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"Holistic" CRM: The Key to Optimizing Customer Value, Service, and Retention

by Hans-Heinrich Siemer | SAPinsider

April 1, 2001

by Hans-Heinrich Siemer, SAP AG SAPinsider - 2001 (Volume 2), April (Issue 2)

In the new customer economy, customer expectations and requirements change rapidly, and customers have the ultimate choice to buy anytime, anywhere they like. Success in the new market is no longer based on product differentiation, it is based on customer service.

     mySAP Customer Relationship Management (mySAP CRM) provides the customer-centric solution needed to plan, build, and retain profitable customer relationships.

     The three supporting pillars of SAP's holistic CRM solution are:

  • Integration of business processes that support the entire span of the customer relationship life cycle
  • "One voice" across all customer communication channels
  • Availability of operational, analytical, and collaborative CRM functions

     These concepts are described in more detail in the following sections.

Integrated Business Processes Support the Entire Span of the Customer Relationship Life Cycle

Enterprise CRM strategies need to focus on the automation of horizontally integrated business processes to provide end-to-end coordination among sales, marketing, customer service, field support, and other vital customer touch points.

     mySAP CRM integrates the right employees, partners, processes, and technology to optimize relationship management across all four phases of a complete customer life cycle. These phases are:

mySAP CRM integrates the right employees, partners, processes, and technology to optimize relationship management across all four phases of the customer life cycle.
  • Customer Engagement - recognizing potential customers and converting them to (first-time) buyers
  • Business Transaction - getting the customer to make a purchase
  • Order Fulfillment - providing the product
  • Customer Service - providing care and service across all channels for that customer

     This is the first pillar of mySAP CRM-support for the entire span of a customer life cycle.

     Companies are typically organized according to these four phases. But the Marketing, Sales, Engineering & Production, and Service departments often have difficulty clarifying the relationship between their internal functions and this customer life cycle.

     For example, "Customer Engagement," although typically a task for the Marketing department, often actually has its beginnings in the Service department, when a Field Service Engineer talks about possible new products and customer needs during a coffee break. So every department needs to fulfill some part of each broader life cycle requirement.

Customer Engagement Marketing Planning and Campaign Management
Telemarketing and Lead Generation
Opportunity Management
Sales Activity and Contact Management
Customer Segmentation, Product & Service Profiling
Business Transaction Order Acquisition
Internet Pricing and Configuration
Field Sales
Profitability Analysis
One-Step Buying and Selling
Order Fulfillment Complete Order Life-Cycle Process
Real-Time Availability Checks
Contract, Billing, and Financials Management
Order Tracking
Customer Service Interaction Center
Internet Customer Self-Service
Service Management
Claims Management
Field Service
Field Service Dispatch
Figure 1 Functional Requirements of the Customer Life Cycle

Figure 1 outlines the functional requirements for each phase of the customer life cycle.

     There are plenty of niche solutions for an individual department to support individual segments of this life cycle. The impasse that these solutions (and the project team during implementation) face is in handling integration across these phases and departments. Companies that neglect the integration of their CRM activities, particularly their customer contact, billing, and fulfillment processes, erode the value of their customer relationships.

     In addition to this process-orientation, the real-world needs of employees must be integrated into a company's CRM initiative. You want to optimize the value of every employee's contribution to the overall customer relationship equation.

     A CRM solution does this by serving the specific needs of each individual. Field service engineers, for example, should not be asked to master all the complexities of a powerful Sales Force Automation (SFA) system in addition to the service application they need to perform their job - especially when all they need to do is simply enter information about opportunities stemming from their last customer visit. Instead, equip them with just that one, small, relevant portion of the SFA solution.

     My view is that you should offer employees the functionality they need; not burden them with more. But whether it is Customer Engagement, Business Transaction, Order Fulfillment, or Customer Service functionality, everything must stem from a common, holistic CRM solution. This is what we have done with mySAP CRM. With this solution, every employee and business partner can be empowered by a personalized portal, mySAP Workplace, to access precisely the information and tasks they need.

     What's more, since all information is housed in the same solution, all parties have the same customer view throughout the entire life cycle. And as each new engagement is initiated, new information is fed into the system, so all involved can view the information and learn from it. This continual "learning" mechanism is invaluable to sustaining a stable, profitable, and loyal customer base - the most important asset of companies these days.

"One Voice" Across All Customer Communication Channels

Customers (and business partners as well) interact with your enterprise through various channels - by phone, fax, e-mail, the Internet, and, of course, face-to-face dialog. mySAP CRM synchronizes customer information from all these customer touch points to provide a consistent view of a customer, so that traveling sales reps, help-desk engineers, billing clerks, managers, and even partners see the same status and history for a customer.

     Support for mobile devices, telemarketing and telesales functions, and Internet self-service and selling activities are essential to a viable CRM solution. mySAP CRM supports all three.

     Mobile devices provide access to personalized customer relationship management information anytime, anywhere. mySAP CRM runs on laptop PCs, pocket PCs, Palm-based handheld devices, and WAP (Wireless Application Protocol) phones. Broad support of mobile channels enables rapid deployment of CRM solutions for enhanced productivity. Mobile Workplaces can be designed as a subset of solution parts that are then used in this portal.¹

     Fully leveraging the Telephony channel, mySAP CRM facilitates all inbound and outbound processes for marketing, sales, and service. Telemarketing and telesales allow planning and execution of high-volume sales and service campaigns.

     mySAP CRM also creates call lists, assigns contact center agents for call processing, and designs scripts for telemarketing campaigns. mySAP CRM integrates sales information from back-office systems and product information from online catalogs. The mySAP CRM Interaction Center manages, integrates, consolidates, and routes all incoming and outgoing customer interactions.

     The Internet channel facilitates customer self-service, e-selling, and Internet pricing and configuration. E-selling includes business-to-consumer, business-to-business, and business-to-partner sales. It offers online cataloging, XML coding and support, customer profiling, and other essential solutions and services for selling over the Internet.²

Operational, Analytical, and Collaborative Functions at the Right Time, in the Right Way

The third pillar upon which mySAP CRM is built is the availability of operational, analytical, and collaborative CRM functions to the right people, in the right manner, and in the right time frame.

     Think, for example, about the different roles and relationships in a typical Sales department.

Sales Representatives
First, there is a team of sales reps who need access to basic customer and prospect information. They need the ability to change customer information and update sales forecasts, among others.

     This basic functionality is called Operational CRM. It facilitates empowerment and personalization through role-based relationship management workplaces; enables seamless real-time integration of front-office interaction and back-office fulfillment; and synchronizes customer interactions across all channels.

Sales Manager
The managers of these sales teams need additional functionality in order to do their jobs. They are interested in the current sales and customer status in order to support the team: "Who were our biggest customers last quarter? How are they doing this quarter? What is our best product? Why?"

     To get information of this quality, you need an aggregation of information coming out of different parts of the organization (data from marketing research, open service requests from the service department, and stock information from the production division).

     This type of solution functionality is called Analytical CRM. It supports discovery and understanding of customer behavior, and enables improvement and optimization of operational processes to drive customer retention and acquisition.

Customers and Business Partners
The third CRM domain refers to the synergies you can achieve by linking people together. The sales team in our example can involve business partners with the Collaborative CRM approach, which combines new ways of interacting with customers to create additional value within the ecosystem, and facilitates participation within a marketplace community of customers and business partners.

The Whole Is Greater Than the Sum of Its Parts
The power of mySAP CRM is derived from the combination of these three pillars.

     As a holistic solution, mySAP CRM delivers everything a company needs to implement an effective tiered-servicing and customer-retention strategy:

  • More effective customer segmentation and target-group optimization
  • More accurate market forecasting, shopping-basket analysis, and customer profitability analysis
  • Improved customer loyalty and long-term customer satisfaction and retention
  • More precise product and service profiling, including personalized product and service offerings, which facilitate up-selling and cross-selling
  • More consistent and better synchronized information across all customer touch points - including the Internet, your interaction center, and personal contact
  • Enhanced service quality and faster resolution of service issues
  • More productive and proactive sales, service, and marketing organizations, permitting faster response to changing customer and market demands
  • Shorter sales cycles and reduced cost per sale
  • Ability to commit resources in real-time at the frontend; reliable delivery commitments
  • Intelligent online product configuration
  • Extensive mobile sales and service support

"Think big, start small" - a phrase often heard from CRM gurus. With mySAP CRM, we support and recommend this approach. Start with a small pilot in your own mobile sales organization, or begin sales or self-service initiatives over the Internet, or enrich your service organization with an interaction center.

     Get to know the benefits, and you can, and will, start to roll out the whole concept of being a customer-oriented company.

Hans-Heinrich Siemers holds a degree in Computer Science and has experience in various areas of IT business. Mr. Siemers started at SOFTWARE AG in 1992 in Development and Technology Consulting, and from 1996 held positions in Business Development, CRM Product Management, and Marketing at Oracle. Since mid-2000, he has worked for SAP AG as Director of CRM Product Strategy.

¹ For more information on mySAP Mobile Business solutions, see Peter Wesche's article, "Wireless Technology Without Reinventing Your Business: Introducing mySAP's New Mobile Business Architecture," in this issue of SAP Insider.
² For more information on mySAP Mobile Business solutions, see Peter Wesche's article, "Wireless Technology Without Reinventing Your Business: Introducing mySAP's New Mobile Business Architecture," in this issue of SAP Insider.

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