1997 Jun 01
Customer Interaction Systems
David M. Raab
Relationship Marketing Report
June, 1997

One of the most basic business maxims is “you manage what you measure”–that is, organizations can only control activities that are captured in their reporting and rewards systems. A plausible corollary is that good systems include ways to report on a function as well as execute it. In other words, the systems must measure what they manage.

Plausible, but not necessarily true. Customer satisfaction is an interesting exception: while customer satisfaction is usually measured with software for surveys and statistical analysis, it is largely managed through systems for customer contact functions including sales, customer service, technical support, and quality assurance. One might argue that the customer contact systems do measure the tasks they manage: time to resolve problems, sales force productivity, product failure rates, and so on. In this view, separate customer satisfaction measures are needed only because customer satisfaction is the product of so many different, interacting forces.

But whatever the reason, the fact remains that a discussion of customer satisfaction software must choose between tools to measure it or tools to create it. Since the survey and analysis tools involved are fairly standard, it is more interesting to focus on the operational systems.

These systems were traditionally separate for each function. That is a company would purchase one package to run its help desk, another for sales force management, and yet another to run its marketing call center. Separate groups of software vendors served each market, reflecting the independent corporate fiefdoms who bought their products. There was some overlap–particularly between sales automation and telephone call centers–but even if a company used the same software for multiple functions, each function would probably have its own separate database.

Today, a very hot new class of vendors offer “customer interaction management” systems that manage all those operations using related software and, most important, a common database. The goal is to make all information about a customer or prospect immediately available to anyone in the company who might come into contact with them, enabling front-line personnel to offer better service and perhaps make a few incremental sales. At the same time, the systems capture the results of all those interactions, making it easier for the organization to learn about problems and market trends as they happen.

Several products have emerged to provide this type of function. Vantive (800-582-6848, www.vantive.com), Clarify (408-573-3000, www.clarify.com), and Scopus (510-597-5800, www.scopus.com) are among the better known players. In addition, vendors who started with other specialties including customer support (Aurum, 800-683-8855, www.aurum.com), telemarketing (Astea, 800-724-2891, www.astea.com) and sales automation (Siebel Systems, 800-720-3115, www.siebel.com) are now increasingly expanding their scope to encompass these additional functions. A typical core set of functions would include sales, telephone support, field service dispatch, and quality management (a somewhat Orwellian term for defect tracking).

The sales management function will typically extend as far as quote generation, but not to actual order entry, which is usually part of the corporate accounting and fulfillment systems. Interestingly, one of the customer interaction vendors, Aurum Software, was recently purchased by Baan Co., which provides “enterprise resource planning” (ERP) systems that integrate order entry, manufacturing, inventory, logistics and related operations. Presumably this will result in close links between order entry and customer management at least for those two products. Whether it foreshadows a larger trend remains to be seen: ERP systems like Baan and SAP are famously difficult to implement by themselves, without trying to simultaneously rebuild all customer contact processes.

The customer interaction systems match the technology standards set by the specialized applications in the different functional areas. Thus, call center modules make heavy use of computer telephony integration (CTI), which lets the system read an incoming telephone number, find the associated account on a database, and “pop” the information onto the user’s screen as the call is answered. The system might even make some intelligent decisions about who should answer the call–such as sending premier customers to a special service group. More advanced CTI functions include the ability to transfer calls and their associated screens from one user to another, perhaps to send a particularly knotty problem to a senior technician or to move a caller from customer service to sales.

Similarly, help desk modules in these systems make use of the latest “knowledge base” technology, which leads a customer through a series of questions and answers, eventually leading to a solution. These systems are able to “learn” as new questions appear, by recording the eventual solution and making it available for future use. It’s also possible to purchase standard knowledge bases for common requirements, such as supporting widely-used software or troubleshooting a local area network.

These systems also employ a variety of “workflow” techniques, which can track the electronic equivalent of a document through various stages of processing. Traditionally this has been used in support operations, where a problem is logged and a trouble ticket remains open until it is solved. The workflow system would have detailed rules to manage where the electronic tickets are sent and what actions are be taken on tickets that remain open after a certain period. Workflow can also be applied to other areas, such as processing sales leads and forwarding requests for product enhancements.

In fact, all these technologies can be applied outside of their original domains, which is one of the advantages offered by the integrated customer management systems. CTI, for example, can help any telephone-based function, not only customer service. Knowledge bases can be used to help sales people deal with objections and to ensure they place orders that are properly configured. More fundamentally, storing the data in a common database makes it easier for, say, product designers to see which features are generating the most customer service problems and therefore need to be improved.

As the sophistication of their technology suggests, the customer interaction systems are large, complex products aimed large organizations. Most run on Unix or Windows NT servers, use merchant relational databases like Oracle and Informix, and are built to serve hundreds of simultaneous users. Internally, they resemble typical transaction processing systems–built for fast updates of an individual customer’s records–rather than marketing database systems built for analysis of large groups of customers. To ease integration across modules and with other corporate systems, most products also make extensive use of “metadata” layers that organize, regulate and present the contents of the underlying databases. The products are built to allow extensive customization to adapt to individual corporate requirements.

Pricing on these systems is typically based on the modules purchased by a customer plus the number of users for each module. Costs might be in range of $10,000 to $15,000 per server per module, plus $2,500 to $5,000 per concurrent user. These are roughly comparable with the charges for single-purpose software offered by functional specialists.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.

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