Playing high stakes with the e-customer - Industry Trend or Event

CommunicationsWeek International, Oct 23, 2000 by George Malim

The strength of electronic business is its ability to reach a great number of customers. But what if it's all one-way traffic? E-CRM could provide the answer.

The key criteria for running a successful electronic commerce site may no longer be the front-end web page, but on-line customer relationship management, or e-CRM.

Industry analysts and software vendors say e-CRM has been neglected as businesses struggle to translate their traditional customer relationship practices into the online marketplace.

"E-CRM is the traditional CRM game played for higher stakes," said Peter Cockburn, product manager, customer care, telecoms, at billings systems integrator ICL, London. "E-business means you can be accessed by a larger number of customers and can communicate through the Internet... The chains of customer communications are extended. There are higher risks and higher rewards."

Vendors of analytical software agree.

"The industry is obsessed with front-page availability but all customers want to do is conduct transactions," said Keith Day, marketing director of BMC Software Inc., of Houston, Texas. "The customer relationship is defined in a different way in e-CRM because it is often more fleeting. The key is understanding the customer experience and ensuring your control of it."

E-CRM is essentially CRM with Web channels and a form of business intelligence software which improves the understanding of customer behavior. But some analysts say that a market already confused by the first wave of CRM software will be just as confused by e-CRM.

"This time it is much worse," said Anoop Ubhey, enterprise industry analyst at Frost & Sullivan Inc., of Mountain View, California. "Some CRM offerings will patch together sales-force automation and customer-support technology, producing only a fraction of a CRM or e-CRM solution."

Best practice

Proponents of e-CRM say it is too early to pass judgement. "The level of richness of customer management functionality online is very thin in most cases," said Matt Price, vice president of marketing at Art Technology Group (ATG) Inc., of Cambridge, Massachusetts. "Few companies implement best practice throughout the transaction process. We're seeing growing awareness but there's a need for education."

Even skeptics like Frost & Sullivan's Ubhey acknowledge there are new business drivers for e-CRM applications, including the realization that customers will no longer tolerate mass mailings, and the development of more dynamic communication channels on the Internet. However, there is concern about e-business's failure to create the strong customer bonds of a traditional commercial relationship by using customer data to implement cross-selling and other marketing techniques.

For some, the problem lies not with the collection of customer data, but in how it is managed and analysed. "There's no magic bullets out there," said John Thompson, vice president of worldwide marketing, Whitecross Systems Inc., of San Francisco, an applications service provider offering e-CRM analysis services.

Site performance

"We see people saying e-business didn't deliver on the promise, but there are other firms putting in place coherent structures and reaping the benefits for their customers and sales forces," said Thompson. "But just grabbing data and using it to throw out all kinds of messages to customers can do more harm than good."

BMC's Day is worried that some end-users believe site performance data is the only e-CRM tool they need. "Internally you can know exactly what's going on [with the website] and yet have no idea what's going on at the customer end," he said.

But tools for analysing data gathered at websites are seen as the most practical way of turning technical performance information into improved customer relationships. "e-CRM is all about knowing your customer and what value each customer has to your business," said ICL's Cockburn.