Customer Relationship Management: Satisfaction Guaranteed

Customer service is the name of the game for e-commerce sites. And it's even more important for Web-based businesses. But today's customer-relationship management products fall short. Forrester Research reports that less than 2 percent of companies today have a unified view of their customers across sales, marketing and customer-service channels.

While vendors such as Oracle, Siebel Systems, Silknet Software and Vantive have comprehensive customer-relationship management (CRM) suites, currently no one product manages to deliver Web-based customer service and still support the help desk and sales and marketing departments. So how can e-businesses satisfy their Web customers?

One option is to implement a piece of the solution, which is what Junona Jonas did earlier this year when she launched Utility.com. Jonas needed a way to service a nationwide base of customers, without having to make an investment in a costly call center or an outside sales force.

The solution for Utility.com was Silknet Software Inc.'s eBusiness software, which automates customer-support functions for the company's portal site. The Web-based application now offers customers pricing information and lets them see their account histories, consumption habits and billing information in real time.

"We don't want to have huge call centers," says Jonas, chief operating officer at Utility.com. "That's not our business model. We're a total Internet company. We reduce energy bills by reducing our transaction costs. There are no paper bills sent out, and we bill directly to our customers' checking accounts."

This pure Internet play would not have been possible two years ago and couldn't be built using traditional CRM tools.

With Silknet's software, Utility.com could build customer-facing applications that solved its immediate need to deliver Web-based customer service. The software also let Utility.com build an e-commerce database that, over time, can evolve to perform more sophisticated queries that should improve the company's sales and marketing efforts.

Utility.com went live in March, offering competitive electric power services to consumers in California, with plans to expand into Pennsylvania, New Jersey and Nevada soon.

Web-based customer service also offers established companies another channel to reach their customer base and a way to use call centers more efficiently. ERP software vendor Clarus Corp. used Web-based CRM tools to shift half its support burden from its call center to the Web, a move that cut costs and let the company's live operators stay focused on complex support issues. The whole process took less than six months to complete.

Clarus used a self-service application from Onyx Software to expose the contents of its support database to its Web site.

The company found that its tech-savvy customer base readily used the database to solve routine support issues. Some of the typical things customers are doing include downloading bug fixes and patches and searching a knowledge base of other customer experiences for troubleshooting information, instead of having to describe a problem to an intermediary at a call center.

"Our customers use good discretion in the identification of a particular problem," says Sally Foster, vice president of operations at Clarus. "We give them the ability to search for a fix at their leisure, 24-by-7. If they can't find it themselves, they can always pick up the phone and call us."

A side benefit of the Onyx Front Office software is that it tracks customer movements on Clarus' site, reporting back which fixes clients download and how they gather information about additional products and services.

Having that data readily available has proven to be extremely valuable for sales and marketing staffs, which can use it to better understand and meet the needs of their clients.

"You can have a salesperson be proactive and go into an account and sell additional software or services, because they know everything there is to know about that customer's software," Foster explains.

Clarus uses Front Office for sales revenue forecasting and lead generation, and added a fax-back capability to handle the online distribution of collateral and investor-relations material.

The company plans to use the software to run customer surveys and provide feedback to the research and development teams, steering product development and building a corporatewide infrastructure to handle an increase in e-commerce.

The lack of an integrated Web-based CRM solution has forced IT shops to cobble together software from different vendors. Typically, companies hire enterprise application integrators to customize the user interfaces, add business logic and hook them in to legacy databases or ERP packages.

This point-based approach has worked well for many midsize companies looking to augment existing sales and marketing functions with the efficiencies of Internet communications.

Cybertrust, an Internet security software and services provider, is using Baan's Front Office software to run opportunity management, forecasting and lead-generation applications for its sales and marketing teams. Baan uses a browser front end over client software that's expected to get thinner in upcoming versions. Thinner clients make for faster deployment.

Cybertrust had the software up and running within eight weeks. Since the application uses a browser, they got the added bonus of providing users with a familiar interface that's easy for nontechnical sales and marketing people to learn.

"The biggest advantage to having the browser interface is training," says Joe Campagna, business applications manager for Cybertrust. "It took us one day to train the sales force. To do training on a client/server package, with a proprietary look and feel, it typically takes much longer."

Cybertrust also is running customer-service software from Vantive and migrating from an Oracle back end to one from SAP.

The company is integrating its front office with an Outlook database, and hoping to build a platform that will let different departments exchange critical customer data in real time.

But for the moment, the focus is on deploying a productivity tool for the sales department so the small company can gauge what it's selling each day.

"The imperative to using [Front Office] is sales forecasting. But then the marketing department wants access to it," Campagna says. "It would be really useful for product marketing to have access to that information so it can evaluate which products are in the pipeline and which ones are doing well in the market."

Delivering such interdepartmental access is a long-term goal for CRM vendors.

The CRM market grew from individual software packages that served the distinctly different needs of sales, marketing and customer support agents within a company. Sales force automation tools helped outside salespeople track who sold what products to which customers, while call centers used active databases to log the support calls of their customers.

Extending these tools beyond each department and securely opening up knowledge databases to customers requires a substantial investment in rearchitecting these traditional solutions. All of today's CRM players have partnered with or acquired other companies to try to link together these functions and extend their applications to the Internet.

The market for customer service, sales and marketing automation software is due for a shakeout. Today, only a handful of vendors have CRM products that were built for the Web. These companies include BroadVision, Net Effect Systems, Octane Software, Servicesoft Technologies and Silknet Software.

Within the next three years, these vendors and others will be selling billions of dollars worth of Web-based CRM software, outselling, as a group, traditional CRM solutions, reports the Aberdeen Group.

"Instead of CRM, electronic communication networks would be a better strategy for providing support for customers," says Laurie Orlov, an analyst at Forrester Research. "You can have a single customer context populated from all the customer touch points. These sorts of packages create customized responses driven off a rules engine. That information is relevant to provide customers, employees, and business and marketing professionals in the form of a content directory."

Forrester analyst Tom Gormley refers to all Web-based customer service as eRM, or electronic relationship management. In a recent study, Gormley concludes that eRM sales will exceed traditional CRM within the next few years. He predicts that only Broadvision, Oracle, Siebel and Silknet will have the critical mass required to complete development of suites of eRM products.

That dismal outlook has not stopped hundreds of companies from claiming to have the comprehensive CRM suites of tomorrow. The numbers are compelling: International Data Group predicts the CRM market will grow from $1.9 billion in 1998 to $11 billion by 2003. Half of that money will be spent on services.

Companies such as CrossWorlds Software, Hyperion Solutions and Liquid Software make a pretty penny helping companies deploy and customize CRM solutions, and integrating front offices with back-end solutions such as manufacturing and financial packages.

The remaining $5 billion market IDC refers to is attracting software vendors of every ilk, marketing everything from data analysis tools to e-mail engines to sales configurators as CRM products.

Few of these unfocused companies will survive, predicts Forrester's Gormley. The majority of the start-ups and small-fry CRM vendors will be absorbed, acquired or simply disappear in the next four years, he says.

And even large ERP vendors, who have gotten into CRM in their quest for an alternative revenue stream, may not make the leap to Web-based CRM. Companies like Baan and SAP acquired traditional client/server CRM products and face the same redevelopment hassles as other CRM vendors.

"The Internet is the dominant architecture, the agent of change. It's what products and their suppliers must respond to," says Chris Martins, a senior analyst who tracks CRM for the Aberdeen Group. "As interested as ERP suppliers are in moving into this growth market, and as big as they are, they have to respond to this Internet architecture requirement as well as the traditional CRM vendors do. Smaller companies may be more nimble because they don't have an installed base to worry about and don't have to implement a traditional architecture."

Established CRM vendors like Siebel Systems are working hard to add Web functionality. The undisputed leader in the CRM market, Siebel is acquiring and partnering with other vendors to maintain its momentum in the marketplace, but adding Web features to its suite of CRM products will take more than a year to complete. In the next version of its product, Siebel 99, the company will add marketing automation and sales configuration features, as well as some basic Web functions.

"Our goal is to make organizations more effective when dealing with customers, whether that contact is through the face-to-face interactions of a direct sales force or field service agents, over the phone in sales and marketing, or in a Web-based interaction doing customer self-service and self-sales," says Paul Rosenblum, senior director of products marketing at Siebel. "That means full support for direct and indirect sales and support channels, and for the entire front office: sales, marketing and service."

Merging corporate data into a single repository is the first step. More ambitious plans are in the works, says Forrester's Gormley.

In the coming years, software companies and integrators will create more powerful customer-service solutions that place information within easy reach of e-commerce customers. And those structures will accommodate outside information, such as credit histories and reports of a customer's interactions with a company's business partners to present an even more comprehensive view of the customer relationship.

Sharing data, via XML and the Internet, will give businesses a more complete picture of the customers they serve and the ability to respond to buying trends more quickly.

Web measurement tools will monitor where customers surf, what data they find useful and provide immediate feedback on the effectiveness of a company's virtual service organization. Web transaction systems will automate selling, and a seamless, central data repository will integrate with existing data analysis and planning tools from vendors, such as NCR and HNC Software. Web-based systems will be able to use voice over IP and integrate with sophisticated computer telephony integration applications.

But before companies write out their CRM wish lists, there's Christmas 1999 to contend with. Last year, Christmas was the test bed for e-commerce technologies, and they came up short. Customers couldn't find what they were looking for or which items were in stock, and it was hard to get any assurance of when a purchase would arrive. Because of this subpar performance, the season of giving didn't pay off for a large percentage of the companies that set up shop online. With better preparation and more powerful tools, analysts hope this Christmas will go more smoothly.

"In Christmas 1998, companies lost huge amounts of revenue on the Internet because they couldn't answer simple questions," explains Erin Kinikin, industry analyst at Giga Information Group. "Now, instead of being worried about the Year 2000, you have to be worried about Christmas '99. Certainly, you'd better get a computer program that can help you keep track of some of these things."

Corporate Web sites may never achieve 100 percent customer satisfaction. And by all accounts, today's CRM tools fall short of meeting corporate needs. But successful e-businesses will continue to implement the CRM features they can do today and keep looking for ways to improve their ability to understand and service their customers. That's guaranteed.

Judy DeMocker is a computer journalist based in San Francisco. She can be reached at jdemocker@sprynet.com