Downloaded from a2zmba.blogspot.com 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. 1Downloaded from a2zmba.blogspot.com 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 IT-systems (including softand 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. 2Downloaded from a2zmba.blogspot.comMajor 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 intelligence alike technology

cooperational - ensures the contact with customers (phone, email, fax, web...) 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

and are a major source of customer dissatisfaction) Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction) Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction) Identify how each individual customer defines quality.communication channels. and then design a service strategy for each customer based on these individual requirements and expectations use internet cookies to track customer interests and personalize product offerings accordingly use the internet to engage in collaborative customization or real-time customization . 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.com Improving customer service CRMs are claimed to improve customer service. For example. before they occur Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved.blogspot. and technical assistance on web sites that are accessible 24 / 7 Help to identify potential problems quickly. and saving you time. Proponents say they can improve customer service by facilitating communication in several ways: Provide product information. product use information. 3Downloaded from a2zmba.

repair. This way customers get what they need as the product ages. and tailor the marketing effort accordingly. increase customer loyalty. and repurchase frequencies Provide a fast mechanism for managing and scheduling maintenance. This way customers get exactly what they want as they change. 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 4Downloaded from a2zmba. and do it in an integrated way so that all sources and types of contact are included.com Improving customer relationships CRMs are also claimed to be able to improve customer relationships . Proponents say this can be done by: CRM technology can track customer interests. they can ensure repeat purchases. and tailor the service strategy accordingly.Provide a fast mechanism for managing and scheduling followup sales calls to assess post-purchase cognitive dissonance. needs. The technology can track customer product use as the product progresses through its life cycle.blogspot. decrease customer turnover. decrease marketing costs (associated with . In industrial markets. repurchase probabilities. improve customer relationships. and on-going support (improve efficiency and effectiveness) Provide a mechanism to track all points of contact between a customer and the company. and buying habits as they progress through their life cycles. 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. repurchase times.

1 CRM Planning: Keys for Project Success .the ability to automatically route work through the system to different people based on a set of rules. data encryption and the destruction of records to ensure that they are not stolen or abused 5Downloaded from a2zmba. increase sales revenue.the centralised storage (in a data warehouse) of all information relevant to customer interaction customer privacy considerations.the ability to interface with users via many different devices (phone. 6Downloaded from a2zmba.some feel it invades customer privacy and enable coercive sales techniques due to the information companies now have on customers .see persuasion technology. and to be reliably expanded to what ever scale is necessary.g.com Chapter # 2. However. e.blogspot. CRM does not necessarily imply gathering new data.blogspot. Technical functionality A CRM solution is characterised by the following functionality: scalability . etc) workflow .customer acquisition and customer ?training?). internet.the ability to be used on a large scale. multiple communication channels .com Privacy and ethical concerns CRMs are not however considered universally good . and thereby increase profit margins. WAP. CRM Planning 2. But in most cases they are used to collect new data. database . it can be used merely to make "better use" of data the corporation already has.

you should make a short list of potential vendors and give them a fair evaluation before you make a decision.2 Identify the Problem and the Solution Before you start thinking about vendors.or in part? Answering these questions will help you determine whether a large-scale CRM infrastructure. and technology environment.blogspot. order systems. Are the employees you expect to use the solution technology savvy and open to change. improved support. a point solution. 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. the greater the risk that adoption will slow the ROI of your project. or a combination of different customer-related technology. 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. Microsoft CRM and FrontRange (for example) can cost considerably less. some basic steps will help keep you on the path to a positive ROI. for example. Your short list should be easy to define based on these factors: Your CRM goals. how flexible it is. you should define your problem in clear business terms. On the other end of the spectrum. You can expect a hosted solution to have a minimal upfront investment and from $500 to $1. previous experience. The vendors whose functionality meets your needs will depend on whether you're looking for improved sales.com 2. CRM solutions such as Siebel and SAP can cost millions of dollars to deploy and require a team for ongoing support and maintenance. or restarting your CRM efforts. 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 . improved reporting and forecasting. Before you write an RFP or start talking to vendors. Your user dynamics. you'll likely want to prioritize one over the other and plan a phased deployment. improved marketing.Thinking about the potential ROI of your customer relationship management (CRM) project should start during the selection process.Whether you're updating. 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. It's also a good idea to know at this point what your likely budget is. Clearly defining your requirements and characteristics in each of these . 7Downloaded from a2zmba.500 per user per year.3 Make the Short List Regardless of your relationship with existing vendors. or a broad solution is likely to deliver maximized ROI. If you know walking into the project that you'll need to show a six-month payback period. Your existing environment and IT philosophy. Do you have existing databases. you can plan accordingly. and what your procurement officer or CFO will be looking for in terms of business justification. jump-starting. 2. you need to do some homework to ensure that you're on the right track to maximize ROI. upgrading. a hosted solution. Your budget.

met expectations. hardware.evaluating each individual solution's ability to deliver returns based on the costs and benefits associated with a deployment. Consulting costs should not be more than twice your initial software investment. using internal surveys. Once you've identified your CRM needs and your short list. you'll want to consider two key factors: The willingness of users to adopt the application. Key Decision Factors 9Downloaded from a2zmba. you'll want to consider the initial and ongoing software. 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. you'll want to check their references . 2) In the CRM world. 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 annual direct benefits. Most solutions deliver value when they're chosen based on clear business needs and deployed correctly.blogspot. and training costs associated with the project. Training users should take fewer than four hours.key areas will prepare you for the next step . Find a Partner (Check Resumes. Look to independently developed case studies and your own 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. On the costs side. You should be able to deploy and achieve some returns in fewer than six months (even if it's only a pilot).blogspot. .and this doesn't mean just reading case studies on their Web sites. and then work on your estimates. and reliable benchmarking information as a starting point for quantifying expected benefits for your company. few companies will deploy a solution without some help from external consultants or systems integrators. case study data.and benefits . you should see benefits in fewer than 60 days. there are a number of factors to consider to help you make the right solution decision. consulting. Check Resumes 8Downloaded from a2zmba. you'll want to consider both direct and indirect benefits.comBy and large. User Adoption In evaluating the type of CRM solution that will be best for your organization in terms of user adoption. Prioritize your expected benefits from most direct to most indirect.comOnce you've identified the likely vendors to deliver the best solution for you. Successful adoption will also depend on how much users will have to change their normal way of doing work to use the solution. internal personnel. there's no such thing as a bad CRM solution. and whether or not their spending . Adoption can often be as much about politics and culture as it is about technology. project successes and challenges. Justify Your Investment Once you've identified your goals and selected a short list of vendors. For a hosted solution. On the benefits side.

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. In all likelihood. when selecting a solution. integration.blogspot. and because the design of the application closely matched its existing business processes. 10Downloaded from a2zmba. Choose a solution that fits the abilities of your users. You'll have the most success with a measured approach that doesn't have to include a hefty initial license fee. Flexibility In addition to the initial development. many companies in the past have overspent on CRM components and features that never delivered value to their users . others have a more intuitive look and feel.com Existing Environment What other solutions and data sources do your sales or customer support representatives use today. Once you've determined where your organization fits. what solutions are they most comfortable using. Many CRM solutions are complex and difficult to use. you should consider how easy it will be to make changes over time as your needs change. It achieved a payback of five months. Here are some red flags you should look out for in evaluating solutions in terms of user adoption: Plans for extensive customization Multiple components that will be integrated to meet your needs Lack of a track record supporting "your kind" of sales reps Functionality planned "for the next release" An extensive training program Ongoing consulting requirements for any changes or updates Cost In CRM. "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. Best Practices . Best Practice: Make a Match One company chose Microsoft CRM because it would easily integrate with back-end office applications. Demand to see a track record with reference customers in a similar situation. In selecting a vendor.The technology ability of potential users.if they even made it out of the box. and deployment. the way you use CRM will change over time . because the sales force was already familiar with the Microsoft interface look and feel. In fact. 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. you'll want to explore how it can integrate with your existing environment.

or the average annual industry maintenance? If you decide to stop paying maintenance in the future. A phased approach would have reduced initial customization costs and the need to train users. does your contact support that? If you're purchasing multiple modules at the same time. Double-check the following: Is the initial license price per user in line with industry benchmarks? 11Downloaded from a2zmba. you'll want to make sure you have the key checkpoints in place so that the project delivers on your ROI expectations. do you have a clear view of the cost of each item? Are you sure you should be buying them all now. You'll also want to keep track of potential upgrade opportunities and take a close look at the business case . .com Are you paying less. and gotten users on board. Even after you've made the commitment.and to gain valuable feedback on how and with what changes the solution should be rolled out to the broader population. Pricing and PurchasingBefore you sign on the dotted line. piloting to a select group of users before you complete customization is a good way to determine whether or not the solution works . it could have accelerated user adoption and thus shortened its payback period by introducing functionality to users in phases. more. planned a deployment with clear milestones.both the benefits of upgrading and the time and pain associated with the upgrade . or would a phased approach be better? What commitment has the vendor made to your deployment time line? If a third party is involved. Best Practice: Phase In Functionality One company deploying a JD Edwards CRM solution found that while it achieved a positive ROI.Once you've determined which solution is right for you and built the business case. The trick to really successful CRM is continuing to evaluate and evolve your solution to deliver greater value. a pilot of an internal solution before you buy may or may not be possible. 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. who were somewhat overwhelmed by the features of the solution.before you make a change. Most hosted solution vendors offer a free or nearly free pilot option today.com Fine-Tuning Your ROI If you've picked the right vendor. make sure you've done due diligence on your contract with the vendor. depending on the level of customization and integration needed.blogspot. you've probably received 70 percent of the ROI you can expect. how are the deployment risk and responsibility being shared? Deployment 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. 12Downloaded from a2zmba.blogspot.

From prospect and client contact tools to billing history and bulk email management. orders. CRM in Business 3.2 CRM Software: A key to scalability and efficiency CRM Software provides added strength to your existing plan. The CRM system allows you to maintain all customer records in one centralized location that is accessible to your entire organization through password administration. 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. however.blogspot. more than they trust e-mail.com Chapter # 3. track-ability and detailed follow-up capabilities. Clients. . and cancellations. but it is completely useless if you are having trouble reaching your customers. 14Downloaded from a2zmba.blogspot. It is up to the companies to focus on reaching every customer and developing a relationship.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.com 3. are touted as less expensive communication methods. compared to traditional methods like telephone calls. in particular. Successful launch of a CRM software campaign requires a strong CRM plan for your business. 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. The data warehouse is a back office system used to fulfill and support customer orders. This revolutionary type of service can be very helpful. like telephone. 3. It has been determined by some major companies that the majority of clients trust other means of communication. Special regressions of this data can be very beneficial for the marketing division of a firm.13Downloaded from a2zmba.1 Introduction In this day and age the use of internet sites and specifically e-mail. CRM software can offer incredible accuracy. with complete objectives and clear priorities.CRM software can run your entire business. Back office CRM makes it possible for a company to follow sales. Front office systems are set up to collect data from the customers for processing into the data warehouse. All customer information is stored in the data warehouse. CRM software is not a "cure-all" for the CRM program in your business.

closed sales.view forecasted sales.get instant perspective into all customer interactions Trend Management.allows consistent communication with customer based on userdefined criteria CRM software Data-base Information Centralized Information .allows access to a database of industry specific CRM forms CRM Software Sales and Marketing Analysis Sales & Quota Analyses . manage and simplify access to critical business information Industry Templates and Form s. and comparisons between sales and quota 15Downloaded from a2zmba.4 What are some key components of CRM software? History and Trend Management History Tracking .automatically follow-up with leads generated from your site Automated Process Management . 3.centralize.see the status of all pending sales and potential revenue of entire pipeline CRM Software Automated Processes Remote Web Synchronization.com Leads Analysis . (preferably three or four companies in similar size and scope).How do other companies feel about the software? Call the provider company and ask for a number of preferrals.track responses to identify effective campaigns CRM Software Mobil Technology Capabilities .blogspot.

rising interest rates and higher gas and heating oil prices. core customers. POS. CRM Advisor suggests a thorough evaluation is done comparing multiple CRM software packages. Loyalty program.com Chapter # 4. Critical customer information is inaccessible and underutilized. They will greatly range in price and capabilities.1 Analytic CRM for Retailers: An ROI Perspective The Retailers Data Challenge Today s retail environment includes increased competition among stores.blogspot. In this economic environment. retailers must learn to generate more business from their existing customers. a general economic downturn. retailers are drowning in customer data. .access your CRM software through the internet. Analytic CRM 4. Merchandisers and direct marketers lack expertise in the standard analysis applications sold by business intelligence vendors today. and demographic databases exist.Synchronization Wizard . To do this they must first mine the data they have collected on customer purchases and loyalty programs. yet are not integrated within a retail corporation.keep calendar and contact information up-to-date on your PDA or laptop while you travel Remote Access Capabilities . All of these factors have reduced the disposable income available to many retailers. More decision-makers need more access to consistent corporate data about their customers. 16Downloaded from a2zmba. Still. Not all CRM software packages are the same.

The biggest hurdle now is getting robust. fast databases to handle the huge amount of integrated data.comCustomerView was designed to address these retail data challenges.Current retail data analysis systems require heavy IT resources to maintain and utilize.000 generating more than $22 for every dollar spent on the promotion. Target top switchers If your firm is not the lowest cost producer in the category and your switchers are price sensitive. The goal is to increase sales and market baskets of top switchers. Then try to persuade these Price Sensitive Purchasers that your offering has the better value. Of the 18. Combining category and loyalty data analysis has been done before. In another example. 17Downloaded from a2zmba. Total revenue brought in from this particular promotion was in excess of $227. generating a 5. and preference for. According to The Marriage of Category Management & Customer Management. all things considered. but with great difficulty.000 customers mailed.s Kellogg Graduate School of Business. specific brand/product attributes. the best marketing strategy for addressing price-sensitive purchasers is to attempt to change their preference structure by raising their awareness of.blogspot.Category Management and promotion management need to include analyses of loyal customers. 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. . whether they are tangible or intangible. a small regional chain with seven stores targeted 18. The events average transaction was $24744 an almost $50 increase from their normal average transaction. written by Gary Robins and published in RIS. 921 responded. CustomerView supports the retailers. July 1999.1% response rate. a study of a chain drug retailer showed a 30%/70% split. It also revealed which categories were more important to top and bottom level customers. Top marketing objectives to solve these problems: Reward loyal shoppers and get them to buy more According to Robert Blattberg. Optimize trade areas and improve assortments store-by-store . meaning the top 30% of their customers generated 70% of their revenues.000 of their best customers based on recency and overall dollar amount spent. director of the Center for Retail Management at Northeastern.

4.4% response rate. According to a senior category manager. CustomerView can help merchandisers measure and build retention. . says that use of loyalty data does help retailers increase basket size.A leading supermarket chain recently used data from loyalty programs to edit which products to delist in a category. In a test of the carbonated 18Downloaded from a2zmba. 350. and the market basket of the responders was 40% greater than the non-responders. It can show market basket value of loyal vs.blogspot. .5% increase in dollars per basket and a 9. received 16. Cross-sell the most profitable products and increase the average basket size A leading beverage company. Using CustomerView they can see how merchandise mix 19Downloaded from a2zmba.8% gain in total dollars among their best shoppers. increase market basket size.combeverage category. merchandisers can quickly see how certain products can increase market basket size. and build market share with no additional capital expenses and labor costs. Merchandisers CustomerView enables merchandisers to improve the effectiveness of their staff. The piece featured 10 different products.000 pieces were mailed bringing the retailer an additional $124. was the mantra from the chain. Using CustomerView. it is how it is affecting loyal customers. the chain did not lose customers even after eliminating 26% of the category.2 Who can benefit by using CustomerView? CustomerView is targeted at five key audiences within the retailer s organization: Financial CustomerView enables retailers to take existing customer data and use it to drive revenue.000 of co-op dollars. Maximize ROI for programs funded with manufacturer co-op funds A national retailer recently completed a targeted promotion with a leading CPG company. It enables the CFO to show increased margins on current capital and enables profitable growth. CustomerView can quickly help identify the value of a consumer that shops in critical categories vs.blogspot.we did a presentation with a small chain in Houston.It is not just sales.s SKUs.comaffects customer loyalty and adjust their assortment accordingly. Texas. which has been working with over 40 retailers. .. the shopper that does not. non-loyal customers. and this company had a 6.

The single most important event that happens in business is a customer conversation. 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 of. activity.blogspot.3 Optimizing Customer Interactions and Marketing Analytics Customer conversations and new analytical marketing techniques make dynamic customer relationship optimization a new top priority. This leads to many opportunities for consultants to create systems to clean the data. Businesses need to create economic value. information. aggregate the data. CustomerView can help them build their share of market by identifying customers buying a particular category of products. etc. The most important thing that CRM can do for you today and tomorrow is help you create effective conversations that are crafted with credible. messaging. The conversation is where economic value begins revenues. departments or categories. but not their brands. which requires understanding customers and then engaging them with value propositions. holistic intelligence and delivered to the right customer on the right channel at the right time. translate.Operators CustomerView can help Operations Executives make changes in an intelligent way. de-duplicate the data. Every company should make the composition of those value props its highest priority. There are also many opportunities for consultants to use CustomerView to help the retailers interpret. Most data is uncleansed and hosted in many locations. Using CustomerView a retailer can keep labor constant while increasing margins. CustomerView can show the CPG manufacturer how to increase multi-segment sales by identifying likely purchase behavior across divisions. increasing a loyal customers shopping trips to a category and increasing overall market basket size. Business competence comes down to a company s ability to generate value by using meaningful propositions. household the data. Vendors CustomerView can help CPG manufacturers build category/brand sales by using real retail data.breed CRM analytical tools that provide marketers with the intelligence to understand customers so that value propositions are relevant and . Consultants Loyalty and POS databases tend to be stand-alone systems not integrated with category management systems. 4. CustomerView can help increase the depth of category purchases by turning cherry pickers into buyers. and develop strategies based on the information and provide business practice recommendations.comcustomers find compelling. relevant interactions. and conversations that 20Downloaded from a2zmba. paychecks. and shareholder value. before the data enters the CustomerView system.

styled. Thus it is critical in initiating conversations. As a result. The interesting thing is that customers expect it. delivered. more informed. This idea has been in existence for a decade. markets are getting smarter.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. The new analytics provide capabilities for companies that wish to make it a business priority to create uniquely effective value propositions. B2B or B2C or B2B2C buyers now instinctively believe that their providers should know them. and more organized. or direct mail piece. assembled. customers expect you to know them and to treat them as persons and remember every contact and transaction they ve ever made. Swift As Internet communities of practice have grown.blogspot. Technology is enabling conversations among human beings that were not possible in the era of mass media. Initially flattered by being treated less as a number and more as an individual with distinct requirements. Yet intelligence from across the enterprise is required to understand and predict what customers will want to know about and demand.arrive at the most opportune time for the customer. 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. Companies can now communicate with their markets directly. 4. which is the application of advanced mathematics to dramatically improve decisions. The opportunities for companies that leverage CRM to interactively communicate with relevance and timeliness are enormous. Where once they would not consider the idea of bargaining. and finally reaching optimization. if not billions. since database marketing began to grow in popularity and use. 21Downloaded from a2zmba. designed. it could be their last chance. . or in a telephone conversation. These networked conversations are enabling powerful new forms of social organization and knowledge exchange. This is where brand differentiation first appears: the proposition is the first impression of the brand and its value to customers.comHere are the pertinent highlights: Marketing is really various types of interaction or conversations. The potential to generate dramatic ROI on such an investment is worth five to 10 to 100 times the investment. people have become more vocal about what they expect from providers in many consumer serving industries. Focusing on and predicting customer demand and making decisions both proactively and scientifically is an opportunity worth hundreds of millions. they now tell the managers of brand retail chains what they are prepared to pay and specify how they want products sourced. More than two years ago. and maintained. Yes. of dollars of incremental revenue starting with segmentation and improved forecasting. consumers are now communicating their demands back to their suppliers. companies that speak in the language of the pitch are no longer speaking to anyone. Already. combined. then shifting to integration and alignment of functions based on demand. Accelerating Customer Relationships . catalog.If they blow it.

22Downloaded from a2zmba.comAlthough it s true that value propositions will naturally evolve over time as markets and competitive conditions change.com Chapter # 5. dynamic scripting capabilities for the customer service representatives as well as the capability to record customer responses in a shared contact repository. Many .office application suite fall into three general categories: Customer Service and Support: These applications automate the service and support functions. In a call center environment. Market Automation 5.transactions. managing. 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.blogspot. and they provide workflow engines that facilitate efficient problem and inquiry escalation. 23Downloaded from a2zmba. and delivering data to marketers and analysts for decisioning. sales reporting and forecasting. and relationships. They provide customizable.For managing value propositions effectively. Calendar management. They allow for the design of sales teams based on defined criteria.blogspot. And to take this a step further. analyzing dimensions of value.The CRM Vendor Solutions The components offered in a front. lead distribution. companies need to first understand what customers value by using analytical tools integrated with marketing automation systems for creating and acting on customer intelligence. activity management. But a value proposition is so much more than a message. The value proposition drives the organization s core logic for creating value. driven in real-time for capturing. Sales Force Automation: These are tools that automate the collection and distribution of all types of sales information. the analytics and automation are best supported by an enterprise view of the business and customers.1 Marketing Automation . tracking and resolution. the competitive advantage belongs to companies that can proactively and quickly adapt their value propositions for optimal business results. including analytics. Professor Ari Ginsberg of New York University s Stern School of Business insists that companies can better invent and reinvent value propositions by analytical means that center on customer behavior. 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. in his words. and tracking sales contacts with customers and prospects are some of the myriad of capabilities offered within these solutions.

blogspot. Some of the features provided are: Planning marketing activities and developing campaign hierarchies.Let's take a closer look at the marketing automation component because it has been positioned as the solution for all CRM analytics. Inbound and outbound e-mail management capabilities are also becoming popular components of the marketing automation suites. Defining campaign success measurements. Incorporating offers and solicitations into the common contact repository and prompting contact agents to follow-up on campaigns can yield dramatic benefits. Campaign Management Segmenting customers. Sophisticated pricing and product configuration engines and third-party channel management capabilities are also available. Internet personalization tools are offered 24Downloaded from a2zmba. . generating targeted marketing campaigns for these segments and tracking results are important parts of CRM analysis. Coordinating multiple channels and event triggers to automate response actions. Integrated MA tools provide these capabilities and provide campaign offers and results directly to the customer sales and support processes. Generating lists of customers to receive mailings or telemarketing calls.comhere to track behavior on a Web site and allow tailoring of the contact experience. Marketing Automation: These applications provide the ability to create automated marketing campaigns and track the results. based on this behavior. scheduling automatic or manual follow-up activities and receiving third-party lists for incorporation into the campaigns are all typical functions. Outlining marketing campaign objectives. or generation of specific cross-selling opportunities.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.

front-line employees and sales force. Tracking customer inquiries related directly to campaigns. Importing third-party target lists. every contact with your customers can be well planned and personalized.blogspot.comacross the organization. The true value of personalization in CRM is when it extends beyond the Internet to encompass all customer contacts 25Downloaded from a2zmba. Features of personalization tools include: Collecting information on Internet site visits. . Tracking sales force closures related directly to campaigns. Allowing visitors to customize content to suit their purposes. Tracking fulfillments supplied to the client via each channel to avoid duplication and maximize effectiveness.Building and testing sample campaigns on a subset of customers. Addressing customers who visit the site by name and remembering their preferences. Internet Personalization Personalization is the ability to track and respond to customers in an individualized fashion based upon their past contacts and behavior. This is a good example of the acceleration of analytics into action. Measuring campaign effectiveness by linking directly to call center. Storing and reusing content from previous marketing campaigns. By integrating personalization into the front-office applications.

Showing customers specific content based on who they are and past behaviors. Integrating technologies and techniques for optimal customer understanding based on transaction history. Outbound e-mail management capabilities provide the ability to construct and execute permission-based marketing campaigns (where the dialog has been started with a customer via e-mail communications) and are said to be up to 20 percent more successful than traditional direct marketing at a fraction of the cost.blogspot.com Crafting responses to incoming e-mail without human intervention. Features include: Automation of the targeting and sending of mass e-mails. Inbound e-mail management capabilities assist organizations in handling inbound inquiries from customers. demographic analysis and collected information. organizations are linking these facilities to their personalization technologies and thus tuning the resulting communications on the basis of CRM analytics.2 Closing the Loop . Automation of mass e-mail responses. Offering specific products (on the Internet or over the phone) based on past behaviors. E-Mail Management E-mail management capabilities are used in two ways in MA .inbound and outbound. Allowing for the possibility of self-adjusting campaigns and offerings based on customer behavior. 5. Use of decision engines to parse information from incoming e-mail correspondence. 26Downloaded from a2zmba. Benefits of this can be quite high as it offers a chance to extend personalization techniques to multiple communication types.Adopting an Architected Solution . While on the surface this would seem to be a purely service-oriented activity.

integrated. etc. The organization is deprived of the more sophisticated forms of CRM analytics. the MA components of the front-office applications would reside here. breadth and share ability of an architected data warehouse solution. open part of an enterprise business intelligence environment. time-variant. current-valued and supply a single point of access for information across the enterprise.blogspot. furthering the very data mart chaos and inconsistency that the data warehouse is designed to prevent. Business management consists of the operational data store (ODS) and its associated transaction interfaces as well as the associated oper marts. . 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. Business Management enables organizations to act on the analytical results generated within business intelligence. The catch is the temptation to implement these front-office product suites and bypass the enterprise as a whole and the data warehouse specifically.com Business Intelligence provides the capabilities required for the strategic decision making in the organization. The data warehouse is defined as a subject-oriented. call center and sales force automation systems. all departments and all functions of an organization. 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.Now that we understand the CRM analytic capabilities offered with MA solutions. Business management systems are subject-oriented. Business intelligence consists of the data warehouse. integrated. You can think of it as a big bucket of generic. it lacks the depth. data marts and associated analysis tools.) that run the day-to-day business processes in an organization. Figure 1 illustrates the CIF. Let's examine the Corporate Information Factory (CIF) architecture to determine where the MA integration points should be. The primary integration point for the MA components is the data warehouse contained in the business intelligence environment. product or policy systems. there may be no catch. and can provide the technology infrastructure and information necessary to manage the complex relationships and analytics required to understand CRM interactions. 27Downloaded from a2zmba. An enterprise customer profiling system is a good example of a CRM business management function. cleansed and non-volatile collection of data for strategic analysis. Properly architected. The CIF is a logical architecture whose purpose is to provide a framework for implementing integrated technology across all areas. what's the catch? When MA modules are implemented as an integrated. the CIF provides a high-level technology road map for organizations wishing to develop CRM initiatives. As stated earlier. forming yet another departmental silo of analysis. The CIF consists of three primary types of CRM systems Business Operations are the core operational systems (billing systems. Front-office solutions generally reside here as they facilitate the day-to-day sales and service processes. While this automates certain types of marketing activities and integrates these activities to the front line.

eliminated. enterprise-wide.The data warehouse consists of standardized. running across the top of Figure 1. if the data 28Downloaded from a2zmba. Because the data in the warehouse is to be used for multiple CRM analytical purposes spanning multiple departments. Because the data warehouse must be the source for data marts containing aggregated and summarized data. static and historical data. data mining warehouses containing statistical samples of data and MA components which fall somewhere in between in terms of detail and history required. It provides detailed data for subsequent use by the data marts.comwarehouse is designed using a data model that is prejudiced toward known data relationships or certain business processes. and subsets of data for ad hoc querying.The Information Feedback loop. It must serve star schemas. 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). The data warehouse reflects the enterprise's view of data in terms of business rules and strategic requirements. Unlike the data marts or MA components.that is. The goal is for the data warehouse to have the "least common denominator" level of data for the data marts and the MA components. consistent pieces of data. For example. The data must not display a bias or prejudice toward any one kind of analytical processing. then analytical activities that search for unknown relationships are compromised or. the data in the data warehouse is not set up for a particular application or department. This is the set of processes that transmit the intelligence gained through usage of the strategic CIF components to appropriate data stores. it must accommodate and reinforce the enterprise's vision of its CRM initiative. it must contain the proper level of detailed data to satisfy these very diverse requirements." 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. is the other key component of the CIF for integrating MA components. This is the mechanism by which we push BI "out to the masses. It is optimized for flexibility. in effect. Examples abound of storing the results of BI analyses in operational systems such as the front-line applications. You are only limited by your technology and the data that you can acquire from your operational systems. The numerical values generated from such an analysis . you can build just about any data mart for CRM analysis.blogspot. One such example is to store the results of a customer lifetime value (LTV) analysis .detailed. exploration warehouses containing detailed data. By constructing the data warehouse in the most generic and flexible way possible. the actual score given to each customer based on their calculated LTV to the enterprise. cubes and flat files for statistical analyses.

Behavior toward each customer is altered based on the knowledge of the customer's LTV score. Higher valued customers may receive different campaign solicitations than those with a lower score. fully-informed tactics. and relevant." While the capabilities embodied in the MA modules do provide significant value. Align business resources and customer communications for effective tactical process execution that balances customer expectations and company objectives.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. Cultivate highly relevant and profitable dialogues with customers across all channels. for better strategic brand and customer equity management. they do not provide sufficient sophisticated analysis capabilities to be your sole vehicle for all CRM analytics. 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." or "MA provides a direct link between CRM analytics and your customer contact points. and optimize information from across the extended enterprise including all customer channels with increasing speed and synchronicity. Instead. 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.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. 29Downloaded from a2zmba. .blogspot. the solicitations generated by the MA components should also be transported via Information Feedback into the data warehouse.Conversely. analyze. 5. Improve your ability to evaluate and use every customer interaction as actionable marketing opportunities with rules driven lead management tools. This allows all analytic applications in the organization to take advantage of the valuable information generated by MA components. 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.comBeware of vendor sales pitches that contain phrases such as "our MA module can drive your entire marketing process. a business must master leading-edge intelligence tools that raise its organizational IQ (intelligence quality) to peak levels. Fully-informed business decisions. including the e-channel. right-time value propositions to individual customers require an integrated infrastructure that can capture. bypass the hype.

Inexperience with such an important. Initializing a CRM campaign and carrying it out for the long haul is a project that involves hands from throughout a business. the ability to instigate highly specific queries that result in rich. Fact is.30Downloaded from a2zmba. This makes customer management very streamlined and easier. Additionally. to the front-end Web site that is tailored to individual customers through such things as preferred language and topics of interest.blogspot. An intelligent database system that can support and store many users and their information is critical. From the person taking incoming phone calls and providing accurate service to the caller. assessing costs is not as simple as checking the price tags on CRM software. to obvious key individuals like CRM project managers. pinpoint demographic information is also an invaluable part of any CRM implementation. enterprise-wide data warehouse. the result of a successful CRM campaign will eventually minimize costs. 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. every facet needs to work in conjunction. such as the high price of luring and enticing new customers. 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. Predicting costs must be done through a unique look at every case. The cost of re31Downloaded from a2zmba. and won t break . If a business has done their homework and intelligently forecasted the resources needed to fulfill a CRM initiative. Consequently. Chapter # 6. to the database-analyzing software that efficiently and smoothly manages and processes customer data. Being able to touch all points of customer interaction requires a comprehensive set of software that is effective and comprehensive. There is no universal equation in which to plug numbers or general projection figures that can be applied across the board. the pains and pitfalls currently being experienced will lessen and the benefits will increase.1 Implementing a CRM Initiative According to the surveys.blogspot.com Master sophisticated multistep and event-based marketing and know when your customers are most receptive to offers and messages. CRM initiatives are company-wide endeavors and become more elastic and abstract because of this. CRM Initiative 6. strategy comes from it being a young and untested initiative. Intelligently manage the e-channel to drive revenue growth across all channels. from customer support personnel. and Leverage the full power of a real-time.In the end. yet often difficult. through the year 2004 only 35% of businesses will accurately forecast the implementation cost and ROI projections before initializing a CRM strategy.comgearing a business to be customer-centric depends on each case and can only be calculated with that in mind. to IT professionals.

Make a user's manual for the software. make a list of your customers' needs. It is very important not to rush through your evaluation. In fact.comthe critical needs off your list first before you look at nice to haves. 3. Customization may not be all at the software end. 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. but are lacking in one or more critical needs.2 Seven Steps to Managing Your CRM Initiative 1. Make sure your whole project team contributes to this list you won't think of everything on your own. you may have to do some process reengineering in your firm. Remember to document everything. Needs analysis: Make a list of your customers' needs As you ask yourself these and other questions. a centralized database. and a process manual with flowcharts for the business processes. scalability. and ask lots of questions.blogspot. Start with the absolute essentials at the top. allow plenty time for this phase. When you are making your project plan. and ideas given to the CRM project do not change systems for the sake of change. probably). Business analysis: Focus on your customer data-collection process The first step in your CRM project should be business analysis. try to cross 32Downloaded from a2zmba. Critical needs must be met so that the time. As you are looking at features offered by the different products. Product configuration: Make the system fit your firm No matter what product you choose. but far less so when they are implemented. Don't get poor results because you sped through this step. Examples of these needs may include collecting certain types of information. . Take a step back and look at the areas of your firm that deal with customer data (most of your firm. 6. 4. as well. even the needs met by your current system.the bank of any company. There will undoubtedly be products that meet a lot of your nice to haves. These are needs that you would like to meet but are not critical to the success of your CRM system. Many products are highly customizable at the front end. and capability to access the system remotely. Product evaluation: Compare vendors and products After you have your list of needs compiled. you can start comparing vendors and products. Treat this as a subproject with its own project plan that includes timelines and milestones. there will most likely be some configuration that needs to be done to make the system fit your firm. money. 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. An important note to remember this list should include all your essential needs. begin to add nice to haves. view lots of demos. As you work through your list of essentials. Take your time.

don't just mandate the change. In choosing a solution it is common for a team to be brought together to develop a needs analysis document. high failure rate. In addition to learning a new software interface. less thought is put into how the solution is going to be implemented which is one of the reasons for the well documented. In reality. roll it out in a small. It is not uncommon for teams to spend months developing selection criteria and subsequently choosing a vendor. To overcome all of the possible obstacles. Make sure your users understand why this change is taking place. Evaluation: Follow-through for a successful implementation As more and more firms are implementing CRM systems. pilot environment. 7. however.comof choosing a product that does not meet the firm s needs or poor communications between project teams and end-users. Use training sessions and documentation to assist the users with the new system. Start with your Marketing users. Follow these 7 steps to managing your CRM initiative for a successful CRM implementation experience. many users will be faced with entire new business processes. CRM Implementation 7. 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. Keep it in a small group until you have the system customized the way you want it. roll it out to all users. plenty of success stories are emerging. this will be a significant change for most of your users.2 Implement And Learn The Basics First . Typically. they will use the software heavily and will be able to provide you with some high-quality feedback. Each person has their own way of doing things and those habits are difficult to change. Pilot implementation: Roll out a small pilot to marketing first After you have customized the system to your specifications. When you have reached that point. 7.blogspot. Failed implementations often are the result 33Downloaded from a2zmba. Chapter # 7. The biggest factor here is communication. Unlike back end systems (ERP. companies and employees have lived without CRM and may be able to continue doing so.1 The Implementation Process Know the required commitment for CRM implementation success Many companies think that choosing a solution is the hard part. etc) the use of which is required for day-to-day operation of a organization. 6. choosing a system is relatively easy.5. SCM. Implementing a system is the hard part of the process. Full implementation: Communicate with users to explain the change As you roll the system out to all users. The firms that experience successful implementations have a plan from the beginning and follow it through to the end.

Some companies have chosen to motivate users by offering incentive compensation related directly to system utilization. utilization reviews. The common mistake here is trying to do too much at one time. For instance.blogspot. The reality is that users who are overwhelmed by a tool end up not using it. Training should be divided into multiple stages designed to fit the particular user group needs. and know that ROI will not come until the team is effectively using the solution. 34Downloaded from a2zmba. 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. Having the software provider spend one day training users is not enough to be successful. Look within the organization to determine whom the power users will be and solicit their support on the project. if inside sales receive incoming phone calls. Customers have been sold on the return on investment (ROI) of the solution. Users need to be able to comfortably duplicate what they have routinely been doing in the new system. and possibly user-by-user basis. 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.3 Outline An Implementation Strategy The first step of implementing a new CRM system is to determine a strategy. and a third for marketing. Those stages may include beginner user training. 7. and users groups to name a few.It is no surprise that once companies select a solution they race to implement that solution.comAlthough often overlooked or assumed.blogspot. another for outside sales. Each organization is unique and goals and incentives need to be thought through on a caseby-case. how can they eliminate filling out call reports? How are people going to send email and create letter and 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. department-by-department. advanced training. goal-specific training. trainer training. medium and long-term goals need to be established and monitored for each department and for the organization as a whole. Companies may find that they want to track one metric for inside sales. medium and long-term goals.4 Invest Time In Training 35Downloaded from a2zmba. 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). do they know how will they log those in the new system? If outside sales make sales visits. It is important that you establish and focus on short. the first goal is to make sure that the user group is proficient on the base functionality of the system. Short.comTraining is a major component of long-term success and should be budgeted for sufficiently. Beginner User Training: . User champions and administrative champions need to be selected.

internal user groups can be very useful to help team members learn from each other 36 . Trainer Training: Some organizations opt for training a core group of user champions who will then be responsible for training the entire team. biweekly). both internally and with the solutions provider. On some set interval (daily.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. Most systems have built in tools to monitor successful usage of the system. Utilization Reviews: After beginner user training plan to set up utilization reviews. Users will not become an expert in one day. This allows companies to rely more heavily on internal resources. to track usage and to uncover issues before they become real problems. This may require an additional upfront expense but should allow minimization of future training costs. the Company will be able to maximize the benefits of improved sales process management. and to work through real life situations. they can do all of their routine tasks in the new system. User Groups: Another component of success will be internal and external user group forums. 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. Breaking up beginner user training into multiple groups over multiple days will allow users to use the system while the trainer is still available. especially in the beginning. once the trainer has gone. especially for larger user groups. weekly. Use this time to ensure that everyone is comfortable enough with the system that.

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