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ecosystems—networks of customers, partners, suppliers, and employees
all connected by the internet. To allow all of these players to participate in an
organization’s information flow, CRM developers added massive new levels of
functionality to existing products while developing suites of new products to serve
the emerging model of the internet-enabled organization.
CRM software vendors then developed software that would allow companies to
provide their customers access to the organization across multiple channels. This
development addressed an old technological challenge: How does one coordinate
the information gathered in sequential customer interactions when some of it may
come in over the Web, some into a call center, and yet more in a face-to-face
conversation? The capability of CRM technology to solve this cross-channel
synchronization problem propelled it into the next stage of market evolution.
Today’s best CRM solutions have come to address specific vertical industry
requirements while integrating unwritten business processes that historically have
varied from division to division. The result is a higher degree of consistency,
leading to improvements in efficiency as well as the integrity of customer-related
information. Most recently, CRM vendors have extended the flexibility of their
Why CRM? The Business Case for Customer Relationship Management Page 4
systems to allow organizations to deliver solutions via hosted or on-premise
versions, or in any combination. In addition, they have integrated business
intelligence to empower every member of an organization with relevant and
up-to-the-moment customer and business data. Ultimately, these CRM solutions
are critical enablers of the seamless, high-quality experience that customers now
demand.
THE CORE COMPONENTS OF CRM
Although CRM software can deliver a wealth of benefits, many companies fail to
appreciate that technology is just one component of a successful CRM initiative.
With the addition of Siebel CRM, Oracle’s experience with more than 5,000 CRM
initiatives has shown that the most successful companies approach CRM as a
complete business strategy, focused on improving the way a company markets to,
sells to, and provides service to customers. When implemented effectively, a CRM
strategy results in greater employee, partner, and customer satisfaction and an
improvement in an organization’s financial performance.
Oracle identifies the following components as central to any CRM initiative:
• Effective customer segmentation
• Integrated multichannel strategy
• Well-defined business processes
• The right skill sets and mindsets
• The right technology
Effective Customer Segmentation
Customer segmentation—the process of dividing a market into discrete customer
groups that share similar characteristics—is a critical component of a CRM strategy.
Customer segmentation allows an organization to understand which customers are
most profitable and how to most effectively market to, sell to, and provide service
to these customers. With this knowledge, a company can determine which
investments will drive the greatest returns.
Segmentation begins with the development of the customer profile, which includes
a rich description of the key characteristics of a specific customer, including both
basic data (demographics, purch