Analysis & Commentary:

USING STREAMING MEDIA FOR CRM

As reported by David Du, the most critical relationship in business is with the customer. In fact, there is an entire industry known as Customer Relationship Management (CRM). However, the way we manage business relationships is changing as the Internet changes how we interact with our customers. As Streaming media technology becomes more advanced and more available, the CRM model, too, will evolve through the application of integrated solutions.

History of CRM

CRM has a rocky history. The telephone is the classic tool for customer contact, but it is costly in terms of dollars and time. It is also frustrating for the client who often experiences lengthy "hold" time and vendors who "pass the buck."

E-mail is an inexpensive communication tool, but it lacks the human touch, which is so critical as well as effective. Knowledge bases are relatively easy-to-use and can provide quick answers to common product-related problems, but they don't serve users who have complex or unique issues. (What is a knowledge base ???)

Java allows for interactive chat. This seems fairly effective in terms of providing an immediate response and being low cost, but it is still not satisfactory for critical situations. Voice-over-IP (VoIP) is the best solution so far because it blends the human voice, an immediate response and relatively low amortized cost. Yet, it is difficult and expensive to deploy. It could be a truly effective CRM tool once the infrastructure obstacles are overcome.

A Solution: Streaming Media

What has prohibited Internet-based CRM from being effective for vendors and customers is the conflict between cost and "humanness". Streaming media technologies, however are unique. They provide a cost-effective CRM solution with a human touch. For example, the addition of video to VoIP allows for more effective, remote management of key relationships.

Major customers demand more person-to-person contact. Therefore, IP Video (IPV) is a good alternative for lower level situations that traditionally require face-to-face representation. Yet, in order for IPV to become part of a CRM model, the usual obstacles Streaming media faces must be conquered: server deployment, user bandwidth availability and the adoption of standards.

The Future of CRM

High customer acquisition costs make customer retention critical in today's business arena. The Nordstrom department store chain teaches its salespeople that it costs 10 times more to acquire one new customer than it does to retain an existing customer. Because of the low switching costs that the Internet gives consumers, this multiplier is probably closer to 100. Even for non-Internet-based businesses, the multiplier is significantly higher than 10.

CRM with IPV can address this problem. Aside from being an acceptable alternative to in-person contact, CRM with IPV offers some advanced features: pay-per-use customized support; remote technical support; training; and multi-language support.

There are obstacles to overcome before IPV becomes standard technology. But as these challenges are met, IPV will become a valuable component of a total CRM solution. Businesses, both Internet-based and non-Internet-based, will be able to use IPV to satisfy their customers and turn them into long-term clients.

David Du is CEO at Streaming21, www.streaming21.com.