Optimising your CRM Resources for Greater ROI

Jeremy Cox
The Wisdom Network Ltd www.thewisdomnetwork.com

Strategy Approach ROI

Start with the outside world

Moneys in short supply
UK shoppers wont queue for more than 2 minutes - down from 5 minutes 6 years ago source: Barclaycard 2010

86% of consumers stop doing business with a company because of a bad customer experience, up from 59% 4 years ago source: Harris
Interactive

To complicate matters further customers can now reference each other via social networks
49% of customers see recommendations from friends or colleagues as the most reliable source of information Only 2% trust advertising source:
Satmetrix

.... Its getting harder to get our messages across

What are the implications for your business?

Competition for customers has moved from product to the total experience
unlikely

A given

Compete here

Virgin Atlantic Brilliant Basics Magic Touches

"Our vision is to grow a profitable airline where people love to fly and where people love to work."
Lyell Strambi COO Virgin Atlantic interview J Cox

Customer experience innovation is based on observation of the customer

Brilliant basics physical aspects + processes Magic Touches those personal touches from individual employees that make the customer feel special

Which firm is most likely to succeed?

Product Centric but charges 10% less
No memory of the customer Thinks all customers are the same Operates in product silos Designs processes and systems for its own convenience Sees customers as transactions
Source: www.mycustomer.com Jan 2011

So where might you start?

The point of CRM is to grow the business profitably

CRM is a customer-focused business strategy designed to optimise profitability, revenue and customer satisfaction. Gartner CRM is the core business strategy to increase the size and profitability of your customer base by creating and delivering superior value to targeted customers at a profit.
Professor Francis Buttle 2004

The true business of every company is to make and keep customers.

Peter Drucker, 1954

Customer strategy boils down to this.....

Which customers? What do they value? How do we engage them to deliver what they value?
Superior customer value Profitable growth

Insightful & Empowered Employees

Even banks can do it

Many firms forget why they are in business. They are in business to add value to customers. This is how they grow the business and this is reflected in superior stock market performance. There is no other way

Peter Simpson former commercial & marketing director at First Direct (07/06
interview J Cox)

He also highlights the cultural values of the firm, which ensure that in his firms case, customers (and employees) are treated with respect. The organisation must coalesce around the customer and actsucceed, CEOs must take responsibility for very difficult to do and To on this insight. This will be a the customer and task the marketing demands the job of importing understanding of customers into the business. director with real leadership and embedding a culture of respect for customers.
"Today its customers who chose how they wish to interface with your organisation, not you"

The organisation must coalesce around the customer and act on this insight. This will be a very difficult to do and demands real leadership and embedding a culture of It also means supporting employees with the necessary respect for customers.

skills, know how, processes and infrastructure to enable them means supporting employees with the with theskills, know how, processes It also to provide their customers necessary experience that and infrastructure to enable them to provide their customers with the experience will make them want to return.
that will make them want to return.

First Direct scored 82% in Which? 's customer satisfaction survey. To give you an idea of what that means, the average for the banks was 59%, and Santander scored 47%. Sep 2010

So what does that imply?

The strategy must drive a complete company wide change

A thorough and integrated approach pays

Vision & Strategy Determine requirements Find solution Build & Implement Go Live

Develop your vision Establish stretch goals for next 3 years Develop Customer portfolio strategy Determine how your business needs to change overall What is your brand promise?

Establish cross functional team core & extended Assess current capabilities, processes Gap analysis Determine future needs

Identify solution(s) Build business case Select

Train Test Implement

Launch Assess Adapt

Time

ROI sources
Customers needs satisfied
Customer Centric Maximise financial return on each customer

Product Centric

Maximise financial return on each product

Customers reached
Source: Peppers & Rogers

Most companies are poor at looking after smaller customers as they focus on the big Some may be small in revenue but are high potential if we can win their loyalty

Small but what is their potential contribution if Big which we look after them effectively? do 80%+ revenue

The problem is that we dont really know much about our smaller customers and we have to replace them too often

Adapted from the long tail (initial concept Chris Anderson)

Customer Profit Contribution/Potential

Who is most profitable today?
The Wisdom Network Ltd 2004

Source: CMI 2004

Lifetime value
Source: Mid Market CRM Prof Francis Buttle & Jeremy Cox et al 2004

What is their potential over time?

Only 17% of companies can determine the worth of individual customers with any accuracy, combining sales margin, sale and marketing cost, management cost, logistics and service
Source: Researchandmarkets.com Nov 04

Heaven or Hell?

You choose

So what can we learn?

Values and People first high satisfaction levels Effective Teamwork/flaw less collaboration Customer focused business strategies

Customer KPIs to balance short term with long term

Common themes

Deep insight into customers context drives innovation

Integrated and consistent

Judicious use of technology to support front line

More about people than technology