Getting it right for customers

For a while, business managers were sick of hearing about the business strategy called customer relationship management (CRM). But if the catch cry of politics is "it's the economy, stupid" then the catch cry of CRM should be "it's the customer, stupid".

CRM is making a comeback this year, thanks in part to the passing of time - more managers have had time to observe CRM strategy, which can be defined as the business knowing how and why it wants to manage the customer relationship, and to see supporting CRM software tools in action.

"CRM is a course of action or a strategy that manages the customer experience from the first contact point onwards.

"It also delivers an understanding of potential customers, and where they were lost and why," says Charles Brooks, e-marketing co-ordinator for the International department of Victoria University of Wellington.

Brooks uses CRM strategies and software to help to turn international student inquiries into enrolments and to make sure each student is the right fit for the university.

"International students can be here for up to five years. If the university or Wellington is not what they thought it would be, they feel misled and take those feelings back home.

"So our goal is to be as transparent as possible from the outset and CRM tools help us to achieve that. It is partly about giving students information they didn't know they needed," says Brooks.

In simple terms, a CRM strategy with the right software can turn a customer question into an ongoing, two-way conversation between the company and the customer in which both end up meeting their needs.

In a competitive and global business environment, this can only be a good thing. The university knows it, and so does Air New Zealand, which uses CRM tools to support its online booking and Airpoints website.

The customer enters a query into the site and CRM software presents a shortlist of likely answers.

The customer then rates the accuracy of the answers and the software gets smarter as a result. It also tells Air New Zealand who the customer was, where they went on the site and what they needed to know.

The airline wins because it has customer intelligence that can be used for future customer service and marketing, fewer customers call with their queries so the airline's call centre costs are down, and the customer, who doesn't want to have to place a call or send an email, is satisfied.

Brooks says the university uses the marketing module of a CRM package called RightNow from Datamail to improve the number of quality international enrolments it gets.

"CRM stops being a vague concept when it produces a result. We are at risk of losing international students to other institutions and other models of learning like online courses. This is a direct marketing tool that works," he says.

Brooks says traditional "broadcast" marketing channels are closed to universities because they can't facilitate a customer relationship.

So how does CRM software work? Different modules are designed for different areas of business, but as an example of a CRM marketing module in action, when an overseas student makes an online inquiry on the university's website, the software looks at the keywords in the inquiry and presents the answers, or redirects the query to a queue appropriate for the type of query.

Brooks says this way the complex questions get the VIP treatment and the easy requests get a fast response.

CRM software can also package each communication more attractively and make it relevant to where the customer is from.

International students can be automatically sent maps, sound bites, graphics or links to parts of the university's website relevant to their inquiry.

They may also be advised of an educational fair in a district near to them at which the university will be represented.

In the meantime, the detailed database of inquiries that is compiled helps the university to plan where to have an international marketing presence in the future, as well as providing it with a contact database.

For big businesses, CRM software can certainly pay its way. But are these tools affordable for the small businesses with an equally valid CRM need?

Vivian Morresey, RightNow product manager for Datamail, says CRM software can be bought and run by a small business or delivered, as RightNow is, as a hosted application in which the business accesses the modules it needs via the internet.

"Affording a [hosted] CRM solution is probably comparable to the cost of employing an extra employee in marketing or customer service."

"Our costs start at around $25,000 a year - that's a good investment for any business that needs to operate efficiently in the e-channel."