I’ve been a programmer and IT enthusiast for 30 years (since the zx spectrum) and concentrated on AI (neural nets & genetic algorithms) at University. My principle skills are concentrated on Enterprise and Solution Architecture and managing effective developer teams.
I enjoy the mix between technical and business aspects; how technology enables and how that (hopefully) improves profit/EBITDA & reduces cost-per-transaction, the impact upon staff and how to remediate go-live and handover, and risk identification and mitigation. My guiding principle is “Occams Razor” that simplicity is almost always the best option by reducing complexity, time to build, organisational stress and longer term costs.
Customer Relationship Management Strategies
Customer Relationship Management (CRM) has become a driving force for improving business efficiency.
Virtually every business can improve their sales cycle by adding CRM; but CRM has become a golden hammer for applications and it's not always applicable. CRM is best used for.. well CRM!
We're increasingly seeing tools like Dynamics CRM and SalesForce used for all manner of application. The reasons being things like "we already used it for..", "we need a lot of concurrency", "we need to track change" etc.
Let's assume we have an organisation that's trying to recruit and manage players to a game. There's two levels of a player: free and paid.
We have three major journeys:
1 - Customer Support need to see that a player is playing a lot.. and offer a paid special deal to get the customer to convert
2 - Customer Support see that a payment fails and hasn't been followed up so they contact the player to try and reactivate them
3 - The Player calls/messages Customer Support. Customer Support try and make free players into paid players
To faciliate this functionality:
a - The Customer Support agent will need to ascertain the status of the player (paid/free/requiring reactivation/currently experiencing a problem)
b - The Customer Support agent will need to make changes to a player's account
If we take a CRM system then we get a few things out of the box:
i - Customer/Contact management
ii - Customer Interaction Logging
iii - Management of Customer Support Agents
iv - Customer Support Agent efficiency reporting
However we still need a mechanism for the product/game to:
- Synchronise the user record (as the product/game is the master of this data)
- View / Synchronise the user's present state/status
- Allow modification of the user's state/status
- [optional] Not show "join us" messaging in-game if the Customer has been recently contacted and not taken an offer/re-activation
In these circumstances we're stuck in a grey area of software architecture: to buy means we now have a dependency on custom code/configuration within the CRM system (but we're not developing functionality that exists and must be maintained), to build means we now have additional costs and the product/game is enlarged.
It's important at this juncture to properly assess ROI.
ROI can be seen as a function of:
- Build Cost (initial CAPEX to create the solution)
- Support / Licence cost (on-going OPEX to utilise an off-the-shelf solution)
- Maintenance (on going OPEX to correct/update code and platforms whether a off-the-shelf solution upgrade/change or a development framework change)
- Cost to Onboard a Customer Service Agent (i.e. the time taken to train a new agent to become effective on the tool)
- Efficacy of the System (typically measured in the efficiency of the Customer Service Agents based upon skill level and interaction length/concurrency)
- Potential (and the cost thereof) of Errors (for instance breaching law by sending erroneous emails/removing payment from the wrong account etc)
In cases such as the above it is often more cost effective (should resources/development allow) to build. This is because small decreases in interaction time (or concurrency if an agent can handle multiple calls at once via webchat etc) quickly scales to be material in cost over time.
For example, let's assume a vanilla CRM system is required for a telesales operation selling standard products/quotes. It's highly likely that an off-the-shelf system handles the majority of the requirement from the box. In this instance training is massively lower as any agent used to that system can be quickly trained to the specific needs.
However, compare that to a system like the above. In this case a non-integrated system means that the agent moves between multiple applications and this is highly inefficient. For an integrated system we will see benefits but both the original system and the CRM have been modified (sometimes massively) to allow for the integration.
Taking sample costs: let's assume we have 50 agents each paid £15 per hour (gross incl. tax/holidays etc) for an 8 hour day.
Cost-wise that's £6,000 per day for agents alone.
Let's assume we can improve efficiency by 5%. Each day that's worth £300 (using naive maths to keep the equation simple!) so over a year that totals £109,000. So any change which costs less than £100,000 is a saving in year one.
Go further, let's assume that by extending the game we can improve efficiency by 25% but the cost to do so is £300,000 and ongoing £50,000 per year. Our payback is within the first 9 months!
Like most things in IT there is no right or wrong. But hopefully this article has pointed out that one size does not fit all!
If you've got comments then please get in touch.
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