By Erika Morphy
Service has been treated largely as a distant stepchild of customer relationship management (CRM) because it has been overshadowed by the revenue-driving applications in marketing and sales. This mindset, though, is slowly changing.
Amazon.com is turning ten years old this month -- a notable benchmark especially given the vast numbers of its dot-com compatriots that have long ago fallen by the wayside.
There is little secret to Amazon's success, of course. Its Web site is among the easiest to use and its service policies and technologies are very customer friendly.
It also has diversified far beyond its original mission of selling books. But that is almost beside the larger point, which is this: Amazon has accomplished what few companies with an online presence have been able to do, even ten years after its trailblazing launch. It drives sales largely through its service operations.
Ten Years Later
You wouldn't think such an accomplishment would be all that rare, given the advancements in service and self-service technology that have occurred over the last ten years. Shopping-cart technology, for example, is almost unrecognizable from the days when Amazon set up shop.
Unfortunately, however, many CIOs still have not realized the revenue potential that a self-service application can deliver. Never mind the obvious mission of service and self-service applications, which of course are designed to service the customer.
Indeed, service has been treated largely as a distant stepchild of customer relationship management (CRM) because it has been overshadowed by the revenue-driving applications in marketing and sales.
This mindset, though, is slowly changing as companies are beginning to recognize that a well-integrated, self-service application can help retain customers and create more revenue opportunities.
Of all the CRM applications, self-service tends to be the one that deceives unsuspecting companies the most in terms of total costs, especially the costs associated with connecting the self-service applications to databases that span a company's front- and back-end operations.
TCO of Self Service
Self-service applications, perhaps more than other CRM systems, tend to deliver a robust return on investment within a matter of months. But the trap for companies implementing self-service applications is the ongoing cost of maintenance and administration, according to a Gartner research report written by Esteban Kolsky.
These applications do tend to pay for themselves -- within a matter of months, in some cases -- but the total cost of ownership for maintaining them is typically higher than with other CRM systems.
Maintenance and upgrades, according to Kolsky, are most often underbudgeted in self-service implementations, even though they require anywhere from 50 percent to 70 percent of post-deployment costs.
Then there are the hidden costs. Consider, for example, the process of returns for an online retailer. Reverse logistics -- managing returns from customer to shipper to warehouse to credit status -- costs money without providing any tangible revenue stream.
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