Glossary of CRM-Related Terms
ACD
Automatic call distribution. ACD systems are used to route voice calls
through a call-center to a resource able to deal with the customer query. They
are used in conjunction with IVR systems. ACD systems often receive a lot of
criticism because they are perceived to get in the way of interpersonal commu-
nications. For organizations that have under-resourced call centers, ACDs
provide a method of routing calls to low-cost response resources such as
recorded voice announcements or voice-mail.
However, when properly implemented, ACD systems can be a valuable
tool. When customer calls are more accurately routed, customers are put in
contact with a resource that genuinely answers the customer's query. When an
ACD is used to route calls to agents on the basis of agent skills (skills-based
routing) they can reduce the amount of time spent by the customer in explain-
ing the nature of the call. Calls can, in effect, be prescreened, resulting in
greater efficiency and less frustration on the part of agent and caller.
Companies such as Genesys and Avaya offer ACD systems.
With the widespread adoption of ERMS tools in larger companies,
skills-based routing schema should be consistent across channels.
Analytical CRM
Analytical CRM is a set of CRM processes that allow CRM practitioners to
have a better understanding of customer needs, or customer behavior. At one
level, analytical CRM can be used on an ad hoc basis to identify opportunity
or potential churn within a customer base. At another level, analytical
173
174 Glossary of CRM-Related Terms
processes can be preprogrammed to ensure appropriate and timely communi-
cations. Increasingly analytical processes are embedded so that certain
customer-initiated "events" result in an appropriate response.
API
Application program interface. This is the interface used by an application
program (such as a CRM application) to access the operating system and other
services. An API can also provide an interface between a programming
language and lower-level utilities and services that were written without con-
sideration for the conventions supported by compiled languages.
Application vendors with "open APIs" allow other applications or services
to integrate or share information with their applications. In some cases, appli-
cation vendors may go further and write simple integration tools that obviate
the need to integrate at the level of the API.
Asynchronous communications
Asynchronous communications describe those forms of communication in
which there is a time delay between iterations of a dialog. E-mail is probably
the most commonly used form of asynchronous communication. Indeed
most forms of communication could be placed in a continuum some-
where between synchronous communication and asynchronous. Voice calls
to a call center are the most synchronous; web forms typically the most
asynchronous.
In a CRM context, there is a growing customer expectation that
asynchronous communications will become more synchronous (e.g., that
email messages are responded to quickly). As a result we are seeing the emer-
gence of tools that allow some of the principles of CRM in the synchronous
world to be applied to asynchronous communications~for example, skills-
based routing technologies and case management.
Case management
Case management allows customer interaction "cases" to be audit trailed,
appropriately archived, and associated in some way with customer interaction
histories. Case management is often used in a call-center context where a cus-
Glossary of CRM-Related Terms 175
tomer call--or at least a synopsis of the call or call outcome~is archived and
numbered in a consistent way for retrieval purposes.
However, as more electronic customer interactions are passing through
multi-channel contact centers there is a greater need to provide case manage-
ment tools to ERMS (or e-channel management) applications.
Categorization
Customers typically make contact with a contact center if they have a particu-
lar type of problem or a certain information need. Over time, the nature of
customer queries can be categorized. In the case of a retail bank, for example,
customer queries would typically fall into one or more of 400 categories.
Often a customer will make contact with multiple queries (e.g, "I need my
bank balance" and "I want information on your latest high-interest savings
account." Categorizing voice calls is relatively easy in that the ACD menus
should allow the customer call to be categorized and routed. However, most
categorization engines fail because they cannot cope with multiple simultane-
ous categorizations. In this respect text based categorization is potentially
more powerful. A customer can type multiple queries into a dialog, and the
text categorizer can apply multiple categories to the customer query, each of
which will have to be resolved before the case can be closed.
Churn
Churn is simply the term for customer turnover or attrition during the course
of a year. So a churn rate of 5 percent implies that 5 percent of the total cus-
tomer base leaves during the course of a year. Minimizing customer churn is a
key objective for many CRM implementations. However, it has to be recog-
nized that a degree of natural churn is to be expected (e.g., customers die or
leave the country). However, defection of high-value customers to the compe-
tition always needs to be minimized. Analytical tools can determine the nature
of customer churn, and primary research can be very useful in determining
likely causes for churn and pointers towards churn-reduction strategies.
CIM
Customer Interaction Management. CIM strategies are, increasingly, about
embracing traditional voice interactions by customers and e-channel commu-
176 Glossary of CRM-Related Terms
nications. New software players that focus on Internet Protocol-based CIM
approaches are displacing traditional call-center software vendors. In certain
markets~such as the mobile telephone sector (which will eventually support
all-IP-based networks and customer bases) all-IP-based CIM applications are
already in use.
Other interesting technologies in customer interaction management
include the so-called universal queue, by which all sorts of messaging, regard-
less of channel or origin, will be routed by the application to a resource best
able to deal with the customer query.
Closed-loop marketing
As marketing processes become absorbed by CRM, there is an increasing need
to ensure that marketing processes are closed loop (i.e., that a communication
with a customer results in an action). Typically this means that as a customer
is communicated with, and the customer responds or fails to respond, the cus-
tomer database, or data warehouse, is updated. This allows analytical tools to
identify nonresponding customers, highly involved customers, or customers
that may require some special treatment. In many organizations there is a total
disconnect between customer or prospect communications and customer sup-
port/management processes.
Collaborative CRM
Another term favored by certain market analysis firms. Definitions of collabo-
rative CRM vary from firm to firm, and there would appear to be an overlap
between definitions of collaborative CRM and operational CRM. However,
collaborative CRM tends to refer to processes that involve the customer in
some degree of collaboration with the vendor organization~perhaps self-help
applications or some type of Web tools to obtain tailored or personalized
information.
CORBA
The common object request broker architecture, created by OMG, allows
applications to communicate with each other regardless of location. CRM
applications are often built as a series of separate "servers" that are intercon-
nected across a CORBA backbone. These servers may themselves be built in
JAVA, but the CORBA architecture provides connectivity between them.
Glossary of CRM-Related Terms 177
CRM applications built as standalone applications have less flexibility
and scalability. Individual services within the application cannot be replicated
to ensure high levels of fault tolerance or redundancy.
Enterprise applications, however, are increasingly being built in all-Java
environments using so-called J2EE~Java 2 Enterprise Edition. CORBA
"servers" are being replaced by Enterprise Java Beans (EJBs).
Contact center
Contact centers are what will ultimately replace call-centers. These are
customer support or sales centers that are able to handle a variety of types of
customer interaction across a series of touch-points or channels. Increas-
ingly, best practice argues that contact centers should be connected to key
resources within the organization so that contact center staff can gain
access to customer-supporting knowledge wherever it resides within the
organization.
CRM
Customer relationship management (CRM) is about understanding the
nature of the exchange_between customer and supplier and managing it
appropriately. The exchange contains monetary consideration between
supplier and customer~but also communication. The challenge to all
supplier organizations is to optimize communications between parties to
ensure profitable long-term relationships. CRM is a key focus for many
organizations now as a shift away from customer acquisition toward
customer-retention and churn-reduction strategies dictates a need for best-
practice CRM processes.
CTI
Computer and telephone integration. CTI applications are what drive call-
centers. Typically, a CTI application sits "on top" of ACD and IVR systems,
allowing contact center agents to answer customer queries and gain access to
relevant customer-oriented data resources. CTI systems prompt agents and
allow them to record and archive customer interactions.
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