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You Can't Build CRM Without Content

Segmentation and Personalization Are Important Related Elements of a CRM Strategy
 
The trend towards segment-based marketing (or 1:1 Marketing as some call it) continues to flourish. Companies targeting both the business and consumer markets are realizing the value of marketing, selling and servicing customers based on their specific attributes and needs in the context of their current or potential value. A corollary to segment-based marketing is solution-based selling, which by nature requires an understanding of the customer’s industry, preferences and needs in order to propose and present a suitable set of products and/or services. Companies that sell complex technology products understand the detailed customer information requirements required of solution-based selling methods. Our survey tested the extent to which organizations had the segmentation capabilities in place.

Figure 12 illustrates the responses to our question, “Do you have the ability to segment customers and service accordingly?”

In most cases however, segmentation on its own does not generate value. Harvesting the value of segmentation involves personalizing communications with prospects, customers and partners.  The foundation of personalization is mapping relevant information, product offerings, specific campaigns, and services to customers with an expressed, implied or potential interest in such offers. Therefore, it stands to reason that the more that is known about the customer and the more that is known about what is being communicated will yield better results from that matching function. One of the key tenets of CRM is the provision of a rich, enterprise view of the customer, often called a “360 degree view.” This approach mandates a comprehensive set of attributes describing who the customer is relative to the selling organization.

Our Web survey also asked participants to rate the importance of personalization with respect to the benefits of CRM strategies and implementations. 64% of respondents rated personalization as “very important” or “critical” as far as producing CRM benefits. Interestingly, small companies place even more importance on personalization, with 69% rating it as “very important” or “critical.”  This may be due to smaller organizations relying on personal service as a key differentiator vis-a-vis their mid-size and large counterparts.

Increased Integration of CRM Applications and Content Systems

2003 beckons to be a year of large scale integration of content systems and CRM, with about 40% of end users across the board planning for integration next year. The results for all of CRM applications are fairly close in terms of planned integration. However, the data suggests that marketing, e-Commerce and service are the leading CRM applications for planned integration in 2003.

In order to drill the point home regarding the importance of integration among content systems and CRM applications, we asked end users to characterize their current or planned investment in the integration. Their responses are presented in Figure 18.

 
The following results are interesting to note:

• Across the board, 17.4% of all end user organizations say that the integration between content systems and CRM applications is “critical” and 44% say it is “very important.”        
• Larger organizations view the integration as more critical. We assume this to be the case because of the greater relative number of systems in large organizations. They are also more likely to have more of the layers we identified earlier and/or have implemented more components in each of the layers.        
• From a vertical perspective, the leading industries that considered the integration “very important” or “critical” included telecommunication (75%), publishing (73%), and financial services (61%.). Though not statistically significant, it is interesting to note that government and non-profit organizations also considered the integration important, with 78% and 90%, citing it as “very important” or “critical”, respectively. The manufacturing and retail/wholesale industry results are interesting in that only 3% and 8%, respectively, view the integration as “not important”, respectively. Across all verticals, the majority of the responses fall into the very important and somewhat important categories.

The Integration of CRM Applications and Content Systems by Vertical

Given the frequency of participants in selected verticals, we were also able to analyze integration plans according to industry. Table 8 provides an overview of results based on the predominant industries that have already integrated or plan to integrate content systems and CRM functional applications. As demonstrated, the survey revealed that the retail/ wholesale, publishing and telecommunications verticals represent industries that have performed fairly extensive integration of content systems and CRM applications. It is not surprising that these are also industries that have been on the forefront of implementing CRM strategies.

As we noted previously, the manufacturing and financial services industries are more likely to be planning the implementation of a CRM strategy versus executing on a defined program. Given this fact, it is not surprising to see that these same industries also rank highly for planned content systems and CRM application integrations. Note that the exception to this trend is the retail/wholesale industry, which ranks highly for planned integration despite a relatively lower CRM planning rating.

Table 8: Plans to Integrate Content and CRM Applications by CRM Strategy Response

This document has been abstracted from CAP Ventures Special Report, "You Can't Build CRM Without Content: Dynamic Content Solutions as a Key Requirement for Customer Relationship Management Initiatives." For more information on this report, please call Keith LaVangie at ext. 132.