the eight building blocks of crm a framework for successful crm
TRANSCRIPT
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The Eight Building Blocks ofCRM: A Framework forSuccess
John Radcliffe
These materials can be reproduced only with Gartners official approval. Such approvals may be requestedvia e-mail -- [email protected].
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CRM Attitudes: ChallengesMay 2002
g Reduced expectations due to the number of CRM
failures
0CRM now has a bad name in some organizations
g They hesitate to spend money because of:
0 Doubts about the economy
0 Inadequate understanding of CRM
0The lack of agreed measures of success
0 The difficulty of successful implementation
gAn emphasis on cost-reduction and short-term gain.0Companies are focusing on survival.
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CRM Attitudes: OpportunitiesMay 2002
g Users continue to express belief in the value of CRM
and remain committed to it
g They know they need it and they know it will cost
money.
g They also have realized that CRM is more thanthrowing money at software.
0Attitudes and processes have to change.
g Increased realism is leading to a renewed focus on
strategic thinking.
0The issues are complicated
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1. CRM Vision
2. CRM Strategy2. CRM Strategy
8. CRM Metrics8. CRM Metrics
7. CRM Technology7. CRM Technology
6. CRM Information
5. CRM Processes5. CRM Processes
3. Valued Customer
Experience
4. Organizational
Collaboration
4. Organizational
Collaboration
The Eight Building Blocks of CRM
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Customer Experience
The vision is the what and why ; the strategy is the how.
DifferentiatingBrand ValuesDifferentiatingBrand Values
Core ValueProposition
The CRM visionrequires a leaderto define CRM,set objectives
and draw a
pictureof what the
enterprise wants
to be to targetcustomers.
Creating the CRM Vision
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How do we develop thecustomers loyalty and value
to us by developing our valueto the customer?
How do we
acquire
valuablecustomers
who will value
us?
How can we
retain or win
backcustomers of
value?
How do we create
awareness of what we offer
to potential customers of
value?
How do we do
this efficiently?
MarketingSales Service
Develop
Retain Acquire
Target
Customer
Life Cycle
Enquire
WelcomeManage
Problems
Win Back
A CRM Strategy: Developing theCustomer Asset Base
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How is a CRM Strategy Developed ?
1. Audit the current market position and
customer position
2. Segment both consumers and customersand identify target segments
3. Set customer objectives (i.e., acquisition,
development and retention) and market
objectives by target segment
4. Outline the strategy to create the CVP and
desired customer experience by target
segment
5. Define metrics for monitoring the execution
of the strategy and evolving it
6. Specify the capabilities and infrastructurerequired (e.g., people, IT and data)
Where Are We
Now...?
Where Do WeWant To Be..?
How Do We Get
There.?
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Design the Customer Experience
What picture of desired future experience would
you want to give your customers ?
Describe it in a story Fill in the details later
You must design the customer experience, otherwise
the customers will design it for you - Tom Peters
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Evolving Toward aCustomer-Centric Organization
Organize byCustomer Segments
Organized by Functionand Product
g Do Not Change the Structure Too Quickly
g Trial in One Division First: Prove It
g Start in the Front Office: But Go Beyond It
g Involve the Business Partners
CustomerSegments
Divisions
Products HybridReality
C t P
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Balance Transfer
The Customer Life Cycle: TADR
The Impact of Back-end Processes on CRM
Horizontal Customer-Centric Processes
Vertical Industry Customer-Centric Processes
Marketing, Sales, Customer Service
Efficiency vs. Effectiveness
Design
Billing
Order Processing
Invoicing
Change Address
UnderwritingDeliveryTracking
Quote to Cash Campaign toCompensation
DeathWelcoming
Winback
Customer ProcessRe-Engineering Fundamentals
Inquiry Handling Call Avoidance
Process change must accompany any technology implementationProcess change could have a greater effect/be an alternative place to start
Optimized processes are an opportunity for competitive differentiation
C t I f ti
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Data Fragmentation and
Consistency Challenges
Data Quality Challenges
? ?
John
Smith
Mr J.
Smith
Data Quality Operationaland Analytical
Data Ownership Stewardship
?
Challenges in creating and
applying customer insight
Customer Profitability
Lifetime Value
Propensity to Churn
Challenges in enabling consistent,
integrated customer Interactions
SingleSingleCustomerCustomerView ?View ?
Customer InformationIs the Lifeblood of CRM
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Sourcing Your CRM Applications
Positioning
Repre-sentativeVendors
Integrated
CRM andERP Suite
IntegratedEnterprise-
level
applicationsuite
Intentia,Navision,Oracle,
PeopleSoft,SAP
CRM Suite
Most-functionalCRM suite
E.piphany,Onyx,
Pivotal,
Siebel
CRMFramework
Freedom tocontrol ownarchitecture
anddifferentiateprocesses
Chordiant,Graham,
Pegasystems
CRM Bestof Breed
Bestfunctionality
for your
department
Avaya,NCR,
Selectron,
Unica
Build ItYourself
Freedom tocontrol ownarchitecture.
Suites tooexpensive and
don't fit.
SoftwareInfrastructure
vendors (BEA,
IBM, Microsoft,Oracle,Sun)and ESPs
ProcessesIntegrated
CRM & ERPprocesses.
IntegratedCRM
processes.
Re-expressyour own
processes.
LimitedProcess
integration.
Re-expressown processes
at app. level
Data Model
Imposeddata model
covering
CRM andERP
Imposeddata
model
coveringCRM
Designedto fit
existing
datamodel(s)
Mixtureimposed/ fitto existing
data model.
Builds onexisting
data model(s)
I t ti O ti l A l ti l
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CustomerInteraction
Inbound/Outbound
MultichannelMultichannel
Multifunction
Customer Interaction ManagementCustomer Interaction Management
Operational Systems
Enterprise Nervous System
PartnerSystems
ERP SCM X
Outbound
MultichannelMultichannel
Campaign ManagementCampaign Management
MarketAnalysis
PredictiveAnalysis
HistoricAnalysis
CustomerInsight
Integrating Operational, Analyticaland Partner Systems
Analytical SystemsExternalData
Data
Mart
DataMart
ETLData
Cleansing
DataWarehouse
GuidedInbound
Interactions
Event-Triggered
Responses
A Hierarch of CRM
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Infrastructure Input
Operational and Process
Customer
Strategic
Corporate
Stakeholder Focus
Employees Efficiency
ManagementEffectiveness
ExecutivesFeedback
on strategy
ShareholdersBottom-line
results
Level
A Hierarchy of CRMPerformance Metrics
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Recommendations
g Vision: Define CRM, get a leader, answer why?, setthe core value proposition.
g Strategy: Develop the customer base as an asset,Answer how?, set objectives.
g Customer Experience: Design, then constantly refine
based on customer feedback.
g Organizational Collaboration: Change organizationalstructures, incentives, skills and the enterprise culture
to deliver the customer experience.
g Processes: Re-engineer to meet customers' expectations,provide competitive differentiation and contribute to the
customer experience.
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Recommendations (contd)
g Information: Treat customer information as an assetand a "blood supply," focus on tighter integration betweenoperational and analytical systems.
g Technology: Outline your CRM architecture first, considerCRM as one big integration exercise, assess the best styleof CRM application for your enterprise.
g Metrics: Set CRM metrics at multiple levels. Consider thisthe most difficult block: Without performance management,a CRM strategy will fail.
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The Eight Building Blocks of CRM
1. CRM Vision: Leadership, Market Position, Value Proposition
2. CRM Strategy: Objectives, Segments, Effective Interaction2. CRM Strategy: Objectives, Segments, Effective Interaction
8. CRM Metrics: Value, Retention, Satisfaction, Loyalty,Cost to Serve8. CRM Metrics: Value, Retention, Satisfaction, Loyalty,Cost to Serve
7. CRM Technology:Applications, Architecture, Infrastructure7. CRM Technology:Applications, Architecture, Infrastructure
6. CRM Information: Data, Analysis, One View Across Channels
5. CRM Processes: Customer Life Cycle, Knowledge Management5. CRM Processes: Customer Life Cycle, Knowledge Management
3. Valued Customer Experience
Understand Requirements
Monitor Expectations
Satisfaction vs.Competition
Collaboration and Feedback
Culture and Structure
Customer Understanding
People: Skills,Competencies
Incentives and Compensation
Employee Communications
Partners and Suppliers
Culture and Structure
Customer Understanding
People: Skills,Competencies
Incentives and Compensation
Employee Communications
Partners and Suppliers
4. Organizational Collaboration4. Organizational Collaboration
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The Eight Building Blocks ofCRM: A Framework forSuccess
John Radcliffe
These materials can be reproduced only with Gartners official approval. Such approvals may be requestedvia e-mail -- [email protected].