A White Paper by IDC France, sponsored by Eptica: Customer Relationship Management on the Web: the new challenges for European companies

Paris, January 15, 2004: IDC France and EPTICA announce the publication of a White Paper entitled "Customer Relationship Management on the Web: the new challenges for European companies." In this White Paper - based on a survey of 309 companies in the UK, Spain and France - IDC gives a clear insight into the level of maturity of companies as regards the issue of customer relationship management on the Web.

Email: at the heart of customer relations

Optimising the management of a company's relationship with its existing and prospective customers can be summed up fairly simply; however, the underlying principles are not only complex, they may even seem paradoxical: maximising the overall satisfaction level of current and prospective customers in order to increase their loyalty - and convert prospective customers into actual customers - while reducing CRM costs. To achieve this in an economic climate characterised by strong competitive pressure, companies are tending to set up new tools enabling them to optimise customer relationships. Interaction channels between companies and customers have thus multiplied in recent years, a phenomenon which has been boosted by the arrival of Internet technologies and email.

Internet access has become democratised among home and professional user populations in Europe, making email the major new mode of communication between companies and their current or prospective customers. According to IDC, the number of emails sent every day across Europe reached 5.9 billion in 2003 - up 23% on 2002. The results of the survey conducted by IDC confirm this development: nearly three quarters of the companies surveyed (71%) claim to have a Web-based CRM solution involving, for all of them, the inclusion of an email address on their Internet site.

However, simply placing an email address on the company Web site does not mean that customer relationships are being managed effectively. The tools implemented to manage the flow of incoming emails must be appropriate. This problem is particularly critical when we consider that the companies surveyed receive a high number of emails to be managed daily: 43% of them say they receive more than 80 emails a day from current or prospective customers. Despite this high number of queries, only 22% of companies have opted for specialised market solutions. In parallel, 20% of them handle their incoming emails with traditional email tools (such as Outlook), while almost 60% of companies have developed their own solution in-house - in most cases, this involves simple scripts supported by a traditional messaging system.

The need to optimise customer relationships via the Web

Like any interaction channel, efficiency is directly linked to the company's ability to meet the requests of its current and prospective customers. The survey conducted by IDC shows that many companies do not reply to every incoming email: 21.3% of the companies surveyed claim not to consider all current/prospective customer requests generated via email. This rate is already high, but it is certainly limited by the fact that some companies are undoubtedly unwilling to share such unfavourable information. The importance of replying to incoming emails is a necessary condition, but it is not enough on its own. Companies should also take care to be particularly responsive - an important differentiation factor in a highly competitive economic environment - and to ensure that the reply is of the highest possible quality. These factors together make it possible to assess the level of maturity of companies when it comes to managing relations with existing/prospective customers via the Web (see chart, opposite). They also indicate that companies are particularly penalised in their Web-based CRM approach when the volume of messages received from existing or prospective customers is high. Although this indicator should be a success factor, it appears here to be a source of failure. What, then, are the winning strategies that can be implemented to transform an Internet strategy into an effective, profitable customer relations channel? This failure is particularly critical when we consider that current or prospective customers who are disappointed by the Internet services of a company - due to insufficient product information or advice to customers, difficult buying processes, laborious online support, or poor responsiveness and interactivity - will hesitate before visiting that company's points of sale, thereby restricting sales opportunities for that company.

Towards Greater Maturity in Customer Relations on the Web

These results seem rather discouraging at first glance, but they do leave room for significant improvement by companies able to make the most of these differentiating factors, whether by improving their handling of replies to existing or prospective customers or increasing responsiveness to customer queries generated by email. According to IDC, companies are gradually moving towards a new maturity in customer relations on the Web:

Companies are well aware of the rewards to be reaped from a Web-based CRM strategy: 83% of them believe that such a strategy makes it possible to respond more quickly to existing or prospective customer queries, while 69% see it as a means of reducing customer management costs.
Companies must position themselves as "trend-setters" rather than "followers" in order to benefit fully from the competitive opportunities brought by an effective Web-based CRM strategy, a trend which is just beginning, according to the results of the IDC survey.
Companies are aware of the benefits to be gained from technological solutions dedicated to CRM on the Web and, in particular, these solutions' ability to provide statistics that will improve understanding of customer behaviour on the Web.
Companies are increasingly combining email with new tools to optimise interactivity of relationships between the company and its current/prospective customers: Chat, co-navigation, Web call-through, Web call-back … Almost two thirds of the companies surveyed (63.5%) use one of these tools in conjunction with email.

In early 2004, IDC surveyed 309 managers from companies based in the UK, Spain and France and directly involved in the Web-based CRM strategy. All the companies surveyed employ over 500 people: 40% of them have a headcount of 500 to 1000 people, 25% employ 1000 to 2000 staff, and 35% have a headcount of over 2000. The companies surveyed belong to sectors which are particularly aware of the customer relationship management issue: banking and finance (30%), mail order/distribution (16%), leisure, tourism and clothing (13%), press and media sector (10%), pharmaceuticals/cosmetics (7%) and the public sector (24%).

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For further information, please contact:

IDC France 5 rue Chantecoq 92 808 Puteaux tél: +33 1 41 97 64 00 www.idc.com

Eptica 95 bis, rue de bellevue 92100 Boulogne Billancourt tél: +331 47 12 68 88 www.eptica.com