“Organizations that focus on siloed implementations of CRM will get only siloed benefits“

Vinay Iyer, Vice President- CRM Solution Marketing, SAP, and author of ‘The Customer Experience Edge’ provided some interesting insights into the use of CRM technology, the vendor’s successes in this category and trends that are dominating the CRM arena. In conversation with Jasmine Desai

Can you elaborate on the concept of Customer Experience and what it entails?
Earlier, the CRM market was all about running a call center; a tool for sales people etc. For instance, when a store entices a customer with a promotional offer or discount and when a customer does not see that particular product on the shelf, they are going to go away disappointed. This has indirect implication on manufacturing, SCM and logistics.  Initially, in the hype days of CRM, it could bring about lot of efficiency but it couldn’t solve the overall customer experience problem. That holds true even today. We are witnessing that organizations are taking a holistic view of the customer and trying to find what matters to them.

How can an unprofitable relationship with a customer be turned into a profitable one?
Not all unprofitable customers can be converted or need to be converted into profitable ones. There are customers who are not suited for certain companies or products. In fact, organizations should focus on identifying the right customer and retaining him or her. For that to happen, you need proper tools and processes. Take the example of Koop, a Swiss grocery retail chain. It’s a commodity business. Koop faced the question of how to get more out of a customer buying from its grocery stores as opposed to shopping at a competitor. It built an application for the iPhone that was tied to the retailer’s SAP ERP, SCM and logistics system at the backend. Koop found that customers started spending more. It also put in a virtual grocery wall at train stations and bus stops. In this manner, the retailer found additional revenue channels by taking advantage of times at which a customer would typically have ended up wasting time.

In what way is analytics transforming the CRM space?
Analytics has been tied to CRM for a long time, especially from the marketing perspective, as segmentation of the customer base, creating the right promotion for the right segment, tracking ROI on promotions etc has always been in high demand. Today, analytics has started to make a bigger impact in predicting customer behavior, predicting markets where certain products have a higher chances of success and penetration and so forth. With this technology, you gain a 360 degree view of the customer—not just from the CRM system but also from SCM, ERP and other backend applications. Organizations are also getting lots of insights from social media platforms. With analytics, one can bring structured and unstructured insights with intelligent data gathering and be thoroughly informed even before walking into a customer meeting.

There is a concern that vendors have built CRM applications focusing more on the top management rather than operational managers. Do you concur?
This is the way that CRM was made and sold in the past. The case was made that one could get more out sales or other stakeholders by putting in automation and analytics. There are two major complaints when it comes to CRM. The first is that it does not deliver on its promise. The principal reason for that is that customers focus on siloed implementations of CRM and they get siloed benefits. Secondly, regardless of the vendor, it is always a challenge to get the users on board. Historically, CRM was never built so that the sales guy could use the tool to sell better. Rather, it was designed in such a way that the sales person could input information for the manager. That has changed fundamentally due to the emergence of new applications that combines social and mobile interfaces to bring in fresh customer perspectives.