Call Centers in the Cloud

Why run customer service in the cloud? Well, let’s rephrase the question in terms of business results. Namely, doesn’t every top-notch call center want to improve:

• Growth by cross-selling and up-selling customers with relevant offers?
• Efficiency by providing service representatives with a better picture of the customer?
• Customer satisfaction by talking with customers more knowledgeably, as well as with greater empathy and intimacy?

For example, you call to renew your car insurance policy. In the call center, the service representative sees not only your account history but also your current Facebook profile picture—a family photo—and notices you have a teenage son. He asks if you’d like to add him to the insurance policy as well.

Or say you’ve been in a fender bender and need to get your car fixed. When you phone your insurance company to locate the nearest auto body shop,  the service agent notices—again from your Facebook photo feed—that you have small children. She asks if you need car seats with your loaner, or if you want to use the ones you have.

In both of these situations, giving the service agent a fuller picture of the customer they’re assisting helps everyone and makes for a richer customer experience. These are just some of the benefits of moving customer service to the cloud.

Insurance Agents Relocate to the Cloud

Recently I asked, Why not run CRM in the cloud? (Just for definition’s sake, by CRM I refer not only to sales force automation, but also to marketing and customer service.) In other words, why not use software-as-a-service (SaaS) CRM applications, provided they deliver—as they typically do—more rapid procurement, easier manageability and a lower total cost of ownership, compared to on-premise CRM applications?

For many organizations, SaaS customer service applications will meet their needs. For example, Innoveer recently helped a property and casualty (P&C) insurance company deploy a SaaS-based customer service application for about 100 call center agents. This isn’t the largest call center we’ve ever worked with, and perhaps the SaaS application doesn’t have all of the advanced features that some of our bigger call center customers have, such as interactive voice response (IVR) integration or computer-telephony integration (CTI) support.

But from a functionality standpoint, the application meets all of the organization’s case management needs—from case capture and assignment to resolution and closure. Furthermore, thanks to having a good plan (because pursuing SaaS CRM applications without a plan is a recipe for failure), the P&C insurer quickly got and running.

What’s not to like about less expensive software that rapidly delivers business value?

Cloud-to-Cloud Integration Benefits

Another reason to run service applications in the cloud is for cloud-to-cloud integration. Many organizations, for example, would love to link their customer service platform to Facebook, so when a customer calls in, the service agent can literally see who they’re helping.

Well, connecting your SaaS customer service application to Facebook is much easier than integrating on-premise CRM with Facebook. (For example, salesforce.com has a Facebook connector; on-premise Siebel does not.) In fact, integrating any two cloud applications will always be easier than integrating an on-premise application to the cloud. With SaaS, one person builds a connector and thousands of people can use it. Whereas when integrating an on-premise application to the cloud, finding that economy of scale is, at best, difficult.

As the Cloud Expands, So Do Service Possibilities

Is SaaS right for all customer service requirements today? No. But that’s changing as the cloud (which includes platforms and infrastructure—not just SaaS) continues to expand.

In other words, as the cloud evolves, the attendant costs and benefits will drive more companies to host their call center in the cloud.

Learn More

Mastering customer service, regardless of whether it’s backed by on-premise or SaaS applications, first requires treating the call center as a strategic asset. In other words, drop the “necessary evil” thinking and remake your call center or contact center into a valuable corporate asset.

Until you get your customer service business practices and self-service sites in order, from a service standpoint also forget social networks. (For more on setting the right service priorities in a social networking world, see The Tweet Must Die.)

Finally, with online self-service success rates declining, maybe we should all just use Facebook for every online customer service interaction instead.

SaaS Seeking Large Enterprises

As the cloud expands, it's extending SaaS to even the biggest businesses. Photograph by doug.siefken.

Large + Complicated = On-Premise CRM?

Why not run CRM in the cloud? In other words, why not use SaaS CRM applications, provided they deliver—as they typically do—more rapid procurement, easier manageability and a lower total cost of ownership, compared to on-premise CRM applications?

Well, size may be one factor. Many people’s perception is that SaaS doesn’t work well for large enterprises. But in fact, we’ve found that SaaS solutions are quite a good feature and functionality fit for many organizations, large or small. As the list of salesforce.com customers shows, many heavy hitters are SaaS devotees.

On the other hand, SaaS isn’t the best fit for every organization, and especially large organizations with quite complex requirements. For example, we’re currently helping a large legal information services provider to adopt a new CRM system. Based on our recommendations, the company is implementing an on-premise application, in part because it needs to integrate its CRM software with various back office, order management and provisioning systems. The goal: to enable the company’s sales force to quickly move from quote to order, and then organize product delivery, all from within the CRM application. Building this is relatively complicated, technologically speaking.

Given that technical complexity, as well as the required integration, this type of project is not a great fit for SaaS—at least not in 2010.  I include that caveat because, going forward, we do see more projects of this nature—technically complex CRM implementations requiring advanced functionality and integration—being well served by SaaS.

Redefining the CRM Choice: On-Premise or SaaS

A little over one year ago, Innoveer released its guidance about when to use SaaS versus on-premise CRM software: The New CRM Choice: On-Premise Software or SaaS.

The gist is that in 2008, SaaS CRM applications didn’t offer as many features, or as much functionality, as on-premise applications. For projects with a greater degree of technical or organizational complexity, on-premise CRM software was the better choice.

But that equation has been changing rapidly—and will continue to do so—as cloud computing evolves, further extending SaaS and providing greater business benefits. CRM analyst Denis Pombriant explains:

The Cloud [has] three parts: infrastructure as a service (IaaS), software (SaaS) and, now, a development platform (PaaS). (…) The new ubiquity [of computing access] spawned by Cloud Computing — all three components — is spawning new, fast and, above all, mobile business processes, not just applications.

In other words, SaaS is now just an application layer—albeit with some minimal accompanying tools—in the cloud. To which the cloud adds an infrastructure layer (servers, storage and bandwidth from the likes of Amazon and Google) and platform layer (such as Force.com). Altogether, these layers can make any SaaS application much more useful and easy to work with.

Bigger Clouds, Greater Benefits

As cloud computing expands, it makes SaaS more extensible, useful and cost-effective. Hence my prediction is that SaaS CRM will evolve to become more deeply connected with the expanding cloud ecosystem. In other words, organizations of any size will be able to support much more complex business processes, at lower cost, using SaaS CRM applications.

In 2008, we said that “CRM projects must now begin by answering this fundamental question: on-premise or SaaS?”  Today, however, the question is simpler: Why not use SaaS? And as the cloud evolves, in another three or five years, will we even bother to ask?

Learn More

When weighing the pros and cons of on-premise versus SaaS CRM software, assess functionality requirements, organizational structures, costs and long-term goals. For more information, see our aforementioned white paper, The New CRM Choice: On-Premise Software Or SaaS.

Finally, want to know which SaaS CRM software is best? See our CRM Software Smackdown.

Master Plans: Not Just for Evil Geniuses

Whatever your strategy, put it in lights. Photograph by L. Marie.

What’s your marketing strategy? For direct marketing to be effective, you must define your strategy in advance. Many organizations, however, neglect this crucial step.

For example, one of our biotechnology clients excelled at marketing and selling to the third-party distributors that sold its products. The company ran top-notch campaigns to generate leads and managed those leads extremely well. But then its market shifted, and instead of selling through suppliers, the company wanted to sell directly to customers. As the firm shifted its approach, however, it didn’t pause to define its new marketing strategy. Instead, the company assumed that all of its indirect marketing knowledge and expertise would work just as well for direct marketing and sales. Unfortunately, this wasn’t the case. As a result, the company experienced a painful transition as it was forced to rethink its entire marketing strategy mid-campaign and on the fly.

Strategy Essential for Direct Marketing

Based on Innoveer’s extensive CRM experience, we’ve found that making your marketing program excel requires mastering these five capabilities: marketing strategy, as well as lead management, campaign management, event management and marketing measurement.

To create a more effective marketing program, almost everyone will agree about the need to consider each of the above disciplines. Except for marketing strategy. “We already have one of those,” we always hear. Perhaps. But unless you define it, are you sure that it’s the right one?

Best Practices: Marketing Strategy

Having the right marketing strategy and articulating it is step one. Step two is ensuring that you can successfully execute your strategy. To do that, we’ve identified these four best practices:

• Profiling and targeting: Identify the key characteristics that differentiate your prospective buyers, to best match appropriate offers with customers.
• Cross-functional alignment: Define the integration between marketing and other customer-facing functions (sharing leads with sales, feedback with developers, etc.) to maximize the effectiveness of demand-generation programs.
• Multi-channel management: Define your strategy and schedule for executing demand-generation programs, using the appropriate marketing channel for each designated customer segment.
• Program design: Develop the objectives and plan for a campaign or collection of campaigns for each targeted audience, using selected messaging and a call to action.

Example: Multi-Channel Management

As an example of how these best practices work in real life, take multi-channel management. Done correctly, multi-channel management—reaching each customer through the optimum channel—becomes much more than the sum of its parts, as organizations can increase their efficiency at identifying and pursuing customers using a variety of channels.

Innoveer benchmarks organizations’ marketing strategies to determine any given organization’s relative process maturity in that area—namely, whether it’s advanced, lagging, or somewhere in between. Here’s how that spectrum looks for multi-channel management:

• Initiating: Just getting started with having multiple customer touchpoints.
• Competitive: Interfacing with some—but not all—channels, perhaps using some outsourcing. Also defining some, but probably not all, customer segments.
• World class: Seamlessly interfacing—across all customer-facing functions and third-party agents—with each customer via the most appropriate and comfortable channel. For example, teens on Facebook, older clients in retail stores, people with office jobs via email, direct mail to homes.

Fix Problems First

By benchmarking their current capabilities, organizations know which parts of their marketing program to improve first. And while it might seem counter-intuitive, our advice is to focus first on making your weak capabilities stronger. This approach will give you the biggest improvement in your overall marketing strategy effectiveness, and thus the biggest return on investment.

Learn More

As you plan for upcoming marketing program enhancements, know the requirements for creating more effective marketing programs.