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The Magazine

Issue 8

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Where our team of guest writers discuss what they think about the current trends and issues.

Andrew McGrath
Commercial Dir., Virgin Media Business

How will consumer IT impact your business?

Back in 2005, the analyst house Gartner predicted that consumer technology would have a huge impact on enterprise IT over the next 10 years.
11 May 2010

Building better bridges

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CXO. How is it possible to increase retention and grow relationships through customer interaction and customer care?

Chuck Schaeffer . Every customer interaction contributes to the customer’s perception of the supplier’s value. When interactions are consistently favourable, the customer perceives the supplier to be useful and the relationship valuable. The relationship value becomes a factor in the overall vendor solution that over time is shown to exceed the original buying factors such as price or availability. However, if the supplier delivers substandard interaction or is inconsistent in the customer’s view, the supplier’s value is diminished and the customer is far more apt to switch suppliers based on costs, convenience or a belief of superior service elsewhere. More consistent and intelligent customer interactions will evolve the solution value proposition from price to include relationship, improve operating margins and decrease customer churn.

CXO. How important is the ability to leverage customer data to drive value-based product recommendations, upsell offers and enhance customer experience?

CS. The disparity between unqualified product promotions and relevant product promotions based upon a customers buying history, buying preferences and buying needs results in stark and fundamental differences in sales conversion success, customer perception and customer relationship advancement. Customers recognise blind advertisements and due to their extremely limited time quickly learn to quickly filter these low value promotions and over time associate the promoter in the same low value context as the unqualified promotions. Key to delivering up-sell, cross-sell or other customer relevant product recommendations is having on-demand access the customers’ product history and understanding of the life to date customer relationship.

CXO. In your opinion, what issues in general need addressing in the industry?

CS. Clearly the biggest change in the CRM industry is the delivery of CRM software solutions based on a subscription pricing model and delivered remotely over the Internet; generally referred to as either hosted software or software as a service. As with any change of this magnitude, there is a need to recognise the benefits as well as the pitfalls and achieve a balanced understanding. For most organisations, hosted CRM and enterprise resource planning (ERP) software solutions are proven effective in eliminating capital expenditures in favour of a subscription pricing model, accelerating business software implementations, reducing the need for internal IT resources to administer the business systems and lowering total cost of ownership over three to five year periods. Organisations need to be reminded that CRM software is merely a tool and enabler to achieve a CRM business strategy.

CXO. Many organisations are dissuaded from utilising CRM solutions because they believe they are too difficult to maintain. Is this an accurate impression?

CS. Like any mission critical business system, CRM applications require disciplined technical and administrative management. Tasks such as system administration, database administration, storage management, security management, business continuity and various other related activities must be methodically implemented by competent IT professionals if the system is to be continuously available, reliable, secure and accurate. Relieving internal IT staff of business systems technical administration and outsourcing these technical responsibilities has been a major impetus for the skyrocketing demand of hosted CRM and ERP software solutions.

CXO. What kind of ROI can companies employing CRM solutions expect to see??

CS. Each company’s ROI will of course be relative to their individual starting point, the scope of their CRM implementation and the depth of their CRM adoption. However, post implementation studies of Aplicor clients performed during the last five years show fairly consistent ranges of results across 16 common key performance metrics. For example, post implementation results show an increase in sales conversions of 11 percent to 34 percent during the first 12-month horizon, when sales activities are automated and sales professionals leverage competitive intelligence. Customer churn normally declines by nine percent to 41 percent when CRM systems empower staff to execute more intelligent and consistent customer interactions across all customer channels. Suggestive selling, up-selling and cross-selling conversions normally increase 11 percent to 38 percent when CRM systems integrate with back-office ERP systems so that the sales professional has complete visibility to the customers buying history. Aplicor post implementation ROI analysis demonstrates similar results for mid-market companies, Fortune 100 companies and even federal governments.

About the contributor

Chuck Schaeffer , CEO, Aplicor, Inc.
Founder and management team member Schaeffer has participated in leading product manufacturing to triple the product scope (with significantly increased product quality), compete globally, grow revenues four-fold and achieve industry credibility by winning more independent awards than any other CRM software publisher worldwide.

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