chp06 crm

Chapter Six Chapter Six Integrating Processes to Build Relationships: Customer Relationship Management

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IntroductionIntroduction

Customer dissatisfaction with service widespread– Expectations of customers higher than ever– “Does your company deserve my patronage and

loyalty?”– Starting point today: What was exceptional yesterday

Organizations with long-standing customer bases find they lack the info and data to make good service decisions

– 90% companies don’t have sales and service integration

Companies must view their service encounter through the eyes of their customers

– To maintain ongoing relationships strong– Acquisition and selling costs of new customer very high– Dissatisfied customers primarily due to lack of customer

service– 70% of complaining customers will do business again if

their complaint quickly addressed


The Basics of CRMThe Basics of CRM

Timely delivery of excellent service

Combination of business process and technology

When competition is fierce, companies go back to basics: create value for customer

Execs must ask– Can their companies’ infrastructures allow value creation?– Can their companies’ existing CRM infrastructures support

doing business in the e-world

Only by integrating sales and service infrastructure with all aspects of operations can management see change in customer relationships


Top Demand Drivers in CRM VerticalsTop Demand Drivers in CRM Verticals

Telecommunications – Primary CRM applications include:

– Multi-channel contact centers – Business intelligence– Customer data integration and analysis– Web-based billing systems– Marketing automation/campaign management systems– Mobile CRM

Banking and Financial Services – Primary CRM applications include:

– Profitability analysis– Target marketing– Data mining – Product personalization

Source: Gartner Group, 2001


Top Demand Drivers in CRM VerticalsTop Demand Drivers in CRM Verticals

Retail – Primary CRM applications use e-commerce transaction and point-of-sale data to drive:

– One-to-one marketing– Cross selling– Personalized content management and

merchandizingSource: Gartner Group, 2001

Few retailers are providing improved interaction but many customers are demanding it --- this is an opportunity for companies to distinguish themselves.

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Strategic Business DriversStrategic Business Drivers

Are these “hot buttons” that influence your business?

– Customer-driven businesses– 360-degree customer view– Personalization/one-to-one marketing– Complex and more diverse channels– Automated sales– Shrinking margins due to product commoditization– Scattered global customers

These are strategic level questions aimed at CxO and other senior level executives to uncover CRM opportunities.


Strategic Business DriversStrategic Business Drivers

This chapter– Clarify the concept of multi-channel organization– Discuss apps supporting customer-focused

business model– Discuss how marketing practices and systems

must be reworked to support ecommerce environment

Service levels on the Web today often leave a lot to be desired. As buyers jump from site to site -- only to ultimately abandon the shopping cart without buying anything from anyone -- revenues slip away.


Defining CRMDefining CRM

Integrated sales, marketing, and service strategy

– precludes lone showmanship – depends on coordinated enterprise-wide actions

CRM software suite– Helps better manage customer relationships by

tracking customer interactions of all types– Automates selling and customer service cycle

• direct-mail marketing campaigns, telemarketing, telesales, lead qualification, response mgmt, lead tracking, opportunity mgmt, quotes and order configuration


Defining CRMDefining CRM

Business Goals– Using existing relationships to grow revenue– Using integrated information for excellent service– Introducing consistent, replicable channel

processes and procedures

CRM is an integrated

framework and strategy, not

product


Managing the Customer Life Cycle: Managing the Customer Life Cycle: The Three Phases of CRMThe Three Phases of CRM

Differentiation• Innovation• Convenience

Acquire

Enhance Ret

ain

Bundling• Reduce Cost• Customer Service

Adaptability• Listening• New Products

Metrics•Direct and indirect sales•Customer service improvements

Metrics•Tangible and intangible benefits•Brand equity gains

Metrics•Lifetime value•Share of wallet


The New CRM Architecture: Organizing The New CRM Architecture: Organizing around the Customeraround the Customer

To determine how CRM and supporting tech will work together for your firm, ask these questions

– Are most of company’s apps designed simple to automate existing departmental processes?

– Are these apps capable of identifying and targeting best customers, those who are the most profitable?

– Are these apps capable of real-time customization of products and services?

– Do these apps track when the customer contacts the company, regardless of the contact point?

– Are these apps capable of creating a consistent user experience across all contact points the customer chooses?

If answers to each is no, seriously consider CRM architecture


The New CRM Architecture: Organizing The New CRM Architecture: Organizing around the Customeraround the Customer

Cross-Functional Processes Breaking Down Departmental Walls

Acquire Enhance

Integrated CRM Applications

{Retain

Direct Marketing

Sales Force Automation

Cross-Sell & Up-Sell

Customer Support

Proactive Service

Complete Integrated Solutions

Partial Functional Solutions

Customer Lifecycle


Features of the New CRM ArchitectureFeatures of the New CRM Architecture

• Integrates solutions spanning entire customer life cycle

– Proactive marketing– Customer care– Call centers

• Automated transaction management capabilities

• Personalization and one-to-one marketing

• Customer analytics and business intelligence

• Field sales automation


Portfolio of CRM Process CompetenciesPortfolio of CRM Process Competencies

Customer Service and Billing

Loyalty & Retention Programs

Field Sales and Service

Sales Cross-sell Up-sell TeleSales

Marketing and Fulfillment

Prospect or

Customer

Fax

Email

Telephone

VRU

Web

Contact Management

Technical Infra

structure


How it Fits TogetherHow it Fits Together

Source: Microsoft Corporation, 2000


What Capabilities Make Up Leading Edge What Capabilities Make Up Leading Edge CRM?CRM?Operational excellence

– Ensuring responsiveness and accurate delivery

– Providing seamless interactions across all interaction channels

Analytical insight– Sales planning and forecasting– Analyzing, predicting and driving

customer value and behaviour– Identifying the right time to make the

right offer to the right market– Consistently enhancing the customer

experience in virtual channels

Collaborative optimization– Involving customers to

better accommodate their needs– Demand driven supply chain and

fulfillment integration

CCollaborative

AAnalytical

OOperational


Integration Requirements of Next Gen CRM Integration Requirements of Next Gen CRM InfrastructureInfrastructure

Closed loop CRM infrastructure must integrate

– Customer content– Customer contact information– End-to-end business

processes– The extended enterprise or

partners– Systems

Less than 2% of companies provide on-demand cross-channel integration of website and call center

42% of top-ranked Web sites took longer than five days to reply to customer emails or never replied at all

Source: Cisco Systems


Next Generation CRM TrendsNext Generation CRM Trends

The multi-channel integrated experience

The rise of the call center as a multipurpose customer contact point

Listening portals: Next-generation CRM capabilities

CRM portals, sales force ASPs, and hosted applications






Telephone






Telephone

Back Office

Ap

plic

atio

n In

teg

rati

on

Customer

Partners

Purchases

History

Operations

Marketing

Billing

Front Office

To

uch

Po

ints

Web

E Mailrs

Call Center

SFA

POS

Direct Mail

Wireless

Customers


Multi-Channel CRMMulti-Channel CRM

Multi-channel shopping behavior has become mainstream; yet widespread retailer excellence remains elusive ( some catalog retailers are exceptional)

Women and young adults are multi-channel shoppers

The role of the catalog has never been more important (Sears recently bought Lands-End)

Analytical CRM -- Segmentation and personalization capabilities are becoming more critical


Multi-Channel Shopper ProfilesMulti-Channel Shopper Profiles

Store

OnlineCatalog

Store + Catalog Online + Store

Online + Catalog

• Tri-Channel Shoppers are demanding (well-informed) consumers; • Servicing Tri-Channel Shoppers is very challenging-requires high-levels of coordination!


Primary Reasons for Tri-Channel Shopper Primary Reasons for Tri-Channel Shopper DispleasureDispleasure

•Late delivery

•Poor product information

•Product out-of stock

•Product misrepresentation

•Website performance issues

•High shipping and handling charges

How can CRM applications help address these issues?


Roadmap for ManagersRoadmap for Managers

• Involve top management

• Define a vision of integrated CRM

• Establish the CRM strategy and specify its objectives

• Understand the customer

• Review cultural changes that will need to occur

• Develop a business case

• Evaluate current readiness



• Evaluate appropriate applications with an uncompromising focus on ease of doing business

• Identify and target quick wins

• Put ownership of the end-to-end project in the hands of a single manager

• Implement in stages

• Be sure to create a closed-loop CRM environment

• Create concrete measurement goals



CRM Scorecard


Anticipate Organizational ChangesAnticipate Organizational Changes

Organizational resistance to CRM inevitable– Current incentive systems work against CRM as

they reward performance that deals with only part of the customer’s relationship with organization

– Requires careful transition from existing silo-centric infrastructure to an integrated customer-centric infrastructure

– Organizations with global operations must manage customer interactions in different languages, time zones, currencies, and regulatory environments

Impact on corporation’s front line staff particularly evident


CRM Key BenefitsCRM Key Benefits

• Deeper understanding of customers

• Increased marketing and selling opportunities

• Identifying the most profitable customers

• Making it easier for sales and channel partners to sell

• Faster response to customer inquiries

• Increased efficiency through automation

• Receiving customer feedback that leads to new and improved products or services

• Obtaining information that can be shared with business partners


Measuring Success or ROIMeasuring Success or ROI

• Accelerated revenue growth

• Fewer product returns

• Increased sales conversion per sales channel (the ratio of leads to customer sales)

• Reduced cost per customer order

• Increased profit per sales person

• Reduced technical support time


CRM Assessment – Gather InformationCRM Assessment – Gather Information

What do your customers expect from you?

What percentage of product and services sales come from your current installed base?

How much do your customers know about the products and services you offer?

Are your employees equipped with the information they need to understand your customers’ preferences, needs and interests?

How effective are your marketing efforts compared to your competitors?


Tell Us MoreTell Us More

Are your product life cycles shrinking and are you getting new products to market faster?

Can you provide real-time customer data to your sales force?

Have you found a cost-effective method of converting prospects into profitable customers?

How do your customers prefer to be contacted?

Are you prepared to support your customers if your customer base doubles?

Is your sales force prepared to scale effectively as growth occurs?

E-Business E-Business Strategies, Inc.Strategies, Inc.

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[email protected]@ebstrategy.com

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chp06 crm

Education

customer relationships

customer service cycle

lack of customer service

customer execs

customer contacts

procedures crm

crm opportunities

crm integrated sales