The Relationship-Based Enterprise - Implementing SAP CRM - page 18

benefits than those accruing from the traditional systems. A piecemeal approach of progressive
implementation should be abandoned because delaying the implementations of all basic com-
ponents together only delays the benefits of a fully functional SAP CRM and, therefore, incurs
opportunity costs.
In analogy with the Metcalfe's Law for networks (see note on “Metcalfe's Law and Network
Effects”), the value of customer information can be assessed to be proportional to
n m × d
where
n is the average number of active users
m is the average number of employees involved in any business process from different
departments
d is the number of interacting departments involved in the primary business processes of the
enterprise
One of the major users of CRM is database marketers whose objective is to automate the process
of interacting with the customers to
◾ Identify the customers or prospects with high-profit potential using mountains of data about
prospective customers and their buying behavior
◾ Build and execute campaigns that impact this behavior favorably to the benefit of the enter-
prise's business
Data mining applications automate the process of searching the mountains of data to find patterns
that are good predictors of purchasing behaviors based on analyses of past activity. Data mining
uses well-established statistical and machine learning techniques to build models that predict
customer behavior.
Table 1.3 lists the various mechanisms that an enterprise can employ to retain, leverage, and
enhance its customer capital.
1.2.2 Customer Responsiveness
It comes as a revelation that customers are neither necessarily looking for more products and ser-
vices nor are they looking for a wider range of choices. Customers simply want solutions to their
individual needs—when, where, and how they want it. The goal of a responsive enterprise is the
cost-effective delivery of an interactively defined need of a customer.
In the traditional mass marketing, the primary focus is on the offering, and the goal is the sales
transaction. It is the offering (whether tangible or intangible) that must be defined, produced, and
distributed. All measures of activity, namely, cost, revenue, and profits, are based on the offering.
Mass marketing organizations emphasize deterministic planning, for example, the best offering,
the best way to produce and deliver the offering, and the best way to inform potential customers
about the offering. The best method is typically based on the anticipated need of a prototypical
customer who represents the needs of the target market. And success depends on how many cus-
tomers buy the offering. In customized marketing, the focus is on flexibility—the flexibility to
obtain the capability and capacity needed to respond quickly to a wide variety of individual cus-
tomer requests. Customer-responsive activities are used to find the best way to solve the individual