Customer Relationship Management
Chapter # 1. Introduction to CRM 1.1 Evolution of CRM
Customer Relationship Management (CRM) is one of those magnificent concepts that swept the business world in the 1990’s with the promise of forever changing the way businesses small and large interacted with their customer bases. In the short term, however, it proved to be an unwieldy process that was better in theory than in practice for a variety of reasons. First among these was that it was simply so difficult and expensive to track and keep the high volume of records needed accurately and constantly update them. In the last several years, however, newer software systems and advanced tracking features have vastly improved CRM capabilities and the real promise of CRM is becoming a reality. As the price of newer, more customizable Internet solutions have hit the marketplace; competition has driven the prices down so that even relatively small businesses are reaping the benefits of some custom CRM programs.
1.2 In the beginning…
The 1980’s saw the emergence of database marketing, which was simply a catch phrase to define the practice of setting up customer service groups to speak individually to all of a company’s customers. In the case of larger, key clients it was a valuable tool for keeping the lines of communication open and tailoring service to the clients needs. In the case of smaller clients, however, it tended to provide repetitive, survey-like information that cluttered databases and didn’t provide much insight. As companies began tracking database information, they realized that the bare bones were all that was needed in most cases: what they buy regularly, what they spend, what they do.
Customer Relationship Management
1.3 Advances in the 1990’s
In the 1990’s companies began to improve on Customer Relationship Management by making it more of a two-way street. Instead of simply gathering data for their own use, they began giving back to their customers not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty. This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking of customer activity and spending patterns. CRM was now being used as a way to increase sales passively as well as through active improvement of customer service.
1.4 Introduction Customer Relationship Management - CRM
The generally accepted purpose of Customer Relationship Management (CRM) is to enable organizations to better serve its customers through the introduction of reliable processes and procedures for interacting with those customers. In today's competitive business environment, a successful CRM strategy cannot be implemented by only installing and integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers' needs and an adoption of relevant ITsystems (including soft- and maybe hardware) and/or usage of IT-Services that enable the organization or company to follow its CRM strategy. CRM-Services can even redundantize the acquisition of additional hardware or CRM software-licences. The term CRM is used to describe either the software or the whole business strategy oriented on customer needs. The second one is the description which is correct. The main misconception of CRM is that it is only software, instead of whole business strategy.
Customer Relationship Management Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It attempts to integrate and automate the various customer serving processes within a company. There are three parts of application architecture of CRM:
operational - automation to the basic business processes (marketing, sales, service) analytical - support to analyse customer behaviour, implements business cooperational - ensures the contact with customers (phone, email, fax, web...)
intelligence alike technology
Operational part of CRM typically involves three general areas of business. They are (according to Gartner Group) a Enterprise marketing automation (EMA), Sales force automation (SFA) and a Customer service and support (CSS). The marketing information part provides information about the business environment, including competitors, industry trends, and macroenviromental variables. The sales force management part automates some of the company's sales and sales force management functions. It keeps track of customer preferences, buying habits, and demographics, and also sales staff performance. The customer service part automates some service requests, complaints, product returns, and information requests. Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer. Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost savings, and also encourage new customers. CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For example, you might be able to check your bank balance via your WAP phone without ever having to talk to a person, saving money for the company, and saving you time.
Customer Relationship Management
Improving customer service
CRMs are claimed to improve customer service. Proponents say they can improve customer service by facilitating communication in several ways:
Provide product information, product use information, and technical assistance on Help to identify potential problems quickly, before they occur Provide a user-friendly mechanism for registering customer complaints
web sites that are accessible 24 / 7
(complaints that are not registered with the company cannot be resolved, and are a major source of customer dissatisfaction)
Provide a fast mechanism for handling problems and complaints (complaints that Provide a fast mechanism for correcting service deficiencies (correct the problem Identify how each individual customer defines quality, and then design a service use internet cookies to track customer interests and personalize product offerings use the internet to engage in collaborative customization or real-time Provide a fast mechanism for managing and scheduling followup sales calls to
are resolved quickly can increase customer satisfaction)
before other customers experience the same dissatisfaction)
strategy for each customer based on these individual requirements and expectations
assess post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase frequencies
Provide a fast mechanism for managing and scheduling maintenance, repair, and Provide a mechanism to track all points of contact between a customer and the
on-going support (improve efficiency and effectiveness)
company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion)
The CRM can be integrated into other cross-functional systems and thereby
provide accounting and production information to customers when they want it
Proponents say this can be done by:
CRM technology can track customer interests. increase customer loyalty. internet. decrease customer turnover. This way customers get exactly what they want as they change. data encryption and the destruction of
what ever scale is necessary. and buying habits as they
progress through their life cycles.g.the ability to be used on a large scale. and to be reliably expanded to multiple communication channels . This way customers get what they need as the product ages. improve customer relationships.the ability to interface with users via many workflow . increase sales revenue.the ability to automatically route work through the system to different database . and thereby increase profit margins. the technology can be used to micro-segment the buying
centre and help coordinate the conflicting and changing purchase criteria of its members
When any of the technology driven improvements in customer service (mentioned
above) contribute to long-term customer satisfaction.
In industrial markets. they can ensure repeat purchases. needs.
A CRM solution is characterised by the following functionality:
scalability . e. WAP. and tailor the marketing effort accordingly.
The technology can track customer product use as the product progresses through
its life cycle.Customer Relationship Management
Improving customer relationships
CRMs are also claimed to be able to improve customer relationships . etc)
people based on a set of rules.the centralised storage (in a data warehouse) of all information relevant customer privacy considerations.
to customer interaction
records to ensure that they are not stolen or abused
. decrease marketing costs (associated with customer acquisition and customer ?training?). and tailor the service strategy accordingly.
different devices (phone.
Customer Relationship Management
Privacy and ethical concerns
CRMs are not however considered universally good . it can be used merely to make "better use" of data the corporation already has. However.see persuasion technology. But in most cases they are used to collect new data.
.some feel it invades customer privacy and enable coercive sales techniques due to the information companies now have on customers . CRM does not necessarily imply gathering new data.
1 CRM Planning: Keys for Project Success
Whether you're updating. CRM Planning 2. or restarting your CRM efforts.Customer Relationship Management
Chapter # 2.
2. upgrading. It's also a good idea to know at this point what your likely budget is. Before you write an RFP or start talking to vendors. Thinking about the potential ROI of your customer relationship management (CRM) project should start during the selection process. Do you need to improve management visibility into the sales pipeline? Reduce customer support costs or improve customer support? Reduce customer-related administrative overhead? Making your CRM challenges specific will help you determine which technologies or components are most likely to deliver ROI and how you can prioritize your development and deployment plans.2 Identify the Problem — and the Solution
Before you start thinking about vendors. you can plan accordingly. you should define your problem in clear business terms. Most companies' CRM goals fall into a couple of main categories: • • • • • Improved sales performance Improved management visibility Improved customer support Improved marketing Reduced costs
If your CRM goals fall into more than two of these categories. If you know walking into the project that you'll need to show a six-month payback period. how flexible it is. and what your procurement officer or CFO will be looking for in terms of business justification. you'll likely want to prioritize one over the other and plan a phased deployment.
. you need to do some homework to ensure that you're on the right track to maximize ROI. for example. some basic steps will help keep you on the path to a positive ROI. jump-starting.
a point solution. • Your budget. Microsoft CRM and FrontRange (for example) can cost considerably less. On the other end of the spectrum.evaluating each individual solution's ability to deliver returns based on the costs and benefits associated with a deployment. You can expect a hosted solution to have a minimal upfront investment and from $500 to $1. a hosted solution. or are they the ones still using pencils and paper to track leads? The greater the magnitude of the change you expect them to make. Look to independently developed case studies and your own
.and this doesn't mean just reading case studies on their Web sites. CRM solutions such as Siebel and SAP can cost millions of dollars to deploy and require a team for ongoing support and maintenance.Customer Relationship Management
2. Do you have existing databases. improved reporting and forecasting.
Once you've identified the likely vendors to deliver the best solution for you. Clearly defining your requirements and characteristics in each of these key areas will prepare you for the next step . you'll want to check their references . improved marketing.500 per user per year. • Your existing environment and IT philosophy. • Your user dynamics. previous experience.or in part? Answering these questions will help you determine whether a large-scale CRM infrastructure. or a combination of different customer-related technology. you should make a short list of potential vendors and give them a fair evaluation before you make a decision.3 Make the Short List
Regardless of your relationship with existing vendors. Are the employees you expect to use the solution technology savvy and open to change. or contact lists that will need to be integrated or migrated into your CRM solution? Do you expect to do your own development or use consultants or systems integrators? Are you comfortable outsourcing your sales and marketing data in its entirety . Your short list should be easy to define based on these factors: • Your CRM goals. and technology environment. the greater the risk that adoption will slow the ROI of your project. improved support. The vendors whose functionality meets your needs will depend on whether you're looking for improved sales. or a broad solution is likely to deliver maximized ROI. order systems.
Prioritize your expected benefits from most direct to most indirect. you'll want to consider the initial and ongoing software. Here are a few guidelines to keep the ROI from your CRM project on track: • • • • • You should spend less on software and consulting than 70 percent of expected You should be able to deploy and achieve some returns in fewer than six For a hosted solution. and whether or not their spending . project successes and challenges. case study data. 2)
In the CRM world.and benefits . there's no such thing as a bad CRM solution. hardware. annual direct benefits. On the benefits side.
. you can use a structured evaluation of costs and benefits to determine the best solution in terms of ROI and build the business case for moving forward.
investment. consulting. months (even if it's only a pilot). Most solutions deliver value when they're chosen based on clear business needs and deployed correctly. internal personnel. you'll want to consider both direct and indirect benefits. Consulting costs should not be more than twice your initial software Training users should take fewer than four hours. you should see benefits in fewer than 60 days. and reliable benchmarking information as a starting point for quantifying expected benefits for your company. and training costs associated with the project. using internal surveys. On the costs side.
Justify Your Investment
Once you've identified your goals and selected a short list of vendors.Customer Relationship Management interviews with references to learn about their decision process. Selecting and planning how you work with consultants is just as important to your project's success as the technology you choose.met expectations.
Find a Partner (Check Resumes.
Key Decision Factors
By and large. few companies will deploy a solution without some help from external consultants or systems integrators. and then work on your estimates.
In CRM. you'll want to consider two key factors: • The willingness of users to adopt the application.
. Successful adoption will also depend on how much users will have to change their normal way of doing work to use the solution. others have a more intuitive look and feel. Many CRM solutions are complex and difficult to use. "you get what you pay for" isn't always true. you'll want to consider both the complexity of the solution and ease (or difficulty) involved in adding and evolving functionality over time as your needs change and your users become more comfortable with the solution.Customer Relationship Management Once you've identified your CRM needs and your short list.
It achieved a payback of five months. In all likelihood.
Once you've determined which solution is right for you and built the business case.
In addition to the initial development.
Best Practice: Make a Match
One company chose Microsoft CRM because it would easily integrate with back-end office applications. Pricing and Purchasing Before you sign on the dotted line. you'll want to make sure you have the key checkpoints in place so that the project delivers on your ROI expectations. you'll want to explore how it can integrate with your existing environment. because the sales force was already familiar with the Microsoft interface look and feel. and what will need to be integrated in some way into the CRM solution you choose to deliver value? How you integrate existing resources and applications into a CRM project should not be an afterthought. Demand to see a track record with reference customers in a similar situation. you should consider how easy it will be to make changes over time as your needs change. does your contact support that?
. Double-check the following: • • Is the initial license price per user in line with industry benchmarks? Are you paying less.Customer Relationship Management
What other solutions and data sources do your sales or customer support representatives use today. or the average annual industry maintenance? If you
decide to stop paying maintenance in the future. and because the design of the application closely matched its existing business processes. and deployment. the way you use CRM will change over time . In selecting a vendor. what solutions are they most comfortable using. when selecting a solution.and the flexibility of the application to enable you to support those changes can have a significant impact on the ongoing cost of the solution. more. integration. make sure you've done due diligence on your contract with the vendor.
Best Practice: Pilot First
One company deploying an ePeople CRM solution used an initial pilot at one location to evaluate the application and get valuable feedback on how and when the software should be expanded to other locations. Even after you've made the commitment. a pilot of an internal solution before you buy may or may not be possible.
. do you have a clear
view of the cost of each item? Are you sure you should be buying them all now. it could have accelerated user adoption and thus shortened its payback period by introducing functionality to users in phases. piloting to a select group of users before you complete customization is a good way to determine whether or not the solution works .
Best Practice: Phase In Functionality
One company deploying a JD Edwards CRM solution found that while it achieved a positive ROI.and to gain valuable feedback on how and with what changes the solution should be rolled out to the broader population. depending on the level of customization and integration needed. who were somewhat overwhelmed by the features of the solution.Customer Relationship Management • If you're purchasing multiple modules at the same time. Most hosted solution vendors offer a free or nearly free pilot option today. A phased approach would have reduced initial customization costs and the need to train users. or would a phased approach be better? • What commitment has the vendor made to your deployment time line? If a third party is involved. how are the deployment risk and responsibility being shared?
Piloting a CRM solution can be a great way to judge both whether or not the solution will work for you and how flexible and agile the solution (and vendor) is in responding to specific needs.
before you make a change. The trick to really successful CRM is continuing to evaluate and evolve your solution to deliver greater value. You'll also want to keep track of potential upgrade opportunities and take a close look at the business case .both the benefits of upgrading and the time and pain associated with the upgrade .Customer Relationship Management
Fine-Tuning Your ROI
If you've picked the right vendor. and gotten users on board.
. planned a deployment with clear milestones. you've probably received 70 percent of the ROI you can expect.
Special regressions of this data can be very beneficial for the marketing division of a firm. All customer information is stored in the data warehouse.2 CRM Software: A key to scalability and efficiency
CRM Software provides added strength to your existing plan. are not the ones to blame because it is often the manner of connecting with consumers on a personal level making them feel as though they are cherished as customers. CRM software is not a "cure-all" for the CRM program in your business.
. From prospect and client contact tools to billing history and bulk email management.
3. Successful launch of a CRM software campaign requires a strong CRM plan for your business. CRM in Business 3. however. Front office systems are set up to collect data from the customers for processing into the data warehouse. This revolutionary type of service can be very helpful. with complete objectives and clear priorities. The CRM system allows you to maintain all customer records in one centralized location that is accessible to your entire organization through password administration. like telephone. in particular. and cancellations. CRM software can offer incredible accuracy. The data warehouse is a back office system used to fulfill and support customer orders. orders. trackability and detailed follow-up capabilities. It is up to the companies to focus on reaching every customer and developing a relationship. compared to traditional methods like telephone calls. Back office CRM makes it possible for a company to follow sales. are touted as less expensive communication methods. CRM software can run your entire business.Customer Relationship Management
Chapter # 3. Clients. It has been determined by some major companies that the majority of clients trust other means of communication. more than they trust e-mail. but it is completely useless if you are having trouble reaching your customers.1 Introduction
In this day and age the use of internet sites and specifically e-mail.
Customer Relationship Management
3.allows access to a database of industry specific
CRM forms CRM Software Sales and Marketing Analysis
Sales & Quota Analyses .see the status of all pending sales and potential revenue of
entire pipeline CRM Software Automated Processes
Remote Web Synchronization.allows consistent communication with
customer based on user-defined criteria CRM software Data-base Information
Centralized Information . closed sales.
Is your software user friendly? If you can't effectively use the software why use
it? CRM software training is usually available by contacting the vendor and asking for recommended referrals. and comparisons Leads Analysis .track responses to identify effective campaigns
between sales and quota
.3 How do you choose CRM Software?
Does the emphasis of the CRM software package match the emphasis of your
CRM objectives? Identify your specific objectives and verify your CRM software can meet those needs.4 What are some key components of CRM software?
History and Trend Management
History Tracking .centralize.automatically follow-up with leads generated from Automated Process Management .
3. (preferably three or four companies in similar size and scope).view forecasted sales.get instant perspective into all customer interactions Trend Management. manage and simplify access to critical Industry Templates and Form s.
How do other companies feel about the software? Call the provider company and
ask for a number of preferrals.
access your CRM software through the internet.
. They will greatly range in price and capabilities.keep calendar and contact information up-to-date on Remote Access Capabilities .Customer Relationship Management CRM Software Mobil Technology Capabilities
Synchronization Wizard . CRM Advisor suggests a thorough evaluation is done comparing multiple CRM software packages.
your PDA or laptop while you travel
Not all CRM software packages are the same.
a general economic downturn. rising interest rates and higher gas and heating oil prices. but with great difficulty. . CustomerView supports the retailers. Top marketing objectives to solve these problems: 17
.1 Analytic CRM for Retailers: An ROI Perspective The Retailers Data Challenge
Today’s retail environment includes increased competition among stores. and demographic databases exist. retailers must learn to generate more business from their existing customers. written by Gary Robins and published in RIS. fast databases to handle the huge amount of integrated data. Failure to consider the effects on loyal customers’ means resources spent on category management and promotion might be and probably is in some or many cases harming your business. The biggest hurdle now is getting robust. Combining category and loyalty data analysis has been done before. POS. Merchandisers and direct marketers lack expertise in the standard analysis Current retail data analysis systems require heavy IT resources to maintain and
applications sold by business intelligence vendors today.Customer Relationship Management
Chapter # 4. core customers. All of these factors have reduced the disposable income available to many retailers. yet are not integrated
customers. • • • • • Critical customer information is inaccessible and underutilized.Category Management and promotion management need to include analyses of loyal customers. CustomerView was designed to address these retail data challenges. More decision-makers need more access to consistent corporate data about their Loyalty program. within a retail corporation. July 1999. retailers are drowning in customer data. Analytic CRM 4. In this economic environment. Still. utilize. According to The Marriage of Category Management & Customer Management. To do this they must first mine the data they have collected on customer purchases and loyalty programs.
a study of a chain drug retailer showed a 30%/70% split. The goal is to increase sales and market baskets of top switchers. whether they are tangible or intangible. 921 responded. • In another example. generating a 5.It is not just sales. was the mantra from the chain.1% response rate.000 of
their best customers based on recency and overall dollar amount spent. director of the Center for Retail Management at
Northeastern.000 customers mailed. a small regional chain with seven stores targeted 18. meaning the top 30% of their customers generated 70% of their revenues.
. it is how it is affecting loyal customers. the best marketing strategy for addressing price-sensitive purchasers is to attempt to change their preference structure by raising their awareness of. Then try to persuade these Price Sensitive Purchasers that your offering has the better value. the chain did not lose customers even after eliminating 26% of the category. The events average transaction was $24744 an almost $50 increase from their normal average transaction. specific brand/product attributes. and preference for. Of the 18. . Total revenue brought in from this particular promotion was in excess of $227.
Target top switchers
• If your firm is not the lowest cost producer in the category and your switchers are price sensitive. In a test of the carbonated beverage category.Customer Relationship Management
Reward loyal shoppers and get them to buy more
• According to Robert Blattberg.s SKUs..000 generating more than $22 for every dollar spent on the promotion. all things considered.
Optimize trade areas and improve assortments store-by-store • A leading supermarket chain recently used data from loyalty programs to edit which products to delist in a category.s Kellogg Graduate School of Business. It also revealed which categories were more important to top and bottom level customers.
According to a senior category manager.Customer Relationship Management
Cross-sell the most profitable products and increase the average basket size
• A leading beverage company. and the market basket of the responders was 40% greater than the nonresponders. Using CustomerView they can see how merchandise mix affects customer loyalty and adjust their assortment accordingly. the shopper that does not. and this company had a 6.000 pieces were mailed bringing the retailer an additional $124. Texas.4% response rate. It enables the CFO to show increased margins on current capital and enables profitable growth.000 of co-op dollars. non-loyal customers.
4. It can show market basket value of loyal vs. merchandisers can quickly see how certain products can increase market basket size.8% gain in total dollars among their best shoppers. . received 16. 350.we did a presentation with a small chain in Houston.
Maximize ROI for programs funded with manufacturer co-op funds
• A national retailer recently completed a targeted promotion with a leading CPG company.
CustomerView enables merchandisers to improve the effectiveness of their staff. says that use of loyalty data does help retailers increase basket size.2 Who can benefit by using CustomerView?
CustomerView is targeted at five key audiences within the retailer’s organization:
CustomerView enables retailers to take existing customer data and use it to drive revenue. which has been working with over 40 retailers. CustomerView can quickly help identify the value of a consumer that shops in critical categories vs.5% increase in dollars per basket and a 9. The piece featured 10 different products. CustomerView can help merchandisers measure and build retention. increase market basket size. and build market share with no additional capital expenses and labor costs. Using CustomerView.
Using CustomerView a retailer can keep labor constant while increasing margins. but not their brands. and develop strategies based on the information and provide business practice recommendations. Most data is uncleansed and hosted in many locations. CustomerView can help them build their share of market by identifying customers buying a particular category of products. and conversations that customers find compelling.Customer Relationship Management
CustomerView can help Operations Executives make changes in an intelligent way. There are also many opportunities for consultants to use CustomerView to help the retailers interpret.
4. The most important thing that CRM can do for you today and tomorrow is help you create effective conversations that are crafted with credible. departments or categories. holistic intelligence and delivered to the right customer on the right channel at the right time. information. Business competence comes down to a company’s ability to generate value by using meaningful propositions. increasing a loyal customers shopping trips to a category and increasing overall market basket size. Businesses need to create economic value. household the data. CustomerView can help increase the depth of category purchases by turning cherry pickers into buyers. relevant interactions.3 Optimizing Customer Interactions and Marketing Analytics
Customer conversations and new analytical marketing techniques make dynamic customer relationship optimization a new top priority. before the data enters the CustomerView system. de-duplicate the data. which requires understanding
. This leads to many opportunities for consultants to create systems to clean the data. messaging.
Loyalty and POS databases tend to be stand-alone systems not integrated with category management systems.
CustomerView can help CPG manufacturers build category/brand sales by using real retail data. aggregate the data. CustomerView can show the CPG manufacturer how to increase multi-segment sales by identifying likely purchase behavior across divisions. etc. translate.
consumers are now communicating their demands back to their suppliers. delivered. Technology is enabling conversations among human beings that were not possible
in the era of mass media. combined. The single most
important event that happens in business is a customer conversation. people have become more vocal about what they expect from providers in many consumer serving industries. activity. paychecks. and shareholder value. 21
. Every company should make the composition of those “value props” its highest priority. and maintained. the book The Cluetrain Manifesto: The End of Business as Usual discussed the new realities of value propositioning and marketing techniques for the new millennium. customers expect you to know them – and to treat them as persons and remember every contact and transaction they’ve ever made.Customer Relationship Management customers and then engaging them with value propositions. Yes. This idea has been in existence for a decade. The interesting thing is that customers expect it. Here are the pertinent highlights: • • Marketing is really various types of interaction or conversations. designed. Swift As Internet communities of practice have grown. “Initially flattered by being treated less as a number and more as an individual with distinct requirements. they now tell the managers of brand retail chains what they are prepared to pay and specify how they want products sourced. But are they doing so? How well do businesses create conversations? How much do firms optimize opportunities? What are some of the best firms driving new customer value? This latest management challenge is being addressed by the best ofbreed CRM analytical tools that provide marketers with the intelligence to understand customers so that value propositions are relevant and arrive at the most opportune time for the customer. The new analytics provide capabilities for companies that wish to make it a business priority to create uniquely effective value propositions. Where once they would not consider the idea of bargaining. B2B or B2C or B2B2C buyers now instinctively believe that their providers should know them.” Accelerating Customer Relationships. More than two years ago. since database marketing began to grow in popularity and use. styled. assembled. The conversation is where economic value begins – revenues.
companies that speak in the language of the pitch are no longer speaking Companies can now communicate with their markets directly. Thus it is critical in initiating conversations. The potential to generate dramatic ROI on such an investment is worth five to 10 to 100 times the investment. markets are getting smarter. The value proposition drives the organization’s core logic for creating value. of dollars of incremental revenue… starting with segmentation and improved forecasting. catalog. Although it’s true that value propositions will naturally evolve over time as markets and competitive conditions change. or in a telephone conversation.4 Manage Your Value Propositions to Better Manage Your Brand and Your Business
A value proposition may be articulated in text on a Web site.
If they blow it. “Focusing on and predicting customer demand and making decisions both proactively and scientifically is an opportunity worth hundreds of millions. if not billions. then shifting to integration and alignment of functions based on demand. it could be their last chance. or direct mail piece. But a value proposition is so much more than a message. more informed. This is where brand differentiation first appears: the proposition is the first impression of the brand and its value to customers. The opportunities for companies that leverage CRM to interactively communicate with relevance and timeliness are enormous.Customer Relationship Management • • • • These networked conversations are enabling powerful new forms of social As a result. transactions.”
4. and relationships. the competitive advantage belongs to companies that can proactively and quickly adapt their value propositions for optimal business results. and finally reaching optimization. which is the application of advanced mathematics to dramatically improve decisions. Already. Yet intelligence from across the enterprise is required to understand and predict what customers will want to know about and demand. Professor Ari Ginsberg of New York University’s Stern School of Business
organization and knowledge exchange. and more organized.
. companies need to first understand what customers value – by using analytical tools integrated with marketing automation systems for creating and acting on customer intelligence. in his words. managing. driven in real-time for capturing. And to take this a step further.” It is specifically in this area – exploring dimensions of value – that customer analytics can make an enormous difference in understanding customers well enough to generate more effective value propositions.Customer Relationship Management insists that companies can better invent and reinvent value propositions by analytical means that center on customer behavior. “analyzing dimensions of value. and delivering data to marketers and analysts for decisioning. For managing value propositions effectively. the analytics and automation are best supported by an enterprise view of the business and customers.
activity management. or generation of specific crossselling opportunities. They allow for the design of sales teams based on defined criteria. including analytics. Many also provide access to internal and competitive product information as well as the automated collection and distribution over the Internet of relevant external information such as breaking industry news and customer-specific events.office application suite fall into three general categories:
Customer Service and Support: These applications automate the service
and support functions.1 Marketing Automation . They provide customizable. In a call center environment. sales reporting and forecasting.
Sales Force Automation: These are tools that automate the collection and
distribution of all types of sales information. Internet personalization tools are offered here to track behavior on a Web site and allow tailoring of the contact experience.Customer Relationship Management
Chapter # 5.
. Calendar management. they also integrate with (or provide) computer telephony integration (CTI) capabilities that allow automatic call routing and automatic screen pop-ups containing customer and product information to agents' workstations as they are answering or initiating calls.The CRM Vendor Solutions
The components offered in a front. Market Automation 5. Generating lists of customers to receive mailings or telemarketing calls. tracking and resolution. based on this behavior. and tracking sales contacts with customers and prospects are some of the myriad of capabilities offered within these solutions. Sophisticated pricing and product configuration engines and third-party channel management capabilities are also available. scheduling automatic or manual follow-up activities and receiving third-party lists for incorporation into the campaigns are all typical functions. Inbound and outbound e-mail management capabilities are also becoming popular components of the marketing automation suites.
Marketing Automation: These applications provide the ability to create
automated marketing campaigns and track the results. lead distribution. and they provide workflow engines that facilitate efficient problem and inquiry escalation. dynamic scripting capabilities for the customer service representatives as well as the capability to record customer responses in a shared contact repository.
Customer Relationship Management Let's take a closer look at the marketing automation component because it has been positioned as the solution for all CRM analytics. Building and testing sample campaigns on a subset of customers. Features of personalization tools include:
. Some of the features provided are:
• • • • • • •
Planning marketing activities and developing campaign hierarchies. Tracking sales force closures related directly to campaigns. Measuring campaign effectiveness by linking directly to call center. This is a good example of the acceleration of analytics into action. every contact with your customers can be well planned and personalized. Storing and reusing content from previous marketing campaigns. Outlining marketing campaign objectives. The true value of personalization in CRM is when it extends beyond the Internet to encompass all customer contacts across the organization. front-line Importing third-party target lists.
Personalization is the ability to track and respond to customers in an individualized fashion based upon their past contacts and behavior. By integrating personalization into the front-office applications. Integrated MA tools provide these capabilities and provide campaign offers and results directly to the customer sales and support processes.
employees and sales force. Defining campaign success measurements.
and maximize effectiveness. Coordinating multiple channels and event triggers to automate response actions. Tracking fulfillments supplied to the client via each channel to avoid duplication Tracking customer inquiries related directly to campaigns.
Segmenting customers. generating targeted marketing campaigns for these segments and tracking results are important parts of CRM analysis. Incorporating offers and solicitations into the common contact repository and prompting contact agents to follow-up on campaigns can yield dramatic benefits.
on transaction history. Inbound e-mail management capabilities assist organizations in handling inbound inquiries from customers.
• • •
behaviors. demographic analysis and collected information.
E-mail management capabilities are used in two ways in MA . Addressing customers who visit the site by name and remembering their Allowing visitors to customize content to suit their purposes.
customer behavior. Benefits of this can be quite high as it offers a chance to extend personalization techniques to multiple communication types.
. Showing customers specific content based on who they are and past behaviors. Use of decision engines to parse information from incoming e-mail Crafting responses to incoming e-mail without human intervention. organizations are linking these facilities to their personalization technologies and thus tuning the resulting communications on the basis of CRM analytics. While on the surface this would seem to be a purely service-oriented activity. Offering specific products (on the Internet or over the phone) based on past Allowing for the possibility of self-adjusting campaigns and offerings based on Integrating technologies and techniques for optimal customer understanding based
preferences.Customer Relationship Management
Collecting information on Internet site visits. Automation of mass e-mail responses.inbound and outbound. Outbound e-mail management capabilities provide the ability to construct and execute permissionbased marketing campaigns (where the dialog has been started with a customer via email communications) and are said to be up to 20 percent more successful than traditional direct marketing at a fraction of the cost. Features include:
• • •
Automation of the targeting and sending of mass e-mails.
Figure 1 illustrates the CIF. The CIF consists of three primary types of CRM systems
Business Operations are the core operational systems (billing systems. call center and sales force automation systems. the CIF provides a high-level technology road map for organizations wishing to develop CRM initiatives. Information originates in these systems and flows through a data acquisition process into the rest of the CIF where it is consolidated and integrated for strategic and tactical decision making. product or
policy systems. Let's examine the Corporate Information Factory (CIF) architecture to determine where the MA integration points should be.Adopting an Architected Solution
Now that we understand the CRM analytic capabilities offered with MA solutions. open part of an enterprise business intelligence environment. While this automates certain types of marketing activities and integrates these activities to the front line. what's the catch? When MA modules are implemented as an integrated. it lacks the depth. all departments and all functions of an organization. Building a framework such as the CIF enables organizations to share customer information freely and distribute analytical results to all individuals in the organization that need them. The organization is deprived of the more sophisticated forms of CRM analytics. Business intelligence consists of the data warehouse.) that run the dayto-day business processes in an organization. data marts and associated analysis tools. there may be no catch. Front-office solutions generally reside here as they facilitate the day-to-day sales and service processes.Customer Relationship Management
5. and can provide the technology infrastructure and information necessary to manage the complex relationships and analytics required to
. forming yet another departmental silo of analysis. furthering the very data mart chaos and inconsistency that the data warehouse is designed to prevent. etc.
Business Intelligence provides the capabilities required for the strategic decision
making in the organization. The CIF is a logical architecture whose purpose is to provide a framework for implementing integrated technology across all areas. breadth and share ability of an architected data warehouse solution. The catch is the temptation to implement these front-office product suites and bypass the enterprise as a whole and the data warehouse specifically. As stated earlier.2 Closing the Loop .
For example. The data warehouse consists of standardized. Business management systems are subject-oriented. The data warehouse can serve as the source of data for data marts and for the MA components (which are actually just another set of souped-up data marts). By constructing the data warehouse in the most generic and flexible way possible. The data must not display a bias or prejudice toward
any one kind of analytical processing. detailed. static and historical data. You are only limited by your technology and the data that you can acquire from your operational systems. Unlike the data marts or MA components.
It is optimized for flexibility. enterprise-wide. you can build just about any data mart for CRM analysis. time-variant. consistent pieces of data. the data in the data warehouse is not set up for a particular application or department.Customer Relationship Management understand CRM interactions.
Business Management enables organizations to act on the analytical results
generated within business intelligence.
. integrated. in effect.
The data warehouse reflects the enterprise's view of data in terms of business rules
and strategic requirements. eliminated. You can think of it as a big bucket of generic. Business management consists of the operational data store (ODS) and its associated transaction interfaces as well as the associated oper marts. cleansed and non-volatile collection of data for strategic analysis. Because the data in the warehouse is to be used for multiple CRM analytical purposes spanning multiple departments. the MA components of the frontoffice applications would reside here. then analytical activities that search for unknown relationships are compromised or. current-valued and supply a single point of access for information across the enterprise. An enterprise customer profiling system is a good example of a CRM business management function. The data warehouse is defined as a subject-oriented. if the data warehouse is designed using a data model that is prejudiced toward known data relationships or certain business processes. integrated. it must accommodate and reinforce the enterprise's vision of its CRM initiative. Properly architected. The primary integration point for the MA components is the data warehouse contained in the business intelligence environment.
Beware of vendor sales pitches that contain phrases such as "our MA module can drive your entire marketing process. bypass the 29
. This allows all analytic applications in the organization to take advantage of the valuable information generated by MA components." or "MA provides a direct link between CRM analytics and your customer contact points. it must contain the proper level of detailed data to satisfy these very diverse requirements. running across the top of Figure 1. Conversely. It must serve star schemas. The numerical values generated from such an analysis can be stored in the front-office system and accessed by the MA components during the generation of campaigns or scripts for call center agents. Examples abound of storing the results of BI analyses in operational systems such as the front-line applications. data mining warehouses containing statistical samples of data and MA components which fall somewhere in between in terms of detail and history required. Instead." While the capabilities embodied in the MA modules do provide significant value. is the other key component of the CIF for integrating MA components. and subsets of data for ad hoc querying. The Information Feedback loop. exploration warehouses containing detailed data. the actual score given to each customer based on their calculated LTV to the enterprise. Behavior toward each customer is altered based on the knowledge of the customer's LTV score.Customer Relationship Management
It provides detailed data for subsequent use by the data marts. Higher valued customers may receive different campaign solicitations than those with a lower score. This is the set of processes that transmit the intelligence gained through usage of the strategic CIF components to appropriate data stores. One such example is to store the results of a customer lifetime value (LTV) analysis . the solicitations generated by the MA components should also be transported via Information Feedback into the data warehouse." It is also the mechanism by which we allow the MA components to receive information from the data warehouse and to feed information back into the data warehouse or on to the operational systems or ODS. Because the data
warehouse must be the source for data marts containing aggregated and summarized data.that is. cubes and flat files for statistical analyses. This is the mechanism by which we push BI "out to the masses. The goal is for the data warehouse to have the "least common denominator" level of data for the data marts and the MA components. they do not provide sufficient sophisticated analysis capabilities to be your sole vehicle for all CRM analytics.
. fully-informed tactics. • Align business resources and customer communications for effective tactical process execution that balances customer expectations and company objectives.3 New Customer Management Tools For Higher IQ and Peak Business Results
To create a sustainable competitive advantage through CRM or customer management and marketing processes.Customer Relationship Management hype. Fully-informed business decisions. • Cultivate highly relevant and profitable dialogues with customers across all channels. • Master sophisticated multistep and event-based marketing and know when your customers are most receptive to offers and messages. and relevant. • Intelligently manage the e-channel to drive revenue growth across all channels. implement MA capabilities that make sense for your organization and ensure that MA modules use the information feedback mechanism to feed information to and receive information from the data warehouse or operational systems. Staying true to an architecture such as the CIF will provide you with the guidelines necessary to build the integrated customer information environment required to drive your CRM strategies.
5. including the e-channel. for better strategic brand and customer equity management. enterprise-wide data warehouse. and • Leverage the full power of a real-time. The best value propositions will be created when a business has the CRM tools to do the following: • Understand the economics of your customer relationships both today and in terms of individual lifetime value – to better anticipate the migration of customer assets over time. right-time value propositions to individual customers – require an integrated infrastructure that can capture. analyze. and optimize information from across the extended enterprise including all customer channels – with increasing speed and synchronicity. a business must master leading-edge intelligence tools that raise its organizational IQ (intelligence quality) to peak levels. • Improve your ability to evaluate and use every customer interaction as actionable marketing opportunities with rules driven lead management tools.
and less than 20% will stick to the guidelines and initiative plans they’ve established without veering off the designated course to an unsuccessful destination. There is no universal equation in which to plug numbers or “general” projection figures that can be applied across the board. CRM Initiative 6. If a business has done their homework and intelligently forecasted the resources needed to fulfill a CRM initiative. from customer support personnel. Being able to touch all points of customer interaction requires a comprehensive set of software that is effective and comprehensive.Customer Relationship Management
Chapter # 6. yet often difficult. The cost of regearing a business to be customer-centric depends on each case and can only be calculated with that in mind. Initializing a CRM campaign and carrying it out for the long haul is a project that involves hands from throughout a business. Inexperience with such an important. to obvious key individuals like CRM project managers. CRM initiatives are company-wide endeavors and become more elastic and abstract because of this. to the front-end Web site that is tailored to individual customers through such things as preferred language and topics of interest. From the person taking incoming phone calls and providing accurate service to the caller.1 Implementing a CRM Initiative
According to the surveys. strategy comes from it being a young and untested initiative. every facet needs to work in conjunction. This is an avoidable situation that mainly illustrates the infant growing pains many companies have when trying to wrap their arms around any new business strategy. to the database-analyzing software that efficiently and smoothly manages and processes customer data. the pains and pitfalls currently being experienced will lessen and the benefits will increase. An intelligent database system that can support and store many users and their information is critical. the ability to instigate highly specific queries that result in rich. Additionally. pinpoint demographic information is also an invaluable part of any CRM implementation.
. assessing costs is not as simple as checking the price tags on CRM software. Consequently. Fact is. through the year 2004 only 35% of businesses will accurately forecast the implementation cost and ROI projections before initializing a CRM strategy. This makes customer management very streamlined and easier. Predicting costs must be done through a unique look at every case. to IT professionals.
There will undoubtedly be products that meet a lot of your nice to haves. How well are you handling data right now? Are you collecting all the data you want from your clients or would you like to collect more? Is this information accessible by all those who need it? Do you ever have to reenter information as the client moves from Marketing & Sales through to Time & Billing? 2. the result of a successful CRM campaign will eventually minimize costs. begin to add nice to haves. As you work through your list of essentials. even the needs met by your current system. Start with the absolute essentials at the top. As you are looking at features offered by the different products. These are needs that you would like to meet but are not critical to the success of your CRM system. and won’t break the bank of any company. and ideas given to the CRM project do not change systems for the sake of change. and capability to access the system remotely. money. When you are making your project plan. but are lacking in one or more critical needs. businesses will see an extremely healthy increase in profits while their costs will level off to a very manageable point if they’ve succeeded in their CRM goal. such as the high price of luring and enticing new customers. try to cross the critical needs off your list first before you look at nice to haves. you can start comparing vendors and products. probably). Needs analysis: Make a list of your customers' needs As you ask yourself these and other questions. Business analysis: Focus on your customer data-collection process The first step in your CRM project should be business analysis.2 Seven Steps to Managing Your CRM Initiative
1. In fact.
6.Customer Relationship Management In the end. Critical needs must be met so that the time. An important note to remember—this list should include all your essential needs. allow plenty time for this phase. 3. make a list of your customers' needs. a centralized database. Take a step back and look at the areas of your firm that deal with customer data (most of your firm. Make sure your whole project team contributes to this list—you won't think of everything on your own. It is very important not
. Product evaluation: Compare vendors and products After you have your list of needs compiled. scalability. Examples of these needs may include collecting certain types of information.
Start with your Marketing users. view lots of demos. 5. Many products are highly customizable at the front end. 4. but far less so when they are implemented. Make sure your users understand why this change is taking place. Treat this as a subproject with its own project plan that includes timelines and milestones. Product configuration: Make the system fit your firm No matter what product you choose. roll it out in a small. many users will be faced with entire new business processes. Full implementation: Communicate with users to explain the change As you roll the system out to all users.Customer Relationship Management to rush through your evaluation. The firms that experience successful implementations have a plan from the beginning and follow it through to the end. 7. In addition to learning a new software interface. and a process manual with flowcharts for the business processes. The biggest factor here is communication. When you have reached that point. as well. Pilot implementation: Roll out a small pilot to marketing first After you have customized the system to your specifications.
. there will most likely be some configuration that needs to be done to make the system fit your firm. roll it out to all users. Remember to document everything. Take your time. you may have to do some process reengineering in your firm. Evaluation: Follow-through for a successful implementation As more and more firms are implementing CRM systems. Don't get poor results because you sped through this step. don't just mandate the change. Customization may not be all at the software end. Failed implementations often are the result of choosing a product that does not meet the firm’s needs or poor communications between project teams and end-users. this will be a significant change for most of your users. Make a user's manual for the software. pilot environment. 6. Follow these 7 steps to managing your CRM initiative for a successful CRM implementation experience. and ask lots of questions. Keep it in a small group until you have the system customized the way you want it. plenty of success stories are emerging. they will use the software heavily and will be able to provide you with some high-quality feedback. Use training sessions and documentation to assist the users with the new system.
however. companies and employees have lived without CRM and may be able to continue doing so. high failure rate. etc) the use of which is required for day-to-day operation of a organization. In choosing a solution it is common for a team to be brought together to develop a needs analysis document. choosing a system is relatively easy. SCM. The reality is that users who are overwhelmed by a tool end up not using it.1 The Implementation Process Know the required commitment for CRM implementation success
Many companies think that choosing a solution is the hard part. Implementing a system is the hard part of the process. In reality. It is important that you establish and focus on short. To overcome all of the possible obstacles. CRM Implementation
7.Customer Relationship Management
Chapter # 7. Unlike back end systems (ERP. CRM must become part of the culture of an organization and people must recognize that by using the system they are helping the team become more effective as a whole. Although often overlooked or assumed. do they know how will they log those in the new system? If outside sales make sales visits. and know that ROI will not come until the team is effectively using the solution. Users need to be able to comfortably duplicate what they have routinely been doing in the new system. the first goal is to make sure that the user group is proficient on the base functionality of the system.
7. if inside sales receive incoming phone calls. The common mistake here is trying to do too much at one time. less thought is put into how the solution is going to be implemented which is one of the reasons for the well documented. Each person has their own way of doing things and those habits are difficult to change. how can they eliminate filling out call reports? How are people going to send email and create letter and 34
. For instance.2 Implement And Learn The Basics First
It is no surprise that once companies select a solution they race to implement that solution. Customers have been sold on the return on investment (ROI) of the solution. It is not uncommon for teams to spend months developing selection criteria and subsequently choosing a vendor. Typically. medium and long-term goals.
Customer Relationship Management manage their task list? Users who quickly become proficient on this base functionality will be more apt to want to learn more and reap the potential added benefits of more proficient use of the new system. Having the software provider spend one day training users is not enough to be successful.
7. Questions like “What is the timeline?” “Should everyone be brought on at once or do a pilot?” “Where are the strengths and weaknesses in of the company and the individual users?” all need to be answered.3 Outline An Implementation Strategy
The first step of implementing a new CRM system is to determine a strategy. The implementation strategy should be developed with the software provider to determine and document the process to roll the solution out to the user group.
. Those stages may include beginner user training. another for outside sales. Look within the organization to determine whom the power users will be and solicit their support on the project. Each organization is unique and goals and incentives need to be thought through on a case-by-case. Some companies have chosen to motivate users by offering incentive compensation related directly to system utilization. and users groups to name a few. trainer training. advanced training. goal-specific training. medium and long-term goals need to be established and monitored for each department and for the organization as a whole. User champions and administrative champions need to be selected. Identify those users who will be the most reluctant to change and help them understand how this will benefit them (One of the most effective ways to overcome reluctance is to help each reluctant user to find one or two things that will make their job easier so that they begin to see the power of the system for themselves). utilization reviews.
7. Short. Companies may find that they want to track one metric for inside sales. Training should be divided into multiple stages designed to fit the particular user group needs. department-by-department.4 Invest Time In Training
Training is a major component of long-term success and should be budgeted for sufficiently. and a third for marketing. and possibly user-by-user basis.
especially in the beginning. These groups provide an excellent way to see how other similar companies are using the system and learn from their successes and mistakes. and to work through real life situations. weekly. the Company will be able to maximize the benefits of improved sales process management. Trainer Training: Some organizations opt for training a core group of user champions who will then be responsible for training the entire team. especially for larger user groups.
. Determine whether or not user groups have been set up and plan to participate in them. Breaking up beginner user training into multiple groups over multiple days will allow users to use the system while the trainer is still available. User Groups: Another component of success will be internal and external user group forums. Most systems have built in tools to monitor successful usage of the system. internal user groups can be very useful to help team members learn from each other and to help ensure that standards are being developed and followed. Users will not become an expert in one day. Utilization Reviews: After beginner user training plan to set up utilization reviews. to track usage and to uncover issues before they become real problems. once the trainer has gone. External user groups are generally coordinated by the solutions provider.Customer Relationship Management Beginner User Training: Most users’ first experience with their new CRM tool will be during beginner user training which is intended to get users comfortable with all of the basic functionality of a system and should be mandatory for all users. both internally and with the solutions provider. Typical questions that need to be answered are “Who is using the system?” “Who is not using the system?” “What are they using it to do and are they following the established standards?” “Are we achieving the goals we set for ourselves and if not why?” “What additional assistance (training or consulting) do we need from our solutions provider?” “What else should we be doing in the system?” “Who else should be on the system that is not currently on the system?” By working internally and with the software provider to track usage and monitor success and failure throughout the user group. This may require an additional upfront expense but should allow minimization of future training costs. This allows companies to rely more heavily on internal resources. they can do all of their routine tasks in the new system. Use this time to ensure that everyone is comfortable enough with the system that. biweekly). On some set interval (daily.
Customer Relationship Management Advanced and ongoing training opportunities: Investigate what additional training opportunities are available. Most solutions providers have established programs for advanced user training. Many have web-based training, on-demand training and other periodic course offerings that focus on client’s specific needs. There is not one ‘right’ way to train. A well chosen software provider will have the tools in place to guide the team through this process based on the needs, goals and budget of the user organization.
Customer Relationship Management
Chapter # 8. CRM Success 8.1 Introduction
Seeing CRM initiatives take hold and begin to pay off is often a waiting game. It’s not a “flip-the- switch” product that automatically spits out results or something that will take affect overnight and cause profits to skyrocket while you sleep. The puzzle must be completed and time must play its part before true success will be seen. However, through dedicated and smart planning, businesses should see markedly increased profits, as satisfied customers will continually re-visit them. Gradually, as businesses get to know their customers, their customers get to know them, and a closely aligned partnership is formed. This one-to-one relationship is the catalyst that sparks both lifetime customer loyalty and revenue increase.
In the true spirit of thinking outside of the box, experts at the Gartner Group believe “the most successful organizations will be those who, through innovation and focus on business effectiveness rather than merely efficiency, manage to break the mold of traditional business thinking”. Being effective is paramount. The end goal of better serving customers and enabling a high percentage of customer retention cannot be met with out creative thinking and effective planning and actions. The task of perfecting the relationship between business and customer is always on going and requires special dedication and innovation as the commerce markets continually change and 38
Customer Relationship Management fluctuate. And over time, customers change, as does their behavior and needs, and business must be able to respond to that. Being on the cusp of the industry and always having a hand on the pulse of the customer is key for success. As the CRM initiative begins to take hold, key players will soon see patterns emerge among customers, will discover what a productive strategy is and what is not. This is the essence of a successful CRM project: being able to really know what will work for your customers, what satisfies them, and what keeps them loyal. The ability to get an accurate gut feeling about the marketing campaigns, new products, and the type of policies customers will respond to is invaluable. This kind of customer knowledge only comes from really digging in and being savvy about how you go about understanding the people that you hope will continually call on the services and products of your business. The ROI in this case would be compelling indeed.
8.2 Advice for Breeding CRM Success:
1. Buy the best package you can afford. Choosing a high-end system that allows for growth is key, Monster.com's Liddell says. Monster.com has rolled out Siebel Systems' sales force automation software to 800 users since implementing the software in November 1998. Where low-end packages break down is in their ability to handle complex definitions of customers, he says. Monster.com established formal guidelines for defining customers across divisions and applications so salespeople can access clean, consistent data. 2. Choose wisely. Figure out who you need to reach and then find the software that will help you accomplish that. Before settling on RightNow, USF scrapped a previous CRM project a month into the implementation after concluding the software didn't work the way the university wanted. Too often companies choose software before they have defined the problem, Akin says. "I've seen it lots of times - 'Hey, this is a neat application. Let's buy it and then figure out how we can use it here.'" USF tapped Right Now Technologies' e-mail management software to help the IT department, financial aid office and other administrative groups that were bogged down with customer service inquiries from 40,000 students and staff.
Customer Relationship Management 3. Build and maintain a relationship with quality consultants. Consultants are important not only in an initial deployment, but also as project parameters change which they will, Liddell says. Monster.com works with CRM consultant Akibia, which lets the company quickly expand its CRM resources when necessary. Each time Monster.com acquires a new company, Liddell's priority is to quickly get those new team members up and running with Siebel sales tools - a process that sometimes requires extra hands. 4. Rely on internal resources. Consultants are helpful, but it's important to maintain ownership of a CRM project. "Nobody's more interested in our success than the team at Monster.com," Liddell says. Plus, somebody has to run the software once the consultants are gone. 5. Make sure everyone is onboard. It's important to have buy-in throughout the organization, Akin says. Financial support is necessary, he says, "but more important is an agreement to use the product universally." It's frustrating for end users if they expect to find a single source of customer service information online and it turns out a key department is missing from the site. 6. Align your project goals and implementation schedule. Berkson and his team at Thomson Financial try to stick to eight- to 12-week projects, rather than rolling out everything to everyone at once. Plus, no department is going to need every function in every application; users would be overwhelmed, Berkson says. Thomson Financial is in the process of upgrading its Vantive applications to PeopleSoft 8 CRM - the new Internet-based suite from PeopleSoft, which acquired Vantive in 1999. "We tend to implement in small, manageable phases," he says. Companies should identify their biggest pain points and greatest opportunities for return on investment, and make those an implementation priority. 7. Start with a low-risk pilot. One project up and running quickly can validate your CRM concepts, Berkson says. Choosing a relatively simple, straightforward project such as outfitting a department that doesn't require integration with other back-end systems - is important. If you start with a complex trial, it can really drain momentum, he says. 8. Aim for configuration, not customization. Take advantage of today's CRM tool sets, Berkson says. Vendors have built more robust configuration flexibility into CRM applications and recommend that users minimize customizations. So if you can break 40
The university departments that are least enthusiastic about the RightNow products are the ones that weren't ready for it. 9. Setting standards for formatting responses can help maintain consistency of service.com has team members who maintain the software. train in advance of rollout. team members who constantly handle requests for changes and team members who police data quality. CRM requires a team that is willing to take ownership of even the most minute details. 11. In hindsight. it will be well worth the effort when it comes time to upgrade. Provide adequate training. 12.
.Customer Relationship Management the habit of writing custom code to accommodate unique business processes. Akin wishes his group had set content standards among departments before going live with the project instead of trying to do it later. Berkson says. Don't underestimate data requirements." Akin says. Watch the details. Monster. "If you have the time and the resources. The time and resources needed for data conversion and cleanup will always be more than you think. 10. Set communications standards. At USF. e-mail inquiries are routed to as many as 30 different departments. Berkson says. he says.
and web self-help. provide sales forecasts. suppliers. Examples of these systems include email response management systems. order status update. consolidate and/or distribute it for use across the multiple customer facing departments (or processes) within the company. then analyze.1 What Are Some CRM Products and What Can They Do For You?
CRM products are automated applications that support the accomplishment of corporate goals related to customers. CRM Products 9.) These technologies capture customer data from across the enterprise.
and/or partners to use the internet to gain information that is directly relevant to them.Customer Relationship Management
Chapter # 9.e. This may include customized product elections. or self-guided query and response.
Sales Force Automation Systems: provide tools for your sales people to
maintain their contacts. track sales prospects. better results with lower expenditures from sales. customer service. CRM products can be grouped into 5 general categories:
Customer/Partner Self-Service Systems: enable your customers. web personalization systems.. enter and track
. on-line order entry. such as increased revenue and/or increased sales efficiency (i. and marketing. web-based order-entry.
automated marketing campaigns.Customer Relationship Management orders. and automated dispatch and tracking.
Operational Billing/Order System Integration Systems: provide
integration (as well as migration) between customer-facing (front-end) applications and the production (back-end) order-status and financial systems that contain the data that clients and partners may seek. improved customer service representative (CSR) access to client information. and customer personalization tools. and provide customized quotes for clients. These systems include customer data mining. and on-line sales forecasting and order-tracking. These systems are not only CRM systems. customer service call tracking. but rather the components of larger software suites that may include CRM. Examples of these systems include web-based customer service. Examples of these systems are packaged accounting and manufacturing systems that have CRM front-ends.
Call Center Customer Service Systems: provide support for staff that answer
client questions or respond to requests for dispatch services. This lead generation could be dynamic (emailing offers or customizing web content) or static (providing targeted databases of clients by type). Examples of these systems include.
Technology-Enabled Lead Generation Systems: enable targeted marketing
based on client needs and/or past business trends.
Customer Relationship Management
9.2 What Kinds of CRM Products Do What?
3 How Much Do CRM Products Cost?
According to Erin Kinikin at GigaGroup. This does not include vendor maintenance and ongoing customization costs as well as cost of organizational process changes. implementation. CRM (software only) costs vary as follows: • A limited system (in terms of range of functions or customizability) usually
supports less than 50 users and costs around $500/user.Customer Relationship Management
9. and customization. • A departmental system (which supports 50 – 300 users and has a more increased
range of functionality and increased ability and need for customization) usually costs around $1500/user. Some vendors quote this functionality for $2000/user.
. • Implementation and customization costs will add from 25% (limited system) to
100% (departmental) to 300% (enterprise) for software installation. Some vendors estimate as much as 500% for implementation and customization. • An enterprise system (which supports over 500 users and has a higher range of
functionality and introduces dramatic change management issues and requirements for customization) costs around $3500/user.
to anticipate the high volume. EMC. and beauty products decided to expand its business to the Internet. however. hosted site with an EMC Proven™ application service provider (ASP) that could deliver a 24x7x365 service level commitment and technology on
. and drives revenue
Retailing Healthcare and Pharmaceuticals on the Internet
In 1997. the order fulfillment process was unable to scale to keep pace with growth of the Internet business channel. this site was deployed primarily to establish a web presence for the company. The company decided to discard the entire “homegrown” site and began again.Customer Relationship Management
Chapter # 10. health. In addition. E-CRM 10. and Cisco to help implement an e-CRM application solution that could deliver: • A highly available. scalable. The site. couldn’t be enhanced in web time. the company turned to Oracle. and manageable technology infrastructure that would keep pace with rapidly changing customer numbers and market conditions • Rapid time to market. high availability. secure. and competitive functionality required as traffic and content grew and new players entered the market. As with many of the early web-based forays into e-commerce. and its underlying infrastructure couldn’t scale to accommodate thousands of orders per day.1 E-CRM: Delivering a Superior Internet Customer Experience
How one Internet retailer delivers the highest quality customer experience. builds customer loyalty. The initial site was not designed. as competitors had established a five to six month lead in site functionality • An outsourced. a billion-dollar retailer of pharmaceutical.
EMC and Its Partners Step up to Meet the Challenge
In 1999. its applications. launching a web retail operation as a division of its brick-and-mortar operation—the first in its industry to go online. had inadequate capability to support applications and was unstable as a whole.
2 Customer Relationship Management. Customers may prefer to use e-mails. Te core of any CRM initiative is the use of knowledge about customers to either align your process with it or you align them with you. filter and sort every segment of it. So. i. while on the other hand. Significant Business Impacts
The company’s E-Infostructure enables the web site to keep pace with multiple simultaneous inquiries from hundreds of concurrent users. Knowledge must be up to date and would be able to categorize. and the company has been able to increase its level of customer. The customer view is simple.Customer Relationship Management demand The resulting solution consisted of a highly functional e-CRM web site using the Oracle CRM eBusiness Suite. organizations that adopt a single view of their customers approach envelops the customers with in the organization mesh. And as we all know that some customers do not feel comfortable with technology and demand a face to face interaction. what really matters?
To run a successful customer support business that adopts customer centricity approach demands control. Consistency and information sharing became on top of the Menu for many organizations. what really matters? … Class A customer support centers characterized by the following: • Customers’ information is up to date and accurately inserted in the data base. others use the telephone. and it is accessible to all customer facing points. The company implemented the solution in three phases: • The Implementation Phase—design and development • The Production Phase—solution deployment and stabilization • The Growth Phase—delivering more functionality to more users
Immediate. technology and finally your staff.: single view of your organization. built on a modular EMC Storage Area Network hosted at a third party ASP data center location. control over process.e.
. Customers like to interact with the same service regarding any transaction with the organization.
quality of service leads to a greater customer satisfaction and repeat of business which by its role will be reflected in the balance sheet eventually. annually…) for individuals and also for processes. The first is to uncover patterns of buying from the customer base. well after all what do they actually tell you or indicates? The quantitative approach is rather to satisfy internal demands than customers. Companies seeking this differentiation must ask the questions below. Internal slogans are for internal consumption. analysis of buying patterns is different from
. How many repeated customers do you have each year? This is really what matters. the companies that explore all possible methods are better positioned to get a better picture of a customer.Customer Relationship Management • Staff has been carrying out customer support training and attaining in house standards. For customers. Indeed. To a certain extent.
10. • Internal process exceed customers expectations • GAP analyses are carried out on regular basis (quarterly. However. • Calls and e-mails responses are regularly audited and monitored to maintain level standards. How do I drive or extract new revenue using CRM? The first question has many possible answers. What does getting “close” to customers mean? 2. One might argue that an expensive CRM system is not required to do this. How do we get close to customers today? 3. As the economy remains sluggish and customers remain cautious. For my purposes. perception equals reality. Uncovering these trends is fundamental to any business.3 Customer Relationship Management
Customer relationship management (CRM) is the most talked about of the three enterprise applications that are the focus of this paper. the need and desire to get closer to customers are the primary means of differentiation in the marketplace. this is true. Statistical data should not be all that matters. 1. I will only focus on a few critical aspects.
order management. demographics. and quality control). An integrated CRM tool can add real-time integration to other systems (e. Giving the presales team. Customer loyalty programs like frequent flyer and preferred guest programs can record 49
. met. positioning tactics. Giving sales management “one-click” reporting capability on leads. Others include the financial market. They believe that will be a sustaining factor in their survival. customer representatives. More than anything. not consumers. or other metrics can ensure a more successful forecasting and market strategy implementation. The first markets were filled with people.where people came to buy what others had to sell—and to talk. problems in the pipelines. they were the places where supply met demand with a firm handshake. the germane point here is the notion of connection. The first markets were markets. competitive offerings. and pricing. Most of all. financial. strategic companies are trying to figure out how to more effectively connect with customers. The second question above is equally important. and post-sales team the ability to input information about a customer cycle over time builds a profile that enables each team member to serve the customer better. eyeballs or seats. breakdown of revenue by product.. not abstractions or statistical aggregates.Customer Relationship Management that of buying history. bears…not demographics. Hospitality industries also use CRM systems to get closer to customers. Buyers and sellers looked at each other in the eye. CRM systems allow a vast amount of input about a customer in order to build a comprehensive profile. While Weinberger and Searls were trying to make a bigger point about the Internet and its role in current market philosophy.g. The simplest example (and one of the most common) is the contact manager concept. new product introduction. geography. In The Clue train Manifesto: The End of Business as Usual Weinberger and Searls make the following point. There are many sales tools for contact management. recent marketing messages. and other parallel actions such as sales. not bulls. and connected…. A customer’s buying history is only one component of the pattern. Making customers feel unique because you understand their likes and dislikes is difficult but critical.
they collect and analyze information to help us gain closer relationships to customers. In addition. possibly unexpected snowstorm. but it can reveal important data.Customer Relationship Management recurring customers’ preferences and then target specific services to specific customers. Examples abound. they can broker better deals with the suppliers by marketing “premium” shelf space. but they can correlate that information to the shelf position where it is stocked. No so-called “new economy” will ever change that. Using this information. grocers can determine the impact of shelf position on customers’ buying habits. it is establishing use of the software. To keep customers satisfied. and target marketing initiatives for maximum impact. bottles of wine. businesses that supply rock salt and snow shovels must be well stocked for that first. derive new revenue opportunities. Using a method (such as CRM) to get a macro view of the customer is invaluable in today’s fragmented communication environments. complex tools to help us do this. However. and health concerns for patrons. grocers can track not only the brands customers like within a given product set. however. However. These efforts help businesses know their customers better in order to better serve them.25. It is not the software. How can a business derive new revenue opportunities from this data? Sometimes customer buying patterns can offer new streams of revenue. like ERP systems. These are a CRM implementation’s biggest challenges today. the sale of tennis rackets (a higher margin item) increased. The third question. if such monitoring identifies that a customer has moved. they will send a “moving special” coupon book to the customer. we have new. To increase customer satisfaction and effectively manage distribution. companies like Union Station in New York track patterns to record favorite tables. requires more complex analysis. many businesses tie their distribution systems into the National Weather Service because a major weather event could affect operations. Also. and call centers to name a few. cashiers. Grocery chains monitor purchases to effectively market specific products or offer discounts. Many corporations have failed at 50
. Even in the restaurant industry. but the point is that knowing your customers today is as important as ever. sales reps. This complex field of analytics is the most difficult aspect of CRM engines. one retailer found that if it lowered the price of a can of tennis balls by $. For example. By measuring trends over time. CRM systems will only be effective if organizations socialize the project goals and actually use the tools. We must also realize that these customers have more ways to interface with organizations today—websites.
it is imperative that you thoroughly understand and proactively manage your operations and your customers.7%. and analyzing information effectively is critical to an organization’s success at recreating that market of old where buyers and sellers meet. You need to wring every iota of useful information from the valuable business data gathered throughout your enterprise. 2002). However. CRM systems are evolving. out-of-the-box products exist that can marginally increase an organization’s effectiveness. to analyze. This investment provides a direct positive impact on your profitability by allowing you to harness the power within the most important untapped asset you already have — your data. CIO Magazine reports “one Fortune 500 organization is on its fourth try at CRM because the sales force has rejected all previous attempts at sharing customer information” (Koch). more productive. In this environment. But now.
10. look at each other in the eye. no matter what you did — or didn’t do. collecting. Your peers agree. and use it to give yourself a competitive advantage. finance.Customer Relationship Management this. storing. BI software allows an organization to access.4 CRM Analytics: Visualize Business Intelligence A Slower Economy Demands Aggressive Business Intelligence Methodology
Gone are the boom years of the 90’s when growth seemed unstoppable. and long range planning. So where do you invest? In BI software. and connect. The slowdown in the economy has put pressure on IT information technology) departments to demonstrate real ROI (return on investment) on any investments made in new technologies. the data warehouse is key. the next generation of CRM is trying to integrate more effectively with an organization’s ERP initiatives to see how customer buying patterns affect manufacturing. According to a recent Business Week article (June 24. your business needs to be more agile. the BI software industry grew by 9% while the software industry as a whole grew only 7. How can you accomplish that? By implementing business intelligence (BI) software that gives you deeper insight into your organization through greater understanding of the operations of your company. more than ever. Changing mindsets must be a top priority. Indeed. In today’s competitive landscape. and more profitable. and to share information
. human resources.
CRM analytics is a specialized area of BI software that focuses on analyzing and maximizing the lifetime value of customers. But the holistic understanding of a customer’s behavior over time – the ability to identify.
10. When budgets are tightest. analyze and predict changes in behavior – has been locked inside the vast vaults of CRM and ERP data storage systems. CRM analytics can help you improve your bottom line by providing better insight into your customers. organizations need to understand their existing customers in order to retain them and to maximize lifetime value. and campaign management. support. Tremendous amounts of data have been collected about customers and how they interact with your organization at these touch points. organizations have gained efficiencies in their customer operations. It is the key to bridging the information gap in decision makers’ minds.
. By automating customer-facing processes such as sales. BI can provide visibility into data about your operations that can generate quick payback engendering better decisions when and where they are needed. This minimizes the significant costs of attracting new customers.Customer Relationship Management across the enterprise using tools and analytic applications. Cultivating relationships with your high-value customers can have a direct and immediate effect on your profitability. It is the difference between experiential. Most importantly. BI software takes advantage of the investments you may already have made in systems such as CRM and ERP by extracting value from the data collected within them.5 Using CRM Analytics to Unlock Customer Data
Operational CRM has delivered benefits to many organizations over the last several years. anecdotal knowledge and actual data.
“Who are our most profitable customers and how has their behavior changed over the last three months?” The goal is to maximize the value of your customers over the entire relationship with the customer. your organization can now discover the right balance of promotional effort. and marketing response behavior. it is important to think in a customer-centric manner.Customer Relationship Management
CRM analytics provides the key to those vaults and enables insight into customer behavior. more agile application-centered data marts. organizations typically react by calling for an enterprise data warehouse with data collected from every possible data source in the organization. payment behavior. you also need to be asking. “Who is likely to buy this new product if we offer a 10% discount?”. Beyond data. cost. Unfortunately. contacts with customer service. not for a single marketing campaign. Whenever the need for “customer-centric” data is established. the single enterprise-wide data warehouse takes too long and costs too much to build before any benefit can be gained. Such a
. and support that will result in improved revenue and customer loyalty. CRM Analytics is an area that provides significant and rapid return on investment. Armed with that insight. Where do you start? At the foundation of CRM analytics are customercentric data and approaches. While it is important to ask. A more effective approach is to develop an information architecture that enables you to build smaller. Data must be organized and managed at the customer level with historical detail covering purchasing and returns behavior.
and load) tool as the central repository of your data definitions and business rules (metadata). Analysis helps devise strategies that maximize profitability. it is important to know actual expenses by product or by customer in order to evaluate how certain products or customers contribute to profit. Your CRM analytics tool must provide you with a complete.Customer Relationship Management design is possible today using the much improved capabilities of an ETL (extract. For example. All reports and informational views must be available for distribution in both electronic and hard copy formats. and queries should be controlled based on user roles and needs. even as you build department. A central repository facilitates a single version of the truth. transform. putting it in the hands of the front-line managers tasked with making decisions that affect customer relationships. Graphical Analytic Tools are a Prerequisite
Useful analytical tools must deliver simple. Your analytical tool must be able to make your results actionable by integrating with operational CRM systems as well as with any back-office systems that can influence customer interactions.6 Accessible. opportunities. views. and problems without digging through pages of tabular numbers. whether at the promotion level or at the customer or product level. It is the ability to quickly view your data along different dimensions and to intelligently drill down into the data that enables you to proactively identify and address issues and opportunities. The tool should provide visual techniques that enable any user to easily identify trends. Modern requirements should include Web-based queries. Flexible. Access to various reports.
. These targeted data marts must contain both atomic and aggregated data that can support multi-dimensional analysis.
10.or application-level data marts one at a time. customizable reports that include all the views and the queries available to you. robust functionality. These capabilities allow you to democratize knowledge of the customer. A CRM analytics portal should provide easy access to key business and customer metrics. with the delivery of HTML pages that have hot spots for further rill down.
businesses will demand greater sophistication in analytical tools. Such knowledge can only come from business intelligence. product by product? Which forms of advertising are most effective. involving publishing data sheets. This model is quickly evolving to include more dynamic applications.
E-Businesses might ask:
What are sales margins. product manuals. and other techniques to give Web company’s powerful new abilities to create highly targeted. and where and when they want it. however. This presents a major challenge: integrating these new and frequently disparate data sources into coherent analytical formats.7 Asking the Right Questions to Get the Answers That Matter
AS E-BUSINESS IS EVOLVING TO WHERE ANALYTICS IS A
REQUIREMENT Not only does e-business present enterprises with growing volumes of data. We are moving toward innovative personalization technologies that combine rule-based processing. telephony. how they want it. and other generalized marketing materials. During the Web’s early days (of just a few years ago!) most marketing activities were relatively static. what they want. and for what audiences? Which products sold best for calendar event XXX? Where is online advertising working? Where should it be scaled back? Which customers should we target with direct email? With E-promotions? Which suppliers have excelled in ship-to-customer time? For which products?
Business-to-business vendors might ask:
Which of our suppliers are consistently on time? Which of our partners are most fully automated? Which of our products are most time-critical?
. these companies will require on-demand detail on who their customers are. For these techniques to succeed. Put another way. customized commerce experiences for their customers and partners. it demands increasingly greater analysis. intelligent content distribution.Customer Relationship Management
Analyze “abandoned shopping cart” behavior to understand barriers to online purchase. marketing. in addition to integrating disparate backend data sources. case volumes. companies can: Remove process bottlenecks in sales funnels by analyzing deal velocity and revenue attainment. the challenge for business intelligence extends to integrating data among sales. Understanding and optimizing the entire customer lifecycle — from prospect to lead to customer — requires integrating data from front and back office systems and across all customer touch points.
. Improve support by analyzing backlogs. measuring performance against industry. both traditional and online.or business-specific metrics. In today’s business environment. Identify and leverage the most popular Web site content and advertising. customers send real-time clues to their needs and purchasing behavior via their interactions with e-business systems. Fine-tune online promotions and personalization by profiling behavior based on customer segmentation. and support automation applications. Share information and best practices in sales and marketing by analyzing successful marketing campaigns. product promotions. or win/loss trends. and pinpointing problems and opportunities. vertical markets. CRM analytic solutions help companies use valuable front office resources most effectively by identifying bottlenecks. With e-business-ready analysis integrated with the traditional customer data sources.
Specific Analysis for E-business & Best Practice Metrics
Analytic applications improve front office business performance by using packaged analysis and key metrics to drive best practices across the enterprise. Integrating and analyzing customer transactions and data from across the enterprise creates a customer–centric view for businesses. and scheduling.Customer Relationship Management Who among our customers demand the greatest service levels? How should we adjust our supply chain to enter new markets?
Integrated Data Provides the Most Complete Information
and cross-sell/ up-sell analysis.
Accelerated Decision-Making with Web-based Applications
Analytic applications targeted at business users can increase the responsiveness and agility of organizations by making them alert to changing customer or market patterns. a Seybold study of the Fleet Bank in New England identified that up to 40% of its customers and products are unprofitable at any time. for a number of reasons. Using traditional decision support products. successful companies not only aim to acquire and retain more customers. and satisfy high-value customers in many ways: Rank and profile customers by critical dimensions. Measure marketing campaign effectiveness in terms of leads generated. delaying timely access to information. and resulting customer profitability. lifetime customer value. For example. deals. Segment and profile customers based on demographics. and profitability. Accordingly. Increase and accelerate sales revenue with deal analysis. Grow existing customers with up-sell and repeat business.
. funnel optimization. online session behavior. this information is often delayed. revenue generation. online personalization and cross-promotion offerings. Information in client-server applications is incomplete or inaccessible. and propensity to respond to marketing campaigns. such as: Business users are isolated from complex business intelligence solutions. CRM analytics help companies prioritize. such as revenue. such as first call closures and time to close. they also focus on their most profitable ones.Customer Relationship Management Improve support quality control by measuring performance against key metrics.
Analytics Tools Help Business Focus on the Most Valuable Customers
Small movements in percentages of customers represent large percentages of profits. click through or online purchase. and must request reports or analysis from resource-constrained IT or MIS departments. grow.
factor in figuring the ROI for an analytic application. By enabling support organizations to track service levels for top customers.
. analytic applications have the potential of delivering significant “time. CRM Analytics allows us to ensure longer customer relationships.
The best way to improve a sales force’s effectiveness is to empower them with pertinent information on their target market. a company can optimize service levels. and bottlenecks to problem resolution. The “time value” associated with decision-making may be the most important. focus support efforts on the most costly problems. although difficult to quantify.to-market” value.
The customer support functions in an organization have significant influence over a company’s recurring revenue stream. and putting information in the hands of the business users. reduced customer turnover and lower overall support costs. On-demand analysis of customer data fuel the ROI for a sales organization by creating a comprehensive view of the customer base. accelerating deployment. and increase customer retention and satisfaction. across all customer touch points. ROI is traced through improved response rates or click-through for marketing campaigns and advertisements. which can be measured by more and better customers for your marketing dollar. These key drivers of ROI all lead to increased revenue. The quantifiable benefits of a sales analytic application come from improving the sales rep’s effectiveness. reducing the risk exposure during the sales cycle. and enabling the rep to sell more product.
The ability to track responses to marketing campaigns and profile target customers yields significantly greater returns on marketing dollars. products requiring the most service resources.Customer Relationship Management
By packaging analysis. CRM Analytics fuel improvements in ROI.
where a software provider provides access through a browser.Customer Relationship Management
Benefits As companies move from a product-centric to a customer-centric orientation. data mart implementation. analytic views. your focus is on maximizing value and minimizing your costs for deployment and maintenance of a CRM analytics system. deliver the competitive advantage of better business performance information without the expense and time of traditional decision support solutions. and extensive IT support for analysis and reporting.to mid-sized business (SMB). you face even more pressure to maximize every investment dollar.
. they need the tools to analyze and optimize their efforts. Traditionally. minimize upfront investments. performing analysis across the many different systems and information sources about the customer has been a difficult task. All the steps required to implement world-class CRM analytics may seem daunting. With today’s business environment putting increased pressure on you to make better decisions faster than ever. with pre-packaged key performance indicators. As an SMB. VisualSmart provides you with a quick and cost-effective way to make an immediate positive impact on your business. Hosted application services. Packaged analytic applications such as Synergy VisualSmart™. and as they add new e-business channels to traditional customer interactions. and an easy-to-use interface. involving significant data integration. As a small. provide the functionality that can accommodate your needs. shorten deployment times and provide the functionality to get you deriving value quickly.
depended on the organizations' ability to clearly define appropriate success metrics at the start of the CRM implementation. Ideas for CRM Success 11. there is no way to accurately measure the return on its CRM investment. The perceived success or failure of these initiatives has. and thus. To be useful these new applications. When a company fails to clearly define its goals.
. Because of the new. This desire is driving businesses to make better use of the reporting applications. but few CRM vendors offer them for an affordable price. However. These business intelligence capabilities--once only included in the most expensive. no way to determine if the program was a success or failure. in large part. high-end systems--are now more widely available. and the users within these businesses. and engines must also be easy-to-use. Many CRM implementations are challenged from this perspective. tools. and reasonably priced.Customer Relationship Management
Chapter # 11. have the opportunity to implement these capabilities at a reasonable cost. built-in or fully integrated.1 Revealing Customers' Needs And Preferences Is Key To CRM Success
Many organizations have made significant investments in their CRM systems over past five years. analytics tools. As CRM implementations move beyond just collecting customer information and reporting on it. there is hope for those struggling with this problem: reporting applications. more businesses. analytics tools. a fundamental driver for many organizations is the desire to better understand their customers' needs and preferences. Companies want to transform the large amounts of data collected in their CRM databases into meaningful reports that different types of employees can use to do their jobs better. low price point. tools. and engines are helping businesses discover the hidden jewels stored within their CRM databases. and workflow automation engines are now available at a fraction of what they cost only five years ago. and workflow engines that a few CRM applications now offer. These applications.
When CRM works. and government relations at Growth Works Capital Ltd. but don't reach for the antacid yet. Cohesive decisionmaking is critical to the success of companies. perhaps the best advice is a thorough evaluation of your strategic sales." said Murray Munro. It's a daunting task.2 Top 50 Proven Ideas For CRM Success
CRM projects fail--and succeed--for many reasons. and workflow automation can positively impact your company's results. and customer service and support processes. salespeople increase their proficiency and close more deals. we've integrated Crystal Reports with our Maximizer database. analytics. profitable customer relationships. "To provide our sales and marketing team with fast and efficient reporting on our sales activity. When they fail it's often because they lack guidance. marketers create more
." Taking your customer relationships to the next level requires commitment from everyone within the organization. marketing. For instance. For companies that are considering a reporting. marketing. C-level execs make smarter decisions because they have a 360-degree view of corporate performance.Customer Relationship Management Today's decisions get made at all levels within the organization. It takes a customer-centric vision across all departments and employee levels to be successful.
11. This means more people stand to benefit from a well-planned CRM strategy as it raises the potential for even greater contribution from each employee to the top line. By conducting this analysis customers will be in a better position to leverage their existing CRM investment. organizations will have a much better opportunity to drive more intimate. and workflow automation strategy. analytics. Then measure how the implementation of reporting. senior vice president of national sales. While the formulas for CRM success may differ. "Having access to this kind of information in a user-friendly presentation enables our sales staff to interact with their contacts at a deeper level and allows our marketing staff to analyze trends and make plans for the future armed with key information. Don't believe it? The proof is in the process. When a CRM system is used to its highest potential.
Disparate databases of customer information prevent companies from gaining a holistic view of the customer throughout the organization. 3| Keep customers in mind. Prior to selecting the CRM system. "The software is only there to enable your implementation of a CRM strategy. Before selecting your CRM software. and company-wide ideas are color coded to show where they best fit in the organization. 2| Make a business case. customer service. 1| Break down those silos. Too often companies neglect to include the correct stakeholders. employees asked their customers and discovered they wanted to carry out banking and financial dealings at their own place of business." says Izzy Franco.Customer Relationship Management targeted campaigns with better insight into their effectiveness. Companies following these strategies are the ones truly committed to long-term CRM success. Pick your CRM team wisely. cut clutter. as it should evangelize the new system when it arrives. While the technology that enables successful CRM is important. Finding out how technology can enable all of your company's touch points to facilitate its corporate strategy is key. CRM leader for North America at Cap Gemini. Determine how the CRM system might help share information and resources. To evaluate possible new retail locations. where customer interactions are largely face-to-face. marketing. and employees-especially CSRs--become more productive and efficient. and duplicated tasks. and the initiative fails to meet the needs of those tied to its results. Farm Credit Services of America wanted to become more vital to its customers and the overall rural agricultural credit business. 62
. Having an integrated customer service solution is critical to maintaining customer service. monitor employee behavior and performance to identify which business processes can benefit the most. at its heart CRM is a business strategy. not the other way around. The sales. So that's what they're doing. 5| Build a team. Consider the 50 ideas list here a guide to proven strategies for starting or resuscitating your CRM efforts. Ask customers how they want to interact with your company. 4| Ask and ye shall receive. form a CRM team with reps from each department to make sure their colleagues' needs and concerns are addressed. administrative duties.
recording and tracking the data that drives the insight. Total cost of ownership (TCO) and return on investment (ROI) need to be used together when evaluating a CRM project. "I can't emphasize enough the value of an expert consulting organization that understands our business [and] a vendor that has a track record. and three-year periods.and long-term costs over time. 9| Take the Goldilocks approach. and technology. Companies need to consider the following six steps when implementing their CRM initiatives: creating a clear strategy. but look deep enough to see the indirect effect of changes to your CRM policy. enabling processes. others are too small. Consider costs over monthly. it is an organizational and business-process change that requires companies to think about people. quarterly. Find what's just right for your business. president of Inortech. according to Jeff Schumacher. an associate partner at McKinsey & Company. Expectations should be managed over time. To that end. 11| Calculate short. and technology to succeed. One of the most common reasons why CRM initiatives fail is that executives tend to think of CRM as an IT project. In fact. addressing organizational issues. Cost justifications are critical. 10| Benefits come in many flavors. 7| Create a project checklist. and customer satisfaction. process. Look past the dollar signs of implementation and consider things like employee efficiency. Costs don't end with technology.
. which can easily cost twice as much as the technology. implementing the appropriate technologies. Just because other companies like yours use one approach doesn't mean you have to do the same thing. process. so consider services as well. yearly. CRM is not a one-time expense. productivity. and measuring the appropriate metrics. Some CRM tools are too big. 8| Experience counts. ask the consultant and vendor for customer references.Customer Relationship Management
6| Consider people." says Jean Marc Pigeon.
If you're lacking accountability across all departments. understands the problems. 15| Get a champion of change. realizes the benefits. Yes. 17| Set goals. Study your top sales and service people. so communicate with them regularly. we promise. director of customer support for Tarantella. 16| Deputize wisely. How can a company succeed if success cannot be measured?
. Don't have a CCO handy? Choose a manager who's behind the implementation. another acronym to add to your mile-long scroll of industry terms. Once they're hot on the idea. If management doesn't believe in the new system. you need to keep them committed. 13| Get support from the top brass. says Lorie Goudie. says Sadie Baron. Nothing turns employees off like being forced to do their jobs differently for no obvious reason. the chief customer officer is the person to bring it to your organization.Customer Relationship Management 12| Emulate best practices. and understands the importance of the implementation from the company's side. but this one's got potential. 14| Go with a CCO. Want proof? Just watch a Richard Simmons video. A strong second-in-command. then design or invest in technology that enables your firm's best practices--their best practices--to be emulated company-wide. marketing project manager at Eversheds. why should the employees? Many times the difference between a successful CRM strategy and a huge waste of money is a leader who motivates the rest. there's nothing more motivating than somebody who always has that can-do attitude. the person "who makes all your glossy words actually happen. After all." is critical. Still not sure what a CCO really does? It's her job to keep an eye on everything we put on this list. Setting predefined and mutually agreed upon goals with your CRM team prior to selecting the CRM vendor will give an organization an idea of how well the CRM solution performs once it is installed.
customer retention. or lead generation." says Barton Goldenberg. Simply because one salesperson has an 80 percent close rate does not mean all salespeople can come anywhere near that. The fewer bells and whistles. the less time and money you'll need to devote to training. can be finicky. Give your employees as much time as possible to learn the new application. what's in it for me? Dump or force a strategy on them and they'll get cranky. "Not all customers write business cases. Don't buy what you don't need. 20| Keep it simple. starting an implementation with a department you know will find success can make other departments start asking. Tackle the smallest.Customer Relationship Management 18| Set attainable goals. Determine a department's average performance levels and aim for 5 percent to 10 percent increases in areas like sales. They don't like change any more than other people do. In baseball they say that hitting can be contagious. People don't like change as it is. Implementing CRM is no different. Not all business cases have metrics. With many sales teams. why can't we do that?" If one department finds success with CRM. 22| Train early. but the sooner you begin. Identify your key client data set before you flip the switch and make sure it's accurate and up-to-date. roll out the CRM system in small steps. Sales teams. keeping things simple only makes the switchover that much easier. 21| Success can be contagious. the sooner they realize they're a part of the process and the quicker they will realize the benefits. "Hey. 19| Cleanse preemptively. Not all metrics are reasonable. 23| Identify quick wins. easiest task straight away and save the hard stuff for later. Do the data audit from day one. With a full-suite product in particular. others will want to as well. 24| Take baby steps.
. train often. Repeat and augment training as necessary to keep those skills fresh. the number one concern is. like cats. Success early on gets the ball rolling and motivates employees. When automating the sales force. president of ISM.
newspaper. Using one integrated set of analytical data throughout the company can help executives to make key decisions about how much to invest in a particular customer. Gartner vice president and distinguished analyst. Speedy. New applications are best served up in small. Don't send mixed or conflicting messages--you will confuse the customer. assistant vice president of customer and provider service at Blue Cross Blue Shield-Rhode Island. director of information services at Master Lock Company. says Jim Johnson. 31| Keep things uniform. 27| Find super users. firms find they spend millions in sales automation only to learn that sales reps are still using ACT!" says Scott Nelson. Measure the results and soothe the inevitable hiccups by showing people the benefits of the new CRM system. 30| See your customer through the same glasses. 26| Slow down. says Stephanie Ledoux. 66
. The latest CRM solutions are forcing salespeople to enter more administrative numbers than before. Try to have the same look and feel throughout the company. 28| Keep your eye on the prize. rather than only make it easier to sell more. regular mail. "CRM should provide salespeople with better pipeline reporting. Make sure your email and other communications are actually being delivered to the right people at the right time. Why fight uphill all the time? Get the most enthusiastic people to use the system first. Various departments in your organization may see your customer as diversely as they would walking past a fun house mirror--attractive and valuable from one angle. Don't get too far ahead of your customers in introducing CRM technologies--changing human behavior is tough. radio. email. Web site.Customer Relationship Management 25| Focus on ROI. and the telephone. Unify your message across all communication channels. As a result. Troubleshoot with test customers before making your services generally available. 29| Test the waters. and takes time. including television. Recognize that customers and employees may be struggling to keep up with the pace of technological change. measured doses. unappealing from another.
S. so keep it clean and avoid duplication. While big clients may look impressive on a customer list.Customer Relationship Management
32| Walk a mile in your customers' shoes. more than 49 million gen Xers (born between 1965 and 1976). Census Bureau. These clients may have special needs." says Denis Pombriant. Reminding customers of promises kept--and taking responsibility for promises unfulfilled--simply requires openness. such as customized packaging. Census. more hand-holding. Don't assume that an ethnic cohort comprises one monolithic group of consumers. special distribution needs. 33| Keep your promises. and send unprofitable clients to the competition. "Having old data is like having no data. Within each culture exists subcultures that include a wide range of people who are fully assimilated to those who don't speak English. relationships with your customers should be based on trust. which take extra time and expenses. According to the U. they may be costing your organization more money than they bring in. Your CRM system is only as good as your data. and 40 million millennial (born between 1995 and now). Look at overall customer profitability. That's why. 34| Clean your data regularly. "According to the U. 67
. he adds. 36| Consider life stages. not just sales. Just like relationships with your friends and loved ones. there are roughly 75 million baby boomers (born between 1946 and 1964). Once you suffer through what you dish out. Getting complaints from customers about how horrific it is to do business with you? Put yourself in their shoes by role-playing the typical customer experience. 37| Know thy customer. you'll be shocked into a more customer-centric mindset." 35| Big names don't mean big money. What's more.S. managing principal of Beagle Research Group. country of origin may also play a significant role in buying behavior. more than 72 million gen Yers (born between 1977 and 1994). Some consumers are more tied to their culture than others. about one in seven people change addresses within a year.
Recent technological developments are enabling marketers to challenge their segmented marketing campaigns with just a few keystrokes. 44| Think." says Catherine Smith. Consider different data sets like attitudinal. demographic. 41| Choose your customers. Just below this requires a one-to-some model. and behavioral data when reevaluating your marketing campaigns. Take heed from Citibank's "Live Richly" and MasterCard’s "Priceless" campaigns. Find some commonality among your best customers in your database and cross reference that with prospects from external databases to pick the most profitable customers.S. The bottom level is your lowest 10 percent. CEO of BranchIT Corp. Spoke Software. Relationship management software from companies like BranchIT.Customer Relationship Management
38| Mass marketing or one-to-one? Actually. in which your marketing messages are somewhat customized and sent to the bulk of your customer base. 42| "Don't reinvent your relationships. 43| Reward team players." says Joshua Yuster. Provide bonuses or team player rewards for referring customers to the right internal sales agent or business partner who's closer to the customer and can add more value. it should be a mix that mostly meets somewhere in the middle. Instead. Your most valuable customers require one-to-one communication. In the big picture a happy customer is more important than one salesperson's commission. like customers. they'd rather purchase products and service that enhance their experiences. which requires little customization. Partners. COO of ING U. 40| Sell what's priceless. want 68
. Financial Services. The affluent are no longer as interested in material things as they were leading up to the Internet boom. partners = customers. "Treat [partners] like they're customers. Marketing is just as much of an art as it is a science. 39| Experiment with marketing. and Leverage Software can search digital records of customers and potential customers who have preexisting relationships with other members of your team.
46| They're not lost. Overstock. 50| Get cozy. bolstering conversion rates and reducing online-checkout customer calls. but you'll score lifelong customers--and long-term profits. 47| Automate contract renewals. It will make them feel important and that you value the relationship. be sure to attempt to restart your relationships with lapsed customers--they're easier to sell to than brand-new ones. You may not pull in as much in the short term. financial institution. You wouldn't give your family (except maybe your in-laws) a roundabout route to get to your home if there was an easier set of directions. identify your partners' needs and wants.Customer Relationship Management what they want when and how they want it. or garage. 45| Bundle up. and implement processes that keep them smiling. Look to contract renewal applications that will remind sales professionals when clients' contracts are nearing expiration and can also automate contract renewal efforts with customers. When business picks up again. For example. When people come to your retail store. Make it less of a maze and more of an express lane. Almost every business goes through rough periods. 49| Get personal. Others provide free Internet 69
. When focusing on customer acquisition efforts. just misplaced. Learn your customers' personal needs and profiles and target your service to each individual. and retooled its product pages to make it easier to complete the checkout process. either individually or when the economy sags. make them feel comfortable. 48| Streamline your checkout process. To really reward those loyal customers who turn to you for multiple products and services. cut them some slack with a discounted pricing plan to show your appreciation. don't let existing customers slip away. Customers hate to feel like the sales agent is reading to them from a script.com condensed its checkout procedure from seven pages to three. and so lose customers as a result. So just like you do with customers. Many kinds of companies provide coffee and cake in the mornings for customers who must come in before work. The same idea applies to your online checkout process.
shipping charges and taxes can be calculated.Customer Relationship Management access to people while they wait. 3)Improves margins Front-office pricing improves margins by enabling dynamic pricing based on various CRM components. the sales agent needs to have the tools to quickly provide an accurate quote for valid products to be delivered by a reliable promise date. A single system gives them more time for these activities. This time could be better spent on getting the product to the customer faster. searching spreadsheets. thus improving cash flow. Customer-focused product configuration rules can be enforced and dynamic pricing can be applied.
11. as well as other customer service-related activities like order management and issue resolution. consistent source. which enables a whole new set of capabilities. and duplicating order entry. When customers are ready to buy. and a specific promise date can be confirmed and guaranteed. and market segments.
. This reduces the amount of time between when an order is placed and when it is delivered. Retail stores increasingly are adding in-store cafes to keep hungry shoppers around longer.3 Six Benefits Of Moving Pricing Into Your CRM Application
There are six key benefits to moving your pricing functions to the front office: 1) Reduces sales cycles and improves cash flow Moving pricing to the front office reduces sales cycles and improves cash flow by giving sales agents the information they need to quickly and accurately quote an order from a single. Sales agents spend too much time on administrative tasks like reviewing catalogs. product attributes. consulting with sales support. including customer profiles. all this without having to travel back to the office or requiring dual entry ("swivel-chair" integration) to other systems. 2) Provides sales agents with the ability to configure and quote an order in realtime via a single CRM application. or selling the product to more customers. Sales agents that spend time handling complex orders using multiple systems have less time to spend on new orders and generating new business.
this approach doesn't just reduce costs and ensure consistency. 5) Reduces accounts receivables 71
. being a competitor's top customer. By distributing pricing logic through one repository. and upgrade costs. account profile information like membership in a buying club. Companies should implement programs and policies that target highly desirable customers and provide incentives for them to increase their sales volumes. maintenance. However. high-cost customer segment group may trigger price premiums that encourage the customer to either purchase more high-margin products or migrate to a competitor. This would ensure that the optimal price is charged for each to balance margin targets with inventory goals. administrative. field sales. Using multiple pricing and order management systems for each selling channel increases implementation. Knowing your customer's previous purchasing history or comparing a purchaser's profile to similar customers allows you to use upsell and cross-sell techniques that steer them toward products with higher margins and those that encourage a more long-term buying pattern. 4) Lowers administration costs Using one system to deliver consistent pricing across all channels (Internet. price premiums may be added for the red product while price discounts could be added for the blue product. On the other hand. For example. changes only need to be made once. and channel sales partners) lowers administration costs. these costs can be significantly reduced while ensuring that your prices are applied consistently throughout your organization. or belonging to a target industry may trigger discounts or promotional benefits that encourage a prospect to become a long-lasting customer. if sales of a product in the color red are outpacing sales of the same product in blue. belonging to a low-volume.Customer Relationship Management Simply knowing who your best and most profitable customers are does not guarantee a successful CRM strategy. Establishing pricing rules dependent upon product attributes may also help raise margins. By deploying a single pricing engine. This allows an organization to adapt quickly to changing market conditions by making them more flexible and nimble. telesales/call center. For example.
Customer Relationship Management Pricing in the front office reduces accounts receivables problems upfront by enforcing pricing rules during order entry. Joining CRM and pricing can positively affect your bottom line by improving cash flow. CRM isn't just about sales force automation. Resolving product configuration and pricing abnormalities at the time the quote is provided improves order entry compliance and reduces the likelihood of invalid orders reaching the order fulfillment system. 72
. Without the appropriate tools sales agents may promise products with options that cannot be delivered. since less back-and-forth communication is required among the various systems before the order is approved. and product information together with product configuration and pricing rules. reorders caused by incomplete sales forms. and effective business transactions that are mutually beneficial. By joining marketing. a company can reduce the number of its cross-application integration points. pricing provides the framework to build and sustain healthy and satisfying customer relationships by enabling smooth. which reduces invoicing errors and disputes. Pricing is a frequently overlooked and underappreciated component of CRM strategies. or 360-degree customer views. However. Customers are demanding more product options to allow them to customize purchases to their exact requirements. consistent. and provide credit card authorization. This can result in cancelled orders or significant order reconfiguration. Delays due to missed deadlines. customer loyalty. Moving pricing processes from the back office into a CRM system also decreases the frequency of round-trips data must take to fulfill an order. and reducing aged receivables. customer. provide inaccurate quotes. It's also about the processes that support those ideas. or lost sales because of cancellations are costly and can damage a once-solid customer relationship. This has led to more complex product offerings that require sophisticated product configuration and pricing models. or configure a product that doesn't meet the customer's expectations. 6) Reduces integration costs Moving pricing to the front office reduces integration costs between a firm's CRM and back-office systems. These include those systems that calculate delivery charges and taxes. lowering administrative and integration costs. increasing margins. Other pricing components that are tied into the back office can be integrated with the CRM pricing engine.
technology. How you develop and grow customer relationships is the lifeblood of your company. Simply stating “We’re going to do CRM this year” is not a strategy. In many cases. it has been defined. Let’s look at why many CRM projects fail and many others achieve great success. It should also define how you plan achieve this result. we want to look at CRM as the following.Customer Relationship Management
Chapter # 12. The CRM strategy is not integral to the business strategy. CRM projects are launched to realize the plans and achieve the objectives defined in the CRM strategic plan. A CRM strategy needs to clearly define how you will be viewed by and manage all touch points with your customers. In the context of this article.” On the other hand.
. What drives companies to have such different results from the same initiatives? Before we look at reasons. Here is CGI’s top-ten list of reasons CRM projects fail. you will see comments and statistics such as “over 50% of CRM (Customer Relationship Management) projects fail. CRM has been one of the most confusing terms established in eBusiness. Customers must be a core part of your overall business strategy. let’s define the scope of CRM. you will also see published results that show double-digit percentage growth in revenue. employees. CRM initiatives launched without a strategy. CRM cannot be viewed as a project or solution separate from your overall business plan. and increased customer satisfaction from new CRM projects. 1. 2. CRM is a strategic approach that combines the business processes. as what the user of the term is promoting. improved productivity.1 The Top 10 Reasons CRM Projects Fail
Depending on which survey you read. Reasons for CRM Failure 12. and information across an enterprise to attract and retain profitable customers.
An important part of any rollout of new processes is the expectation of improvement. 74
. This offering has since been expanded to offer broader functions through acquisition or system development. The greatest success will come from the coordinated efforts of business users and technologists in the company. CRM is launched with no regard for enterprise or customer interfaces. knowledgeable. It is so easy to get caught up in the rush to implement CRM solutions that you forget those people on the outside of your business. these started around a particular process and product offering that was very effective. or manage it. If you don’t expect performance to improve. CRM is launched without defined metrics and objectives. electronic media. There are many CRM tool offerings in the market place. Typically. 5. 7. Can you afford to invest in making one part of the customer experience excellent only to destroy it at another step in the lifecycle? Make sure every touch point you have with the customer provides consistent. CRM is launched without customer input.Customer Relationship Management
3. Be sure to evaluate tools against your business requirements to get the best product for your highest priority needs. How can you better meet their needs? How can you collaborate for a true win/win initiative? What are other suppliers doing for them that they like? 6. transactions and indirect relationships. The capability. The CRM toolset is based on someone else’s success. or has the same priorities as your business. Consequently. function and reliability of the systems are critical. has the same business processes. Not everyone serves customers the same way. Even if you achieve it. Talk with your customers. don’t measure it. Customers interact with your company through people. quality. Set expectations. processes. But design them to support the best customer processes you can provide. CRM is considered an IT project – not business initiatives leveraging technology. They typically will not know what language your tools are written in or what platform they run on. Find out how they want to be serviced. you won’t see improvement. and high-quality service. 4.
Once your initiative is launched. Altering the CRM solution to accommodate current business process and behavior. 11. Get them excited about doing a better job for your customers and making your company more successful. Refine your strategy. Assume you have a customer-centric culture because you have customers. Provide feedback. Appoint an executive sponsor. Reinforce it with every employee.
8. Benchmark with other organizations. There will be bumps in the road. analyze and track customer service performance. 9. Solicit input and feedback from your customers. Develop your strategy. design processes.Customer Relationship Management Measure performance improvement. Consider how they want to do business with you. Get employees on board. CRM is considered a one-time event. You will have some employees who resist the change. Look for ways to continue the improving trends. Provide training so employees know their role and the rationale for change. The global economy has broken down consumer barriers. you’re just getting started. reducing geographic constraints and revealing little difference between the products and prices of one competitor to the next. No top down leadership and employee buy-in for CRM. Set new goals. 10. As a result. quality and service have become driving forces behind brand preference. Look at it as an evolutionary development of your organization that will require multiple iterations to implement. Be sure to look at your company as your customers do.
. Every employee will be affected by fundamental changes in CRM. Measure. and make decisions looking from the outside in. Learn from the new data at your disposal. Create momentum toward a competitive customer focus. Communicate vertically and horizontally through the organization. Drive this “customer first” culture throughout the organization. loyalty and bottom line results. Reinforce successes. Develop plans to achieve these new goals. Solicit feedback.
Your customer’s expectations are increasing. what will it take to get customers back after you have lost them? How much is it worth to pre-empt your competitors and lock in new customers? 13. What about the sense of urgency you ask? It is difficult to change the entire organization overnight and keep it running.
. Show successes to bring the rest of the organization along. Move forward in manageable steps. or highest priority areas first. lower operating costs and improved service resulting from new CRM tools. CRM is regarded without urgency. speed. Try to implement “everything CRM” at one time. Organizations have personalities and need to learn new and adaptive behaviors.Customer Relationship Management Benefits will accrue from the adoption of new processes that leverage the information. Be sure to take advantage of these revenue. Go after your highest leverage. service and productivity enhancements. Maybe not from your direct competitors but from other service providers. integration. 12. Will your competitors announce a quantum leap tomorrow? If they do.
and integration required to create and deliver effective value propositions (measured by the take rate) as well as highly efficient ones (measured by the ROI from the profit of those extra tickets. This illustrates the kind of speed. The take rate? Over the following month. Travelocity had analyzed the browsing behavior of its 30 million registered users. By mid-afternoon. Puerto Rico. the power of analytical CRM on an enterprise data warehouse can extend well beyond marketing. not days. leveraging an integrated enterprise data warehouse (EDW) environment. It was executed within hours.m. intelligence. so that insights and intelligence created by and for marketing can be leveraged in all departments. Gartner recognizes this with a forward-looking view of what CRM is really about:
. At 8 a.1 Case Study: Travelocity. including Travelocity. EST. pulled the email addresses for 30.Customer Relationship Management
Chapter # 13. However. Case study 13.000 people living in the Los Angeles area who had browsed but not bought tickets to the Caribbean. crafted value propositions in the form of email messages. the airline sent this offer out to all travel agencies.com
Leading the Way in E-Commerce to Optimize Customer Relationships Let’s look at what online travel agency Travelocity recently did with integrated analytics and marketing automation on an enterprise data warehouse. and sent them out. compared to Travelocity’s cost for developing and launching the communication campaign). the greater opportunity is in improving customer management processes across the business. a whopping 25 percent of the recipients of that value proposition had booked tickets. A major airline offered a special fare from Los Angeles to San Juan. Travelocity’s marketing department created a customer campaign with the right value propositions and then started booking tickets.
we know that those that have focused their resources on creating more effective customer communications are getting great results. and optimize ever-changing relationships. and abilities to drive new decisions every day. Synchronization. These departments are responsible for customer interactions. resources. This must be formed from a data warehouse that synchronizes for quick access and leverages of all
. but the enterprise is responsible for the customer. CRO begins with the integration of analytical CRM and marketing communication tools to give marketers multiple views from which to discover. Companies won’t often share the details of their own intelligence. not just in marketing. However.
Peak Returns by Integration. fulfillment. NAB. not merely days or months. the financial department. in fact.” — Gartner Research Note. was one of the inventors of relationship optimization and of integrating it with marketing and services. Conversations with customers occur in the service department.Customer Relationship Management “Customer relationship management refers to the concept of moving ownership of the customer up to the enterprise level and away from individual departments and channels. shipping. Each of them has implemented a form of optimization for meeting these business needs. communicate. Customer conversations take place across the whole organization. and other functional areas. Ferrara and Nelson Even the best business minds often assume that customer management is the concern of the marketing department. An analytical solution that truly drives a higher quality of intelligence must also provide communications capabilities that support relevant. however. consistent conversations with individual customers – anywhere.generating tools with the world. plan. anytime. This is the real-time approach to meeting business needs. and Customer Relationship Optimization These firms have experienced a transition to an analytical information infrastructure that focuses on customers. the customer-centric enterprise of tomorrow knows better. And then tracking and managing detail data on each customer over time – measured in years. It is critical to make sure that every customer’s ongoing conversation with your company is consistent – wherever they touch your company.
Marketers will create complex analytic workloads to develop new intelligence from this holistic view of your customers and drive dynamic communication across all channels for highly profitable returns. Event triggers are used to monitor customer behaviors and interests in real-time. This ensures that customer analyses are always fresh for more accurate intelligence and more refined value propositions.Customer Relationship Management data when and where needed. skill sets. as pointed out in the forthcoming book The Value Factor by Mark Hurd and Lars Nyberg. Marketers also need to focus on being innovative in their application of customer intelligence through making the science and practice of CRM a total learning environment. The result is an optimized multichannel. Learning is a critical part of the CRM process. Moving From Vision to Reality: Start Getting The Most From Your CRM and IT Investments To make all of this a reality. By closing the loop on understanding their customers. Firms must become masters of the customer conversation – and instinctively learn how to appeal to customers. right-channel offers and messages are delivered in ways that make sense for the customer as well as the business. not only so it can market to them more effectively. These executives know that: “A company needs to understand its customers better. companies can design products and services that anticipate customers’ needs. but also so it can learn from the information in an iterative feedback process. enhance contact. and technology tools to leverage the power of advanced CRM analytics and marketing automation tools.” The New Top Priority: Improve Customer Conversations and Relationships
. companies must align technology tools and customer processes to interact with individual customers in meaningful and relevant ways. and predict the next best interaction. marketers can get this alignment underway by developing their knowledge base. Optimization tools ensure right-time. CRO will utilize customer profiles that are automatically refreshed in real-time in the data warehouse. multistep. event-based customer-driven dialogue and relationship. Specifically.
Then. Next. • • Make accurate assessments of each customer’s affinity to a value proposition Learn to optimize channels and frequency of customer contact.
When a company can continually identify those opportunities that hold the greatest long-term value potential. finite resources can be directed at exploiting these opportunities and maximizing profits. relearn which channel you should use for specific messages as times and offers change and decide how often to contact each customer. integrated view of the customer in an environment designed for optimized dynamic customer interactions. Learn and and its timing. This means establishing an environment where a company can continuously assess and act upon value-generating or value-retaining opportunities as they occur. Here are a few practical suggestions: • See and segment your customers by business value. model them to predict their migration into a spectrum of value segments.Customer Relationship Management To move from where your company is today. multiple campaign response models. Then communicate to them with value propositions that will have the effect of moving them in the right direction. including market basket analysis. With a complete. • Perform detailed customer value analysis. churn and attrition models.
13. Learn from the customers’ positive and negative responses. and customer lifetime value models to spot opportunities to more effectively communicate your value propositions.2 Case Study: Westpac's Strategy For CRM Success
. • Perform a marketing-influencers analysis to identify which customers can be influenced in their value migration. cross-product correlation analysis. you need to consider tactics that allow you to better understand the value and interests of your customers. customer growth models. product affinity analysis. simulate and predict customer buying behavior based on the potential effectiveness of different potential value propositions you devise. customer processes across the business will consistently create and deliver messages that customers find compelling and the positive and profitable results will follow.
has offices in key financial centers around the world and employs more than 26. ahead on anticipated benefits and right on budget. Westpac Banking Corporation's Program Reach. Most banks don't have a single view of the customer and cannot determine and act upon what needs (their customers) may have. "You don't want to be offering credit cards to young teenagers or to someone who already has two or three of your credit cards. most importantly perhaps." Ricardo says. More than two years into a five-year CRM program.Customer Relationship Management A Teradata platform for data management and analytics is key to the company's winning ways. In fact. personnel experienced in CRM and. Launched in 2002. It operates more than 1." The program gives bankers concrete information about what customers need. Everything that we have done to date is working fine." Ricardo explains. We don't have any particular issues. New Zealand and the Pacific region. Ricardo believes the program has exceeded expectations. Founded in 1817 as the Bank of New South Wales. As Ricardo puts it. "But if you have a home loan with us and you don't have insurance. the right corporate culture and buy-in across the organization. enabling them to offer to customers the right kinds of products and services rather than blindly suggesting something." he reflects. "It's been a very good first two years. Westpac wanted "to provide the right tools for our staff to better service customers and have relevant conversations with them.
. I can't see any scenario where things could have gone better. Such information would allow staff to proactively approach customers as well as reactively satisfy their needs. "Systems in banks worldwide are still very much product-centric. it makes sense to talk to you about insurance. of which Ricardo is director." The ability to know the difference is a key advantage in a highly competitive industry. Fernando Ricardo has good reason to feel happy. is ahead of schedule. Westpac is Australia's oldest bank.000 branches and agencies. business and institutional customers in Australia. which he attributes to state-of-the-art technology. Program Reach's principal business driver was to provide Westpac's staff with better information about customers. It provides banking and financial services for nearly 8 million personal.700 people.
Westpac selected Teradata CRM technology for its Westpac Leads engine—which is the heart of its cross-channel. referred to as Westpac Leads because they are generated in that system. At the front-end. Through real-time visual reporting. timely lead to be attached to 82
. an outbound caller employed by Westpac who is targeting potential customers via Relationship Builder is sent a Westpac Lead regarding a specific campaign and a specific customer. or presentation layer. During the conversation. Westpac Leads draws data from Westpac's source systems.5) and the Reach Dashboard (Siebel Analytics). browser-based. Modeling is performed using SAS Enterprise Miner. Westpac could not deliver consistent or "next best" offers. integrated customer management and event-based customer contact system. holistic view of customers. Ricardo says that prior to Teradata and Program Reach. enabling a continuous conversation with customers through multiple channels. and it allows bankers to manage this information. which used Teradata. The Reach Dashboard provides sales management information about activities spanning from the call center to the executive level. In December 2002. are Relationship Builder (Siebel 7. For example. Profile information and future opportunities recorded in Relationship Builder can be used to trigger a future Westpac Lead. the caller might discover that the customer has a term deposit with another institution that will expire in four months. a Westpac Lead will be triggered in time for the banker to contact the customer with an appropriate Westpac offer.
Building a system Through its data warehouse. service requests and opportunities. after extensive investigation.Customer Relationship Management Ricardo gained oversight of Program Reach in September 2002. are delivered from Teradata CRM to Relationship Builder as opportunities for bankers to make proactive customer contact. which enable a relevant. a manager can monitor the sales pipeline and focus on coaching or other sales activities as indicated by the Dashboard. Sales leads. Relationship Builder provides a fast. It is a powerful sales management tool that records referrals. bringing nine years experience in analytics and strategic marketing for National Australia Bank. This can trigger discussion about other future needs. When the banker records this as part of the customer's profile.
One of the biggest benefits Westpac reaps from Teradata is the ability to analyze billions of rows of data in a very short period and gain quick access to the most recent information in order to leverage it across millions of customers. the Internet. Ricardo admits such things do not happen in two years. and thanks to Westpac Leads' modeling capabilities. the likelihood of the offer being accepted is high. "In terms of performance and speed of data analytics. Teradata has no real competition. Westpac has successfully deployed Program Reach to its small and medium enterprise (SME) customer base. Westpac has made significant gains in SME market share over the last few years. any banker can easily introduce a relevant offer to the customer. Ricardo believes Teradata is one of the most potent. bankers had a hard time targeting customers' needs with appropriate product or service offers. although Ricardo does not attribute this solely to Program Reach.000 staff members use Program Reach in Westpac's business call centers and branch network. The right offer at the right time While there are a number of platforms available on which to do data management and analytics. irrelevant offers should be a thing of the past by the program's fifth year. in addition to outbound callers being sent leads. With the scripting capabilities of Relationship Builder. Five full-time Teradata Professional Services associates will remain on-site as the deployment continues. According to Ricardo. Around 5. While Program Reach's aim is to deliver the right offer to the right customer via the right channel at the right time. Without that information. The bank is progressively rolling out the solution to its consumer and wealth management customer segments. Westpac plans to integrate the system with ATMs. Now.Customer Relationship Management the customer's record within Relationship Builder. if progress continues. However. It is also the only platform optimized to run a campaign-management system on top of it. short message service (SMS) and interactive voice response (IVR) systems. It has the ability to trawl through billions of rows in a table very quickly and do it thousands of times in a few seconds. customer service staff can see relevant sales or service offers against a customer's record. every time. After that phase. the feedback and impact on customer and staff satisfaction have been extremely positive." Ricardo says.
the rest was on technology.Customer Relationship Management Smartly planned moves According to Ricardo. starting with defining and addressing the bank's top 20 types of customer interactions. when it will happen. "Ten years ago. Normally in chess it is not the great moves that win games. however. A decade on. which he thinks is unique in Australia. Another potential barrier for other organizations is lack of senior support for the project. the technology staff and the executives exactly what we are doing. what value CRM will add in terms of profitability and customer and staff satisfaction. A large proportion of executives around the world believe that CRM doesn't work because they are not made an integral part of the process." he says. The players who win are those who execute better by making fewer mistakes. Everybody thought that the technology was the silver bullet (that) would fix everything and is so easy to use. all of my peers were spending 1% to 2% on people. so there are never any surprises for anybody. 84
. He has sought to make careful and thoughtful moves along the way. and when there will be a visible return. it's the bad moves that lose games. Westpac's approach. 20% to 30% of the total program effort has been focused on training staff." he says. "CRM is a bit like chess." he says. the sponsor is the group executive of the retail bank for Westpac in Australia. Ricardo advocates clear communication about what is taking place. the principal challenge in the project has been to avoid the mistakes that others have made with CRM. It's what people feel about the technology and how they use it. For example. Ricardo believes most CRM projects fail because the organizations did not spend enough time on people issues. Now that the SME pilot is up and running. we all know that the most important piece in the puzzle is not the technology. however. has been to undertake small pieces of the program at a time. initially by Westpac's group executive for business and technology because the first 12 months or so essentially involved technology and building the necessary infrastructure. In Program Reach. Another reason Ricardo thinks IT-related projects fail is that they are overly ambitious. Program Reach has been well sponsored. the marketing staff. "I spend a lot of time articulating to the frontline staff.
" he says. "This is also a place where the focus on the customer exists as a natural part of the company's fiber. Ricardo thinks that many of the companies that first attempted CRM in the early 1990s found themselves dealing with highly customized applications and are now struggling to upgrade to browser-based applications." Ricardo explains. This is really not as hard as it would have been in other companies where customer service." Finally. they are already focused on customers. "We are deploying existing browser-based technology and setting up an infrastructure that will survive the next decade or so because it's geared up for the future while I think a lot of our competitors in Australia will incur significant expenditure in migrating to existing and future technologies. The second differentiator is that Westpac's sales and corporate culture is unrivaled in Australia. He also believes that these days there is much less need to customize CRM solutions and consequently lock oneself out of an upgrade path. "The lack of cultural alignment between the various stakeholders has been one of the causes of the many failures of CRM projects. We're not using technology to help our staff to focus on customers. customer satisfaction and doing the right thing for the customer are not core business (directives) like they are here. The bank has been recognized with global and national awards for social responsibility and customer focus." He continues. staff and customers puts Westpac in a unique position. according to Ricardo.Customer Relationship Management
The Westpac way Ricardo believes three qualities differentiate Westpac's CRM strategy and focus from that of its competitors. "That cultural fabric of the company provides a fertile ground for these things to work. he says the bank is deploying current technology that is much more mature than it was 10 or 15 years ago. Having this environment as well as a balance between the interests of shareholders. Ricardo and others on the project have been able to bring their prior experience with CRM to bear so that Westpac will not have to start from scratch.
. First. This accelerates the speed of execution and the quality of the outcome while reducing the number of failures in technology. training and process reengineering.
it is beginning to invade traditional territories occupied by brand management or customer support. But the opposite is true. Peel shows companies how to make the shift to the new paradigm. as I think that it will be a good indicator of confidence in business in general and technology in particular. At a business level. not about the customer. The CRM vendors look like they have got their act together in terms of coupling their wares to the needs of the business. At a technology level. One would be forgiven for thinking that this differentiation was contrived to allow the vendors to retreat back to pre ecommerce CRM. these three things provide us with a unique opportunity to do well." Ricardo says. Conclusion
In the past. eCRM is the new game and the vendors are being bullish about it.
. CRM was mostly about the technology.Customer Relationship Management "Combined. The market now distinguishes between CRM and eCRM. It may well be worth creating a CRM vendor index. CRM is increasingly about conjoined best-of-breed applications delivered via portal technologies.
Chapter # 14. There is a change in the way the organizations do business. I think the big difference for Westpac is that Westpac is going straight to the nuggets without spending a lot of time mining in areas where there is no gold.
com o www.Customer Relationship Management
Annexure-I Bibliography Magazines
o Business World o Business Today o Business India
Newspapers o Times Of India o Financial Express o Economic Times Websites
o www.co.salesforce.bitpipe.com o www.darwinmag.crm2day.google.crmassist.com o www.com o www.serachcrm.com o www.customerservicemanager.in 87
.com o www.com o www.
Customer Relationship Management o www.com
o CRM: Redefining Customer Relationship Management o Why CRM Doesn’t Work? o CRM: Getting It Right