BETTER YOUR CRM

Times can be really hard when your company is struggling. Romil Timbadia points out some important tips to keep in mind when business looks bleak.

Recently, thinktanks at the Boston Celtics basketball team in the US have been taking advantage of a data analytics tool in their annual task of setting prices for tickets. This tool helps them to monitor consumer demand through real time displays of sold and available seats in its home arena. Officials are also using the tool to set base ticket prices for the next season.

This new tool has helped the organisation quickly develop promotions and sales strategies, and the basketball team has already seen a seven figure return on investment (ROI).

While the US has been realising the true potential of data analytics, most of Western Europe have been slow to capitalise on this key functionality. But, it is only a matter of time.

MAKING SENSE OF IT ALL

Let's make it simple. Companies across Ireland and Western Europe are facing difficulties in retaining customers. This is because of sweeping changes within the company such as value shift, reduction in margins and price volatility, which impact consumer behaviour and business practices. At the same time, consumers are becoming more informed as a result of the Internet and the options available to them are increasing.

As a result, companies have little choice but to shift to a customercentric strategy. "A shift toward a customer-centric strategy is causing a phenomenally high demand for companies to expand their resources and move away from their traditional IT infrastructures and implementation policies to accommodate new business strategies," says Anders Ebbesen, senior research analyst with IDC's European software research programme.

However, regardless of a company's strategic business intent, companies always aim to attract and retain customers.

EXPLORING CRM EFFECTIVENESS

Now, most companies do have a customer relationship management (CRM) strategy. But it is critical to understand the enormous losses incurred by inefficient CRM processes and systems. The Data Warehousing Institute estimates that data quality problems cost US businesses more than $600 billion a year.

Experts say 2% of records in a customer file become obsolete in one month because customers die, divorce, marry or move. Explains Marc Vollenweider, CEO of Evalueserve, "european companies usually do not leverage the information contained in their CRM databases well enough and incur very high unnecessary costs from badly maintained databases."

THE NEXT STEP

With the hoard of information rising by the minute, businesses, small and big, irrespective of their nature, are increasingly inclined to explore the realm of data analytics (DA). DA services have enormous potential, not just for CRM (churn/retention analysis, cleaning, data acquisition/structuring), but also for marketing teams (market basket analysis, segmentation) and especially for financial analytics (modelling, forecasting).

Customers are demanding higher service levels from companies, posing technical and business challenges. As a result, the role of analytics and business intelligence (BI) is critical to the success of a CRM strategy.

Analytics and BI includes a number of functional activities from data mining and statistical analysis to predictive modelling and reporting. "The faster you can collect and analyse data, the better position you're in to make the right offer to the right customer at the right time," says Greg Gillett, national director of Cap Gemini Ernst & Young's CRM real-time marketing practice.

Larger companies generally manage to have analytics support inhouse. However, for smaller companies such an option is not costeffective. But they can too get analytics support given the recent emergence of Knowledge Process Outsourcing (KPO) concept.

CHEAPER OPTION

KPO is termed as the remote delivery of high quality, high value-added services from cheaper offshore locations to high-cost ones in the west. Outsourcing solutions for high-end processes are usually customised and valuebased. It is often this customisation that enhances the value proposition of KPO.

Explains Hedda Pahlson-Moller, managing director of Evalueserve Benelux, "outsourcing non-core activities to specialised firms that are better, faster and more efficient at managing these processes, can accelerate the process cycles and reduce turn-around time for these services. The client can launch a product faster and get to the market quickly." SMEs benefit the most from outsourcing to third-party vendors.

SMEs generally have a very small setup and the overhead costs are very high for them since they cannot fully take the advantage of the economies of scale. Offshoring can have an immense effect on the bottom line of a small enterprise simply by controlling the costs.