Why a Traditional Siloed CRM Approach is Doomed

8/6/2019 Why a Traditional Siloed CRM Approach is Doomed

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Volker Hi ldebrand an d Vinay Iyer, SAP

Feature Story | Strategic CRM

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Why a Traditional Siloed CRM Approach Is Doomed6 New Core Competencies for Delivering the Total Customer Experience

Volker Hildebrand (volker.

[email protected]) is Vice

President of CRM Solution

Management at SAP. He has been

with SAP for over 10 years, building

momentum in CRM and e-commerce.

Prior to joining SAP, he was an

assistant professor of marketing

and helped companies drive

CRM initiatives as a business

consultant. A thought leader in

CRM for 15 years, he has written

several books and 100+ articles.

Volker holds degrees in businessand technology and earned his

Ph.D. in business economics.

In a 2009 Strativity Group study o 869 executives,

80% o those surveyed declared that customer-

acing strategies are high on their corporate agendas

and are even more important than they were three

years ago. Strativitys research also shows that com-

panies that invest 0% or more o their revenues inthe customer experience realize a ar greater num-

ber o customer-driven reerrals.

In short, organizations that embrace the concept

o customer experience management are more suc-

cessul than those that do not.

So how can you manage the customer experience

successully? And what are the key success actors?

The Cstomer Empowerment PhenomenonFor starters, companies must recognize that custom-

ers today are very dierent rom customers in thepast. They are more empowered than ever beore,

due largely to three important actors:

The dramatic growth and increased availability o

communications technology, which connects an

ever-growing number o people worldwide

The rapid and pervasive adoption o the Internet

as the medium or inormation consumption and

interaction

The recent explosive growth o online social media

and other Web 2.0 technologies, which enablepeer-to-peer interactions on a global scale

Since todays customers can so easily connect with

one another, with companies, and with inuencers,

nothing can be a secret or long. Product peror-

mance, pricing, and customer experiences are no

longer under the direct control o companies. Rather,

the power has shited dramatically to consumers, who

TheCustomerCentricEnterprise:PartNewCustomerStrategiesfor

CompetitiveAdvantageintheMillennium,StrativityGroup(2009).

now collectively determine how brands and customer

experiences are identifed, defned, and expressed.

The Resltn New CstomerEnaement Model

Given this dramatic shit in customer power and theree movement o inormation, companies have to

adopt a undamentally new approach to engaging

with their customers. They can no longer simply

manuacture products, advertise them, market and

sell them, provide ater-sales service, and repeat the

process all over again. Todays world requires a very

dierent customer-acing approach, which weve bro-

ken down into six core competencies (see Figure 1).

Sense customer and market sentiment. Custom-

ers are already engaged in several online and

oine communities, expressing their opinions,

preerences, needs, and trends. It is imperative

that companies listen to and engage in these con-

versations arguably even beore they design a

new product or service.

Develop comprehensive customer insight. By

actively listening to customer conversations and

sentiments, and by leveraging historic customer

interaction inormation, companies can derive

comprehensive customer insight.

Create optimal oers. Companies can then lever-age this comprehensive insight to create the right

products, packages, and oers to cater to cus-

tomer expectations.

Market and sell consistently across multiple

channels. Next comes marketing and selling to the

customer, leveraging traditional channels like

direct or email marketing, as well as new social

media channels like Facebook and Twitter. Ensure

that youre delivering a consistent customer expe-

rience across all channels.

1.

2.

3.

4.

Vinay Iyer ([email protected]) is

Vice President of SAP CRM Global

Marketing, responsible for go-to-

market and thought leadership. He

has championed the use of social

media and Web 2.0 channels in SAP

CRMs marketing efforts, and

aspires to keep SAP CRM in the

forefront of new media marketing.

Prior to joining SAP, Vinay held

product marketing and business

development roles at Siebel

Systems in the US and EMEA. Vinay

has a masters degree in electrical

engineering and an MBA from the

Wharton School at the University

of Pennsylvania.

This article appeared in the Jan n Feb n Mar 200 issue o SAPinsider (http://sapinsider.wispubs.com)

and appears here with permission rom the publisher, Wellesley Inormation Services (WIS).
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Deliver superior customer service. This consis-

tency o experience has to be carried beyond the

sale to whenever the customer requires service

and care through whatever channel the cus-

tomer chooses, including new channels like Twit-

ter. Whether the customer needs repairs or the

product they purchased or has questions related

to billing and payment, service agents at every

touch point must have adequate knowledge o the

customers previous interactions. This is critical;

customers must receive a consistent experience

in order to ormulate a steady and positive

opinion about your company and your brand.

Seek and infuence ongoing customer engage-

ment. Finally, it is no longer enough to provide cus-

tomer service only when the customer requests it.

Companies should also constantly engage custom-

ers in ongoing conversations in whatever orums

the customers are participating in as a continuing

eort to build mindshare and brand perception.

How Does SAP CRM Spport Ths NewCstomer Enaement Model?To re-architect your customer-centricity strategy

in line with these six new core competencies, we

have identifed three key pillars o customer experi-

ence management that every organization should

consider: operational excellence, interaction excel-lence, and decision excellence (see sidebar on the

next page).

Lets take a closer look at how SAP is driving

innovation in each o these areas (see Figure 2 on

the next page).

Enabling Operational Excellence:

SAP Business Suite

SAP has always been committed to helping organiza-

tions achieve operational excellence. We do this

simply and efciently by providing industry-specifc

solutions or end-to-end sales, marketing, and ser-

vice business processes out o the box. These pro-

cesses ensure that organizations have a 360-degree

view o customer interactions and operational con-

straints. And they enable managers to ocus on

process efciencies, thereby optimizing every oppor-

tunity to increase revenue or cut costs.

At SAP, we will continue to ocus on entire business

processes, not only across sales, marketing, and service

(and across customer touch points), but across the

5.

6.

enterprise and beyond. Customer relationship manage-

ment (CRM) and customer experience managementin particular is not limited to the ront ofce: Orders

need to be shipped as promised, feld service techni-

cians need spare parts in time, sales reps need inor-

mation about unpaid bills or back orders, and retailer

shelves need to be stocked when a promotion hits

the street. And i you want to know who your most

proftable customers are, you will need inormation

rom your fnancial system. SAP Business Suite is

unique in its ability to seamlessly connect one end o

your customer-acing processes to the other.

Making Every Interaction Count: Exciting New

Developments in SAP CRM

As we noted earlier, the explosive growth o wireless

communications and the rapid adoption o the Inter-

net globally are enabling people to be connected and

inormed like never beore. Realizing this opportu-

nity to expand the reach o enterprise inormation

and processes to every participant in the business

conversation, SAP Customer Relationship Manage-

ment (SAP CRM) is pioneering several major capabili-

ties. Here are a ew exciting developments that either

are available today or will be available soon.

SAP Business Communications Management

SAP Business Communications Management is an all-

IP (Internet) communication sotware solution that

empowers organizations to integrate multichannel

communications (such as telephone, email, ax, voice-

mail, text message, or online requests) with customer

business processes across sales, marketing, and

service. SAP Business Communications Management,

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Business Context

Customerexperience

Sense customerand marketsentiment

Market and sellconsistently acrossmultiple channels

Developcomprehensive

customer insight

Seek and influenceongoing customer

engagement

Deliver superiorcustomer service

Createoptimal offers

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in conjunction with SAP CRM, replaces traditional

telephony hardware-based solutions with sotware.

Intelligent routing ensures that your customers and

ront-line employees can reach the people with the

right skills to best address their questions no mat-

ter where in the world those experts might be.

Mobile CRM

In collaboration with partners like Sybase and Syclo,

SAP is co-innovating exciting new smartphone-based

solutions to deliver SAP CRM on mobile devices.

Sybase is developing SAP CRM applications on its

Sybase Unwired Platorm (SUP); these applications

are designed to run on the iPhone and Windows

Mobile smartphones. SUP provides a single platorm

or delivering applications and data to multiple

mobile devices and mobile operating systems,

thereby simpliying the challenges o deliveringmobile applications to global users.

And through our partnership with Syclo, we are

launching a mobile CRM application specialized or

traveling feld service personnel. Syclo oers deep

domain expertise in feld service mobile solutions,

along with a best-in-class mobile feld service solu-

tion that complements SAP CRM.

Web Channel

The Internet is a low-cost, high-impact channel through

which you can market, sell, and provide services tocustomers (who expect to interact with vendors online

24/7) so its an increasingly important channel in

tough economic times. Today, many companies have

homegrown Web presences that are either custom-

built with high TCO or based on outdated technology.

SAPs next-generation Web Channel platorm, with

its state-o-the-art visual and interaction design, will

set a new standard. The platorm, which will be made

available in the latter hal o 200, will enable organi-

zations to create an exceptional online customer

experience by leveraging existing back-end processes

and creating content-rich customer interactions.

Exciting innovations including a revolutionary

interactive catalog, a sensational product gallery,

embedded product ratings and reviews, user-ocused

online sel-services, and integrated, real-time oer

management will allow organizations to turn the

Internet into an appealing and powerul B2B or B2C

sales channel, unleash the power o Web 2.0 tech-

nologies and media, and provide their customers

with convenient, intuitive online sel-services.

The 3 Pillars of Customer Experience Management

Pillar #1: Operational Excellence

Operational excellence is a prerequisite or delivering a positive customer

experience. It is all about efciency, eectiveness, and your ability to deliver

on your promises to customers at the lowest possible costs. This requires a

business process design across and beyond the entire organization, eec-

tively synchronizing ront and back ofces and efciently mapping supply to

demand. In todays environment, companies must not compromise on

operational excellence or they will ail.

But business strategies also need to adapt urther, as interaction excellence

and customer insight are becoming key sources o competitive dierentiation.

Pillar #2: Interaction Excellence

Customer experience is to a large extent based on the interaction experi-

ence; that is why companies should make every interaction count. As chan-

nels prolierate, organizations must seek new ways to interact with custom-

ers and provide a consistent experience across all touch points. This includestechnology to support mobile workers and bridge the gap between multi-

channel communications and customer-acing business processes.

Organizations should also consider leveraging contextual social media

and collaboration by enriching structured data with unstructured data rom

outside o the enterprise. For example, companies should be harnessing

the collective intelligence o online communities to get a sense o customer

and market sentiments rom orums, product reviews, and blogs.

Pillar #3: Decision Excellence

To regain power (as the balance has clearly shited toward the customer),

organizations need to gain and develop proprietary insight into their cus-tomers beyond industry wisdom, disseminate this inormation across the

organization, and turn this insight into action by making excellent decisions.

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Capitalize oncustomerinsight

Drive efficiencyand effectivenessto deliver onpromises at thelowest possible costs

Make everyinteraction

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Social Media Channels

Realizing the emerging need to embrace social mediachannels as avenues o customer engagement and

intelligence gathering, SAP CRM has pioneered busi-

ness process integrations with Twitter and Facebook.

Twitter is a rapid-fre communications channel or

broadcasting short messages (tweets) to ollow-

ers. And it is very easy or ollowers to respond to

your messages. Consequently, in a very short time, a

message can reach very large audiences. Companies

are interested in tracking these conversations to

evaluate sentiment and determine what response

may be required. SAP CRM has developed integrationwith Twitter to read tweets, analyze them by leverag-

ing SAP BusinessObjects Text Analyzer, and ormulate

a sentiment (positive, negative, or neutral) based on

business rules. Marketing and service proessionals

can now monitor tweets, evaluate sentiment, and

respond either directly on Twitter or as a transac-

tion in SAP CRM (see Figure 3).

Many companies are launching promotions on

Facebook to leverage Facebooks powerul network-ing and trusted reerral opportunities. For example,

some companies are enticing users with loyalty

rewards as an incentive or providing reerrals.

Accordingly, SAP CRM has developed an integration

into Facebook to extend the reach o its powerul

loyalty management solution. Companies can deploy

a simple widget to present loyalty rewards inorma-

tion calculated in SAP CRM directly in Facebook; then,

consumers can easily access their reward program

inormation through Facebook. Furthermore, compa-

nies can launch promotions on Facebook, and whencustomers participate in the promotion or reer the

promotion to a an, theyll acquire loyalty rewards

that are calculated and assigned through SAP CRM.

These SAP CRM social media pilot launches are

generating considerable interest in the exciting new

sphere o social CRM. SAP continues to actively

experiment with these and other innovative ideas.

Capitalizing on Customer Insight:

SAP BusinessObjects Analytics and Dashboards

Many organizations are still struggling to achieve a

true 360-degree view o their customers, let alone

make this inormation available to every customer-

acing employee in an actionable way. SAPs

approach to CRM analytics utilizes market-leading

SAP BusinessObjects tools to provide intuitive, oper-

ational intelligence or line managers and employees

across sales, marketing, and service (see Figure 4).

For example, out-o-the-box, role-based Xcelsius

dashboards, as well as exible, ad hoc reporting

through SAP BusinessObjects Explorer, give users

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intuitive access to personalized inormation thats

embedded in a business context. With this dynamic

and easily customizable data visualization sotware,

business users gain autonomy rom the IT department;

they can engage with enterprise data directly and then

use this inormation to make more inormed decisions.

Whats more, integrated planning, orecasting, and

simulation capabilities can help you optimize opera-

tional processes and a predictive real-time oer

management engine provides product recommenda-

tions across customer interaction channels, helping

to boost cross-selling and upselling opportunities.

Key TakeawaysConsistently managing all aspects o the customer

experience has become more important, yet more

challenging, than ever beore. Customers are more

demanding, powerul interaction channels are proli-erating, and margin pressure is increasing. At the

same time, new technologies are emerging and

theyre enjoying rapid adoption.

Consequently, companies must look beyond

traditional CRM and leverage all available channels

and inormation sources to better engage with

todays customers. And they also have to deliver a

consistent customer experience at every interaction

opportunity.

Doing this is not easy. There are too many chan-

nels to manage and too many conversations to moni-

tor. However, with careul planning and prioritization

and by applying the right technologies, including

exciting new capabilities in SAP CRM customers

can deliver on the promise o a consistent total

customer experience.

To connect with the SAP CRM community, we

encourage you to check out the ollowing resources:

BPX: www.sdn.sap.com/irj/sdn/bpx-crm

LinkedIn: www.linkedin.com/groups?gid=238243

1&trk=hb_side_g

Twitter: www.twitter.com/sapcrm

YouTube: www.youtube.com/sapcrmtv

Thought leadership: www.thesocialcustomer.com

SAPs Web site: www.sap.com/crmn

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Why a Traditional Siloed CRM Approach is Doomed