IT people have been known to view their colleagues in sales and marketing with some puzzlement: hence all those Dilbert strips about togas and Heaven (where these mysterious people seem to hang about drinking). A bemused IT professional when asked about his marketing team responded: “You mean the colouring-in department?”
Such an attitude is unexcusable as organisations use technologies like search engine marketing, CRM and data warehousing to better understand their customers and produce more effective promotions initiatives.
At the same time many firms have faced as much bafflement as that IT guy around just what the hell CRM is. “In Europe alone there are over 300 CRM application suppliers on the market,” says Ed Thompson, vice-president of research with Gartner. “We have also tracked 50 different sub-categories of CRM and CRM functionality: the only looser term in the market at the moment is ‘e-business’. Many suppliers talk about CRM when they really mean customer service, for instance,” says Thompson.
“Ultimately the only way to make sense of it is for the organisation itself to come up with its own definition of what CRM is and what you want from it.” That seems to be happening: CRM is coming into mainstream acceptance as a way to anchor marketing information.
The scene on the ground
The promise here is that every penny spent on marketing can be tracked back on its performance, giving the company precise, quantifiable information on customer interest and behaviour. The question is, how close to reality is that application of IT to marketing today?
This month we spoke to three quite different organisations to gauge how technology is helping underpin their company’s marketing projects.
Take Savills, the international property services group, which in the words of its group IT director Richard Colman, “does everything from selling islands to space in Canary Wharf”.
The company has been using the Pivotal CRM package in one form or another since 1999, he says, for all the traditional CRM reasons. “We want one view of the customer, we want to be able to offer relevant services to cross and up-sell. We want that information back quickly and simply, without a lot of heartache.”
Colman singles out the company’s success with its private finance operation as an example of how it has managed to get these things and put them to good use. “This started as a very small, 10-15 person unit that had been struggling with a horrendous database – it was mailing people who had died three years before, that sort of thing.”
The company’s decision to switch to an internet-based marketing approach allied with CRM soon turned things round, he says. A more segmented and targeted database was the finishing touch.
“We made about 3 per cent of sales with the website in 1998 and expect 60 per cent in 2006 or £600 million worth of property all told. I can’t say we wouldn’t have sold all that without these technologies – maybe these individuals would have phoned us anyway – but it can’t have hurt.”
"We want one view of the customer, we want to be able to offer relevant services to cross and up-sell. We want that information back quickly and simply, without a lot of heartache"
Richard Colman, group IT director, Savills
A company possibly a little less as far along the CRM exploitation track but one still committed to benefiting from the idea, is Notts Sport, a Leicestershire-based supplier of artificial surfacing used in sports facilities and schools.
The firm, working with IT services player Aspective, is looking to CRM to help increase its turnover by 30 per cent over the next five years.
Steve Foxon, head of technical services, Notts Sport, says the new Microsoft CRM system supersedes an older, more limited database to form a new sales and marketing tool to improve both the quantity and quality of customer information available to sales staff.
This will let managers monitor the success of specific marketing campaigns plus track information from suppliers and customers to ensure that product replacement and cross-selling opportunities are accurately identified and acted upon. The system integrates closely with the firm’s existing email and desktop systems. It is also available remotely, Foxon adds.
“The old system was adequate but too limited,” he says. “We adopted a very cautious approach. It was a lot of money to spend – we are a small company – and we had to feel it was something that would return the investment. What we really want and think we now have, is something that at the push of a button will tell us the micro-details of campaign x or y. What did we sell? Was it worth the money? This is the level of detail we want to get to and have never been able to before.”
Another organisation that has long resisted CRM but has now started to acknowledge there may be value in it is a highly specialist cloth manufacturer – or to any true blooded Scot, the only sort of cloth that matters: tartan.
Lochcarron is a small company with international distribution and field offices but one major weaving and headquarters plant in Selkirk, Scotland. The company, by dint of its product perhaps, is a highly traditional and risk-averse one. “When I joined they told me to take it from the 18th to the 20th century technology wise. I think I’ve got us up to about 1875,” jokes its IT director, Chris Turner.
The company has recently taken on board the Kelros CRM package. “We needed a way for everyone on each site to see a customer’s history while sharing that information with each other,” says Turner. The new software integrates closely with the company’s existing IBM Lotus Notes communications infrastructure.
A major benefit is that if a customer contacts the company about a piece of tartan, the Lochcarron knitwear and accessories division get pinged at the same time, allowing them to plan their next step together to try and boost the eventual total sale’s value. Turner evaluated a number of products, he says, before selecting Kelros. Some of the competition he disregarded as either “too unreliable” or “not fully developed and too expensive”.
Pragmatism is the keyword of the company’s approach to systems, he says, but since implementation 12 months ago the benefits have definitely started to accrue.
“It’s definitely proven to be fit for purpose,” he says. “It’s much more efficient as a sales support tool than the old database, always prompting people about contact and reminder follow ups. It’s also cut down the number of calls to check information that used to go back and forth between us and London.”
His next step may be integrating the system with a proposed converged voice over IP telephone network, where he sees great potential to link contact information via the CRM system and the phone. All in all there are still grey areas when it comes to CRM and getting it right. “CRM can be incredibly useful and effective, even if measuring exactly what it does can be tricky,” cautions Gartner’s Thompson.
The success of these very different organisations suggests more often than not they are getting nearer the mark and getting IT to really help marketing. Which can only be a good thing for the business.
The CIO’s guide to CRM
Though the term ‘CRM’ came into huge prominence in the late 1990s it was actually first used in a Harvard Business Review article in 1984.
An increasingly popular way to consume CRM is as a managed service. According to AMR Research, CRM is now the fastest growing segment in the enterprise application market, propelled by the success of hosted services. Sales of CRM and human capital management systems are said to be growing at 10 per cent a year in comparison to ERP, way behind at 3 per cent.
Still, not all is rosy in the CRM world. A July study of 100 UK sales directors in midrange firms sponsored by Microsoft found 25 per cent believe they have lost customers directly because of their poor use of CRM in the past.