CRM Backwards
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CRM Backwards explains CRM from customer perspective and exposes critical flaw in trasitional CRM technology and deployment design. CRM Backwards identifies key areas for innovation and new thinking around managing customers and monetizing customer relationships. The CxC Matrix or Customer Experience Matrix presented in the program is the industry standard for visualizing and monetizing customer experience. MRHoffman, author Customer Worthy, provides detailed notes for this presentation downloadable at CustomerWorthy.com
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CRM Backwards
- 1. CRM Backwards What you need to know before you spend another cent on CRM 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 2. Every contact matters… … especially to customers. 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 3. Customers measure contacts differently then companies 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 4. How Your Customer Measures CRM Monetize this: From Preface, Page XII, Customer Worthy, Why and how everyone in your organization must Think Like a Customer, Michael R Hoffman, Paramount Publishing 2010 The Customer Revolution Starts While Your Customer is on “Hold” 2012 All rights reserved. ClientXClient 908.542-1134 [email_address] Michael Hoffman Investment My Cell Phone Company (rhymes with horizon) 20 minutes preparation 20 minutes online 20 minutes on hold 20 minutes call hold time = Free 11 Minutes Customer Service Rep Interaction Time 11 minutes Customer Service Talk Time My time @ 3.00 minute Call time @ $0.45 minute X 71 Minutes Me, The Customer Cost = $210 Wireless Phone Company Cost: $4.95 @ $50 hr = 59.16 @ $10 hr = 11.43 Final Resolution 6 Month Cost X 551 Minutes 120 minutes @ $54 Me, The Customer Cost = $1,653 Wireless Phone Company Cost: $54
- 5. It’s coming… Consider your company warned CustomerPayback.com a social network for customer self-monetization, Live May 2012 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 6. For customers, every contact is part of customer relationship management = 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 7. Customers invest across the entire customer cycle 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 8. Yes, every contact has at least two costs: company $ + customer $ And every contact has potential revenue… 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 9. So CRM is Everyone’s Job 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 10. Figure 12.4 CxC Matrix Systems Include (sample list) Customer Worthy, pg. 151 Accounting Advertising Business intelligence Business performance management Business process management Call routing Care center inbound Compensation Contact management Content management Cost accounting Credit authorization Credit modeling CRM (customer relationship management) Customer service Customer survey Data matching Device design Device management Digital asset management Security Self service Self service kiosk Self service mobile Self service phone Self service web Shipping Social media Statistics Subscription management Supply chain management Telephony Text to voice Voice to text Web analytics Web chat Web hosting Web presentation Web security Work flow Direct marketing Distribution Email hosting Email management Enterprise marketing management ERP (enterprise resource process management) Financial reporting Fraud detection Fulfillment Game management General ledger Inbound telemarketing Integrated communications Inventory It operations Lead management Licensing List management Location security Logistics Maintenance Marketing automation Master data management Modeling Network design Offer management Order management Outbound telemarketing Packaging Partner management Performance management Performance reporting Point of sale Point-of-purchase Predictive modeling Printing Public relations Quality systems Resource management Returns processing Reverse logistics sales Automation … and CRM is “in” Every System 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 11. But companies don’t understand CRM Cost focus here enflames customer rage 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 12. Companies would “get it” if they monetized every contact 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 13. CRM must incorporate customer experience transparency From Thinkmap®, Visual Thesaurus® 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 15. Start broad Macro CxC Matrix build in 1 week 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 16. Identify & monetize cells critical to business objective Prioritize budget, projects based on monetization x x x x x x x x x 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
- 17. Thank You! Michael R. Hoffman, 908.542.1134 CLIENT x CLIENT clientxclient.com Think Like a Customer! CRM & Marketing for the next 10 years. 2012 All rights reserved. ClientXClient 908.542-1134 [email_address]
Editor's Notes
- (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134 CRM is almost always done wrong. Customer relationship management has a forty percent to seventy plus percent project failure rate as reported by major technology analysts firms and business consultants whom have interviewed executive management, IT and system end users. If you ask customers, the failure rate is even higher as customer dissatisfaction ratings climb and customer outrage grows. Customers have become less loyal and more vocal as they spread their disapproval across all media channels from web site reviews, FaceBook slams, product and company review sites. Most telling, if you are a company, is how customers vote with their feet and wallets. Describing and designing the best customer outcome has been the fatal flaw of most, if not all, CRM initiatives. CRM should be built backwards. Define what you want the customer experience to be. Inventory every contact and quantify and the best business outcome. Then script best customer contact across each company contact, system, function and process.
- The best measurement for CRM effectiveness is impact per customer as measured at each stage of the customer life cycle. CRM should move more customers to sales, grow margin per customer, extend customer life time value, grow referrals and generate referral and affiliate business. Operational cost savings, overhead reductions, processing efficiencies are symptoms of a well architected CRM solution but should not be considered the primary business drivers. Business growth through customer growth will create a sustainable and higher yielding business outcome. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- Seems obvious, but this fundamental concept is quickly overlooked by customer service, sales, marketing and IT professionals. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- While “transparency” is the popular buzzword of our time, most organizations prefer to ignore their customer’s view and fail to consider ‘customer time’ and ‘customer sequence of events’ in their relationship measurement designs. Multi-channel customers, the most engaged customers, the customers making the most commitment and often greatest time commitment, are mismanaged due to IT barriers, department functional responsibility barriers and compensation and goal management goal barriers. The disparity between internal measures and customer measures is the greatest catalyst for business innovation for the next 10 years. Side note: The Apple iPod is an example of designing backwards. With a goal of delivering a device to fill customer’s leisure time, music and now video acquisition and personalization with the greatest convenience is how customers measure their iPod’s value. Style and branding help too – but the time savings, ease of use and customer experience are the core deliverables. All this CRM happens before customers contact Apple about a problem with their device, the service side of CRM, which is subsidized by the four revenue streams of content, hardware, software, affiliate relationships/licensing. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- Customers are tired of being nickled and dimed. Tired of cancellation fees, waiting on hold, waiting for the technician and fed up with complicated set-up and poorly designed operation. Customerpayback.com is one example of a way customers will start “billing” companies for their time and demand more equitable customer relationships. 2012 is the start of customer self monetization. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- Customers see and value their relationships with companies based on the culmination of all their direct and indirect contacts with a company. Companies need to factor all these contacts into their CRM design. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- More than just providing a 360 degree view, a favorite CRM term for data and system integration, CRM must factor customers moving through their customer life cycle in order to invest in the key customer contact areas that will generate the highest immediate, near term and long term revenue. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- Companies must attempt to understand not only their internal cost per contact but must factor the customer’s cost and investment per contact to truly architect superior customer relationships. Each interaction has a set of costs and revenue contribution value. The CxC customer experience matrix uses a method of cost accounting similar to Activity Based Costing to evaluate customer investment and yield. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- In going backwards from customer to contacts to customer life cycle, companies discover the customer relationship management is an organization wide effort. Here we use the CxC Matrix to describe the customer expereince across channels and across functional departments exposing the proverbial “missed hand-offs” and “cracks” that customers often fall through. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- Just as CRM spans multiple departments, CRM functionality, that is system functions that affect customers, exist in nearly every customer system and need to be considered for optimum customer performance. On a positive note, many existing systems have customer-benefitting functions that have simply been overlooked and under-utilized due to company centric and IT centric design. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- Proof that companies do not understand CRM is their consistent emphasis on reducing cost of service and transaction cost in latter relationship stages while customer issues start earlier in the customer lifecycle. Also, latter contacts, transactions, are an excellent source for additional revenue. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- How much can you script each contact using CRM? This Amazon.com page example is overkill for most any business, but its components, inventorying each message slot, predicting which content will best persuade customers and create urgency to act and continuous testing and measurement are the key elements every organization should use for contacts from answering the phone, planning a meeting, meeting face to face in the store in the aisle and at check-out. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- Customer experience is too fuzzy a concept to be generally accepted and adopted by most management teams and this diagram partially show why: customer experience is too big. So customer experience through CRM needs to be an organization wide effort where all managers are accountable, know their roles and impact and organizational measures and roles are commonly understood and measured achievng organizational customer experience transparency (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- The CxC Matrix is a simple multi-disciple businsess tool that helps companies plot their customer’s experience across functions, systems, channels and all stakeholders. The visual model is unique to every organization and represents the organization’s customer finger print, no two organizations have the same CxC Matrix. The mental model is vitally important for explaining where, why and how departments need to work together and communicate to avoid downstream and upstream customer lifecycle issues. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- With simple and quick customer monetization applied to the CxC Matrix key areas (tactics, functions, process, departments and systems) are quickly identified and prioritized and addressed accordingly. (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134
- (c) 2004. All rights reserved. CRM BPM Client X Client LLC (908) 542-1134 I hope this information is helpful to your organization. We greatly appreciate all feedback and welcome the addition of all content, resources and tools that will help organizations manage customers better. For a detailed walk through of how your company can adopt the concepts contained here, read Customer Worthy, Why and how everyone in your organization must Think Like a Customer available at Amazon and ParamountBooks.com. Michael R. Hoffman is a CRM, marketing, sales and technology consultant and motivational speaker. Michael Hoffman is a pioneer in monetizing customers and customer experience. He has spent more than 20 years working with global data and technology companies helping them design and sell systems to help companies better understand, target, win, and grow customers. Mr. Hoffman speaks the language of sales, operations, finance and technology all with a customer dialect. His “customers are everyone’s business” approach invigorates employees across a company spurring innovation, enthusiasm and a contagious passion to build, sell and deliver customer worthy solutions. Mr. Hoffman’s knowledge comes from years spent in front of customers and in boardrooms, within customer technology development skunk works, and inside multi-thousand cubicle customer contact centers. He shows companies how to gain unfair competitive advantage leveraging customer information to design, execute and measure superior customer worthy solutions. His prior experience includes executive positions at Google (formerly DoubleClick), Sitel (formerly ClientLogic), Experian, and marketing technology start-ups. His diverse clients and partnerships include well-known establishments in the retail, banking, insurance, non-profit, telecommunications, publishing, travel, technology, services, and entertainment industries. His CxC Matrix is used by both business-to-consumer and business-to-business enterprises. [email_address]