Vendors, users grapple with CRM shakeout

By Bob Trott, InfoWorld |  Software

A customercentric approach is being taken at, an online partnership between Estee Lauder, Chanel, and Clarins that is set to launch this summer. Doug Dalton, CTO of the San Francisco-based beauty products triad, said the customer's point of view must be the centerpiece of the online effort because the products are highly personal.

"It's imperative to maintain high levels of customer service," Dalton said. "All of our customer representatives have met with the brands involved and gone through extensive training so they can provide that level of service."

Many companies, including British Airways, Allstate, United Airlines, Delta Airlines, Cisco Systems, Avaya, and L.L. Bean, have moved ahead on customer service in recent months by hiring a CCO (chief customer officer).

But whether or not it has a CCO, a company will face intriguing, tough choices when it comes to implementing a CRM solution.

While Kana, Broadbase, Onyx, Firepond, and even E.piphany struggle financially, the bigger players such as Siebel Systems are also feeling the economic pinch.

With PeopleSoft and Siebel offering across-the-board CRM solutions, the smaller players could be in for even more trouble unless they find ways to clearly differentiate themselves in the market or expand their offerings.

"There is definite pressure to offer a full suite. A few niche players will of course always be around, but some will be bought or go out of business," said Sheryl Kingstone, a CRM analyst at the Yankee Group in Boston. "There could still be a few standing vendors that just offer customer service software for the small business market, or a dedicated marketing services company. However, the pressure is to offer a full suite of services such as sales, service, and marketing."

Greg Gianforte, chairman and CEO of Bozeman, Mont.-based e-CRM vendor RightNow Technologies, pointed to his startup's self-service Web technology as a differentiation that will set the company apart in the marketplace.

"Companies are either growing and experiencing increased customer inquiries or looking to make their organizations more efficient," Gianforte said.

Stamford, Conn.-based Pitney Bowes, implemented RightNow's Web-based CRM system last year, and saw ROI earlier this year when the U.S. Postal Service upped postage rates.

Pitney Bowes, which has about 1.3 million customers nationwide, traditionally sees a large spike in call-center activity when postal rates increase. But in January the volume of calls was half of what it was during the previous increase, a turn of events that Laura Gibbons, Web support services manager, credits to online self-service.

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