Since the dawn of commerce, merchants have recognized the importance of taking care of their customers and anticipating their needs. A thousand years ago, Omar the sheep trader may have practiced customer relationship management (CRM) by remembering that Ahmed, his best customer, liked his wool prepared in a special way. Omar also remembered to ask about Ahmed's wife and three daughters, and to present a gift of two goats when the eldest got married.

Implementing a CRM system involves more than just buying a package of software and installing it. In fact, CRM is more than just software; it's a different way of doing business. It involves changing your business procedures, integrating existing intelligence-gathering, fulfillment, and distribution systems, and even building bridges to your customers' internal systems. Often, it also requires mixing and matching multiple software packages. Employing the services of an integrator specializing in CRM, such as EDS of Plano, Texas (sponsor of that running-with-the-squirrels Super Bowl commercial) is a common strategy.

"Customer relationship management is a strategy, not a process," says Mike Littell, president of CRM for EDS. "It reaches beyond anything you can buy in a software package. It entails a commitment at the executive level to put the customer at the center of a company's business processes. In order to succeed at creating and executing customer focused business strategies, a CRM program must span organizational and functional boundaries."

Small- to mid-size enterprises (SMEs) have generally lagged behind the rest of the market in deploying CRM, simply because of the immensity of the entire proposition. According to the Aberdeen Group, a Boston-based research and consulting organization, many market-leading CRM software packages "are too expensive, hard to use, and inflexible to be suitable for SMEs, which as a group are typically not as far along as larger firms in defining and executing a CRM vision." For this reason, a modular approach, in which a company acquires only the CRM components that it needs and can afford, may work best for smaller enterprises. (See CRM downsized.)

Getting with the program

In order for CRM to succeed, management has to buy into the idea of orienting business processes to the customer, not the other way around. Marketing, sales, service, and other areas of the enterprise must be willing to work in concert and freely share information flowing in from call centers, sales reps, brick-and-mortar stores, e-mail, and the Web.

One of the most important organizational transformations required for CRM is to think in real time. It's easy enough to generate multiple reports from several distinct applications, massage them into a spreadsheet, and send a periodic report to a manager. Although these reports may be of some use, the best approach in a customer service setting is to be able to log onto a Web site in real time, see how many calls or e-mails are in a queue, how fast the queue is moving, and how long it takes to respond. Further, the manager should be able to listen to any call, monitor any e-mail or text chat thread, and give instant feedback to the agent.

The central mission of CRM is to maintain a central repository of all relevant information about a customer, and make it accessible to everybody in the company who interacts with that customer. Unlike applications such as Enterprise Resource Planning (ERP), which is usually deployed only in a few areas of a company, CRM is likely to be deployed throughout the enterprise. So employees had better be comfortable with the concept, and the tools they're given to implement it, says Dan Metzger, senior vice president of sales and marketing for Worldtrak, a small CRM vendor in Minneapolis. "You don't give the HR application to anyone outside of payroll and HR," he says. "But with CRM, virtually everyone in the company comes into contact with customers at some point in time, and so to have access to that customer-centric information at or before that interaction point is beneficial."

The limits of customized CRM

There is no way to select "the right CRM package." In fact, there is no such thing as a single, one-size-fits-all CRM solution, no magic combination of applications that works for everybody. Regardless of what pieces make up the whole, an integrated CRM system must offer a highly intuitive user interface because of the high number of users that are likely to come in contact with it. Aberdeen Research has found that, despite millions of dollars being spent on sales force automation (SFA) deployment, sales people at many firms ignore them in favor of simple e-mail and contact-management tools, such as Microsoft Outlook, ACT, or Goldmine.

In a recent report, Aberdeen advocates a gradual, modular approach to CRM implementation: "Many SMEs are not yet ready to tackle the entire range of CRM applications; they need time to adjust strategically, culturally, and procedurally to a customer-centric, information-driven business model." One such modular system is Oracle CRM, part of Oracle Corp.'s e-business suite; a single interface, the "customer relationship management dashboard," provides access to all customer-related applications. Another is Worldtrak's product, which offers multiple CRM modules built around Microsoft Outlook.

A sound CRM system should ensure that customers get the same fast response and the same service, no matter how they contact your company. Yet all too often, the guy who e-mails a question has to wait a couple of days for a response, while someone else who dials 800 number gets a response within 15 minutes. The person who turns to online text chat for tech support may not get information that is as in-depth as the guy who goes the self-service route, combing through the company's knowledge base. "With sub-disciplines such as Web-enabled CRM emerging, it becomes increasingly important that an organization be able to integrate multiple channels of customer interaction to ensure a singular view of the customer," adds Littell of EDS.

An integrated call-center service such as Echopass Corp. of Burlingame, Calif. ties together every response mechanism into one system, giving customers access to the same base of knowledge, regardless of how they contact the call center. The Echopass service also adds an extra level of efficiency to the call center itself, by allowing a single rep to handle all types of contacts through a single, unified interface.

"If I go into e-mail for help, I shouldn't be penalized and get poor service levels, just because I want to use e-mail," says Art Coombs, CEO of Echopass. "I should have the same level of service." All interactions and customer inquiries, whether they come through the telephone network or the Web, are routed through Echopass's call-center facility, and then routed to the appropriate agent based on their skills and knowledge.

All together, now

Integration is the watchword for the new millennium. In the CRM arena, this means not only integrating different methods of contact (such as in Echopass's solution), but integrating different applications across the enterprise. Boston-based Forrester Research believes that CRM systems must be able to model customer processes, coordinate applications using shared workflow rules, and identify and fix failure points everywhere. This may require multiple applications and a great deal of integration.

Forrester divides the CRM universe into three different types of players, each of which may contribute to a single CRM implementation. Traditional CRM vendors such as Siebel, Kana, and Nortel control and consolidate the various channels through which customers communicate with companies. Analytics vendors (e.g., Personify, Broadbase, E.piphany) gather business intelligence from multiple sources for use by marketers, call centers, and sales managers. Specialized applications from firms such as NetPerceptions, Selectica, and AskJeeves provide insights that must be combined with input from other applications in order to determine a customer's most likely behavior.

Customer relationship management has the potential to significantly improve relations with customers, and by extension, the bottom line. But the CRM implementation has to be intuitive, easily integrated with other applications, and inexpensive for it to deliver on its promises.

Dan Blacharski has written several books on telecommunications, networking, and information security. He lives in Santa Cruz with his wife and three children, and enjoys staring out his office window at his backyard koi pond.