December 10, 2007
Aplicor CXO Magazine Interview
I just had the privilege of being interviewed by CXO Magazine, the leading business magazine in Europe. While the discussion will be printed as an Executive Interview feature in the magazine, I'm posting some of the questions and answers that I believe Aplicor users will find most relevant.
CXO: How is it possible to increase retention and relationships through customer interaction and customer care and how can more intelligent customer interactions increase business profit?
Chuck: Good question. Every client interaction contributes to the customer’s perception of the supplier’s value. When interactions are consistently favorable, the client perceives the supplier to be useful and the relationship valuable. The relationship value becomes an increased factor in the overall supplier solution that over time is shown to exceed the original buying factors such as price or availability. However, if the vendor delivers substandard interaction or is inconsistent in the client’s view or opinion, the vender ’s value is diminished and the customer is far more likely to switch vendors based on convenience, costs or a belief of superior service elsewhere. The precursors to grow customer relationships include a customer relationship strategy that is pervasive throughout the company, defined business processes which can be consistently performed across all customer interaction channels and information systems which grant customer facing staff on-demand customer visibility generally in the form of a 360 degree view of the customer relationship. Consistently intelligent customer interactions will evolve the supplier 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 suggestions, up-sell offers and enhance the customer experience?
Chuck: The disparity between poorly qualified product promotions and relevant product promotions based upon a customer's buying history, buying preferences and/or buying needs results in stark and fundamental differences in sales conversions, customer perception and customer relationship advancement. Clients' recognize blind advertisements and due to their extremely limited time quickly learn to filter these low value promotions and over time associate the promoter in the same low value context as the unqualified promotions. However, when sales professionals leverage customer needs, buying habits, procurement history, purchase cycles and other customer centric criteria, their offers are viewed as relevant, their offers are perceived as higher value and the offeror is elevated from the less desired category of vendor toward the more coveted category of partner. Key to delivering up-sell, cross-sell or other customer relevant product recommendations is having on-demand access the customers’ product history and an understanding of the life to date customer relationship.
CXO: In your opinion, what issues in general need addressing in the industry?
Chuck: 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 (SaaS). As with any change of this magnitude, there is a need to recognize the benefits as well as the pitfalls and arrive to a balanced understanding. For most companies, hosted CRM and ERP (Enterprise Resource Planning) software solutions are proven effective in eliminating capital expenditures in favor 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 (TCO) over three to five year horizons. However, SaaS CRM systems face the same prerequisites as their predecessor on-premise applications in terms of CRM strategy, a customer centric business culture and proven implementation approaches to achieve the CRM vision. Implementing any CRM software solution – whether the traditional on-premise systems or the newer hosted systems – does not achieve CRM or improve customer relationships in and of itself. Companies need to be mindful that CRM software is merely a tool and enabler to achieve a CRM business strategy.
CXO: Many organisations are skeptical from utilising CRM solutions because they believe they are too difficult to maintain. Is this an accurate perception and, if so, how important is effective technical support?
Chuck: Like any mission critical business system, CRM solutions require disciplined technical and administrative support. Activities such as system administration, database administration, storage management, security management, business continuity and various other related tasks must be methodically implemented by competent IT (Information Technology) professionals if the business system is to be continuously available, reliable, secure and accurate. Relieving internal IT staff of business systems technical administration by outsourcing these technical responsibilities has been a major impetus for the skyrocketing demand of hosted CRM and ERP software solutions.
CXO: What kind of return on investment can companies employing CRM systems expect to see?
Chuck: Each companies ROI will of course be relative to their individual starting point, base line, scope of CRM implementation and the depth of their CRM adoption. However, post implementation studies of Aplicor clients choosing to perform post-implementation measurement 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 initial 12 month horizon when sales activities are automated and sales professionals leverage competitive intelligence (CI). Marketing campaigns demonstrate increases in ROI from 6 percent to 44 percent within six months of leveraging historical campaign metrics for campaign optimization. Customer churn has been shown to decline by 9 percent to 41 percent when CRM information 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 whether for midmarket companies, Fortune 100 companies or federal government clients.
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Posted by Chuck Schaeffer on December 10, 2007 in CRM Strategy
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European CRM Differences
I've not seen the actual article and probably won't as I don't subscribe or receive that magazine. Did you incur any questioning or discussion points that would infer differences in CRM strategy or software for the European region as compared to the Americas.
Posted by Samantha Potnik on December 11, 2007
Just My First Name
Not really. The key factors related to CRM software implementation success or failure seemed to be an interesting theme for the interviewer as it is in North America and elsewhere. The SaaS concept is not yet as mature in the European Union, however, the growth is significant and increasing at a steady clip. The only difference I encountered was that apparently my first name in the UK is the common term for the uncontrolled regurgitation or expulsion of your food or drink (if you get sick or presumably drank too much).
Posted by Chuck Schaeffer on December 11, 2007
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