You talk to retail customers all the time. What is your take on their view of CRM?
They don't necessarily want to experiment with point solutions any more. I think they're moving out of the proof-of-concept stage. Now they understand all the pieces that need to work together and they're saying 'somebody please give me a solution that provides all of this, and that can be easily managed and implemented.' And it has to be easily accepted by customers as well. If they can't get this, the retailers know they've wasted a lot of time and money on something that is going to be a white elephant in their enterprise. Where do you see the retail market for CRM headed in terms of functionality?
It's not so consistent across the industry. Different retailers are looking for different things. Some retailers want to take cost out, some want to drive revenue and some retailers want to retain customers, which impacts both sides.
We have a customer in the U.K., retail clothing chain Marks and Spencer, that had customer service issues and found they had a very inconsistent view of the customer. They also had an inconsistent way of treating customers. They went ahead and purchased Siebel and implemented in a customer service setting. Just finding out how many customer complaints they had out there was going to drastically change their outlook. They also wanted to make sure that they responded in a prioritized and consistent way. So, they started out by using templates for the basis of the responses and they personalized down from there. Now, they had a customer view. In addition, and this is true for many retailers, they found when dealing with customers that it was not just important how you respond stylistically, but that it was also important economically. You might give someone $5 to make them happy. Well, that's not going to appeal to every customer. Driving consistent responses from a customer compensation point of view is incredibly important. Does Siebel have any plan to focus on specific areas of the retail market with 'sub-vertical' products, if you would?
There are as many different definitions of the retail market as there are retailers. We approach it from the direction of the kind of relationships retailers have with their customers. What's the difference between a grocer and a hardware store? If you go into a grocery store you probably don't want advice on pinto beans. You want to get in and out. The value propositions are selection, ease of use and quick check out. At Home Depot, the value proposition is different. You've seen their commercial about the dad building a tree house for his kid. Well, by the end the dad isn't the hero, it's that knowledgeable sales associate at Home Depot. In order to be successful he needs to know a lot more than 2x4s, he needs to know the whole tree house. It's solution selling. So, the short answer is no. What we'll do is try to create an easily customizable solution with enough strong points to appeal to retailers with different needs. Retail is obviously an extremely varied market. Does that make it harder to create a vertically oriented product that can appeal to enough of those potential customers?
The fact that we've got repository-based configuration helps a lot. And customers are allowed to configure even further. The big challenge in getting CRM implemented in the retail industry has more to do with the history of the industry than it does with software. The advantages to having an object-oriented architecture are substantial. At run time, using a repository file, which contains all the information about how objects are going to interact, the process end of things runs pretty smoothly. Because all of those configurations are built this way, a retailer that wants to save their specific configurations over years and different point releases can do so easily. That's not something you can do outside of an object-oriented architecture. Looking forward, what do you think the most important issues in the retail market for CRM will be?
The challenge is that the industry has been very product-centric for a long time. This has been reflected in the political structure in retailers [and] is also evident in the data structures and systems infrastructures in these companies. The databases contain different pieces of the customer information. This makes it difficult to transfer from a product-centric mode into a customer-centric one. But retail CEOs are starting to understand that they need to do something. That means they need powerful analytics that span the whole enterprise. And they need to share that information among product groups to build that consistent view of the customer. They're starting to understand the processes, technology, metrics and people knowledge in order to make the shift. They need to find the right kind of CRM. Mistakes are too costly to be tolerated in the current environment. These companies are dying for something integrated and truly effective.
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