With the economy slowing and some consolidation in the CRM and eCRM space, I was wondering if anyone had an opinion on the winners and losers in this space.

I have read some of the articles from the February/March time frame but I'd like to know if there are any updates. I am specifically interested in Pivotal, how do they measure today against Siebel, Peoplesoft especially in a slowing economy? What do people expect Nortel will do with Clarify?

Are CRM projects still critical in a slow economy?

I would appreciate any comments people would have on these questions.

Thank you!
TD

I couldn't agree more. CRM is even more crucial during any kind of recession (be that industry-based or general economic). In fact I've read somewhere that, during a recession, the trend amongst american firms is to hire double the marketeers they previously had because marketing in a recession is at least twice as hard. And CRM becomes much more tricky because people just don't have the money to spend, and need to be thoroughly persuaded to do so.

Same goes for the online economic downturn. But as a general principle of making any business work, CRM and service is incredibly important.

During the 80s/early 90s, my father ran the photocopying side of things for Barclaycard. Now they could have bought the machines themselves, but decided to outsource. He didn't have to come in low on price, it was the service levels that they were interested in. And hey presto, he got it right, and so retained their business for nearly 10 years. That is, until he sold the company, and the new board didn't believe in the kind of service he was giving, so they lost the contract! It's basic CRM, but it was the service and the organisation thereof which they appreciated.

Homily over.
Charon
www.media.co.uk
On 09:53:32 1 August 2001 Barney wrote:
>TD....
>
>As the manager of a large entertainment site I have two
>clear objectives, and my task is as simple... or as
>complicated as this:
>1. I seek low cost ways of customer acquisition /
>increasing traffic to my site (through content exchanges,
>barters, competitions)
>2. I concentrate on Customer retention through simple CRM.
>For my sites this includes the following:
>a). Simple registration process with a compelling
>reason/proposition for registering in the first place
>b). Regular "value adding" communication to my
>users (via e-mail) - giving my users what they want most.
>c). Regular updates and new features on my web sites -
>which are well communicated on the site to the users
>d). Using better than best practice in data collection,
>advertising
>
>My task is to constantly reinvent ways of getting the
>basics right.
>
>CRM projects are supremely important and especially in a
>slow economy. All site owners must
>a) minimise the cost of getting more customers
>b) not give their competitors a better chance by off
>loading existing users - therefore must retain users -
>through clearly communicating the value proposition of
>their offering.
>
>To me the interesting question is how far can you
>complicate CRM, and are the incremental benfits really
>viable in terms of how much you need to invest.
>
>Can anyone give me examples of where significant
>investment in CRM and complicated systems are required?
>
>Spending lots on CRM projects is no substitute for getting
>the basics right. Getting the basics right is the holy
>grail in any economy, fast or slow.
>
>

Barney, the objectives for your CRM exercise are in keeping with a site proposition I am currently developing. I am interested in whether anyone has had any experience of ROI with CRM? One of my requirements is to break down an existing database of users into finer categories of audience types, as a means of identifying primary and secondary groups for generating more meaningful profits. Is it realistic at this stage to expect to make savings interms of marketing budgets etc through these kinds of targeted initiatives? Does anyone have any experiences with this? successful or otherwise?

On 09:53:32 1 August 2001 Barney wrote:
>TD....
>
>You ask: Are CRM projects still critical in a slow
>economy?
>
>Do you wash potatoes even when they are clean? Of course -
>and all the more so because there is never a greater need
>for CRM than now in a slow and spendthrift economy.
>(Apologies for the analogy).
>
>I can't comment on who the winners and losers will be in
>this market. My flippant answer would be "Those who
>have not over invested in highly engineered
>solutions". People seem too ready to believe that
>they have got the basics right and it is time to raise
>their game to a higher level, but in such a fast changing
>market I believe there is constant work in continuing to
>get the basics right. Employing more and more complicated
>CRM solutions will rarely bring incremental benefit. From
>my perspective they will merely act as a distraction and
>very soon you will find yourself back to learning the
>basics.
>
>As the manager of a large entertainment site I have two
>clear objectives, and my task is as simple... or as
>complicated as this:
>1. I seek low cost ways of customer acquisition /
>increasing traffic to my site (through content exchanges,
>barters, competitions)
>2. I concentrate on Customer retention through simple CRM.
>For my sites this includes the following:
>a). Simple registration process with a compelling
>reason/proposition for registering in the first place
>b). Regular "value adding" communication to my
>users (via e-mail) - giving my users what they want most.
>c). Regular updates and new features on my web sites -
>which are well communicated on the site to the users
>d). Using better than best practice in data collection,
>advertising
>
>My task is to constantly reinvent ways of getting the
>basics right.
>
>CRM projects are supremely important and especially in a
>slow economy. All site owners must
>a) minimise the cost of getting more customers
>b) not give their competitors a better chance by off
>loading existing users - therefore must retain users -
>through clearly communicating the value proposition of
>their offering.
>
>To me the interesting question is how far can you
>complicate CRM, and are the incremental benfits really
>viable in terms of how much you need to invest.
>
>Can anyone give me examples of where significant
>investment in CRM and complicated systems are required?
>
>Spending lots on CRM projects is no substitute for getting
>the basics right. Getting the basics right is the holy
>grail in any economy, fast or slow.
>
>
>
>
>
>
>On 20:30:49 31 July 2001 dimock wrote:
>>With the economy slowing and some consolidation in the
>CRM
>>and eCRM space, I was wondering if anyone had an
>opinion
>>on the winners and losers in this space.
>>
>>I have read some of the articles from the
>February/March
>>time frame but I'd like to know if there are any
>updates.
>>I am specifically interested in Pivotal, how do they
>>measure today against Siebel, Peoplesoft especially in
>a
>>slowing economy? What do people expect Nortel will do
>>with Clarify?
>>
>>Are CRM projects still critical in a slow economy?
>>
>>I would appreciate any comments people would have on
>these
>>questions.
>>
>>Thank you!
>>TD

It sounds as if you want empirical evidence and all I have to offer is anecdotal advice.

Remember there is a large difference in delivering a single targetted offer to a segment of your database (perhaps the most responsive or valued segment) and contemplating a different offer for each segment of your database. Roughly speaking the former halves your efforts and doubles your returns; and the latter doubles your effort with a risk that you dilute any potential return to nothing. (Half the people respond well, half disappear: if your database can be so clearly split in 2, and each offered a significantly different service then you should be 2 different business anyway).

Lacking the context of your project I don't know how far off the mark this is. The difficulty in the way you put your question is that you may well make savings by segmenting your database (e.g. don't send Direct marketing to those that have never responded, OR, send DM to only those that have bough online before). Alternatively, you stand to lose considerably if you segment your database in a non-relevant manner i.e. if you do not understand you user base well enough.

Take the following for example:

I have a database of 100k users. I send generic newsletters and deliver a generic homepage to each. Then in an effort to build loyalty or increase return visits, I decide I want to make my newsletters and home page more individual/personal. I ask them, or I deduce from information I have at hand, which of 4 categories they like most, and each catergory turns our to have 25% of the overall database:
1. Generalists
2. Lovers of action
3. Lovers of horror
4. Lovers of Love

... and to each of these I send correspondingly suitable information. As a result I loose 75% of my users. Although they have a stated preference for a particular genre, their usage pattern is evidence that they like to excercise their "choice" in the matter. Being presented with a targeted offer has actually diminshed the value of my site in their eyes.

A different way of segmenting the database is to look at what I know of users by their habits on my site. Here at least I can address the "holes in my bucket" without putting anything else at risk e.g. 40% of my visitors only visit once. Why? Perhaps a targetted way of dealing with this segment will bring incremental returns. Anything I do in this area cannot make me worse off than before, and success in this area will give me positive information about my users that I can build on in the future. This sounds like an "opportunity saving" that only some finance directors would recognise as a saving...

I think Amazon still has one of the best example of CRM through their recommendations and, .."people who bought this... also bought x, y , z...". The fact that they have continued to develop this feature is indicative of its success.

My 2 take-away points are:
1. Be careful of making the wrong segmentation
2. Don't ignore the obvious. Are you sure that you have addressed those bits of CRM that don't need investment? (Getting the basics right, identifying the opportuntiy savings, customer churn etc)

On 11:39:29 9 August 2001 aim72 wrote:
>Barney, the objectives for your CRM exercise are in
>keeping with a site proposition I am currently developing.
> I am interested in whether anyone has had any experience
>of ROI with CRM? One of my requirements is to break down
>an existing database of users into finer categories of
>audience types, as a means of identifying primary and
>secondary groups for generating more meaningful profits.
>Is it realistic at this stage to expect to make savings
>interms of marketing budgets etc through these kinds of
>targeted initiatives? Does anyone have any experiences
>with this? successful or otherwise?
>
>
>On 09:53:32 1 August 2001 Barney wrote:
>>TD....
>>
>>You ask: Are CRM projects still critical in a slow
>>economy?
>>
>>Do you wash potatoes even when they are clean? Of
>course -
>>and all the more so because there is never a greater
>need
>>for CRM than now in a slow and spendthrift economy.
>>(Apologies for the analogy).
>>
>>I can't comment on who the winners and losers will be
>in
>>this market. My flippant answer would be "Those
>who
>>have not over invested in highly engineered
>>solutions". People seem too ready to believe that
>>they have got the basics right and it is time to raise
>>their game to a higher level, but in such a fast
>changing
>>market I believe there is constant work in continuing
>to
>>get the basics right. Employing more and more
>complicated
>>CRM solutions will rarely bring incremental benefit.
>From
>>my perspective they will merely act as a distraction
>and
>>very soon you will find yourself back to learning the
>>basics.
>>
>>As the manager of a large entertainment site I have
>two
>>clear objectives, and my task is as simple... or as
>>complicated as this:
>>1. I seek low cost ways of customer acquisition /
>>increasing traffic to my site (through content
>exchanges,
>>barters, competitions)
>>2. I concentrate on Customer retention through simple
>CRM.
>>For my sites this includes the following:
>>a). Simple registration process with a compelling
>>reason/proposition for registering in the first place
>>b). Regular "value adding" communication to
>my
>>users (via e-mail) - giving my users what they want
>most.
>>c). Regular updates and new features on my web sites -
>>which are well communicated on the site to the users
>>d). Using better than best practice in data
>collection,
>>advertising
>>
>>My task is to constantly reinvent ways of getting the
>>basics right.
>>
>>CRM projects are supremely important and especially in
>a
>>slow economy. All site owners must
>>a) minimise the cost of getting more customers
>>b) not give their competitors a better chance by off
>>loading existing users - therefore must retain users -
>>through clearly communicating the value proposition of
>>their offering.
>>
>>To me the interesting question is how far can you
>>complicate CRM, and are the incremental benfits really
>>viable in terms of how much you need to invest.
>>
>>Can anyone give me examples of where significant
>>investment in CRM and complicated systems are
>required?
>>
>>Spending lots on CRM projects is no substitute for
>getting
>>the basics right. Getting the basics right is the holy
>>grail in any economy, fast or slow.
>>
>>
>>
>>
>>
>>
>>On 20:30:49 31 July 2001 dimock wrote:
>>>With the economy slowing and some consolidation in
>the
>>CRM
>>>and eCRM space, I was wondering if anyone had an
>>opinion
>>>on the winners and losers in this space.
>>>
>>>I have read some of the articles from the
>>February/March
>>>time frame but I'd like to know if there are any
>>updates.
>>>I am specifically interested in Pivotal, how do
>they
>>>measure today against Siebel, Peoplesoft
>especially in
>>a
>>>slowing economy? What do people expect Nortel
>will do
>>>with Clarify?
>>>
>>>Are CRM projects still critical in a slow economy?
>>>
>>>I would appreciate any comments people would have
>on
>>these
>>>questions.
>>>
>>>Thank you!
>>>TD

Barney,

I think you will find interesting the information published at the site http://www.hewson.co.uk, mainly the article http://www.hewson.co.uk/sistrum/crm_management_insights/stream4/0001compelling_crm.htm.

Hope that helps