Early adopters of CRM see the benefits

Two of the early adopters of customer relationship management (CRM) software say they are seeing the first benefits from their investment.

CRM vendors have traditionally talked up the promised returns, but never detailed how they are calculated.

Insurance provider Direct Line and Nationwide Building Society both told Computing they have identified ways of achieving a financial return on projects integrating call centre and internet customer contacts.

Last year, Direct Line introduced a CRM datawarehouse, using tools from software vendor SAS. The warehouse can hold information on 18 million clients, and is updated with 60,000 transactions every day.

Analysing the data helps Direct Line identify the customers most likely to buy certain products. Call centre staff use the information to help them sell additional products over the phone.

An initial group of operators has been using the system since October, and it will be extended over the next six months across all 3500 phone lines.

Jehan de Silva, CRM chief analyst at Direct Line, said the project was improving the cross-selling of products. "People are more likely to stay with Direct Line if they buy more than one product from us. This greatly increases their lifetime value," he said.

Direct Line is also gathering large amounts of data from its website, which is being merged into the main CRM warehouse. By August, the company will have an integrated view of customer transactions through both channels - the real aim of CRM.

"At that point, we will have the ability to converse more closely with our customers. We have put the foundations in place by getting the data into the right environment," said de Silva.

Mark Cromack, Nationwide's senior operations manager, said its service has improved by automating email through its internet banking operation.

Its web contact centre receives nearly 20,000 emails every month. Some 45 per cent of emails are responded to automatically, using software from Firepond subsidiary Brightware.

Cromack said the payback comes from controlling staff expansion. Customer contacts have increased fourfold, but the number of operators has only doubled. The web contact centre will be integrated with the call centre over the next 12 months.

Neither company can put a precise figure on the payback achieved, but this is not unusual, according to Rasika Versleijen-Pradhan, senior analyst at IDC.

"Calculating an exact monetary value on customer relationships or retention is difficult," she said.

Also published in Computing