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The five most important capabilities that companies need to focus on, according to the study, are: customer service; motivating and rewarding people; turning customer information into insight; attracting and retaining people, and building and selling service skills.

The ability to build strong customer relationships in a virtual world is growing increasingly more critical for companies. In fact, by improving procedures and efficiency by 10% in any of the 21 key areas of CRM, a $1 billion company can easily add $40 million to $50 million to their bottom line, Herag J. Haleblian, CRM solutions manager at Andersen Consulting said as he unveiled new CRM research at the e-Customer Intimacy show in Boston.

Andersen's research identified 21 different CRM capabilities, ranging from customer service and strong value propositions to eCRM, channel management and brand management that could each add over $1 million per year to return on sales. The five most important capabilities that customers need to focus on, according to the study, are: customer service; motivating and rewarding people; turning customer information into insight; attracting and retaining people, and building and selling service skills.

The 21 capabilities fit into five areas high performing organization, which includes building a service culture and building selling and service skills; enterprise integration, encompassing partner and alliance management and eCRM; customer insight, including measuring profitability, segmentation and customer retention and acquisition; customer offers, including brand management, strong value propositions and new products and services; and customer interactions, such as customer service, sales planning, advertising, promotion and channel management forming a blueprint for the customer-driven enterprise, Haleblian said.

"Businesses are moving to a customer-driven model" because customers are becoming more aware of the choices they have in terms of products and services, Haleblian said. Typically, companies seeking to become customer-driven have had little guidance on where to invest to get the highest return, he said, which is what Andersen's research seeks to illuminate.

The most profitable companies are leveraging their human and technology resources. "Forty percent of the total impact [of CRM programs] is driven by technology," Haleblian said. Meanwhile, another third of the total impact across CRM capabilities stems from people-related capabilities.

As an example of a leader in customer interactions, Haleblian introduced, which is licensed in 10 states to sell electricity and touts itself as a "one-stop shop" for all utility related products and services.

Katherine S. Kaldis, program manager of customer care for, advised companies to "start early on CRM implementation." She discussed the challenges faced as it began implementing CRM, and when the company started, "we lacked tools, we lacked process, we lacked the expertise, and we lacked the leaders" necessary to serve customers.

"Customer service agents need more than tools," Kaldis said. "By industry standards, we were an organization in crisis.", before implementing Kana software and a custom-designed Web tool for customer service representatives, used an in-house manual process to track e-mail through Microsoft Outlook. There was no ability to track customer telephone calls, Kaldis said, and the abandonment rate of customer service activity stood at 45% to 50%, efforts to assist customers were duplicated and customer service representatives were under so much pressure that they dreaded arriving at work. In terms of the two main factors that impact CRM, was not measuring up.

After evaluating the business, technology needed and the budget available, selected Kana Connect for their outbound marketing campaign, Kana Service for contact and case management, and Kana Response as an e-mail management tool, Kaldis said. also looked to Andersen for consultation on e-commerce and CRM issues.

With the new software, added e-mail diagnosis and management, contact and case management, outbound marketing with segmentation, customer contact history and metrics, a knowledge base, workflow management with categorization and queue structures and an integrated toolset between Kana and's custom applications to their CRM capabilities.

The Kana package came integrated and "added efficiencies... we had a backlog of 2,000 e-mails, and our [customer service representatives] could ... start cases" and view the status of already open cases, Kaldis said. Customer service representatives that were previously only able to handle six to eight e-mails per hour could now service 20 e-mail inquiries per hour.

"E-mail templates and Kana Service added a point of solution, step by step, as to what a [customer service representative] is supposed to do" with each customer contact, Kaldis said.

Other advantages of the new software included the ability to calculate metrics, including the volume of e-mails and calls and what customers are inquiring about, and a customer history, which allows representatives to address repeat issues or customer issues with multiple products.

Since Kana Response is Web-based, Kaldis said that's relevant personnel has easy access to the tools. "We opened up the firewall and gave [our representatives] user names," she said. "The best benefit is that we don't' have to have someone in IT to manage the tools; a [customer service representative] can build rules and set up a queue for inquires," Kaldis added. did face challenges with implementation, however. Because "Kana is the most finicky of tools to implement and doesn't play well with others, we had to put it on its own server," Kaldis said. And according to Andersen's Haleblian, the four-month time frame that required for implementation, a short time, was a big challenge.

Overall, though, is faced with happier customer service representatives, technology that suits their business, and is "moving closer to being the blueprint of a customer-driven organization," Kaldis said.

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Andersen Consulting

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