FedEx Expects CRM System to Deliver

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FedEx Corp. is launching a multimillion-dollar customer relationship management (CRM) initiative in an effort to cut costs and use its existing customer data to cross-sell and upsell services to potential or existing accounts.

In an ambitious multiyear effort, FedEx will deploy software from Clarify Inc. in San Jose to create a system that gives every member of the Memphis-based company's 3,300-person sales force a comprehensive view of every customer, detailing each one's needs and suggesting services that might meet those needs, said David Kevren, vice president of worldwide services at FedEx.

The CRM system, which will be phased in beginning next year, is expected to allow FedEx to tailor its data in ways that aren't currently possible.

However, analysts say they don't expect the effort to create any significant advantages for FedEx in the highly competitive package-delivery market because rivals such as Atlanta-based United Parcel Services of America Inc. are likely to keep pace.

Still, the system should help FedEx substantially improve its customer support. For instance, if a customer who does a lot of international shipping calls to arrange a delivery, a sales representative will see a detailed customer history on his computer screen, determine the customer's needs and try to sell the most appropriate offering, said David Roussain, a vice president of e-commerce at FedEx. This should prove especially helpful because the firm offers 220 different services -- from logistics to transportation to customs brokerage -- thus making it difficult for salespeople to identify the most appropriate fit for customers, said Kevren.

The CRM system should also help FedEx conduct promotions and qualify potential sales leads, said Kevren.

The Clarify software will be configured with rules that indicate where the market "sweet spots" are and calculate how profitable those market segments will be to the corporation, and even to the individual salesman, said Kevren.

Embracing Change

Some CRM implementations have forced companies to revamp their existing business processes, but Kevren said FedEx isn't worried. "We are constantly retooling with the addition of new technology," said Kevren. "This will be just another modification."

The new system should make it easier for customers to use the courier's Web-based customer support systems because call center representatives will have greater access to customer data across all channels, explained Roussain.

That should foster 25% to 40% annual growth in the number of FedEx customers who use the Web for customer support.

Great FedEx-pectations

Meanwhile, that should help hold the growth rate in FedEx's call center activity to a manageable 3% to 4% per year, said Roussain. The shift among customers to using the Web for customer support should create huge cost savings; each call center transaction costs a few dollars to support while a Web-based transaction can cost as little as two cents.

Analysts say FedEx is doing what it needs to do to keep pace with customer expectations but hasn't leapfrogged the rest of the market with these moves. "It's the price of staying in business," said Chris Newton, an analyst at Boston-based AMR Research Inc.

If UPS hasn't already launched a major CRM initiative, said Newton, it's probably not far behind.

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