1. Consumer Electronics Gets CRM RightNow
Friday, October 05, 2007
Robert Bois
The customer management market pendulum has swung back and forth countless times on whether it’s better to
tune products to a specific industry or keep them general for use across a spectrum of industries. Siebel (now
part of Oracle) was the most notable vendor to present a number of industry-specific versions of its CRM
application. The challenge with this approach, of course, is that it usually requires the vendor to maintain
separate versions of the code base, adding cost and complexity to support and development.
However, in the new world of software as a service (SaaS) and service-oriented architectures (SOA), much of
this complexity associated with splitting code libraries has been eliminated. Vendors can now build different
editions using templates that lay over a single code base, removing some of the cost and complexity of
maintaining industry versions. Regardless of technology, the debate goes on.
Of the market leaders, for example, we see roughly an even split in strategies. Oracle sells industry versions for
both on-premises and on-demand versions of Siebel, while SAP has remained largely industry-agnostic (with a
few exceptions). Microsoft Dynamics CRM remains almost entirely horizontal, although the company is relying
on partners to build out industry versions. Salesforce.com takes a similar approach to Microsoft, although for
key industries such as wealth management, it has created its own industry editions. By contrast, the one SaaS
CRM vendor aggressively going after industry-specific needs is RightNow Technologies, which just released its
eighth industry edition, and first that is specific to manufacturing.
RightNow has made a concerted effort to market mostly to larger enterprises, which are more likely to tailor CRM
to its unique company and industry needs. And because of the flexible architecture, RightNow can build and
deliver industry solutions without creating multiple code bases, or even multiple instances of the application.
RightNow, given its heritage in multichannel customer service applications, sells largely to consumer-based
industries (which has been extended to include citizens and students with the public sector and higher education
editions). Since the company’s first industry edition launched just over six months ago, ensuing editions have
been rolling out at a fairly rapid clip, offering testimony to the template-based architecture.
While the consumer electronics version is new, RightNow is not new to the industry. The company boasts an
existing customer base that includes Black & Decker, Canon Canada, LG Electronics, Logitech, and Nikon
among others. Drawing from insights gleaned from its customers, the new edition adds features that help
companies present relevant product information to consumers before they make a purchase and extends to
provide service, such as product registration, after they’ve bought a product. In doing so, RightNow is going
after a market that is already investigating the technology landscape to find new ways to get closer to its end-
customers, which until recently were almost completely anonymous.
While many fast-moving consumer goods (FMCG) companies have the luxury of gathering point of sale (POS)
data and syndicated data among other demand signals, most consumer electronics companies do not. These
companies sell predominantly through retail channels that share little demand data, making demand sensing and
forecasting much more difficult. Therefore, it is imperative for these organizations to find innovative ways to get
“closer” to the customer without disintermediating the retailers. As such, building a branded e-commerce
channel to directly address consumers is simply not an option.
As a result, many consumer electronics companies are rethinking their customer service channels as a means for
building a demand signal, and some are already starting so see results. One wireless device manufacturer has
begun instituting product registration in conjunction with enriched online service channels to encourage
customers to identify themselves. Over time, the customer data repository has grown, and given the company
more customer insight which has increased clout within its demand chain. Not only has this increased customer
loyalty, it has also resulted in more of a collaborative relationship with the retailers (or wireless carriers in this
case). Another RightNow customer is collecting data from all its customer service channels to build a better
knowledge base for quickly identifying product quality issues and collecting consumer preferences for further
product innovation.
The bottom line is that while many enterprise CRM buyers in the past have regretted over-customizing, providing
an industry-specific version as a starting point can go a long way. In a software market still struggling with
adoption issues and implementation failures, the combination of a SaaS delivery model along with industry
functionality further reduces risk, complexity, and implementation time and cost. Consumer electronics
companies will continue to explore new means for gather betting customer insights beyond traditional call-center
channels, not just to reduce costs but to build loyalty, brand equity, and build better consumer insight. Vendors
that provide customer service, web self-service, loyalty, and product information management stand to capitalize
on this trend.
Copyright © 2007 AMR Research, Inc.