Posted 03/2000

Back Office

eCRM to the Rescue
Providers Tread Water In Search Of Bailout For
customer Service Woes
By Chris Garifo

Customer relationship management (CRM) has become an increasingly critical aspect of business for CLECs trying to stand out in this competitive marketplace. CRM isn't simply a tool, it is an attitude--and, as some service providers may learn the hard way, a matter of corporate life or death.

CRM in today's business environment provides a means for CLECs to determine how a customer uses its network and services, what new products and services that customer might be interested in, and what sort of interactions the customer has had with the company. CRM also empowers customers by giving them a feeling of control and a sense of their real value to the service provider. These are all critical factors that significantly outweigh mere price offerings as a means of reducing churn.

CLECs are turning to an e-commerce model for products and services as a way of generating new revenue and achieving the kind of profitability the investment community is now demanding. In order to make that business model work, carriers will have to follow the lead of traditional brick-and-mortar enterprises that also have turned to the web.

However, in the competitive telecom marketplace, service providers are having to come to grips with an aspect of doing business that those brick-and-mortar stores have understood for centuries: If you're going to beat your competition, you have to know what your customers want and need.

To gain that critical knowledge, carriers will have to develop a far more intimate relationship with their customers than they have ever had before.

That fact of business life is what has helped to push CRM to center stage.

It's an area that no longer is the private domain of the company vice president responsible for customer service. Now, it's the CEO who is taking a hard look at what the company will have to do, and what tools it will have to develop or buy, in order to achieve the level of CRM that will differentiate itself from the competition.

One of the keys to making CRM work is ensuring that the customer has a feeling of being treated as an individual who has some degree of control over meeting his or her own telecommunications needs.

A Network with a View

CoManage Corp. (http://www.comanage.net/) provides a solution that helps give CLECs insight into what their customers want and need, while also allowing those customers the ability to manage for themselves those wants and needs. The 3-year-old software developer's flagship Integrated Service Manager (ISM) gives ICPs and their customers the ability to look into their network in order to see and respond to problems on a real-time basis.

CoManage CEO and co-founder Dave Nelsen says ISM allows a service provider, for example, to see how much bandwidth a customer is using and, if that customer is bumping up against the amount of bandwidth subscribed to, offer the option of increasing the level of service. Customers also will be able to look into the network, to whatever degree the service provider allows, in order to see how the services are being utilized and to spot any problems.

Such a solution can be of equal benefit to both the service provider and the customer. Service providers can discover problems inside the network before their customers call to complain. They can then call those customers, explain what the problem was and what has been or is being done about it, and what will be done to compensate the customer for any loss or degradation of service. At the same time, the customer can see how it is using the services it's paying for, to ensure it's getting the most bang for its buck, and even spot problems on its own that it can talk to the service provider about.

Among the values of such a product is that the customer gets a greater sense of empowerment, and has greater control of the network and services to which it subscribes.

Providing a Sense of Value

An important aspect of CRM in today's world is, in fact, giving the customer a greater sense of self-worth, that the individual customer has real value to the carrier. That customer-centric approach to doing business is virgin territory for an industry that had always taken a network-centric, or product- centric, approach. It's for that very reason that service providers need to develop a new customer-centric attitude that looks beyond the network and the products and services that it can handle, and takes into consideration who the customer is and how the customer wants to be treated.

CRM solutions on the cutting edge are geared toward the customer more than ever. For example, California-based E.piphany Inc. (http://www.epiphany.com/) offers a single view of the customer by using its E.5 System to bring in a host of customer information from a wide variety of sources and then build scalable, fast "data marts" that CLECs can analyze for those bits of information that will tell executives and marketers what actions to take toward their customers.

"So, rather than just having a laundry list of $75+ a month customers, we actually enable them to see the relationship between products they own, third-party data, and churn information, whatever it might be, whatever problem they're trying to solve," says Mike Burke, E.piphany's director of industry marketing. "We enable them to gain insight on it and then, with other tools we have, take action on that insight: send them an e-mail, send them an outbound marketing call, feed that information to the inbound call-center rep, whatever it is."

E.piphany doesn't re-create information, Burke stresses. Rather, it pulls information from whatever sources the CLEC dictates--existing databases, the CLEC's website, call centers, or even third-party sources.

The E.5 System has three platforms:

* An analytical platform where much of the insight takes place. It pulls in the data from any system--Oracle, NT, and others. The data is then analyzed and, in an integrated fashion working off a web-based browser, campaigns can be set up to take advantage of the knowledge gained from the analysis. The campaigns can be sent out via e-mail, through a direct-mail shop or over the web.

* The real-time personalization platform, which is able to "learn" what customers are doing and buying. A carrier is able to track a customer's clickstreams at its website, plus other information, and then correlate what the customer buys or doesn't buy. By looking at a large number of customer interactions, the carrier gains insight about what its customer base is actually buying, and allows individual customers to receive customized offers that are more likely to result in a sale.

* The interaction platform is designed for call-center reps to use, and is integrated with the other platforms so that information gained here is pulled into the analytical platform. A call-center rep can use a web browser to access the information and see not only what products and services the customer already has, but also what offers have been made to the customer in the past.

By using the E.5 System, a carrier can respond to its customers on a more individualized basis, giving each customer a greater sense that the carrier recognizes how important that single customer is to its business success. That sense of value can be worth more to the customer than some of the savings that can be realized through price reductions.

"People will pay, not a huge premium, but still pay a premium to be taken care of," Burke says. "But if you're going to treat [the customer] as terribly as anybody else, [that customer] is going to keep looking for the best deal. So CRM is a strategic imperative for a communications company."

CLECs will have to be careful, though, that they don't give their customers the impression that all they care about is selling to the customer.

"Customers don't like being sold to," says Rory Byrne, manager of marketing research for Altitude Software (http://www.altitude.com/), which provides solutions for unified customer interaction. "Customers will move on. They'll move to another provider of the same service, of the same products, because there are so many options out there."

CRM is about forming a two-way relationship with the customer. The customer wants to know more about the organization and how it can help him or her, while the service provider wants to give the customer a view of itself based on what it knows about its customers, Byrne suggests.

While there are a number of touchpoints--the phone, interactive voice response (IVR), e-mail, the web, wireless appli- cation protocol (WAP) devices--that allow for self-service or assisted-service interaction between a CLEC and its customers, the customer wants a single entity within the CLEC with whom he or she can communicate, Byrne says.

And, in many cases, the customer's frustration trip-line can be low.

That means CRM solutions must provide the ability for CLEC customer service reps to have information about the carrier's customers literally at their fingertips. If the customer needs to be passed on to a higher level of decision-making authority, the person at that level must have the same information without needing to get it from the customer again. That information should include the reason for the current contact and a record of all past contacts and their resolutions.

Diagram

"When the customer feels that the company is making an investment in helping them, they're more willing to stay," Byrne says, adding that customers generally don't differentiate between the brick-and-mortar and online versions of a company.

"So it's really a two-way relationship where the enterprise has one solid view of the customer and every rep is empowered to help the customer, and the customer has one [solid view] of the enterprise, and they get consistent service across all the channels--because customers are channel-indifferent," Byrne says.

Those customers can be equally indifferent to who is providing their telecommunications needs.

"When the services that you're providing to your customers as a LEC are very generic--dial tone, long distance, etc.--then the customers can switch and switch and switch," says Steve Kowarsky, executive vice president of CosmoCom Inc. (http://www.cosmocom.com/), a Melville, N.Y.-headquartered developer of IP-based call-center platforms. "If you're providing inbound '800' service for 7 cents a minute and the other competitor comes in and gives it to [your customer] for 6.5 cents a minute, hey, he's gone."

If a carrier relies on price alone as a means to attract and keep customers, the chances for churn can go ballistic. It's fast becoming an axiom among the industry's top execs that customer loyalty is derived from quality CRM.

Communications Merchants

As a result of the changes taking place in the market relationship between the CLECs and their customers, and the new products and services that are being offered, service providers are becoming less access providers and more communications service merchants, according to BlueSpring Software (http://www.bluespringsw.com/), a Cincinnati-based developer of enterprise management software.

A customer is likely to bolt to another service provider if that customer believes the new provider has more insight into what he or she wants or needs, adds Rob Daly, BlueSpring Software's CEO.

Prior to the Telecommunications Act of 1996, customers only had a single option when it came to picking a communications services provider, Daly explains. Just five years later, businesses and consumers in the nation's top 30 markets have on average 12 to 16 opportunities to buy a variety of services such as web hosting, long distance, local service, broadband access and wireless.

"So, you're continuing to look at who's got the package, who's got the bundle, who's got the price points and the service to give me the most of what I want in the least complicated way," Daly says. In order to provide the sort of product and service bundles the customer wants, the service provider needs to know just what should be included in those bundles in the first place. And that's a key aspect of what CRM can bring to the table by allowing the service provider to manage the front-end relationship with the customer.

However, the data provided doesn't do much good if the carrier isn't able to respond to the data. That means being able to manage internal information related to the offering: the package, how it's bundled, how it's rated, and ultimately how it's billed. And all that has to be accomplished with an eye firmly planted on the time-to-market clock.

With market pressures what they are, CRM solutions must be able to provide the CLECs with what the customers want and offer the ability to give it to them quickly. Failing to do that can dramatically increase the risk of churn.

BlueSpring's Windows-based Priority CS, for instance, handles customer care, billing and accounts receivable. Daly admits that Priority CS wouldn't manage sales-force automation and other aspects of CRM the way Siebel Systems Inc. (http://www.siebel.com/) solutions do, but rather manages "all the things associated with products, customer profiles, how to merchandize and price and manage that relationship with the customer in the CSR mode and self-care."

More Satisfaction

In the days when CRM was known as customer service, a company could get by with giving a customer a friendly word or two and a smile. Those days are long gone. Today's carriers must be able to gather customer data, analyze it, and then act on it.

"[CRM] is not only a tool to satisfy the customer and make sure that they get their problems fixed when they want [them] fixed; it's also obviously become a way to cross-sell and up-sell additional products to them," says Daniel Kenyon, vice president and general manager for the communications industry at PeopleSoft Inc. (http://www.peoplesoft.com/), a California-based developer of business applications, including CRM solutions. "To companies that are using CRM effectively, it also has become a way to really take the temperature of their users, to really understand how products are being used, and to take that information and turn that into benefits for both sides."

PeopleSoft's primary CRM solution is PeopleSoft 8 CRM, launched in July. PeopleSoft 8 is powered by the PeopleSoft Internet Architecture, an e-business platform based on HTML and XML, and integrates with the company's Customer Relationship Management for Communications, which provides a fully integrated set of CRM, back-office and supply chain solutions tailored to the communications industry.

PeopleSoft developers believe that integrating financial applications with CRM and the billing applications could provide carriers with a much greater level of revenue management, Kenyon says. The company is working on concepts that chain together those three disciplines, to come up with an idea of revenue-chain management that is going to be essential for healthy CLECs and other types of communications companies to maintain profitability, he says.

"This is one of the areas where taking customer information and using it in a way that helps you run your company better will allow you to become more competitive, because it enables you to have more information about your customers, about their bills. But it also helps you integrate that information into your managerial team, and understand precisely where that revenue is in the entire stream and what you can expect, when you can expect it, and those things," Kenyon says.

The bottom line, though, is that no matter how benevolent the pitch to the customer is, it's still an economic pitch, says Vic Ahmed, president and CEO of Denver- based VROOM Technologies Inc. (http://www.vroom.net/), a provider of sales and marketing effectiveness solutions for the telecommunications industry.

"The fact of the matter is, you've got to become much more picky [about] which customers you pick because you want profitability, and not every customer necessarily is going to be profitable," Ahmed says. "Secondly, you've got to figure out which customers you want to retain because you're making money on those customers and ... you don't want to lose existing customers because the customer acquisition [cost] is very high."

CEOs who, not too long ago, were concerned mostly with building out their network, today are trying to figure out how to ramp up revenues very quickly and make each opportunity profitable.

In order to succeed, Ahmed suggests, CLECs are going to have to find CRM solutions that are designed specifically to meet the unique needs of communications providers; they have to be able to handle the complex set of product and service offerings; be able to tell sales personnel whether a prospective customer is actually on the carrier's network; and whether the network has the capacity to meet the needs of the individual customer. In addition, the CRM system should be able to integrate to a number of OSSs, no easy feat considering that telcos can have multiple provisioning systems, multiple ordering systems, multiple billing systems and other OSS pieces.

"If you haven't built your CRM solution to easily integrate into this OSS environment, you're going to face a lot of challenges taking care of the smallest things," Ahmed warns. "So it's critical to have those back-end systems integrated well."

The problem many service providers face is that because customer service has only been important since competitive markets opened up five years ago, they lack the experience and knowledge to truly develop the kind of CRM strategy that will help them survive in a highly competitive environment where the customer has a real advantage.

"People who have emerged from the RBOC world don't even know what it means to have competitiveness; don't even know what it means to have a converging product set," Ahmed says. "Those concepts are alien to them. They have never had to worry about customers before."