Customer relationship management (CRM) practices have traditionally included sales activities,

marketing, customer care and even technical support. However, these same organizations handle
collections the way they did 20 years ago with separate customer care and accounts receivable
functions. This reactive strategy stalls collection activity -- and payment -- until the customer
is well past due.
However, a new preventive collections approach that combines advanced technology and
sophisticated billing analytics identifies revenue recovery opportunities early in the payment
cycle. This strategy, with proven success at sites in 27 countries, secures payment before the
customer ever reaches the collections stage.
In many cases, customers that have receivables issues are still contacting the companys
customer care representatives to conduct business. But one can route these contacts to a new type
of collection associate called universal agents who handle customer service calls and then
move the conversation to billing or collection issues. In a single call or multi-channel
engagement, costs are reduced, payments are rendered, and customer relationship is preserved
and revenues increased.
Here are the seven key steps to establish and manage a preventive collections strategy alongside
your current customer relationship management practices:
1. Choose the right people
Screen agents for collections, with a customer care skill sets up-front. Identify individuals
capable of serving as universal agents, able to handle virtually any issue from standard
customer care issues to past-due collections. Then, match top performers in each area to specific
clients.
Universal agents can easily be identified by their customer service skills and a thick skin
required for past-due collections. Simply put, you can teach a collections agent how to handle
customer care, but customer care agents rarely have the skills needed to manage collections
calls.
2. Provide up-front and ongoing training
Once identified, universal agents should receive special training. They must have the empathy,
bridging and negotiation skills needed to open and close a customer care issue and negotiate and
resolve a past-due billing issue often during the same call.
A certain amount of ongoing training is required. Agents must be kept abreast of the latest client
offers. They must know how to change a customers payment due date, offer credits, or waive a
service fee.
If the customer recently lost a job, the universal agent must be able to show empathy and offer
payment alternatives.

3. Control customer service quality and performance

With customer data and payment habits on their screen the moment the call comes in, universal
agents can deliver a quality customer experience by offering empathy and sympathy while
remaining firm enough to meet the clients collection targets.
Statistics prove that empathy and the ability to offer alternative arrangements as opposed to the
traditional, bottom-line collections call enhances customer satisfaction/loyalty and increases the
likelihood of receiving payment.
4. Leverage customer data to build prevention strategies
When a customer gets his or her paycheck, every company wants to be paid first. By having the
individuals payment history on-screen at the outset, the universal agent is better able to
negotiate. They may offer suggestions like: Can we change the due date to better fit your
needs?
After incorporating a more conversational, sympathetic approach, our clients experienced a
twelve percent lift in payments. Though a friendly, caring approach increased the handle time, it
also delivered superior financial results.
5. Provide access to all customer contact channels
More and more consumers and business people are using non-traditional means for
communications. Communicate in the medium of their choice. Employing a multi-channel
approach, the preventive collections program can leverage or combine voice communications
with other direct contact channels, including direct mail, chat and email.
6. Deliver global consistency
Implement and enforce a set of operating standards for all customer care and collection
interactions throughout your operation. This will ensure equally trained agents with reliable
service to your clients around the world.
This program is derived from a set of highly defined standards developed from global call center
experience over the past 20-plus years. It delivers universal agents with consistent skill levels,
regardless of where theyre located.
7. Provide motivation and incentives
Every client has different needs. When it comes to motivating and incenting universal agents,
there are a variety of client-specific compensation models. Earnings and incentives can be based
on cure, liquidation and collection rate measurements.
With this strategy, agents are able to engage late-paying customers and gradually move them
away from the collections process, in some cases permanently. Identifying and resolving past-

due issues before the customer reaches the collections stage is a proven way to enhance the
bottom line.

Implementing a CRM Strategy

By Lisa Burris Arthur

Lisa Burris Arthur is Vice President, E-Business Marketing for Oracle Corporation. She
is responsible for global product marketing for Oracle's CRM Applications and Online
Services. She has presented at many prestigious events around the world including
Direct Focus, Gartner Asia, Frost & Sullivan, Customer Contact World, and Stanford
University.

1. Introduction
Now more than ever, the customer is king. In today's competitive business landscape,
recognizing this fact is imperative for a company's success.
To help businesses cope with the ever-increasing customer demands, many companies have
chosen to implement a Customer Relationship Management (CRM) strategy to manage the
customer-facing processes of their business.
Customer Relationship Management is nothing new. In fact, it's been the foundation of
business since the first barter ages ago. What is new are the strategies, technologies and
applications that enable better management of customers, customer information and the
business as a whole.
Even with these latest advances, the basic fundamentals of CRM are constant. Ask any
business and you'll hear the same demands:
"We need a 360 degree view of our customer"
"We need to track our marketing leads"
"We need to obtain more customers"
"We need to measure our marketing return on investment"
"We need sales force automation"
"We need to increase our customer satisfaction"
Those are fine, elementary goals to obtain. But it's not enough. Companies need to reduce the
complexities within the organization in both processes and communication channels so that the
benefits of CRM can be measurable and more concrete.
It incorporates applications in marketing, sales, and service to give the individuals who interact
with the customer the ability to access valuable customer information. CRM can also
consolidate that customer view across multiple channels including the Web, call centers, field
service, sales reps, and partners so that they can better market, sell, and service their
customers.
The Goal
The primary CRM focus areas support the requirements of the customer-facing processes of a
business:
Marketing Automation applications give marketers the ability to create, plan and
execute their campaigns to a targeted audience.
By using CRM, marketers can also access the necessary business intelligence to better
understand which campaigns are working and which customers to target with a specific offer.
This type of information reduces wasted time and money on sending out the wrong promotion

to the wrong customer.

Sales Force Automation or SFA helps sales people track leads and opportunities
for forecasting and to optimize their sales across all sales channels. SFA also helps reps target
whom to call on, what to sell, and to understand how their customers prefer to buy their goods
or services.
Customer Service applications enables reps to resolve service issues throughout
multiple channels, whether it be through the Web, a call center, fax or field service rep.
Customer Service applications and Interaction Center applications enable customers to solve
their own problems on a self-service model for efficient problem resolution.
CRM provides employees with the business intelligence and processes necessary to better
understand customers needs and effectively build relationships between its customer base and
its partners.
CRM also links its customers, employees and suppliers over the Web, the phone, fax, in
person and through partners. Companies can then improve relationships with customers, add
value, reduce costs and improve efficiencies in their business processes.
What does this Mean to Marketers?
An integrated CRM strategy gives the marketer access to intelligent information on customer
profiles as well as campaign metrics and analytics.
Marketing intelligence on campaign metrics can help the marketer understand which channels
are most effective, which campaigns are generating the most leads, and which lists resulted in
better response rates. This enables marketers to measure campaign effectiveness and allocate
resources to the most successful tactics.
These conclusions can also be used as a basis for future campaign activities. For example, a
marketer planning a campaign to existing customers should have knowledge about past
customer sales, service requests, and even customer satisfaction. This helps the marketer
tailor promotions to customers who provide the most profits for the organization.
When marketing campaigns are based on comprehensive customer knowledge, tight customer
profiling and segmentation, and the ability to tailor offerings based on an individual's
preferences and needs, they generate better-qualified leads that can secure a sale and deepen
customer loyalty.

2. Sources of Customer Information

Companies must synchronize their marketing, sales and service across all customer interaction
channels. They also need to link customer information throughout all back office systems such
as accounting, human resources, manufacturing and inventory for a complete view of the
customer.
In many companies, customer data exists in separate silos maintained by each department. By
not sharing information between silos, companies lose efficiency. Also, information updates
(such as contact information or addresses) will not necessarily be transferred to the other
departments.
For example:
Marketing has data on markets, prospects, and lists. This is also supported through

a third party vendor. But marketing needs to drive generated leads to Sales for
follow up. The marketing department also could use feedback from service and
sales about what campaigns are working.
Customer Service has excellent customer feedback, but it's not looping back into
marketing department. This is the type of data that can act as the foundation for
upcoming marketing campaigns. Customer Service can also provide sales reps
important product information or specific account issues that would be invaluable
for sales to have before they call on an account. Finally, Customer Service can be
used for cross sell and up sell opportunities.
The key is to have all your customer information integrated. This provides each department
with a 360-degree view of the customer, and ensures that the data is current and complete.
CRM applications must also enable companies to interact with customers throughout multiple
channels including the Web, phone, fax, direct mail, e-mail, in person or through partners.
Where else is Your Company Customer Information?
It doesn't end with the integration of marketing, sales and customer service, however.
Companies also need to account for other department databases and systems such as
manufacturing, accounting and purchasing.
Global companies have an added layer of complexity. Customer files from the United States,
Europe and Asia must be integrated.
3. Importance of Integration
Unless you have integration between marketing, sales, order management and accounting, it is
impossible for a marketer to understand what revenue a campaign generated - "What's my real
ROI?"
Visibility into ROI and which channels are working successfully is critical. Integration delivers a
genuine flow of information with meaningful information to marketers.
Also, an integrated CRM system enables companies to drive efficiencies by leveraging the
Web, not as a standalone e-business initiative, but integrated into the heart of the business.
Component vs. Package Approach
There are two strategies used to achieve the kind of data integration needed for a successful
CRM implementation, the Component and Package approach.
Component Approach: The component approach connects a series of individual department
"data silos" into a single system. The underlying data is shared between platforms through
software and applications that must access the data from various sources.
Package Approach: A package approach deploys a single technology platform and a single
database to handle all of a company's data. Each department would then tie into the same
database and the systems would speak the same "language."
On balance, the package approach is recommended because it more easily provides a 360degree view of the customer. Tying component systems together can be a challenging and

expensive task due to differences in programming and database structure.

4. Successful Implementation
A simple way of implementing a CRM strategy is to consider Business Flows. This requires a
company to examine the business processes such as planning and executing marketing
campaigns, driving leads to sales and ensuring customers are being served quickly at a low
cost.
A business flow also addresses how you need to interact with other departments and how
information is shared and collaborated among teams to achieve overall objectives. Companies
can start by focusing on the key business flow that has the highest priority or causing the
greatest pain within the business. Some areas to consider might include:
Are your marketing expenditures too high or not targeted enough?
Do you need to lower the cost of sales?
Do you need to save money on customer transactions over the web?
That way, a company can implement an integrated CRM strategy in stages based on the
priorities of the business.
The Blueprint of CRM
A CRM system is only as good as the commitment garnered from the entire organization.
Successful CRM requires transformations on four basic levels:
Structure
Process
Culture
Technology
The Meta Group reported that 55%-75% of CRM projects don't meet their objectives (March
2001). Why is there such a high failure rate? The reason is that companies have not affected
change in these four fundamental areas:
Structure: Departments will be restructured for maximum business efficiencies that require
departments to begin sharing customer information.They will no longer exist as separate
entities.
Process: As departments begin to work together, they will discover ways to interact more
efficiently.
Culture: Employees need to change their thinking and the way they conduct their work. They
must begin to work efficiently with other departments and other divisions around the world.
Additionally, many of the daily functions of a company can be shifted to the Web - which
requires a change in both procedure and attitude.
Technology: The final, obvious change will be in applying a new technology. Companies will
add the latest tools to help everyone get their jobs done, but also to help customers manage
their business.
The good news is companies don't have to make these changes overnight. But keep in mind
that no solution can take you to a new way of doing business unless these four areas are

addressed.
5. Conclusion
CRM strategies offer companies a complete view of their customers across the entire
organization.
When implemented properly, a CRM strategy integrates all customer-facing and back office
applications with the same data. Companies reap large gains from these efficiencies by
offering better service and developing deeper relationships with customers.
In order to achieve those gains, the implementation of the CRM strategy has to create a 360degree view of the customer. This means merging the information silos maintained by each
department into a single data repository accessible by all departments.
Selection of technology is vital to a successful CRM implementation. Selecting a package
approach, rather than tying together existing individual components, enables each department
to tie into the same database with systems that speak the same "language."
Implementation of a CRM strategy is by no means a project for the IT department alone.
Marketers must be directly involved in the process because they will ultimately win or lose
based on the quality of the outcome.
If implemented properly, a CRM strategy enables marketers to interact with customers armed
with useful information. Additionally, by analyzing existing customer data, marketers have
better tools to build future marketing campaigns, increase sales and drive ROI.