Travel agent Thomas Cook has achieved what marketing gurus might trumpet as multi-channel customer relationship nirvana. In the UK, it offers services or takes bookings through more than eight channels: face-to-face, phone and fax interaction at its high street shops; over the phone through its call centre; at its ThomasCook.com web site; by WAP-enabled mobile phones; through customer information emails; and via Thomas Cook TV, the company's interactive TV channel.

According to Andrew Windsor, managing director of ThomasCook.com, if customers are to consider using Thomas Cook ahead of its competitors across any of these channels, it needs to be able to provide " a complete and personal one-stop travel service" across all of them. While many customers refer to the company's online or interactive channels during the holiday planning process, almost all prefer to speak to someone before handing over the money to book the holiday.

Thomas Cook's multi-channel approach to customer relationship management (CRM) is something of an exception. For most organisations, the goal of establishing a ‘360-degree' view of the customer has proved elusive. In fact, according to figures from analyst company Forrester Research, only 6% of companies interact with their customers across four or more channels at present, although 29% hope to do so by 2003. Further research from Forrester indicates that for the majority of Fortune 1,000 executives, gaining a single view of the customer is still the main reason they implemented a CRM system.

But lately, as IT budgets have tightened, organisations have been forced to reassess whether the millions of pounds they have spent on customer-facing systems has been well invested. More and more, customer managers and IT departments are asking themselves whether the expense is, in fact, cost-justifiable or even practical – especially given the formidable task of integrating channels to provide the much sought-after 360 degree view of the customer.

What has changed is their means of achieving that goal. For example, since investment in multi-channel CRM burgeoned in the late 1990s, some channels have failed to gain momentum ( WAP and iTV) or have faded (fax). Others – such as dealing with free-form email or iTV – have simply proved far too expensive. The upshot is that many organisations have had to adopt a more realistic view of how they build multi-channel relationships.

"The real question now is not ‘Should we do CRM?' but ‘How can we do CRM right?'," explains Erin Kinikin, vice president of ebusiness applications and strategies at Giga Information Group. According to Kinikin, a third of the organisations she deals with are now standing back, focusing on CRM systems they have already bought, tuning them to establish a clear return on investment. Another third are continuing to roll out software modules they have already licensed as part of a wider contract, and only the final third are looking at new pilots. The overriding reason for project failure in the past, adds Kinikin, has been that too many organisations set themselves unrealistic goals and thus tried to achieve too many ‘touchpoints' at once.

Think big, start small
What the industry is experiencing is a shift in attitude towards building a multi-channel view of the customer – the focus now is to continue thinking big, but start small. "Businesses quickly realised that it would be impossible to get a 360-degree view of the customer all in one go – it's a massive integration undertaking – so now they're developing local platforms of CRM capability while keeping an eye on the ultimate goal of a unified system," explains Neil Malpas, a consultant at call centre implementation specialist Parity.

Furthermore, the success of CRM can depend on the size and longevity of the organisation. Although the software performs similar functions at each organisation, different organisations achieve very different results – those with complex interaction chains and longstanding, legacy systems can often obtain only a partial, snapshot view of the customer, thwarted by the immense challenge of integrating the data that flows from multiple customer touch points; others, such as online start-ups or spin offs, have more chance of putting in place an infrastructure that can support new and historical channels and obtain a near real-time view of all customers. "One hundred per cent certainty of having every bit of customer data to hand may be an achievable goal for a start-up, but it is more of an ambition for a company like ours – with legacy systems dotted all over the place," says Kevin Lloyd, chief technology officer of UK high street bank Barclays.

But even if organisations follow a piecemeal approach to deploying multi-channel CRM, integrating disparate systems and dispersed customer data to achieve this single view of the customer remains the chief pain point – regardless of the size of the organisation. Tom Siebel, CEO of CRM market leader Siebel, laboured this point to customers at the company's European user conference in April 2002. "The biggest projects being funded now are integration projects. It's the number one priority for Siebel's installed base, Oracle's installed base, PeopleSoft's installed base. Our main priority as CRM vendors is to lower the cost of integration for customers," he says.

One of the main reasons that integrating customer touchpoints has become such a burden, however, is that organisations have not aligned their customer processes in the first place. In order to do this, many businesses find they must change how they approach building multi-channel customer relationships on a cultural level – a process that has nothing to do with technology.

An influential factor in past project failures, according to a research paper from management consultancy Accenture, is that there has been no organisational structure to support a seamless customer experience. Accenture describes the disjointed but all-too familiar scenario of ‘Company X', where the operations division is responsible for deploying a multi-channel contact centre, the IT department is responsible for the implementation budget, product development designs the product, and sales and marketing sells it.

Tuning customer-facing processes will become more important as organisations look to add new channels and maintain that single view of the customer. More and more CRM vendors are now seeing the potential value of opening up CRM as a web service, where users access various business processes associated with dealing with the customer through the browser, while the underlying systems exchange customer data and transactions using open web services standards such as XML, SOAP, WSDL and UDDI.

	Kevin Lloyd, Barclays: “Analysing customer transactions has generated quick returns.”

Siebel, for one, has introduced the Siebel Application Network, which allows organisations to access more than 200 set business processes in this way. Other vendors, including Kana Software and E.piphany, have also now standardised their architectures on open, web-based standards such as Microsoft's .NET and Java 2 Enterprise Edition (J2EE).

"The approach of companies such as Siebel has traditionally been ‘Put everything in our system and we'll solve all your problems'," explains Roger Siboni, CEO of E.piphany. "With that approach you only cover 40% of the customer experience. With our approach, you can have a common customer information backbone on top of which you drive a series of functions that are open and can interface with one another."

Mark Camilleri, international sales and marketing director at UK-based call centre software company Graham Technology, concurs. The company has developed a ‘toolkit' approach to CRM software, where the emphasis is on business process integration, rather than the tightly coded, application-by-application integration of systems that has impeded many companies from seeing any return on CRM investments. "This is truly multi-channel – you develop the processes and deploy them across any channel ," he says.

But investments in CRM will still go askew if they are focused on an organisation's own products and services rather than on customers. "One of the fallacies of early CRM was that businesses could use software to bring efficiency gains in the same way as they did with ERP [enterprise resource planning]," explains Kinikin at Giga, pointing to the hundreds of early contact centre implementations that focused solely on bringing down call centre costs and improving efficiency, often by driving customers to cheaper, Internet-based channels such as web self service. Jason Goodwin, a product manager at business intelligence software company SAS Institute, agrees: "Lots of companies have put in systems that allow them to contact customers more efficiently, but not more effectively."

Tom Siebel, Siebel: “The main priority is to lower the cost of integration for customers.”

This is where many organisations are seeing the benefits of using analytics software to determine which channels work best for which customers, and why. "Much of the focus is swinging away from automating customer transactions to ‘What is this information actually telling us?'," explains Tim Burfoot of UK-based CRM consultancy Detica.

Lloyd of Barclays, for one, says that analysing customer transactions has generated quick returns for his company. "Getting a behavioural and transactional understanding of customers means you can make meaningful propositions… If you know a customer is moving house, they'll be more prepared to take a phone call from a home insurance sales person."

Overwhelmingly, the attitude towards multi-channel customer relationships has become more realistic. Organisations realise that by having as much information available about customers as possible, they are more likely to fulfil their needs. But building the necessary systems is going to take more time and have more false starts than first envisaged.