VideoLike all software vendors, execs at Oracle Corp. are not exactly wallflowers when it comes to extolling the virtues of the company's products. This industry tendency toward puffery may explain a press release promoting the Ebusiness Network, a how-to Web site on E-commerce that Oracle co-sponsors. In a bit of bumpf promoting a show on that network, Oracle proclaimed that, with E-business intelligence programs, "you can kiss your CRM problems goodbye."
Hardly. And it's not as if Oracle doesn't have a right to crow about its E-CRM offerings. With the May launch of E-Business Suite 11i, an integrated E-commerce package that includes customer-relationship modules, the business application and database specialist has vaulted into the top tier of CRM and E-CRM software vendors. That elite group includes market leader Siebel Systems, as well as ERP heavyweights SAP AG and PeopleSoft. Oracle's CRM programs for its Ebusiness Suite have proved so popular, in fact, that sales of the applications shot up 54 percent in calendar year 2000.
Of course, now is a real good time to be selling E-CRM software. Outside of remote hosting, E-CRM is about the hottest topic in E-commerce these days. Originally, customer-relationship programs were designed to capture information about shoppers and to help sales personnel manage leads and service requests. But the latest crop of browser-based CRM applications go much further. Using E-CRM programs, E-tailers can respond to customer inquiries (both traditional and Net-based messages), answer basic questions about products and policies, and track complaints and communications. According to industry follower IDC, the E-CRM software market will top $11 billion in sales by 2003.
But despite vendor claims, no E-CRM software — or suite of programs — eliminates every E-business problem. As executives at some online businesses have discovered, relying too heavily on E-CRM software can cause almost as many headaches as it solves.
Case in point: Some companies employ E-CRM programs to generate E-mail responses to consumer complaints. The thinking: Getting back to the customer quickly demonstrates genuine commitment to service. The flaw in the thinking: Many consumers are put off by generic E-mail responses, viewing them as the new-economy equivalent of form letters. "CRM software isn't a silver bullet or a panacea," acknowledges Terry Nelson, E-commerce marketing manager at Lands' End, a direct seller of apparel and luggage, in Dodgeville, Wisconsin. "It's one tool in our toolbox that helps us understand our customer better."
Indeed, industry experts say online merchants who view E-CRM applications as the ultimate in customer care are asking for trouble. "Because the Net must be incorporated into business rather than added on, E-CRM should be part of CRM and E-commerce initiatives," notes Beth Herzog, financial services analyst at UK-based market researcher Datamonitor. "To think of it as an entity unto itself detracts from its real purpose."
Therein lies the rub. Many corporate users of E-CRM software don't bother to tie the software into their CRM operations, such as call centers and fax-back procedures. The quick-fix approach can be a disaster, says Philip Tamminga, a partner in the customer-relationship management group at consultancy Accenture. "The implementation of E-CRM programs is complex," Tamminga argues. "Introducing the software requires massive, if not transformational, change for a company."
Customer Nine Will Not Return
If you're scoring at home, E-CRM software is 1) not a panacea, and 2) difficult to implement. So why bother?
For starters, a recent survey by Indiana University and professional service organization KPMG revealed that product information is the most important factor for online customers over age 25. If E-tailing is to move beyond the novelty stage, Net merchants must keep their customers informed.
They can't do much worse. According to Datamonitor, virtual retailers lost a staggering $6.1 billion in 1999 because of poor customer service. And compared with traditional retailers, online sellers are flat-out lousy at getting window-shoppers to do a little forking over. The numbers tell the tale. At land-based stores, about 40 percent of prospective customers end up making a purchase. By comparison, only about 3 percent of online shoppers actually buy something.
Some industry watchers believe E-CRM programs will help improve that figure. Future releases of the software promise to go beyond merely providing information on a customer's previous buying habits. Explains Erin Kinikin, a CRM analyst at consultancy Giga Information Group: "The programs will suggest the best answer, best offer, best piece of information to meet a customer's needs."
At the very least, E-CRM applications should provide E-tailers with a clearer picture of what online shoppers are looking for. "Companies that implement E-CRM know what the customer wants," insists Tamminga. "They know the attributes of a customer, how to treat him or her, and how to tailor their offerings."
Executives at Lands' End know about tailoring. Until a few years ago, the $1.3 billion-in-revenues retailer sold mostly through catalogs. Because of customer intelligence wrung from E-CRM software, the company now operates several channels, including a mail-order business, specialized children's catalogs, and a Web site. Says Nelson: "E-CRM is changing the way we think about interactions with customers."
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