“CRM measures bring products to the markets with enormous power”

Michael Bauer, Head of CRM Consulting at IBM Global Business Services, has observed an increased desire for strategic and entrepreneurial thinking in marketing. At absatzwirtschaft-online he explains what the CRM contributes to this and how quantitative analyses, controlling and financial parameters provide analytical support with regard to consumer behavior.

Photo: Michael Bauer, Head of CRM Consulting at IBM Global Business Services

Mr. Bauer, in recent years, Customer Relationship Management (CRM) has developed into a tool for corporate management. What’s the status? Which topics are gaining in importance?

BAUER: We see the most significant changes in the technological basis of CRM programs. With their monolithic architecture, many of the standard solutions that exist today are too cumbersome for a modern IT landscape. The magic word is service-oriented architecture (SOA). SOA is already an important topic in the considerations of many companies because it creates exactly the flexibility that companies need for modern CRM today. Secondly, so-called “Software as a Service” solutions will gain market shares. This is about preconfigured CRM solutions with which companies can rent a corresponding number of “workstations” for a defined period of time. Significant advantages are time and cost savings. The downside is the lack of customization.

Experts are now talking about customer experience engineering. What is behind it?

BAUER: We call the CRM of the next generation “Customer Experience Engineering”: A company plans and designs – hence “engineering” – consciously, actively and consistently all points of contact, interactions and experiences that a customer can have with it. This includes functional aspects such as products, services and sales channels, but also – no less important – experiences with employees, external representatives such as dealers or brokers, as well as every other form of communication from product design to the presentation of an invoice, mailings to TV spots and all other direct and indirect experiences with the brand.

Can that still be controlled?

BAUER: All of these components are fully coordinated and networked, actively designed, measured and controlled. The separate control of individual channels will disappear, as will purely socio-demographic customer segmentation or “random” communication. A company that aligns its offers, its appearance, its processes and infrastructures with this in mind, we call “Customer Focused Enterprise” – a completely and uncompromisingly customer-centric company.

And what does that mean for marketing?

BAUER: Marketing needs to be in control of four Ps, namely Product, Price, Place and Promotion. In most cases, however, the marketing department now controls only one P: Promotion. In order for the marketing department to regain its importance, the following steps are particularly recommended: First, a rigorous thematic shift in focus: Away from individual media and channels towards holistic customer experience management as described above. Second: Instead of “creative” skills in marketing, strategic and entrepreneurial thinking is increasingly required, combined with an understanding of quantitative analyses, controlling and financial parameters. Third: Due to changing consumer behavior, marketers need new technologies and new competency profiles and incentive systems to successfully implement campaigns and provide analytical support. Close cooperation with the IT and HR departments is therefore increasingly crucial to success.

With a view to optimizing its business strategies, the industry expects a significant increase in the importance of analytical CRM. How can this be explained?

BAUER: The almost unmanageable flood of data has so far not led to a better understanding of the customer. What is needed are solutions that reduce complexity. Far-reaching advances in analytical IT enable a kind of “individual mass marketing”: Customers are contacted precisely when the potential for closing a deal is particularly high – a mobile phone company could, for example, offer a partner tariff to a newly married couple in a timely manner.

With so-called “Information On Demand” strategies, companies should become more flexible, more responsive and more competitive. What’s really new about it?

BAUER: More and more companies want to get a better handle on the complex issue of data integration. “Information On Demand” (IoD) means, based on the existing information infrastructure, extracting the information from its application silos and managing it as a strategic resource throughout the company and making it available. This increases the usefulness of the information, since employees, partners and customers can make applications and processes available as needed. At the same time, it offers more flexibility, since new internal and cross-company business processes and applications can be implemented more easily and quickly on the basis of uniform information services.

Will CRM gain importance, stay the same or lose it?

BAUER: The strategic importance of CRM will continue to increase because companies have recognized the customer as a source of innovation. Companies can only differentiate themselves in the market and open up new growth opportunities with innovations. With the approach of the completely customer-centric company, CRM supports this topic holistically: Viral marketing, Web 2.0 marketing and customer advocacy are just a few CRM measures that can bring products, services and market strategies to the markets with enormous power in terms of content and technology. New key topics of global relevance, such as climate protection, are also paving the way for new business, customer and market strategy models that are fully geared to the respective topic.

Michael Bauer is head of CRM consulting at the management consultancy IBM Global Business Services