NCR blames CRM failures on infrastructure

TORONTO — Companies have no problem collecting and storing data about their customers, but they fall down on using that information to improve existing relationships and boost profits, a CRM expert says.

With data scattered across multiple divisions, corporations often lack one view of the customer to help develop a more complete picture of the business, according to Ron Swift, vice-president of customer relationship solutions at NCR Corp.

“We’re all out there trying to buy CRM software,” said Swift. “Just think of all the departments holding on to data. The problem that began in the 80s and 90s was when everyone redesigned their processes, they forgot to put the information infrastructure in place and join it all together.”

Therefore, the failure of most CRM initiatives is not a failure of the tools or software being used, but a failure of the infrastructure in place, said Swift, speaking Friday at Contact 2001: The Strategic Customer Relationship Management Forum in Toronto.

The key is to integrate all consumer contact points, which can include Web site purchases, call centres, retail point of sale, kiosks, ATMs, branches, telemarketing and direct mail. Customers must then mine that information to learn more about customers by using analytic data warehousing.

Swift says only 37 per cent of companies in the U.S know if they share a customer with another division, and only 45 per cent of firms alter service based on a customer’s profitability. As well, only 45 per cent of firms know about a problem before the customer does. The biggest offenders are telecommunications companies. They have the ability to know, for example, when a customer has experienced a dropped phone call, but do nothing to compensate the user.

“In a case like that, the customer gets upset twice – once when the call is dropped and again when they get the bill,” said Swift. “They choose not to call the customer and say ‘We’re not going to bill you for it, even though the call was 45 minutes long’.”

According to research from the Yankee Group, it costs seven to 10 times more to acquire a new customer than it does to retain an existing customer. Therefore, Swift said more should be done to strengthen relationships rather than sell more product to someone new.

CRM should also include building knowledge about what customers don’t like, or say no to when a sales person makes a pitch. Knowing why a customer buys or doesn’t buy a product or service can also result in a more evolved relationship, as opposed to only acquiring knowledge about what has already been sold.

“Go to the CIO OR CEO of your company and ask why you don’t record in the sales system all the customer denials. Denials are worth 10 times more than a purchase,” said Swift. “Most only record sales and that’s the problem — sometimes customers mean no today, but not necessarily tomorrow or next month.”

Swift gives retailers like Wal-Mart top marks for using its data warehouse (the largest in the world) to know what sells and what doesn’t. He credits their “investment and integration of hundreds of technologies” as being one of the key factors in using the information the chain collects to better manage their resources.

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