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ProfitabilityProfitabilityThe revenues from implementing e-CRM systems must be greater than relationship management costs. There is therefore a need to examine closely two major groups of customers. The first consists of those buyers or customers who are relatively undemanding in their relationships with their suppliers for various reasons: for example, where trust has been built up over a number of years or where the immediate costs of switching suppliers are greater. The second consists of other types who are more demanding, requiring their suppliers to reduce prices while at the same time expecting continual innovations to sustain their own competitive positions. Both groups of buyer are essential to the generation of significant revenues for their suppliers. The art of CRM is to keep both groups and to retain their business. A modified CRM strategy to adapt to the needs of both groups is potentially more enriching than one strategy for all. It is important to identify such customers with the possibility of deselecting others who generate poor revenues, add high costs and take up a lot of time. Organizations in the telecommunications sector must further address the revenue growth and cost reduction benefits to be gained from their chosen CRM strategy before implementing it. At the time of writing, this industry is feeling the fallout from deregulation, shortening product lifecycles and a huge amount of churn as the technological advances mean increased competition and the potential for switching (as discussed above). Figure 24.2 shows the potential benefits to be gained from a complete CRM solution that concentrates on not only the customer contact management aspect that is often the key driver for CRM, but the equally important back-end infrastructure that allows the enormous amounts of data collected to be manipulated and fed back into the system to increase knowledge of the customer. Figure 24.3 goes on to further break out the key areas of cost reduction, revenue growth and the building of a customer community, showing the potential areas of benefit for CRM in this fast-moving sector. Finally, here are two real-life examples of how CRM can benefit a company in this sector. The first example is BT Cellnet, who have implemented a new complaints resolution system, and the second is Telecom Italia who have recently installed an enterprise data warehouse. These are two very different solutions, showing the importance of both back and front-end systems, and both have brought enormous benefits to the businesses. These case studies are public domain and have been written with the help of the companies involved. 107
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