Customer connections: a RIM opportunity: customer relationship management opens the door to greater organizational teamwork -- and compelling opportunities for RIM professionals. (Business Matters).

At the Core

This article:

* Dispels myths about customer relationship management (CRM)

* Shows how records and information management professionals can be a vital part of CRM initiatives

Recall the small-town merchants of yesteryear: the banker and barber who knew enough about their customers and their customers' families to know what products and services would likely make them happy. In today's era of automated call centers, online transactions, and grocery store express lanes, establishing a neighborly relationship with a customer has become more challenging -- if not impossible.

Enter customer relationship management (CRM). Also referred to as customer reengineering programs, customer care initiatives, or campaign management, CRM is an ongoing process of understanding customers -- how they spend money, what they like and don't like -- and using that information to develop better customer service and marketing initiatives.

According to Frederick F. Reichheld, director emeritus of Bain & Company and author of Loyalty Rules! How Leaders Build Lasting Relationships, a five-percent increase in customer retention results in a 25- to 95-percent increase in profits. Perhaps that is why research and advisory firm Gartner Inc. predicts that CRM will be one of the major areas of focus for the next five years.

Implementing a successful CRM program requires good research and planning. META Group, a research and consulting firm, reports that nearly 60 percent of all CRM project failures result from a lack of business buy-in and alignment. In other words, the projects failed because of inadequate business research prior to launching an initiative, insufficient upper management support, and improperly collected and utilized customer data.

With their expertise in managing information, records and information management (RIM) professionals have valuable skills to support CRM initiatives.

Dispelling Myths about Customer Relationship Management

Understanding how RIM relates to CRM means first defining exactly how CRM can benefit the company. Organizations must research what their customer relationships mean to them and set clear objectives for CRM implementation. However, these key components are often overlooked, says Jill Dyche, a partner and vice president of management consulting with Baseline Consulting Group.

"The term `customer relationship management' has become a `bucket' of often disparate efforts," suggests Dyche. "An alarming number of clients launch CRM without defining what it means to them. It's important to constantly re-ask the question, `What is the main business problem we're trying to solve with CRM?'"

Common misconceptions about CRM include:

* CRM is a project, not a process. Viewing CRM as a "project of the moment," as opposed to an ongoing process, has caused various organizations to be less effective with their customer-oriented programs than they might be. Because business needs change, identifying what these needs are is a continuous process. In addition to being collected, customer data must be integrated throughout key areas of the organization, notes Bill Chambers, a principal analyst with Doculabs. This could mean integrating a company's "data warehousing systems with CRM solutions. It involves integrating technology, people, and organizations." Often, companies underestimate the length of time it takes to implement any of these solutions. "They attempt to roll it out too quickly without testing it out with a small pilot group," Chambers says.

* Simply buying CRM software and hoping it will be compatible with the company's CRM initiative is enough. Not true, says Ronald S. Swift, vice president of strategic customer relationships with NCR Corp. Some companies buy CRM software without "sufficient information to segment or profile the customer being addressed," Swift says. "They are unsuccessful and don't achieve expectations" because they let the software drive their CRM efforts. "This is not just about investing in software; it is investing in a new approach to relationships," Swift says.

* CRM is strictly an IT initiative. A report issued by cio.com says CRM's greatest returns come from aligning business, CRM, and IT strategies across all the organization's departments and not leaving it for one group to handle. This means departments collaborate to turn information into knowledge and make this knowledge available to senior managers and front-line employees. It is important, Dyche says, to have someone "sponsor," or drive, the CRM process. "This should be someone internal who has at least participated in the decision to do CRM in the first place," Dyche says. "It could be the vice president of marketing or a director in customer support. As long as it's someone with a vision on the business side who is at the management or executive level."

Where RIM Professionals Fit

There is also a myth that RIM professionals have little to contribute to CRM. Companies increasingly view CRM as an organization-wide effort that puts business knowledge first and technological expertise second. Effective CRM processes employ the expertise of a variety of professionals, including RIM professionals who can help analyze information and see where it can best be used. John P. Frost, a certified records manager and project manager/knowledge manager for American Airlines, suggests that RIM professionals assess CRM by asking these questions: "Who else in the organization has a need for the information created? What other information in the organization can be made available to assist the CRM program as a whole?" When it comes to CRM initiatives, RIM professionals can help bridge the gap between three functions in the company: customer service, marketing and sales, and IT.

Take, for instance, a marketing department whose product managers want to launch an innovative new product. Their research indicates that longtime customers will embrace the product, so they launch a massive campaign to promote the item to those customers. At the other end of the office is the call center/customer service department, which is fielding calls from customers about other products. Customer service representatives take the opportunity to also mention the dynamic new product to the customers. The representatives note in the customer database those people who are most interested in receiving additional information about the product, and the sales and marketing department follows up with them. Farther down the hall is the IT department, which is maintaining the software that supports the customer database. The IT staff is also upgrading the software so that the sales and marketing department can be notified of customer information in real time.

In this office scenario, the records and information manager could play a pivotal role in ensuring that

* the customer service department is properly entering customer information into the database

* the information is properly and promptly shared -- and reinforced -- with sales and marketing staff

* guidelines are established with regard to what customer information should be stored in the database and for how long

"Management of the records and information used by marketing, sales, call centers, field services, forecasting, and decision support functions is a tremendous challenge requiring knowledge of both records management and information technology principles," says Angie Fares, a records and information manager for RadioShack Corp. "Failure to ensure that there are appropriate measures to manage data lifecycles, security, and data integrity might result in business decisions with negative, far-reaching consequences. For records and information managers, there are opportunities to make a positive contribution to the bottom line."

CRM-specific areas requiring RIM oversight include:

Content management. This means ensuring that customer information is properly collected, analyzed, and documented so that each department within the company has the customer data it needs to implement CRM functions. Information to collect could include business transactions, interactions, and "all touches of a customer" in order to "analyze and understand the preferences, propensities, behaviors, timing, and needs" of the customer, says Swift. This demographic information would be analyzed for integrity and relevance and then be thoroughly documented.

Chambers sees content management as an almost untapped CRM area for information managers. "There is really no effective content management supporting CRM initiatives right now. Some companies are doing content management (either within their marketing, sales, or IT departments), but they are very much on the leading edge," Chambers says. "For information managers, there is an opportunity to make sure information is up to date and meets legal and regulatory requirements, and to provide the link between repositories of information. The knowledge that information management professionals have is the common knowledge that will link these repositories of information."

One of the myths is that all customer information must be retained in order for the CRM process to be successful. This would be like storing huge warehouses of data only to use one-fourth of the information in any given year. Not only must information managers set up retention schedules for customer information in a database, but with content management they must also be able to determine which data is most valuable, moderately valuable, and least valuable to the company. If the organization specializes in financial services, for example, pertinent information could include a customer's financial history with the company, level of investment risk, and years away from retirement.

Information security and privacy. In the recent cio.com article "How to Keep the Citizens Satisfied," data privacy was listed as one of the most sensitive issues surrounding CRM, particularly in the public sector. Combining databases is a regular practice in private companies to enable customer service representatives to access a complete profile of customers, including their demographic information and past sales history. This process may be somewhat difficult for public agencies, which are governed by strict boundaries.

RIM professionals can understand corporate policies and government regulations surrounding customer database access and share this information with key departments in the company. "There is an opportunity to review database management procedures and information workflow to ensure that there is both security and integrity in the process," Fares says. "By controlling the creation and growth of records and information, an organization is less likely to use data with no value to make business decisions."

Facilitating communications between sales/marketing and customer service departments. In order for customer information to be used effectively, there must be regular communication between these departments. As the content managers of CRM information, RIM professionals have an opportunity -- or, rather, a responsibility -- to make sure sales/marketing and customer service departments are adequately informed about this content and how it will affect each of them.

Records and information managers should understand how customer information is being used in other parts of the organization and assess what other departments need to get the CRM program started. "The overall goal is to make sure the right information is provided at the right time to the right people," Frost says.

Before applying content management, information security, and communications principles to the CRM process, Frost suggests that RIM professionals ask themselves these eight questions:

1. What information is being collected in the CRM system?

2. How is the information used?

3. What reports, forms, and other documentation are created from the data and for the program?

4. How long does this information need to be kept for legal, fiscal, historical, or administrative value?

5. What CRM software tool (and version) is being used?

6. On what operating system and platform is the tool built?

7. How is security for the system handled, especially to protect customer data?

8. What organizational unit is ultimately responsible for the system and the information?

The Value of CRM

Understanding the customer relationship is not a new business objective, but it has taken on new momentum as companies have become more competitive in vying for the customer's attention. Customer relationship management applies small-town, 20th century, customer-friendly business practices to the fast-paced, e-commerce-driven business world of today. It emulates the local banker and barber who knew their customers by name, made those customers feel like part of the family, and, as a result, had satisfied customers who returned regularly.

How well an organization knows its customers directly ties to the bottom line. As Dyche explains: "The more information a company has about its customers, the more accurate its decisions will be."

References

Bass, Alison. "The ABCs of CRM." Available at www.cio.com/research/ crm/edit/crmabc.html (accessed 24 January 2002).

META Group. "Dysfunctional CRM Business Cases Are the Norm (If They Exist at All ...)." Available at www.metagroup.com/metaview/mv044 6/mv0446.html (accessed 24 January 2002).

Ulfelder, Steve. "How to Keep the Citizens Satisfied." Available at www.cio.com/archive/111501/citizens.html (accessed 24 January 2002).

READ MORE ABOUT IT

CIO's CRM Research Center. Available at www.cio.com/research/crm.

CRM Community. Available at www.crmcommunity.com.

Dyche, Jill. The CRM Handbook: A Business Guide to Customer Relationship Management. New York: Addison-Wesley, 2002.

Reichheld, Frederick E Loyalty Ruled How Leaders Build Lasting Relationships. Boston: Harvard Business School Publishing Company, 2001.

Swift, Ronald S. Accelerating Customer Relationships: Using CRM and Relationship Technologies. Upper Saddle River, NJ: Prentice-Hall Inc., 2001.

Shanna Groves is the Associate Editor for The Information Management Journal. She may be reached at [e-mail].