C R M

Business Challenges Businesses in many industries may lose up 50% of their

customers over a five year period.

Studies have shown it’s 6 to 7 times more expensive to acquire a new customer than it is to retain a current customer.

As little as a 5% increase in customer retention can increase profits by 25 to 95%.

Yet many businesses are still focused only on customer acquisition and see customers from the fragmented view of individual transactions

Customer Relationship Management

Fortune 500 companies will lose 50% of customers in 5 years(Peppers & Rogers Group)

Only 4% of unsatisfied customer complain. 65~90% do not repurchase(Anderson Consulting)

82% of customers whose complaints resolved repurchased

Cost of new customer acquisition 7-8 times of retaining current customers (Yankee Research – global connectivity experts)

98% coupon are scrapped.

50% current customers do not contribute to profit(AMR Research)

Top 20% customers contribute 60% of revenue and 70% of profit

20 : 80 rule

Customer is important

Analysis on Customers essential

Customer is

When products become so similar and technologies are commonly available , CUSTOMER EXPERIENCE is the only true differentiator

There is only one boss. The customer!

He can fire everybody in the company, from the chairman on down, simply by spending his money somewhere else.

Sam Walton,

founder of Wal-Mart

Today’s customer is …

• Smarter• leaner• more price conscious• has lower morale• overwhelmed by competitors• more demanding• less forgiving• harder to satisfy• less loyal

Core Marketing Concepts

What's In

A fundamental paradigm shift is occurring in how company market to customers.

One-to-One MarketingCustomized ProductsShare of WalletLife Time ValueEvent Driven MarketingKnow Your CustomersManage Your CustomersDifferentiate CustomersCross-sell / Retentionl0% of Market, l00% of Customer

Mass MarketingStandardized ProductsMarket SharePresent ValueProgram Driven MarketingKnow Your ProductsManage Your ProductsDifferentiate ProductsAcquisition100% of Market, 10% of Customer

What's Out

What CRM means? What CRM means?

Customer ?

Relationship ?

Channels of interaction, segmentations

Management?

organization of customer related information

Relationships with whom?

All stakeholders including

Customer

Employees

Suppliers

Government

Citizens

I focus on Customers here.

The Customer Relationship Management (CRM).

The Meaning of Relationships

Continuity

Mutuality

Interdependence

Understanding

Trust

Evolution of customer relation over time

Val

ue o

f cu

stom

er r

elat

ion

Three simple business goals of CRM

CustomerAcquisition

Acquire the „right“ customers with high potential

valueCustomer

Development

Cross- and up-sell by offering

the right products at the right time

CustomerRetention

Retain profitable customers and increase their

long-term value

The process of Targeting Acquiring Servicing Retaining

and Building long-term relationships with

customers

CRM Versus Mass Marketing

Traditional Traditional Mass Mass

MarketingMarketing

Traditional Traditional Mass Mass

MarketingMarketing

CRMCRMCRMCRM

““Shotgun” ApproachShotgun” Approach““Shotgun” ApproachShotgun” Approach

““Rifle” ApproachRifle” Approach““Rifle” ApproachRifle” Approach

Define customer relationship management

1. …a technology.”• “CRM is just a new system to install, new code to write.”

2. …sales force automation (SFA).”• “CRM is just a business development process for our salespeople.”

3. …customer loyalty.”• “CRM is a synonym for customer loyalty.”

4. …database marketing.”• “CRM just allows us to leverage our customer data better.”

5. …call center technology.”• “CRM is just a way to cut costs in the call center.”

6. …a project.”• “We can install CRM in 30 days with this team of three!”

7. …a producer of intangible benefits.”• “You just can’t measure relationship management concretely.”

8. …a business panacea.”• “Just install the software … apparently it solves problems.”

CRM is NOT…

CRM is a customer-focused business philosophy designed to effectively create experiences that attract, acquire and retain customers.

To realize the benefits,

enterprises must implement collaborative processes

and technologies that support customer interactions throughout all channels.

CRM ?

A company-wide business strategy

designed to optimize profitability,

revenue, and customer satisfaction by

focusing on highly defined and precise

customer groups.

Customer Relationship Management

“..an enterprise approach to understanding and influencing communications in order to improve customer acquisition, customer retention, customer loyalty, and customer profitability.”

Customer-centric

Under this philosophy, the company

customizes its products and service

offering based on data generated through

interactions between the customer and the

company

An data-driven approach that enables companies to assess each customer’s current needs and potential profitability and tailor sales offers and service. It often involves using multiple channels to improve effectiveness and efficiency. (Goff et al. 1998 Mckinsey Quarterly, No3)

An enterprise approach to understanding and influencing customer behavior through continuous relevant communication to improve customer acquisition, customer retention, and customer profitability. (NCR corps.,1999)

A management discipline utilizing specialized tools, technologies, and techniques to facilitate the operation and improvement of front-office business functions with the intent of optimizing the total value derived through customer relationship. (Pivotal software Inc. 1999)

An enterprise wide business strategy designed to optimize profitability, revenue and customer satisfaction by organizing the enterprise around customer segments, fostering customer-satisfying behaviors and linking processes from customers through supplies. (Gartner Group)

CRM Definitions

What is CRM?

Organizing Around Segments

Organizing Around Segments Tracking InteractionsTracking Interactions

Fostering SatisfactionFostering Satisfaction Linking ProcessesLinking Processes

Special Promotions Targeting

Markets and Individuals

Special Promotions Targeting

Markets and Individuals

People - Belief that your customers and employees are your most important asset and that long-term survival depends on these relationships.

Process - Structuring your organization and business processes to support the culture.

Technology - Automating and integrating business processes to capitalize on the culture.

CRM is a Management Tool, encompassing all functions, for focusing on the customer

Sales

MarketingService

Mfg

Purchasing

R&DSpares

ProductProductPlanningPlanning

CRM is a set of operating business processes built around the customer

CRM is the front end (customer facing) activity. It needs to be firmly supported by all other back-end processes.

ERPSCM MFG

FAST FWD

PURCHASING

R&D

CRM

All improvement initiatives under the CRM Umbrella

Makes Four Marketing Dreams Come True

1. Dream to target and serve customers on an individual

basis ( prefer 1 to1 marketing to mass marketing.

2. Dream to enjoy log term relationships with them,

especially with the profitable customers (preferring

commitment to flirting).

3. Dream to get rid of barriers and distortions created by

the non-value adding intermediaries (preferring

disintermediarization and direct marketing)

4. Dream to reduce marketing cost progressively.

Architecture of CRM

There are three parts of application architecture of CRM:

operational - automation to the basic business processes (marketing, sales, service)

analytical - support to analyze customer behavior, implements business intelligence alike technology

co-operational - ensures the contact with customers (phone, email, fax, web, sms, post, in person)

Operational CRM

Operational CRM means supporting the so-called "front office" business processes, which include customer contact (sales, marketing and service)

Operational part of CRM typically involves three general areas of business:

Sales force automation (SFA) Customer service and support (CSS) Enterprise marketing automation (EMA)

Analytical CRM

Data gathered within operational CRM are analyzed to segment customers or to identify cross- and up-selling potential.

Collaborative CRM

Collaborative CRM facilitates interactions with customers through all channels (personal, letter, fax, phone, web, e-mail) and supports co-ordination of employee teams and channel.

Operational CRMBusiness Operation Management

Analytical CRMBusiness Performance Management

Collaborative CRMCustomer Interaction Management

SalesMarketing ServiceSales Data Analysis

Marketing data Analysis

Customer Data Analysis

Feed Back

Planning/Analysis

Action

CRM Components

Web Personalization

Call Center Automation

Web Sales & Service

Closed Loop Processing

Add Customer Attrition to the P&L Sheet

Components of Operational and Analytical CRM

Operational CRM:

effective and efficient use and management of people, process and technology

Analytical CRM:

the measurement of people, process and technology

Bridge the divide….

Member

Value

Segm

enta

tion

Communication

Reta

in Customer

Value

Convers

ion

Segm

enta

tion

Communication

Bottom-line !!!!

Customer is

KING

Understand him !!!

How to build Loyalty?

Framework of building Loyalty

CRM

(CR Strategy)Trust/

Intimacy

Reward Program/Continuing Campaign

Repurchase/ Cross-selling

ImprovingCore Products/Service

Innovation of Channel Mgmt.

CustomerSatisfaction

CustomerLoyalty

Phased ElementsDriversDegree of

Relationship

Attitude,not Action

Action, not Affinity(Artificial Loyalty)

Recognition of Relationship,

Referral

A Brand-Infused Causal Model

Loyalty-the customer-facing tip of the CRM Iceberg

LoyaltyLoyalty

CRMCRM

Customer Direct CommunicationsCustomer Direct Communications

(email, postcards, etc.)(email, postcards, etc.)

Encourage Multi-channel Buying

Increase Cross-sell

Identify Customers at all Touchpoints

EncourageWOM

(word of mouth)

Increase Re-buy Rates

Increase Email Click-thru and

Open Rates

Organization

Customers

Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Touchpoints

Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production

Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production

Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production

CRM

Website

Email

Retail

Call Center

POS

Traditional Mail

Field Sales

Fax

PDA

Sales

Marketing

Service

Finance

Production

CRM

Process, Technology, People

Selling KnowledgeProduct KnowledgeSolutions KnowledgeCustomer Knowledge

That’s is the introduction and familiarization with CRM…