M

Chapter 4:
Implementing the CRM Strategy

MBA. Nguyễn Thị Trung Trinh – 090.88.736.88

Overview

Topics discussed:
▪ Types of CRM implementation projects
▪ Return on Investment (ROI) of CRM
▪ Why do CRM implementation projects fail?
▪ Case Study: Capital One

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“Strategy before structure”
Key Stakeholders of Strategic CRM

Customers

Preferred Value
Propositions
Owners Partners

Practice of
Strategic
CRM

Suppliers
Employees

Management
Customer Journeys
19. Customer Relationship Management
Types of CRM Implementation Projects

Implementation Projects

Operational Projects Analytical Projects

Application Projects
> Deploying Operational and Analytical Outputs

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Operational Projects

▪ Objectives:
▪ Construct infrastructure meeting technical and functional
requirements of CRM
▪ Don’t directly generate revenue, but provide resources to
perform value-added CRM Projections
▪ Maximize profitability
▪ Reduce support costs
▪ Increase sales and customer loyalty

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Components of CRM Infrastructure
Component Description

Information Capability to display and list the company’s products and services online
Delivery/Online
Catalogs
Customer Database Capability to capture, organize, present, and analyze customer-specific
data, in order to identify sales opportunities and address product
development and delivery requirements

Personalization and Utilizing results of data analysis to create an individualized experience for
Content Management the customers and enhance/modify service delivery vehicles to match the
specific needs of customers (based on their user profiles)

Sales Force& MKT The deployment and use of tools and services designed to automate the
Automation sales and marketing lifecycle

Partner Channel The deployment and use of tools and services designed to integrate a
Automation company’s service vehicles with those of its provider and third-party
partners
Customer Services The deployment and use of technology and business processes designed
to successfully support a company's products and services
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Marketing automation definition (MA)

Marketing automation is the application of computerised technologies to

support marketers and marketing management in the achievement of
their work-related objectives.

Marketing automation là việc áp dụng các công nghệ máy tính để hỗ

trợ các nhà làm MKT và quản lý MKT trong việc đạt được các mục
tiêu liên quan đến công việc của họ.
Benefits from marketing automation

a. Enhanced marketing efficiency

 The replication of marketing processes delivers greater control over costs.
When marketers use manual systems and ad hoc processes, there can be
considerable inefficiencies. MA enables companies to develop more
streamlined, cost-efficient processes, that can be operated by any marketing
incumbent, whether experienced or new-to-role.
b. Greater marketing productivity
 MA enables companies to run dozens, even thousands of campaigns and
events through multiple channels simultaneously.
Benefits from marketing automation

c. More effective marketing.

 MA allows marketers to employ what is known as closed-loop marketing

(CLM). CLM is based on a Plan-Do-Measure-Learn cycle.

d. Improved accountability

 MA provides better data and analysis on which to judge the commercial

return from marketing activities, improved transparency, and faster
(almost real time) information for management.
Benefits from marketing automation

e. Enhanced responsiveness.

 Marketers have traditionally created and implemented annual marketing

plans with campaigns and promotions planned and scheduled many
months ahead. MA allows marketers to respond instantly to
opportunities, even if not part of a plan.

 MA functionality enables companies to engage in real-time marketing,

responding immediately to an identified opportunity.
Benefits from marketing automation

f. Improved marketing intelligence.

 MA’s embedded reporting and analytics functionality provides valuable
management insights into markets, customers, campaigns, events etc.
g. Improved customer experience.
 Customers receive personalized, relevant communications and offers at
appropriate times.
h. Improved customer engagement.
 Customers develop a stronger sense of emotional and behavioural
identification with the firm.
Benefits from marketing automation

Geography
Leads

Industry

Routed Sales Team

MKT Product Interest

Automation
Other business Rules
MKT Automation Platform

https://triggerm.digital/nen-tang-marketing-automation/
Hỏi gì khum?
Sales force automation definition

Sales Force Automation(SFA) is the application of

computerised technologies to support sales people
and sales management in the achievement of their
work-related objectives.
Key technologies for SFA

a. SFA hardware includes desktop, laptop and handheld devices, and

contact/call centre technology.

b. SFA software comprises both ‘point’ solutions that are designed to

assist in a single area of selling or sales management, and
integrated solutions that offer a range of functionality.
 Tools for salespeople Tools for sales managers

Account management Document management

Activity management Incentive management

Collaboration Product encyclopaedia

Contact management Sales analytics

Contract management Sales forecasting

CPQ - Configure-Price-Quote Territory management

Event management Workflow development

SFA
Lead management

Opportunity management
functionality
Order management

Pipeline management

Product configuration

Product visualization

Proposal generation

Quotation management
Hỏi gì khum?
Service automation definition (SA)

Service automation is the application of computerised

technologies to support service staff and management in
the achievement of their work-related objectives.
Benefits from service automation

a. Enhanced service effectiveness

b. Enhanced service efficiency
c. Greater service agent productivity
d. Better agent work experience
e. Improved customer experience
f. Improved customer engagement
g. Improved customer retention
Where is service automation deployed?

a. Contact centres
➢ are configured to communicate with customers across multiple
channels including voice telephony, web, mail, email, SMS, multimedia
messaging, instant messaging, web chat, social media and fax. call-
centres
➢ As contact centres spend more time interacting with customers in
social media, some firms re-imagine their contact centres as customer
engagement centres.
Where is service automation deployed?

• Website (Tab CSKH, Thông tin liên hệ)

• Website (Google docx form)
• Web chat
• Facebook, Zalo, Viber, Email.
• Fchat, manychat Best CRM
• Forum Contact centres
• Zalo
• Apps
• Viber
• Email
• AI (trí tuệ nhân tạo)
• Social listening Tool
Hỏi gì khum?
Analytical Projects

▪ Also called Data Analytics

▪ Leverages resources created by operational projects
▪ Adds value by enabling firms to understand their customers
▪ Helps determine customer strategy and development of on-
going CRM strategy

▪ Major activities:
▪ Capturing all relevant customer information – data
sourcing
▪ Customer data transformation - data warehousing, data
integration
▪ Customer knowledge discovery - data analysis,
prediction based on results
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Analytical Projects - Capturing all relevant customer
information

▪ Significant challenge to many companies (legagy systems,

availability)
> Tradeoff: Comprehensiveness vs. efficiency
▪ Key steps in building a CRM database
(1)Data integration and standardization
(2)Real-time updating of customer information
(3)Incorporation of external sources of information
(4)Evaluation of customer-related back office data
(e.g. shipment or billing information for profitability analysis)

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Analytical Projects - Customer Knowledge Discovery

▪ Data analysis of customer base

▪ Analysis of customer demographic
▪ Analysis of psychographic information (e.g. survey results
on customer satisfaction, loyalty, attitudes)
▪ Analysis of actual behavior (e.g. customer transaction
history or customer service records)
> Define customer segments to form basis for differential
marketing decisions
▪ Prediction of future purchase behavior
▪ Model a behavior pattern for specific customers and
predict future behavior
▪ Customer Value Assessment
▪ Focus resources on most valuable customer relationships

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Metric.vn

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Deploying Operational and Analytical Outputs

▪ No value will be created until this system and the information are applied and utilized to
improve the company's marketing decision making and the company's relationships with its
customers
▪ Examples:
▪ Using the analytical results of customer value assessment and customer profiling helps
design marketing campaigns that target the customers or prospects that are most likely
to respond and that provide a high expected value.
▪ Products or service can be customized based on customer behavior modeling and
customer segmentation to meet their unique expectations
▪ The planning and forecasting of sales, marketing, and customer service can be
improved based on customer life-cycle patterns (engage, transaction, fulfill, and
service) to make the sales and marketing efforts more focused and efficient

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Return on Investment (ROI) of CRM

▪ Formula: Profits/Investment X 100% = ROI (%)

▪ Is the investment in CRM elements worth it?

▪ The practice of developing and implementing a CRM
system should always measure the expected monetary
benefits to see if the investment is likely to payoff

▪ Key questions when ROI is applied in the context of CRM

▪ What should be counted as an investment in CRM?
▪ What should be counted as a return on that investment?
▪ What is the time period over which ROI should be
measured?
▪ How do we arrive at the ROI estimate?

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ROI of CRM (2)

Questions on what can be counted as investment in CRM?

▪ Can the system be easily configured and maintained by internal IT

staff or is continuous external assistance required?

▪ What is the cost of training the company’s staff to use the CRM
system?

▪ What is the timeframe for implementation and what will happen to the
current system processes during that time?

▪ What are recurrent costs?

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ROI of CRM (3)

▪ Key Decision Questions to Compute ROI for CRM Activities

Consulting Services Procurement & Maintenance

• What will be the consulting cost for
the project
Business Processes
• To what degree is business process
re-design necessary?
Information Technology
• What new IT software and hardware
must be purchased to accommodate
the new system?
Vendor Management
• How much customization is required
and at what cost?
• Can the system be easily configured
and maintained by internal IT staff or
is continuous external assistance
required?
Staffing & Training
• What is the cost of training the
company’s staff to use the CRM
system?
Implementation
• What is the timeframe for
implementation and what will happen
to the current system processes
during that time?
Costing
• What are recurrent costs in the
implementation?

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Hỏi gì khum?
CRM Costs

▪ IT Costs
▪ People Costs
▪ Process Costs

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IT Costs

▪ One-fifth to one-third of total cost

▪ Investment in IT infrastructure, database development and
software
▪ Software categories required for CRM Investment
▪ Sales Force Automation
▪ Sales Management Automation
▪ Call-Center Automation
▪ Customer Service Automation
▪ Marketing Automation
▪ Operations Management
▪ E-commerce Functions
▪ Knowledge Management

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People and Process Costs

▪ People costs
▪ Recruitment, redeployment and training costs

▪ Process costs
▪ Market segmentation process, selling process
and campaign management process

42
Hỏi gì khum?
Why is ROI of CRM difficult to measure?

▪ Computing the gain associated with a CRM initiative requires that all other variables
impacting profit are held constant

▪ Some CRM investments are necessary costs which enable the functionality of CRM.

▪ Although measuring the return on CRM investment becomes easier with small scale
projects, without appropriate controls in place, the management can-not be sure that the
cause of the change is the CRM investment

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Stages of ROI Estimation

Setting the target

Reaching the target

Building consensus and commitment

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Setting the target

▪ Content
▪ Determine ROI goal of CRM project based on benchmarking, similar projects, external
and internal knowledge

▪ Questions to raise
▪ Is the goal sufficient?
▪ Is this goal achievable?

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Reaching the Target

▪ Content
▪ Generate ideas of how to reach target through internal bottom-up participation, external
views, consultants, benchmarks, etc

▪ Questions to raise
▪ What factors have to change and by how much?
▪ Does it work from a technical perspective?
▪ Are the proposed benefits clear?
▪ Will customers and/or staff accept these measures?

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Building Consensus and Commitment

▪ Content
▪ Have executives and line staff agree on proposed ROI goals and ensure commitment
on both sides

▪ Questions to raise
▪ Are we collectively prepared to sign them off?

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Hỏi gì khum?
Why Do CRM Implementation Projects Fail?

▪ CRM implementation failures a key pain point for many companies

▪ Figures for failure rates as high as 50% (e.g. ZDNet 2009)
▪ Why is that?
(1) Assumption that CRM is a software tool that
manages customer relationships for you.
(2) Implementing CRM before having a CRM strategy.
(3) Poor match between CRM system and Covered in
chapter 3
organizational processes.
(4) Resistance from employees.
(5) Poor data quality. See following
slides
(6) Low “actionability” of the information.

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Resistance from Employees

▪ “Positive” aspects of resistance

▪ Think of resistance as energy – resistance/care better then apathy
▪ Use resistance as source of information for process adaption
▪ Guidelines for overcoming resistance
▪ Plan: Be prepared, focus attention on the benefits of changing, the
consequences of not changing, and the impact of these changes on
the individual and group.
▪ Communicate: Hold regular meetings. Provide as much information
as possible to clarify what is happening and how it will impact the
people.
▪ Listen: Encourage people to talk about what is happening. Allow
people to “grieve”.
▪ Support: Understand that there are no quick fixes for these changes
and managers who become champions of change should be
supported.
▪ Role of internal marketing
▪ User Trainings

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Poor Data Quality
▪ Types of poor data quality (Reid & Catteral, 2005):
▪ Poor data entry (including misspellings, typographical errors, or
variations).
▪ Missing data.
▪ Lack of company-wide coding standards (and/or missing unique
identifiers in all relevant data sources).
▪ Multiple databases scattered throughout the organization (with
potentially conflicting information and/or missing unique identifiers
across data sources).
▪ Legacy systems containing poorly documented of obsolete data.

▪ Recommendations for good data quality

▪ Consider data quality at the very beginning when devising the
CRM strategy
▪ One-time effort for data cleansing (e.g. replacing legacy systems)
▪ Emphasis on continuous data care

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Low “Actionability” of the Information

▪ Worst case: CRM system as a huge exercise of data

collection without improving business processes and
decision making and in the end, helping serve customers
better.
▪ Dedicated team of data/business analysts that help make
sense of the data
▪ Two types of CRM “outputs”:
▪ Periodic reports of specific key performance indicators
with pre-defined processes
▪ Tailored analyses for frontline business units
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Improving Profitability by Investing in CRM

Economic
Medical Legal

Social Issues Marketing

Challenges
Ignored Technical
Managerial
Political

Resources
Required
Original Process

Pre-CRM

Challenges
Addressed
New Process

Time

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CRM at Work

▪ Enhancing Customer Interface using technology

▪ La Croissanterie introduced loyalty program
which allowed customers to record purchases through
three channels – loyalty card, a mobile phone, or a transit pass
▪ Customer data collection was possible using
Near Field Communication (NFC) technology

▪ CRM Implementation
▪ In 2008 economic slump, Giant Eagle, a national
grocery chain, realized the importance of CRM program
▪ Giant Eagle increased use of its customer loyalty program through fuel discounts,
which managed to cross-over fuel discounts with a food discount loyalty card and
increasing cross buy between food and fuel.

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Case: CRM Practices at Capital One

▪ Segmentation Strategy
▪ Targeting all types of risk profiles, offering different prices and products
▪ Customer database distinguishes high-risk ‘revolvers’ and low-risk ‘transactors’
▪ Retention Strategy
▪ Help retain customers when introductory rate expires or risk of ‘dormancy’ exists
▪ Operations aligned with customer requirements
▪ Personalized and flexible handling of customers
▪ Calculation of profitability on an individual basis to improve product offer to customer
▪ IT infrastructure

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CRM Practices at Capital One (2)

▪ Collections
▪ Payment assistance, recoveries and fraud
▪ Sales
▪ Sales system (SALSA) enables targeting cross-sell offers to specific customers
▪ Uses accumulated data on customers to suggest how to react to specific customer
requests
▪ Co-operation between Marketing and Analysis (M&A) and operations
▪ Partnership to review risk perspective of present and future strategies enabled through
IT

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CRM Practices at Capital One (3)

▪ Information Technology
▪ Interaction with company in terms of prospect pool management and solicitation,
account acquisition, account servicing and call-center technologies, core systems

▪ Human Resources
▪ Managing associate selection and development of company culture

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Test and Learn Strategy

Account Acquisition Account Management

Test Stragety
Executed Developed

Account
Strategies Accounts Tests
Performance
Developed Required Developed
Assessed

Results Results
Analyzed Analyzed

Drives New Product Development

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Systems Infrastructure

▪ Different Systems Working together

Service View

Screen of front-end accolades

Vectus Bass Salsa

Data from Data from Solicitation and

customer customer marketing data
applications applications

MIS

Data Warehouse

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Systems Infrastructure

▪ Use of Data

Online decision
Customer Data Segmentation
of associate
• Statistic consumer data • Expected NPV • Rank order of what to
(identity) • For every customer offer/ cross-sell
• Demographics • For all sales activities • Which products
• Transaction data • Monthly recalculated • Value per product
• Products sold • Products already
• Campaigns received offered (=bared from
sale)

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Growth of Capital One’s Revenues
(Worldwide Operations)

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Summary

▪ Illustrates successful implementation of a CRM strategy

▪ Business model founded on the crucial premise that each customer requires a different
product and service from a credit card provider
▪ Adopted an Information Based Strategy (IBS), to collect information on customers
▪ “Test & Learn” tests customer related activity in a controlled condition before it is introduced
in the market
▪ CRM is viewed as a key strategic process in Capital One; different depts. work in an
integrated fashion towards understanding and satisfying customers
▪ 2001 - Capital One was named 3rd ‘Best Place to Work in the UK’ by The Sunday Times.
Capital One named in Forbes 400 list -Best Big Companies in America

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Minicases : Challenges in Implementing CRM

▪ CRM in FMCG Industry:

▪ To define, conceptualize, and implement a suitable CRM approach

▪ B2B CRM Implementation:

▪ To create transparency across customer relationships

▪ To design cooperation processes across the three companies

▪ To develop sales support tools

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Summary

▪ The key elements of CRM are touch points and CRM

applications that span sales, marketing and service functions

▪ Once the elements of CRM are identified it is important to

calculate the ROI of CRM to see whether investment in CRM
is worthwhile

▪ Building a complete customer database incorporating all the

relevant customer information from different departments
and external sources is very crucial for a successful
analytical CRM project

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