CRM

REDEFINED
(Emerging Concepts & Case Studies)

A presentation by
N.Kalyan Sagar
DGM-Fin & IFA, NATFM-BSNL
 Scope & Ambit of this Session:

Defining – Concepts
Refining – Emerging trends
- Concepts and Percepts
Designing – Case studies
- “Out-of Box” thinking
Customer & Business at the level of STRATEGY
 Relevance?

• Competition – acute and ruthless

• Customer preferences that are fleeting
• Cost of operations
• Convergence - Technology, Business, Company
• Churn – European / US telcos - $ 4 Bill/yr
Global telcos - $ 10 Billion/yr
Highest compared to other industries
Cost of recruiting new customer 15 times more

Change in YUGA…New Era…

 The “Yugas”

• Product Yuga – Producer/selling only

• Image Yuga - Push and Pull
• Positioning Yuga – Locus and focus

“Customer-centrism”
 CRM
Customer – n.1. A person who buys on products or services from a shop
on business.
2. A person or thing of a specific kind that one has
to deal with.

Relationship-n.1.The way two or more people are connected or in a

state of being
connected.
-The way in which two or more groups of people
regard & behave towards one another.
2. An emotional association between two people.

Management-n.1. The process of managing

2. The people managing an organisation.
 Noun to Adjective
Customer:
 Buys goods/services - Can buy goods/services-potential-BSNL-9-to-90- All
1) Gender
2) Class
3) Cohort
4) Region
Relationship:
 Connected & ‘state’ of being so – point in time
 ‘Regard’-perception-empathy
 ‘Behave’ – ‘Action’-S-R-,R-S,S-S models. CS = set of behaviours Customers
 ‘Emotional association’ – not just rational.

Management:
 Managing – what is
 Leading – what is + is not. –
 RETENTION, REVENUE PER ‘UNIT’, ACQUISITION

Don’t worry about profit. Think about Customer service. Profit is a by – product of customer
service.
-Herb Kelleher (Southwest)
CRM – ART OR SCIENCE?

Creativity R L Logic

First Q again . Who are our customers?

 Suppliers/ Subscribers/Customers/
External
channels End users

Customer

Employees Internal Divisions/Managers

CRM CEM
 1
Self-definition Vision & Mission

2
4
Involving & CUSTOMER Empathy
Collaborating

Inward
Customer
3 Market
Responding & Business envt.
Interacting

3 – R’s
Responsiveness Outward Strategy, Plans
Reliability Business model, Revenue Model
relationship
1. SELF DEFINITION

Vision & Mission

 Vision Statement

 What you want to become – your purpose.

 Must resonate with all members
 Pride, excitement, stirring passion
 Stretch organisations capabilities & image of
itself.
 Define its destiny in over arching message –
simple & understandable
“To bring happiness to millions & promote wholesome
family values”- Walt Disney.

“To become number 1on number 2 every market we serve &

revolutionize this company to have the speed & agility of a
small enterprise” – GE.

“We exist to provide value to our customers” – Wal-Mart

“To honourably serve the community by providing products

and services of superior quality at a fair price” – Motorola.
 VALUE OF VISION
Sony - Akio Morita & Marasu Ibuka

Honda - Soichiro Honda

Carrier - William Carrier

Aravind Eye Care - Dr. G. Venkataswamy

Great leaders and not visionaries because
they are great. They were little people who
achieved greatness because of their vision.

As is with people, so it is with organizations

Vision = purpose, direction

Mission = Signposts
 COMMUNICATION – The Missing Link

PARC of Xerox
 1970 – PARC by Xerox
 Alto – First PC
 Ethernet – Prototype LAN
 Mouse – Alto & 8010 star
 GUI – On Alto Apple/Macintosh/Windows 1.0
 Lazer Printer
The last thing IBM needs now is a vision.
--Gerstner –IBM
Who says elephants can’t dance?
2. EMPATHY

Customer
Market
Business Environment
Satisfaction guaranteed but not a guarantee

 30% likely to shift even if satisfied.

 Concern: Customer care & Billing (TRAI)
a) Avg.waiting time to speak to a rep=15 minutes
This could be a vacant positioning slot.
b) 23% - Billing dissatisfaction.
43% - Billing complaints took over 3 days to be resolved.
“I think there is a world market for maybe five computers”.
- Thomas Watson IBM
Chairman. 1943

“There is no reason why any one would have a computer at

home”.
- Ken Olsen, President, Digital Equip. Corp. 1977

“Who on earth wants to hear actors talk”.

- H.M Warner. Warner Bros. 1927

“We don’t like their sound, & guitar music is on the way
out”.
- Decca recording Co, rejecting The Beatles
 Customer Satisfaction?
Customer Delight?
Customer VALUE !

Positioning Yuga – “Ashwattah Tree”

American Customer satisfaction Index – 0 correlation – Satisfaction & Loyalty
Centre for Customer Driven Quality – Purdue University – “A delighted customer is
6 times more likely to repurchase the product than a
satisfied customer”
“No.1 thing – Focus on customer value”

 Why companies must change behaviour to

understand, build & leverage customer value.
 Role of technology in enabling CRM.

Dr.Martha Rogers
(Leading Guru of CRM)
 What is of Real value to Customer?.

1) Survey Customer you have lost.

2) Encourage Customer complaints/
articulation.
3) Drive value directly & indirectly.
MUL - 1984 – M-800
1991 – Liberalization – Hyundai, Fiat, Toyota, Ford, GM,
Volkswagen, Daewoo, Honda, Mitsubishi,
Tata Motors, Mahendra & Mahendra
Late 1990s – 5 years lifetime
2001-2002 – Losses
Pulse of the Indian Consumer:
• (a) Insurance on delivery
(b) Finance available in all show rooms
(c) warranty spread over four years
2003: Public issue over-subscribed in 3 hours after opening
Being in touch with customer need is always
important.But perhaps more important when
the needs are changing.
-Michael Dell.
A dissatisfied customer is our most important
source of knowledge
- Bill Gates
3. RESPONDING
&
INTERACTING

Strategy, plans
Business and Revenue Models
 ESSENTIALS
• 1. REALISTIC
• 2.FOCUSSED
• 3.QUICK (speed –to- market)
• 4.APPROPRIATE
 No Blind Imitation
Gary Wendt – GE capital – Conseco (Insur)
- “memos” – Welchism
Paolo Fresco – Dy.to Welch – Fiat
- Diversified conglomerate
- Agnilli family
Robert Nardelli – GE Power Systems – Home Depot
- JIT
- 6 Sigma
Market penetration Market Integration

Existing markets/customers Existing markets/customers

Existing products/services New products/services

Market Expansions Market Entry

New markets/customers New markets/customers

Existing products/services New products/services
Need to improve Competitive Advantage

High Customer value High Customer value

Low delivery/capability High delivery/capability

Maintain but Monitor Reduce emphasis

&/or create value
Low Customer value Low Customer value
Low delivery/capability High delivery/capability
 Brand Image “interface”
“A name, sign, term, symbol or a combination
of these intended to identify the goods on or
services….” (Kotler)

“A visual design/name intended to

differentiate the goods or service….”(Koch)
 COMMUNICATION IS KING
1. I saw el papa (The pope)
I saw la papa (The potato)
3. Pepsi brings you back to life
Pepsi brings ancestors back from grave
5. Ke-kou-ke-la – Bite the wax tatpole
Ko-kou-ko-le – Happiness is the mouth
“Rent a car from us. Look at the long lines at
our counters”

“Rent a car from Avis. The lines in our

counters are much smaller”
-Avis – Rent – a - Car
 BRAND TO BRAND EQUITY
BRAND EQUITY
An intangible value – added aspect of particular
service/goods otherwise non considered unique.

Track
Explore Change
Extend Brand power
 BRANDING TODAY

3. Fragmentation – small lucrative niche.

4. Targeting – Right information.
5. Innovation & speed- Response time.
6. Cost squeeze.
7. Margins squeeze.
8. Performance squeeze.
9. Creating value.
 Eg. Dow Chemicals
• My Account@Dow: - Extranet service – 1999
- Customer focused order management
- Easy & quick – order entry, status, a/c
history, multiple orders on-line payment
info, product details etc.
- Personalized service: Customer specific
“Consolidation of customer interactions
through multiple channels”
& Phone – if problem after 5 p.m., we will
show you another way ……
• Elemica – B2B:
- e-Market place
- 7 Companies together – alliance –
exchange # customers
- On-line buy & sell – Integrated Hub
- Empowering customers – choice +
reduce transaction cost
- Capture value from supply chain
efficiencies
DowNET:
- Global N/W – 2001 – EDS & Cisco
- 1” global – VoIP – Voice, data, video
- Integrate knowledge at single source - real-
time
 4. INVOLVING
&
COLLABORATING
…IF NOT, EVEN A TINY RIVAL
WILL…?
 2006 – Ecosystem Approach

Broadband
Low-cost PCs
Affordable Mobile Phones
Convergence in general
Make customer a part of the Ecosystem
 Business Intelligence

3. Timely information to tap new opportunities.

4. Effective marketing campaigns & analyse
effectiveness.
5. Quick response – Time – to – Market.
6. Outer directed + Inner Directed

“KM – strategies”
 Olympic blunder (1998)
Technology for technologies sake

“We had created a product that was technology for

technologies sake, rather than technology for
customer’s sake. If we had consulted customers
first, we would have saved ourselves a lot of
aggravation.
-Michael Dell
 Let Customers Identify your Achilles heel.

“IBM had enjoyed such a long run….that people

began to look for their next real challenge, and
started working on it rather than in the
marketplace”.

“There is a customer running IBM & we are going to

rebuild the company from the customers back.
-Gerstner.(IBM)
 CUSTOMER AS PARTNER

Make your business competitive by making the

business of your customer more competitive.

EDUCATE
EMPOWER
ENNABLE
ENHANCE EFFICIENCY & EFFECTIVITY
 CRM + CEM
CRM = 1. Maximize revenue and profits
Through already existing customers
2. Quick results

CEM = Customer Experience Management

1. Long term
2. Stress on every interaction
3. First focus = employees –
recruitment/training/performance
appraisal/suggestion/QCs
CEM = Totality of “employee + customer experience”
MARUTI – INTERNAL CEM

1. Increase dealer profitability:

Conversion ratio of sales executives = Enq / test Vs buy
Asked its dealers → ↑ Manpower
→ ↑ Salaries of sales agents
→ ↑ Better incentives
Ratio – 10-35% ↑ - Others adopted

But Small dealers ? – Underwriting half the cost for a year

- Liberal credit
- can deal with insurance services too
2. Rural Market – State Bank of Patiala
- Pay every Kharif & Rabbi (6 months)
- Teachers Plus – couples
3. Promos – simple and straight
Boy car – ‘Kya karu papa, Petrol khatam hinah hota’
Leverage – fuel efficiency ‘brand recall
MARUTI – EXTERNAL CEM

2000 – Price wars to positioning

New Revenue Streams
4. Maruti True value – 2001 – Used cars
1. Huge market
2. , ‘Protect’ customers
Beyond – Initial stages of purchase, After sales and Maintenance

Used cars- Less than 7 years,100,000 k.m. mileage, condition

→ Certified
→ 1 year warranty
→ 3 free services

Customer Delight to Customer Value

Maruti is truly “Maruti”
 PHILIP KOTLER- KEYS FOR
SHAPING FUTURE

2. Invest in the future – “leading” the future and not merely

“managing”it.
“Companies pay too much attention to the cost of doing
something. They should worry more about the cost of
not doing it”
4. Move Fast
“Every company should work to obsolete its own
product/service line ….before its competitors do”.
6. Excel at everything you do.
“Your company does not belong in any market where it can’t
be the best”.
 DELL/IBM/SOUTHWEST/WAL-
MART/MS/GE etc.
 Customer in driver’s seat
 Commitment to learns more about customer
 Specific usable feedback
 Survey – customers knowledge
 Increased customer involvement in target
areas.
 IDC CUSTOMER ANALYSIS
Criteria for customer success.
1.Timing.
2. Functions & features.
3. Price.
4. Packing.
5. Potential Market size.
6. Target Market.(niche)
7. Marketing strategy-(defence & aggressive)
8. Customer preferences/specifics.
9. Customer awareness.
Big Mistakes/Blunders
13. Mimicry – cloning to clowning.
14. Magic Bullet fallacy-awareness.
15. Decision-undemocratic/unfounded
16. Rollout disaster – no takers – functions
17. Internal selling lacunae.
18. Product versus process dilemma.
19. Data overload/overlap & ignoring subtleties (quality in CRM).
 CASE ANALYSIS

(These are real- time cases. Please don’t give “sabkuch” solutions.
You have to justify your decisions)

BEST WISHES. MAY THE BEST TEAM WIN…

 CASE 1.
J&J vs Bristol Meyers

 Tylenol vs Datril – 3% lower

 Senses plans – timing
Cuts price – pricing
Informs – strategy
Credit to distributors – Rollout
Convinces Media – Awareness (Customer)
 CASE 2
Kellogs vs McDonalds

Burgers & French Fries

 Cheese & Oil – obesity – functions & features.
 K-Bars-Health snack-Market size (Potential)
 No Mimicry
 Data/Information-utility-McDonald-overload.

Burger King – “have it your way”

 CASE-3
Ford Edsel

 Ford – Edsel – Young executives – 1957

 Mimicry – old is new
 Magic bullet – Target Market
 Decision – undemocratic –Name too
 Product vs process – Hype – Packaging
 Timing – Recession.
 CASE – 4
1985 – Coca Cola Blunder

Rober + C. Goizveta vs Roger Enrico

(Pepsi) Pepsi – declares Victory & holiday.
 Customer awareness – Taste Tests.
 Customer preferences
 Internal selling. – ignored frontline reps
Public outrage- “WE HEARD YOU!”
 CASE – 5
Alfred Solan - GM
 1920-Alfred P.Solan (My years with GM)
 Charles kettering & Pierre do Pont.
 Managing (vs) leading
 Internal selling
 Functions & features
 Decision – “operation successful but patient
died”!
 CASE -6 Motorola
Iridium – 1987 -2003

 10 billion
 “Good if you are in the middle of a desert”
“Not working well inside a building”
 Call cost – 5/Minutes – Pricing/ awareness
 Cost of phone set – Target Market
 Design – Bulky – Antennas – Packaging
 Access – Functions & features
 10- years lead time – Time & Magic bullet.
And the winning team is …
 …TEAM BSNL
Thank You

Keep Smiling

JAI HIND
JAI BSNL