit more of a challenge.

Apple's AirPort Base Station costs $299, while the wireless receiver cards cost $99 each; Apple's newest iBook laptops come already equipped to support AirPort networking. Intel's AnyPoint costs $190 for a home network starter kit, which allows you to connect two PCs via existing phone lines in your home.

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-- ALERT: DOMAIN NAME SCAM --

We periodically learn about internet scams, and in the interest of keeping you from falling victim, we are sending out a special alert on one of the latest we have encountered. We have also heard from several Executive Technology Briefing subscribers who have also been contacted.

The scam involves a company called Electronic Domain Name Monitoring (EDNM). EDNM faxes out a very official looking notice is stamped "FINAL NOTICE" on it from offices in Atlanta and Toronto. The notice correctly lists your firm, and indicates that someone has applied for either the .net or .org version of your domain name. The letter seems to indicate that EDNM has been hired to help eliminate bad faith registration of trademarked names.

In reality what appears to be happening is that EDNM is looking through the domain name registration database, and sending out these forms to a large number of firms who own a domain name, but where the .net and .org have not been registered. The scam is that this company will tell you that they can prevent the other company from registering your domain, and obtain it for your company. They will offer to register the domain for a fee plus the $35 Network Solutions (NSI) registration fee.

Your best bet is to register the domain name directly with NSI, and all it will cost you is $35. We highly recommend that you lock-up the .net and the .org version of your domain. You can check out the registration database at: http://www.networksolutions.com/cgi-bin/whois/whois.

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-- BOOK REVIEW: FUTURIZE YOUR ENTERPRISE --

http://www.amazon.com/exec/obidos/ASIN/0471357634/createit/

Futurize Your Enterprise by David Siegel is one of this year's must-read business strategy books. The author explains how developing a customer-centric culture is an important prerequisite for e-commerce success. He also outlines a practical, multi-faceted process that any business can use to develop an effective, focused e-business strategy - including common pitfalls to avoid.

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That's all for now! I welcome your comments and feedback on the Executive Technology Briefing, which will help me to focus it even more closely on your needs.

Jordan Ayan
President
Create-It! Inc.