January 11, 2001, 8:56 AM — David Spinelli doesn't want to know that you caught a cheap flight to the Bahamas last March. But he does want to know your birthday.
For Spinelli, general manager of Lowell, Mass.-based Action6, a travel-related services firm, it's not the transactional data that matters most when it comes to cross-selling to customers.
"We need [the travel agents] to collect things about demographics -- if they have a birthday coming up, and if they prefer to ski," said Spinelli. "This data is extremely valuable."
Deciding what information is collected and how it's used is going to be a thorny issue for companies this year as many embark on customer relationship management projects, predicted Erin Kinikin, an analyst at Giga Information Group Inc. in Santa Clara, Calif.
Giga's new CRM forecast sees infighting among corporate departments this year over who owns the customer -- and the knowledge about the customer.
"There's going to be a huge culture clash," Kinikin said.
Translating this data into repeat business isn't going to be easy, as sales, marketing and service branches step up their fight over the best way to leverage information to produce results. Kinikin suggests that to resolve these CRM data clashes, companies make sure everyone involved gets a reward. For example, if the sales force is sharing their data, they should be able to get special access to it later to help them sell better.
It's also just starting to dawn on companies just how hard it is to define the return on investment for these data-gathering e-mail, call center and Web site CRM applications, said Sarwar Kashmeri, president of Niche Systems Inc., a New York-based consultancy.
A basic CRM implementation can run anywhere from $100,000 for a small firm to millions of dollars for a multinational one, Kashmeri estimated. And figuring out the value of the knowledge generated by these applications is extremely tricky, if it's even possible, he added.
Among those facing the CRM data management dilemma is audio equipment maker Bose Corp. in Framingham, Mass. The firm has been undertaking a multimillion-dollar project to install a set of applications designed to allow Bose's sales, service and marketing channels to share customer data. Siebel Systems Inc. in San Mateo, Calif., and Akibia Inc. in Southboro, Mass., are the software vendors.
Tim Arnold, manager of CRM strategy at Bose, said a company needs to justify each piece of data it collects, since it must pay to acquire, store, analyze and transmit the information through various departments and IT systems. The firm must then make tough decisions about how to use the data. For instance, a company's marketing department might want to use a set of customer data to launch a campaign that's similar to data a salesperson might use to try to close a deal.