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October 24, 2001

Branding the Customer Experience

Rally all customer-facing operations to one, enterprise-serving goal to realize the full value of customers

By Mark Smith

You can't ignore the renewed imperative these days on businesses to manage or reduce costs while simultaneously increasing revenue. Obeying this imperative begins with understanding your customers and fully maximizing their potential - through customer relationship management (CRM). However, it doesn't end with CRM as we know it today; you must follow through with a set of business strategies and processes that help the organization reach its goals.

EXECUTIVE SUMMARY

Mark Smith

Existing CRM systems focus more on departmental efficiencies than on managing customers consistently from the standpoint of enterprise goals. Customer Interaction Management (CIM) is an evolving CRM practice that addresses current shortcomings. CIM requires analysis-driven customer interaction software and a supporting architecture. CIM optimizes every interaction with customers, regardless of channel or touchpoint. CIM requires a centralized customer information hub, applied analytics, and interaction campaign software that can deploy and embed centralized, high-level decisions throughout sales, service, fulfillment, and marketing organizations.

Customer relationships are a critical business asset, but most businesses do not understand how deeply they need to invest in these relationships to be successful. Businesses often house several inconsistent approaches to CRM. Too often, they mistake anything called "CRM" for a magic bullet. CRM is not necessarily about automating or speeding up existing operational processes; rather, it's about developing and optimizing methodologies to intelligently manage customer relationships.

Whether they realize it or not, all organizations face the question of who is primarily responsible for optimizing the processes of customer interactions through marketing, sales, fulfillment, and service. Asking this question leads to an important development: It will shift the business away from the traditional CRM organizational unit and toward the customer-centric process approach.

CIM-BIOSIS

This approach of optimizing customer relationships is beginning to unfold. Many organizations have already begun the shift by extending the role of marketing to include managing customer interaction process optimization. This change will grow the current methods of campaign management and marketing automation into a new class of enterprise software that I call customer interaction management (CIM).

Marketing and sales might deploy a CIM campaign, for example, that aims to make customers more loyal by increasing customer satisfaction and spurring promotional interaction. These interactions will not go well if directed by a focus on operational efficiency. Rather, data analysis must lead the interactions. Leveraging analytic tasks such as modeling, segmenting, and predicting will boost your ability to influence customers through these interactions.

Fully optimizing every interaction you have with each customer can influence their actions in the direction of your enterprise goals and will build sustainable and mutually beneficial relationships. The resulting loyalty and profitability are the mission of CRM, so this initiative deserves full support, with the commensurate investment of resources.

CULTURE CLASH

As with most things, CIM is easier said than done. Many organizational units or interaction channels support the customer life cycle: market-sell-deliver-service. To further complicate matters, customers can access each channel through a multitude of touchpoints. For example, the marketing, sales, or support of a product or service can be done through the Internet, telephone, mail, or a retail outlet.

When these organizational units operate independently, as has predominantly been true, their aggregate operational performance cannot be controlled centrally to ensure they are working together in the service of enterprise objectives. Just improving the efficiency of each organizational unit to market, sell, deliver, or service better is not enough to optimize customer interactions.

The interactions need to be optimized along a continuous customer life cycle process that can be dynamically invoked at any step. This means that a customer may start an interaction through one channel and touch-point - let's say customer service via telephone - but through a promotional up-sell or cross-sell offer be dynamically placed into the telesales organization. If you took the traditional approach of just providing the phone number for sales or referring them to the Internet to purchase the product, you may lose the customer to dissatisfaction.

Unfortunately, the inefficacies of the past have been exacerbated by the fact that each organizational unit has had its own supporting CRM software system - sales with sales force automation, marketing with enterprise marketing automation, and so on. These applications operate independently, as "silos," with no cross-process integration, and have been specifically designed to improve efficiency within single organizational units. These systems are important, but are only one small step toward fully achieving organizational efficiency and optimization of customer interaction processes.

Last but not least, this transition to sharing role and responsibility with someone outside of the organizational unit will create significant cultural friction. Companies that have appointed chief customer officers (CCOs), or individuals responsible for managing customer relations, have encountered this friction. As with all organizational hierarchies, someone is eventually in control of making the final decision, which heats up the politics and adds pressure on everyone else.

Marketing is the natural locus of control, because this organization in every business is the one that has slowly built business knowledge and best practices to identify customers and deploy marketing campaigns. Strategies marketing has devised methods to build awareness and effectively promote goods or services. These methods provide the foundation for marketing to extend its responsibilities to developing strategies and plans for customer interactions across all channels.

HUB OF INTERACTIVITY

A CIM system needs to identify, interact with, and influence customers. It requires a customer information hub for centralized understanding and analysis of customer behavior. Through this hub, the company can design, deploy, and measure interaction campaigns in a centralized interaction server environment.

Interaction campaigns can be accessed from or integrated into the customer life cycle operational systems of marketing, sales, fulfillment, and service organizations. This design is similar to existing enterprise marketing automation systems and their focus on marketing business needs. The interaction campaigns can be generated, personalized, and embedded to influence customer interactions at the operational level.

The software market for customer interaction management has just emerged this year, with early signs from many of the CRM suite providers. Vendors like PeopleSoft Inc., Siebel Systems Inc., and Oracle offer pieces of CIM but none provides a full solution. Blue Martini Software Inc. and E.piphany Inc. are moving faster toward this approach, and their offerings are more viable than a similar one from the recently announced merger of Broadbase Software Inc. and Kana Communications Inc.

Other vendors such as SAS Institute Inc. and Unica Corp., which focus on enterprise marketing automation, and Marketswitch Corp., which enables channel optimization, will become viable components of CIM. All of these vendors and many others will need to ensure they provide application integration points for mixing best-of-breed software packages.