Updated 3 yearss ago
For Barbara Shrut, Royal Caribbean's vice president for customer loyalty, the ability to analyze the patterns of who cruises where, when and for how many days is crucial for targeted, cost-effective marketing. "It's all about customer loyalty," says Shrut, noting that 25% of Royal Caribbean's passengers in any given year have been on one of the cruise line's past trips.
The need for sophisticated technology to keep customers happy as well as analyze their buying patterns has led to a boom in customer relationship management (CRM) software. "It's a business philosophy for companies to identify, develop and retain a company's most profitable customers," says Ana Martinez, Florida sales executive for IBM.
CRM technology began in the mid-1980s with simple contact management software -- titles such as Eighty/20 and Act! -- used by sales account representatives to track their calls to customers and potential customers. By the late 1990s, CRM evolved into company-wide customer databases that could be accessed not only by salespeople, but by customer service, accounting and service personnel within the company.
"It is not just the salesperson who touches the customer," says George Colombo, a Winter Springs consultant and author of the book "Capturing Customers.Com." In the insurance industry, for example, an agent who sells an auto policy would collect the initial customer data. As the customer's history with the company grows, there are records of premium payments, changes in coverage, claims and even details related to adding or deleting a spouse and children. Everyone from the sales agent to the office assistant has access to the customer data and can, hopefully, respond quickly to questions and concerns at the click of a mouse. "Demanding customers are driving the trend for CRM," says IBM's Martinez.
Today, CRM isn't just for customer service. It's a tool for sophisticated marketing, or data mining. The idea is to analyze raw data about customers and then create products and programs to appeal to select groups of people. At Royal Caribbean, the cruise line's new CRM software, Protagona Ensemble, is used to develop targeted promotions. For example, instead of pitching its new cruise ship, Adventure of the Seas, to Royal Caribbean's entire customer database, the promotion can be targeted to those who like to cruise the Caribbean, like to book on new ships and other relevant criteria. Says Shrut, the Royal Caribbean vice president, "Leisure travel is an emotional purchase."
For many businesses, it's easier to embrace the idea of CRM than to put it in place. "Most of the implementations of these types of technologies are judged a failure," says Colombo. The problem is that it's often a daunting process to integrate a company's existing software applications and database with the new CRM product.
"Take baby steps," says Shrut. "Find the area where you can see the most immediate return."
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