CRM Strategic Analysis

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CRM Strategic Analysis

  1. 1. CRM Gap Analysis And Making CRM Useful Customer Processes Strategy Organizational Change Technology Greg French Example of Approach Used 1
  2. 2. The Gap Analysis is based on extensiveorganizational participation and tested framework Starting Point: Current State Current CRM state has been assessed through extensive study of company documentation, CRM Scorecard responses, and 20+ in-depth interviews with various executives and managers. Analysis Framework The high-level vision defined in the Vision & MOS in terms of Organization, Process, Technology is been further broken down into six areas of the Customer strategy — CRM Business Framework: — Customer data — Value proposition — Customer contact — Operations — Organization 2
  3. 3. CRM business framework consisting of six areasis used to structure the Gap Analysis CRM Area CRM Area Description and Objectives Define and operationalize how individual customer relationships are to be managed Customer Strategy • Customer value definition • Definition of customer segments and objectives • Definition of customer strategies and treatments • Test and learn • Decisioning environment Provide the tools and data needed to manage a customer value-based organization Customer Data • Data availability and gathering • Data quality • Data infrastructure • Models Develop innovative product offerings with the flexibility to personalize key features (e.g., pricing Value Proposition and channel options) according to the customer segment objectives Customer Contact Manage all CRM processes, systems and customer-facing staff and channels that have any interaction with the customer to deliver consistent and high quality customer experiences • Contact infrastructure - customer-specific guidelines, contact tracking, results capturing, etc. • Contact channel processes and scripting Ensure consistent administration and execution of differentiated customer strategies and Operations treatments • Response to changes in customer strategies and treatments Manage transition from a product-focused to a customer-focused organization Organization • Organizational alignment • Performance incentives 3
  4. 4. The following CRM terms are used throughoutthis analysis Vision  Customer Segments The company CRM targeted end state Cross-LOB customer grouping based on customer End State Requirements value and other customer level metrics, such as Set of statements that describe how The Provident attrition will look and function after its CRM vision has been  Segment Objectives fully implemented Enterprise-wide business objective for each CRM Areas customer segment (e.g. retain&grow, manage 6 inter-related areas of the CRM business model that risk, etc.) must be aligned to support enterprise wide customer  Customer Treatments profitability-oriented strategic objectives Actions defined for each customer for each function Enablers (e.g. marketing offer, fee refund limit, service level, Technology or business components, technical or etc.) business activities, and/or knowledge currently  Customer Strategy existing or underway at The Provident that will Collection of all treatments for each customer facilitate the transition to the CRM end-state vision  Test and Learn Gaps Continuous process of analyzing results and evolving Distance between the current and envisioned customer treatments using experimental design business model that identifies which competencies  Decisioning need to be developed to realize the vision Process of evaluating customer metrics and Gap Size determining segment and treatments for each Individual-level gap - Magnitude of individual gaps customer based on AMS observations and experience, Provident interview input (see page 9), as well as presence of effort underway and its leveragability as reflected by enablers Area-level gap - Magnitude of area-level gaps, assessed collectively on Area level Kiviat Chart Visual tool used to communicate the gap level The Provident needs to overcome in order to realize the CRM Vision 4
  5. 5. The Kiviat Chart Concept is used to visualize CRMcurrent state and summary of gaps Kiviat Chart: — Summarizes the company’s current gap level to overcome and realize the CRM Vision — Presents a high-level CRM assessment — Contains 6 axes, each representing 1 of the 6 CRM areas — Assess each area using a 5-point scale Operations Organization Customer e pl Contact Area is at the Vision state m Exa Area is at minor distance from the Vision state Area is at moderate distance from the Vision state Value Customer Area is at significant distance from the Vision state proposition Strategy Area is at major distance from the Vision state Customer Data Note: The shaded area provides a big picture of the current state of CRM at the company. An enterprise that has fully employed CRM would have a filled-out profile. 5
  6. 6. Company Vision: Customer Strategy  Accept and document cross-LOB definition of customer relationship value (across all accounts and products)  Develop an enterprise-wide customer segmentation scheme based on customer metrics (e.g. value, attrition, etc.)  Define business objectives for each customer segment  Define cross-LOB customer strategies and treatments for all customer segments  Conduct test & learn (experimental design, strategy evolution, results analysis) to monitor the effects of multiple treatments for customer segments  Deploy established methodologies to evaluate customer strategy effectiveness, consistent across all products and channels  Define economic impact of customers treatments on customer value, attrition, and satisfaction  Use enterprise decisioning environment to facilitate customer evaluation, segmentation and treatment definition 6
  7. 7. Gaps & Enablers : Customer Strategy Area Objective: Define and operationalize how individual customer relationships are to be managed CRM Area End State Requirement Gap Enablers Gap Size Customer 1. Accept and document cross-LOB 1. No cross-LOB • Organization structure Strategy definition of customer relationship definition of customer (all products under the value (across all accounts and value agreed to umbrella of Customer products) Management) • New profitability system 2. Develop an enterprise-wide 2. No segmentation based • Needs-based segmentation customer segmentation scheme on customer value proposed (as outlined by based on customer metrics (e.g. exists today BAIGlobal) but not yet value, attrition, etc.) operationalized 3. Define business objectives for each 3. No customer segments customer segment exist 4. Define cross-LOB strategies and 4. Strategies and treatments treatments for all customer segments are not based on customer value and are LOB- specific KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 7
  8. 8. Gaps & Enablers : Customer Strategy (continued) Area Objective: Define and operationalize how individual customer relationships are to be managed CRM Area End State Requirement Gap Enablers Gap Size Customer 5. Conduct test & learn (experimental 5a.Limited manual cross-LOB • Feedback established Strategy design, strategy evolution, results feedback on business between loan collections analysis) to monitor the effects of activities exist and originations to improve multiple treatments for customer credit decisions segments 5b.Limited evolution of customer treatments based • Manual feedback process on feedback exists between branch and marketing on campaigns • Horizon ACquire 6. Deploy established methodologies 6a.No experimental design • Monthly Key measures to evaluate customer strategy methodology currently in Management Report effectiveness, consistent across all use today products and channels 6b.No statistical software for analyzing results of experiments in use 7. Define economic impact of 7. No cross-LOB customer • Customer-level attrition customers treatments on customer metrics exists metric exists but it is not value, attrition, and satisfaction linked to specific customer treatments 8. Use enterprise decisioning 8a. No enterprise-wide • Current loan application scoring environment to facilitate customer decisioning • MCIF evaluation, segmentation and environment* • Mortgage Ware treatment definition 8b. Decisioning limited to • Horizon RMS the origination function KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 8
  9. 9. Company Vision: Customer Data  Achieve a common definition of a customer, including all its potential levels- account, individual, and household  Capture data to measure customer value for all customers on a regular basis (at least monthly)  Use customer value and predictive models as inputs to enterprise- wide customer value segmentation scheme and treatment definition  Update segmentation inputs regularly  Maintain, validate, and refine segmentation inputs  Implement process to collect enterprise-wide data such as summary, transaction, financial, operational, and contact data  Provide ability to capture data from separate product portfolios  Provide activity based costing data as inputs to customer value models  Capture and store customer level info on demographics and linkages to account relationships in centralized customer information repositories  Capture and store customer contact data and back office events in centralized Customer Activity DB (CA DB) 9
  10. 10. Company Vision: Customer Data (continued)  Capture and store customer strategies and treatments in centralized and integrated Customer Strategy Profile DB (CSP DB)  Capture and store transactional customer data (e.g. use of all products and channels) in a central repository or warehouse  Refresh or update data regularly (at minimum monthly)  Provide sufficient (at least 12 months) historical data  Ensure well-defined and documented, accurate and consistent data for all customers 10
  11. 11. Gaps & Enablers: Customer Data Area Objective: Provide the tools and data needed to manage a customer profitability based organization CRM Area End State Requirement Gap Enablers Gap Size Customer 1. Achieve a common definition of a 1a. MCIF has customer • MCIF Data customer, including all of its defined by SSN and HH potential levels- account, individual, but not all products are and household captured (e.g. loan, safe deposit, trust, debit card) 1b. MCIF does not store the SSN of joint/secondary holder 2. Capture data to measure customer 2. No definition of value for all customers on a regular customer value exists basis (at least monthly) 3. Use customer value and predictive 3a. No cross-LOB customer • New profitability system models as inputs to enterprise-wide models exists • Credit application customer value segmentation scorecard 3b. No centralized QA/policy scheme and treatment definition for model development, • Needs-based • Update segmentation inputs evolution and maintenance segmentation proposed regularly 3c. No statistical modeling based on BAIGlobal • Maintain, validate,and refine expertise in-house study segmentation inputs • Harland attrition, 3d. No statistical modeling software (e.g. SAS) in- propensity-to-cross-sell house and PTB models KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 11
  12. 12. Gaps & Enablers : Customer Data (continued) Area Objective: Provide the tools and data needed to manage a customer profitability based organization CRM Area End State Requirement Gap Enablers Gap Size Customer 4. Implement process to collect 4. No such process exist • Data feeds of MCIF Data enterprise-wide data such as • Horizon summary, transaction, financial, operational, and contact data • Provide ability to capture data from separate product portfolios • Provide activity based costing data as inputs to customer value models 5. Capture and store customer level 5. Systems of record exist • Horizon RMS info on demographics and linkages (Horizon RMS), but to account relationships in data quality issues need • Duplicate Resolver centralized customer information to be addressed (e.g., repositories duplicate records) 6. Capture and store customer contact 6. Limited customer • Horizon data and back office events in contact data captured centralized Customer Activity (CA today DB) 7. Capture and store customer 7. No customer strategies • Horizon RMS strategies and treatments in and treatments data centralized and integrated Customer exists today Strategy Profile DB (CSP DB) KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 12
  13. 13. Gaps & Enablers : Customer Data (continued) Area Objective: Provide the tools and data needed to manage a customer profitability based organization CRM Area End State Requirement Gap Enablers Gap Size Customer 8. Capture and store transactional 8a. Limited transitional • Horizon Data customer data (e.g. use of all information captured (e.g. no products and channels) in a central data on rebates by fee type) repository or warehouse 8b. Data captured in separate • Refresh or update data control files that are regularly (at minimum application specific monthly) • Provide sufficient (at least 12 8c. Some channel info is months) historical data incorporated in transaction codes (e.g. cannot differentiate if funds transfer via IVR or Web 8d. Transition data from before conversation is kept separately) 9. Ensure well-defined and 9a. MCIF, Loan Station not well • Horizon database well documented, accurate and consistent documented documented and data for all customers defined 9b. Contact management not well defined (uses free text notes) 9c. Duplicate customer records and multiple addresses exist in Horizon RMS 9c. Internet and IVR transactions are not distinguishable KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 13
  14. 14. Company Vision: Value Proposition  Analyze and understand the composition of product holdings for customer segments  Continuously analyze and understand customer needs  Define customer pricing strategies based on customer segment objectives  Design new product offerings, features and access options based on customer segment objectives and needs  Conduct regular marketing and competitive research to support customer segment management and creation of new offerings  Adopt rigorous test and learn approach of designing product and service offerings supported by an analytical process  Market products in customer-based, coordinated fashion, e.g., consciously coordinate marketing contacts and marketing budgets for all products and offerings  Proactively manage channel usage based on economics and customer preferences  Use customer satisfaction measurements to help in the continual evaluation of strategies, decisions and offerings using test & learn  Measure success based on combination of product profitability, customer value, (e.g., customer satisfaction, value, attrition) 14
  15. 15. Gaps & Enablers : Value Proposition Area Objective: Develop innovative product offerings with the flexibility to personalize key features (e.g., pricing and channel options) according to the customer segment objectives CRM Area End State Requirement Gap Enablers Gap Size Value 1. Analyze and understand the 1. Product holding analysis • Harland Study Proposition composition of product holdings for performed but based • BAIGlobal Study customer segments primarily on deposit holdings and not entire customer relationship 2. Continuously analyze and 2. Analysis is performed on • BAIGlobal study understand customer needs ad-hoc basis and is focused on testing products and features 3. Define customer pricing strategies 3. No price differentiation based on customer segment based on customer value objectives exists 4. Design new product offerings, 4. Product development features and access options based on not based on customer customer segment objectives and segments needs 5. Conduct regular marketing and 5. Research is performed but • Peer Group Study competitive research to support on ad-hoc basis and is customer segment management and more product based that • BAIGlobal Study creation of new offerings customer based KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 15
  16. 16. Gaps & Enablers : Value Proposition (continued) Area Objective: Develop innovative product offerings with the flexibility to personalize key features (e.g., pricing and channel options) according to the customer segment objectives CRM Area End State Requirement Gap Enablers Gap Size Value 6. Adopt rigorous test and learn 6. No test and learn approach in place today • BAIGlobal Study Proposition approach of designing product and service offerings supported by an analytical process 7. Market products in a customer- 7a. Limited coordination with • Centralized module based, coordinated fashion, e.g., Investment Services today approach consciously coordinate marketing 7b.Campaigns do not leverage • Marketing budget is contacts and marketing budgets for centralized predictive tools (e.g. all products and offerings propensity-to-buy, etc.) 8. Proactively manage channel usage 8a. Limited channel usage based on economics and customer information exists preferences 8b. No channel costs captured 8c. No preferences captured 9. Use customer satisfaction 9. Satisfaction surveys measurements to help in the conducted for overall continual evaluation of strategies, satisfaction but not strategy decisions and offerings using test & or treatment specific learn 10.Measure success based on 10.Success generally not combination of product profitability measured based on and customer value (e.g., customer customer profitability or satisfaction, value, attrition) satisfaction KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 16
  17. 17. Company Vision: Customer Contact  Provide customer contact staff in key functional areas with customer specific guidance for action and related info and/or scripting on how to best approach a customer or respond to a customer’s request  Provide customer contact staff across the enterprise with consistent messages and guidance regardless of contact platform  Enable contact platforms with access to update to Customer Strategy Profile DB  Provide customer contact staff with capabilities to record the offer/action made to the customer and the outcome of the contact  Include customer value in measure of effectiveness of customer contact  Develop consistent sales processes and scripting for all channels 17
  18. 18. Gaps & Enablers : Customer Contact Area Objective: Manage all CRM processes, systems and customer-facing staff and channels that have any interaction with the customer to deliver a consistent and high quality customer experience CRM Area End State Requirement Gap Enablers Gap Size Customer 1. Provide customer contact staff in 1a. No customer specific • Fairmount sales training Contact key functional areas with customer guidance exists • Horizon RMS specific guidance for action and related info and/or scripting on how 1b.Culture focused on to best approach a customer or reactive service rather respond to a customer’s request than proactive needs based selling 2. Provide customer contact staff 2a. Inconsistency in • Horizon across the enterprise with consistent customer experience customer-specific messages and across channels and guidance regardless of contact products exist platform 2b. Limited customer contact platform capabilities 3. Enable contact platforms with 3. CSP DB does not exist access to update Customer Strategy Profile DB (CSP DB) 4. Provide customer contact staff with 4. Limited capabilities to • Horizon capabilities to record the record customer contact offer/action made to the customer deposition exists and the outcome of the contact KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 18
  19. 19. Gaps & Enablers : Customer Contact (continued) Area Objective: Manage all CRM processes, systems and customer-facing staff and channels that have any interaction with the customer to deliver a consistent and high quality customer experience CRM Area End State Requirement Gap Enablers Gap Size Customer 5. Include customer value in measure of 5. Customer value not part Contact effectiveness of customer contact of contact effectiveness measures 6. Develop consistent sales processes 6. LOBs/channels have • Fairmont Sales training and scripting for all channels different sales processes, training, and scripting KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 19
  20. 20. Company Vision: Operations  Enable back office systems with access to and use of customer strategy info stored in Customer Strategy Profile DB  Ensure back-end processes and systems have capability to execute consistently differentiated customer strategies and treatments  Provide scalable and flexible operational environment to support changes in customer specific strategies and treatments 20
  21. 21. Gaps & Enablers : Operations Area Objective: Ensure consistent administration and execution of customer strategies and treatments CRM Area End State Requirement Gap Enablers Gap Size Operations 1. Enable back office systems with 1. No link between back • Horizon RMS access to and use of customer office systems and CSP strategy info stored in Customer (CSP DB does not Strategy Profile DB exist) 2. Ensure back-end processes and 2. Back-end processes and systems have capability to execute systems to support consistently differentiated customer differentiated treatments strategies and treatments do not exist 3. Provide scalable and flexible 3. Most changes to operational environment to support Horizon environment changes in customer specific are not user-driven, and strategies and treatments depend on Horizon schedule KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 21
  22. 22. Company Vision: Organization  Provide active and visible CRM leadership  Establish a cross-LOB strategy team with the authority to set consistent, appropriate, and coordinated customer strategies and treatments  Introduce cross-LOB CRM program office structure and processes  Dedicate staff to coordinate, implement and monitor activities based on customer value (segment management)  Designate staff dedicated to CRM result analysis and customer strategy evolution  Align performance and incentives across all levels of the enterprise (e.g., product profitability, customer value, and customer satisfaction) (customer-centric model) 22
  23. 23. Gaps & Enablers : Organization Area Objective: Manage transition from product-focused to customer-focused organization CRM Area End State Requirement Gap Enablers Gap Size Organization 1. Provide active and visible CRM 1a.Complete commitment of • Executive Management leadership senior leadership is still Team required • CRM Advisory team 1b. Customer-centric strategy is not clearly translated into action 1c. No clear definition of CRM across the organization exists 2. Establish a cross-LOB strategy team 2. No cross-LOB customer • CRM Advisory Team with the authority to set consistent, strategy team exists • Cross LOB teams, such as appropriate, and coordinated Credit Review Committee, customer strategies and treatments Write-off and Recoveries Committee, Game Book Meeting, etc. 3. Introduce cross-LOB CRM program 3a. Project Management is office structure and processes decentralized and currently done by line officers 3b. Project justification and benefit tracking process does not exist 3c. Accountability for business/technology initiatives is not well defined 3d. Interactions among business areas is limited No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area KEY Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 23
  24. 24. Gaps & Enablers : Organization (continued) Area Objective: Manage transition from product-focused to customer-focused organization CRM Area End State Requirement Gap Enablers Gap Size Organization 4. Dedicate staff to coordinate, 4. Segment management • Consumer Segment implement and monitor activities structure not Management group based on customer value (segment operationalized mgmt) 5. Designate staff dedicated to CRM 5. No staff dedicated to result analysis and customer strategy CRM analysis evolution 6. Align performance and incentives 6. Performance and HR to follow-up across all levels of the enterprise incentives measured on (e.g. product profitability, customer product level only value, and customer satisfaction) (customer centric model) KEY No Gap - Provident has all capabilities in the area Significant Gap - Provident has few capabilities in the area Minor Gap - Provident has most capabilities in the area Major Gap - Provident has no capabilities in the area Moderate Gap - Provident has some capabilities in the area 24
  25. 25. One View of The Customer Review ‘One View’ of the Customer Today’s Date:  Provides a centralizedDemographic Data Deposit Account Relationships display of aCustomer Type: Retail, Small DDA: $4321.08 Savings: $8231.80 customer’s entireBusinessLast Update: 3/30/09 - VERIFY Total Deposit Balance: $12,552.88 relationship, includingName: Irene VictorSSN: 123-45-6789 Credit Account Relationships Mortgage: $89,089.20 and 3rd party dataDOB: 01/01/1961 Personal Loan: $12,324.65Home Address: Total Credit Balance: $101, 413.85431 Appleby Dr.Golden, VA 23029Business Address: Alternative Investments  Facilitates35 Main StreetSuite 6 Investments: $14,111.44 Trust: $237,892.95 comprehensiveSmithville, VA 23102Home phone #: (555) 915-5555Work phone #: (555) 955-5555 Total Alternative Investment Balance: $252,004.39 understanding ofEmail: ivictor@isp.net Ancillary Services every customer’sOffer Pending: Yes Overdraft Protection: $1,000.00 Safe Deposit Box: No relationship Debit Card: YesPreferred Channel of Contact: Call Internet Banking: NoCenter Privacy: TrueLast Customer Contact:3/30/02, Call Center  Enhances customer experience 25
  26. 26. Customer Strategy CRM Action Profile Customer Strategy Profile Offers (Proactive) Opportunities (responsive) Nam e: Personal Loan Name: Investments Displays actionable Name: Money Market Name: Checking Name: Home Equity Name: IRA information based on OID: GD-06-30-2002 OID: MM-06-30-2002 strategic customer Channel: Direct Mail Exp Date: 07-31-2002 ODate: 06-30-2002 segment objectives Term s: .25% bonus in first 12 mon. on new bal > $25K E xp Date: 07-31-2002 Status: Declined Allows for consistent Term s: Standard Offer w/ Free online bill pay for 6 months S tatus: Pending treatment across Account Management channels and contact Allowabl e Cred it Line Discretion PID: OD-1234 staff Name: Overdraft Protection Increase: $500 PID: PL-1234 Allows for contact Name: Personal Loan Increase: $5,000 staff to update offer Pricing and Fee Management Retention Actions and Activity disposition – which Allowab le Fee Refund s: A cti on: Flowers sent on 5 yr. anniversary can be used in the Amount: $50 Date: 12/21/2002 Fees waived YTD: next evaluation Amount: $0 Service Guidelines S ervice Level: High, support phone 555-555-1212 26

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