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Executive Editor

CRM at the outpost

Feb 17, 20039 mins
CRM SystemsEnterprise Applications

These days, providing top-rate service means extending customer-relationship apps to wherever users are — be that a hotel off Highway 9 or a lending office on Route 12.

These days, providing top-rate service means extending customer-relationship apps to wherever users are

“The check-in line was too long.”

“We didn’t get enough towels.”

“This room is too close to the elevator.”

Complaints are a fact of life in the hospitality business. Hotels can’t hope to satisfy all guests, during every moment of their stay. But a hotel can control how its employees handle guest requests, with the help of a CRM system.

In the past, individual Sheraton hotels devised their own systems for dealing with complaints – “including writing them down on the back of a napkin,” says Kevin Vaughan, a senior vice president with the IT division at Sheraton’s parent company, Starwood Hotels & Resorts Worldwide, in White Plains, N.Y.

Last year, Starwood decided to formalize the process. Using application server software from IBM and interactive client software from Nexaweb Technologies, the IT group built a Web-based application that logs and tracks guest problems throughout 200 Sheraton hotels in North America.

The application gives Starwood new visibility into problems that guests experience. While Starwood had other corporate systems in place to collect and analyze transaction data and customer demographics, it was missing this piece of the CRM puzzle. Extending CRM to the farthest corners of the Sheraton properties lets Starwood witness even the most mundane customer requests and use the data to construct a chainwide view of customer satisfaction.

Similarly, financial services firm Household International decided to provide CRM applications at its outposts – 1,500 branch offices in 42 states where employees sell consumer mortgages, loans and credit products. To handle CRM at the branches, the company installed network gear from Vertical Networks that turned each branch into a call center, with advanced call routing, monitoring and reporting features.

In both cases, IT executives undertook the CRM projects to meet corporate performance-improvement objectives and to make life easier for employees working directly with customers. Success of CRM projects rests on the latter, experts say.

CRM is known for being complex, expensive and often disappointing – a reputation earned in its early days when companies tried to overhaul massive customer systems in one fell swoop. Today, experts advocate short, focused CRM projects with clear objectives. AMR Research says companies that don’t use CRM to boost productivity on day-to-day tasks “are constructing an expensive house of cards that will likely topple.”

Customer-focused initiatives are particularly important in a poor economy. “CRM is more crucial in times of weak spending, as companies need to find ways to attract and retain customers,” says Kelly Spang Ferguson, analyst at Current Analysis.

The Sheraton way

Starwood’s customer-response system, called StarGuest, complements Sheraton’s broader Service Promise program, which ensures guests a great stay or the hotel will make it up with a gift certificate, loyalty points or refund.

Consistency is a key aspect of Sheraton’s Service Promise program. If someone at a Sheraton hotel in Seattle receives a gift certificate after a poor experience with room service, Starwood wants the same reward system to be applied to similar situations in Boise, Boston, Baton Rouge and at every Sheraton in between.

The Web-based StarGuest application is one means of enforcing consistency. If a guest registers a problem or complaint, a hotel staffer enters the information into StarGuest using a PC or mobile device. The system identifies fair compensation, based on preset conditions; alerts hotel employees with appropriate skills, via e-mail, to the tasks that need to be completed; and tracks the problem’s resolution. Once a problem is resolved, a hotel employee closes the trouble ticket in the application.

For the hotels, the StarGuest application provides a way to expedite problem resolution and provides a tool for spotting problem areas. For example, an unusual number of housekeeping complaints concentrated on the 11th and 12th floors might indicate that a new staff member needs more training, Vaughan says.

“Instead of finding out a month later when the property gets its customer-satisfaction scores, the manager has real-time data to look at and see what’s going on,” he says. A problem can be corrected before a guest leaves unhappy and more guests are affected.

Using StarGuest’s centralized reporting features, Starwood can spot trends and identify problems at a chainwide level. “If there are 15 or 20 hotels with recurring plumbing problems, that’s something that might need to be addressed in the capital budget,” Vaughan says.

Technologically, the application’s bandwidth-agnosticism is its beauty. Hotels that don’t have broadband Internet access can use the application, as can employees equipped with wireless handheld devices. Unlike the case with many CRM applications, functionality isn’t compromised. This is because of the Nexaweb Smart Client Platform, which sits on top of IBM’s WebSphere application server, Vaughan says.

Bandwidth, thin or fat

Nexaweb’s development tools are designed for building distributed applications with interactive clients, such as Starwood’s StarGuest application. Unlike typical browser-based applications that require multiple round-trips between Web server and client devices to render screens, Nexaweb’s “user interface server” uses a device’s local processing power to execute code within a single screen and without multiple client downloads. By replacing the user interface portions of Java Server Pages code with XML-based User Interface Language, Nexaweb can achieve a desktop-like performance over even thin network connections and speeds, the company says.

The system works with Starwood’s existing infrastructure and lets the company lower its operational costs associated with developing and managing Web-based applications, Vaughan says. Before availability of the StarGuest application, a handful of hotels had bought software on their own for tracking guest requests – duplicating efforts throughout the process of acquiring and deploying packaged software, Vaughan says. “It was clear that a system that was at an individual property level was not the right answer,” he says.

For now, StarGuest is a stand-alone application. But down the road, Starwood plans to integrate StarGuest with its other CRM systems. This way, if an employee were to type in “Room 411” the application would be able to tap into transaction systems and immediately identify who the guest was, if the guest was a frequent visitor and the guest’s personal preferences, he says. And if a guest had a problem during a stay, the software automatically could prompt marketing employees to follow up with a personal note, apologizing for the problem and offering an incentive to return, such as a free upgrade to a suite.

A broader deployment also is on tap. Starwood has deployed test versions of StarGuest to some of its W and Westin properties, Vaughan says. This year, progress will continue at these chains.

The Household approach

Like Starwood, Household International wanted a clearer view of how employees in remote offices were handling customers. The Prospect Heights, Ill., company wanted to be able to monitor consumer lending sales staff and see how employees were chasing sales leads.

As it was, Household had no insight into the specific activities of salespeople at the branches. Household’s corporate marketing efforts were generating 5 million leads per month, but only 40% of those leads were being worked actively, says John Armstrong, managing director of networked systems at Household.

While Household’s large corporate call centers had tools to manage agent productivity, the branches didn’t, he says. The business challenge was “to make 10,000 remote agents appear as if they were all in one call center and do all the things that we normally would do in a call center,” Armstrong says.

However, to do so required more than the average CRM application. Each branch needed advanced call-center features, such as call routing, call monitoring and automatic sales prompts that pop up on agents’ screens.

Consolidating sales functions into regional call centers was an option, but Household found that customers preferred to deal with local branches. The company also explored a few options for bringing call-center features to its branches, such as predictive dialer systems, traditional PC-based solutions, and pure IP PBXs. It selected Vertical Networks’ InstantOffice platform and started deploying the gear in November 2001 – at a pace of 200 branch offices per month.

The InstantOffice gear let Household revamp and consolidate its voice and data communications on a single IP PBX. In the process, Household upgraded its branches from 56K bit/sec WAN connections to T-1 lines that carried voice and data traffic. The system delivers the call-management capabilities that Household needed, Armstrong says. “We know when the salespeople are calling, how much time they’re spending on the phone and which accounts they’re really working,” he says. “In addition, we’re getting more information about our customers.”

Today branches can handle inbound and outbound calling activities locally, and corporate can capture the data it needs. “Not only can the branches be their own call centers, but collectively they can look like one big, virtual call center,” Armstrong says.

With better sales lead management tools – and greater accountability to corporate higher-ups – the sales teams reached Household’s goal of increasing sales by 15% to 20% last year, Armstrong says.

Down the road, the system, which is tied to Household’s new, internally developed computer-telephony application, will incorporate caller-identification information so that a loan agent automatically will have access to customer records when calls arrive, he says.

Also on deck are automatic call-scheduling features for providing loan updates to customers and the ability to place phone calls from an agent’s PC via the CRM system interface.

The system costs $12 million – but it’s been paying for itself since the start, Armstrong says. “The net is actually positive. We took out more costs than we added to this equation,” he says.

At the same time, Household managed to increase the data bandwidth at each branch. Now Household plans to deploy more bandwidth-intensive applications to its branches, including image-heavy appraisal software, document management and enhanced e-mail software, Armstrong says.

Simplicity, consistency

Armstrong’s advice to other companies considering branch-office CRM projects is to keep things simple. Adhering to a standard configuration for all 1,500 branches let Household deploy the Vertical gear quickly and support it remotely.

He also advocates minimizing the amount of change to remote sales agents’ habits. From the agents’ perspective, Household’s new sales lead management system looks a lot like the old one, he says. The plan is to add features gradually as users become accustomed to the new system.

Similarly, Starwood’s CRM project is all about consistency. By reducing the number of applications individual properties choose independently, Starwood is conserving development, deployment and maintenance efforts.

These kinds of decisions make for a successful CRM project.