Michael Hoffman, President Client X Client Reduce Costs and Increase Revenue in Every Customer Contact. Michael R. Hoffman, ClientXClient, [email_address] , 908 542-1134

Reduce Costs and Increase Revenue in Every Customer Contact.

Overview Financial Services, Retail, Publishing, Travel, Non-Profit, Education Marketing Technology Expert Customer Infrastructure – Customer Architecture Advertising – Mail – SFA – Contact Center – Fulfillment – Customer Service The Matrix – Creating leverage in each customer contact Tools to plan and view enterprise Need background Need key areas Target markets vertical expertise

Financial Services, Retail, Publishing, Travel, Non-Profit, Education

Marketing Technology Expert

Customer Infrastructure – Customer Architecture

Advertising – Mail – SFA – Contact Center – Fulfillment – Customer Service

The Matrix – Creating leverage in each customer contact

Tools to plan and view enterprise

Need background

Need key areas

Target markets vertical expertise

Top Causes of Failure in CRM Today Not realizing that functions, jobs, performance and reward systems must change. Not thinking big enough. Don’t believe your vendor – Tools are the easy part. How is you company going to make this work? Systems and processes can be CRM’d without buying software and consulting. Technology and non-technology systems need to be accessed for their impact to customer… Think Like a Customer approach. Limited or no input from the customer’s perspective Thinking that technology is the solution Lack of specifically designed, mutually reinforcing processes Poor-quality customer data and information Little coordination of multiple departmental initiatives and projects No concrete measures for payback and milestones No view of “What this looks like when its done.” Are we there yet?”

Not realizing that functions, jobs, performance and reward systems must change.

Not thinking big enough.

Don’t believe your vendor – Tools are the easy part. How is you company going to make this work?

Systems and processes can be CRM’d without buying software and consulting.

Technology and non-technology systems need to be accessed for their impact to customer… Think Like a Customer approach.

Limited or no input from the customer’s perspective

Thinking that technology is the solution

Lack of specifically designed, mutually reinforcing processes

Poor-quality customer data and information

Little coordination of multiple departmental initiatives and projects

No concrete measures for payback and milestones

No view of “What this looks like when its done.” Are we there yet?”

How much is CRM worth? THE TRUE MEASURE OF CRM IS CHANGE THAT IMPACTS EACH CUSTOMER IN EACH INTERACTION

Increase Yield Per Customer Acquisition Service Retention Increase Revenue – Protect and Grow Margin Expand Revenue Streams Additional Revenue Streams

Acquisition

Service

Retention

Increase Revenue – Protect and Grow Margin

Expand Revenue Streams

Additional Revenue Streams

3 CONCURRENT CRM DEVELOPMENT AREAS Per Channel Cross Channel Multi-Channel Offer Management Customer Value Management Technology: (Channel & Infrastructure) Management + +

Reverse Engineer Operational Processes to Reflect Customer Processes: From: Acquisition Service Operations

CUSTOMER EXPERIENCE MATRIX 1. Awareness 3. Identification 4. Selection 2. Information 7. Logistics 5. Negotiation 6. Contract 8. Delivery 9. Acceptance 10. $ Collection 12. Care & Support 14. Community 11. Use 13. Repair Acquisition Service Operations

CUSTOMER EXPERIENCE MATRIX 1. Awareness 3. Identification 4. Selection 2. Information 7. Logistics 5. Negotiation 6. Contract 8. Delivery 9. Acceptance 10. $ Collection 12. Care & Support 14. Community 11. Use 13. Repair A Customer becomes aware of a need Customer gathers information regarding filling need Customer identifies potential options and sources to satisfy need Customer selects product(s), service(s), provider(s) to satisfy need requirements Customer negotiates all aspects of acquiring product or service Customer legally commits to product purchase and specifications Customer establishes criteria for receipt Product or service is delivered to customer Customer accepts or rejects product/service Customer pays for product and/or services Customer uses product Customer cares for product, learns about product Customer fixes, repairs, product Customer participates in “word of mouth” product/service community

A Customer becomes aware of a need

Customer gathers information regarding filling need

Customer identifies potential options and sources to satisfy need

Customer selects product(s), service(s), provider(s) to satisfy need requirements

Customer negotiates all aspects of acquiring product or service

Customer legally commits to product purchase and specifications

Customer establishes criteria for receipt

Product or service is delivered to customer

Customer accepts or rejects product/service

Customer pays for product and/or services

Customer uses product

Customer cares for product, learns about product

Customer fixes, repairs, product

Customer participates in “word of mouth” product/service community

14 Stages of Customer Experience Awareness Information Identification Selection Negotiation Contract Logistics Delivery Acceptance $ Collection Use Care & Support Repair Community

Awareness

Information

Identification

Selection

Negotiation

Contract

Logistics

Delivery

Acceptance

$ Collection

Use

Care & Support

Repair

Community

Direct Mail Web Outbound Telemarketing eMail Banner Ads Portals Web Direct Mail CCM VRU Direct TV 3G Personalization eMail Web Coupon CCM VRU DTV Aggregators Web Personalization Direct Sales CCM Loyalty Continuity Automated Service eMail CCM Web Chat Service Auto. Collaborators Service Automation Fulfillment Form Sharing Web CCM Chat VoIP Fulfillment Web CCM Partners Fulfillment Web eLogistics Fulfillment eLogistics eMail S. Alerts CCM eCollection Lock Box eBilling CCM CCM eMail Self Help Knowledgebase Chat Direct Mail Continuity eNewsletter Web CCM eCRM Portal 14 Stages of Customer Experience 1. Awareness 3. Identification 4. Selection 2. Information 7. Logistics 5. Negotiation 6. Contract 8. Delivery 9. Acceptance 10. $ Collection 12. Care & Support 14. Community 11. Use 13. Repair Web Contracts Usage tracking CCM eLogistics Return Processing

Geography Digital Store 3 rd Party One-to-One SEGMENT Lifetime Value 1. Awareness 3. Identification 4. Selection 2. Information 7. Logistics 5. Negotiation 6. Contract 8. Delivery 9. Acceptance 10. $ Collection 12. Care & Support 14. Community 11. Use 13. Repair

Marketing Advertising Promotion Communications Product Management Distribution Operations Sales Operations Delivery Retail Distribution E-Biz Communications Sales Third Parties Finance Product Management Retail Operations Re-Seller Management Sales Customer Support Operations Sales Dysfunction Junction Geography Digital Store 3 rd Party One-to-One 1. Awareness 3. Identification 4. Selection 2. Information 7. Logistics 5. Negotiation 6. Contract 8. Delivery 9. Acceptance 10. $ Collection 12. Care & Support 14. Community 11. Use 13. Repair

Objectives for Each Interaction Identify Customer Recognize Customer Serve/Resolve Issue Upgrade Extend Offer(s) Grow Relationship Educate Collect Data/Learn Gain Referrals

Identify Customer

Recognize Customer

Serve/Resolve Issue

Upgrade

Extend Offer(s)

Grow Relationship

Educate

Collect Data/Learn

Gain Referrals

Single Purchase Index: % Likelihood of no second purchase Projected time to second purchase: Remaining time to second purchase: Propensity to defect next 30 days: Propensity to defect next 60 days: Propensity to defect next 90 days: Propensity to defect next 120 days: Propensity to defect next 180 days: Propensity to buy next 30 days: Propensity to buy next 60 days: Propensity to buy next 90 days: Propensity to buy next 120 days: Propensity to buy next 180 days: Next most likely purchase: (product/service) Next most likely purchase category: Next most likely purchase channel: Next most likely purchased: amount New Customer “A” Profile Tenure: Expected 3 month revenue: Expected 6 month revenue Expected 12 month revenue

Single Purchase Index: %

Likelihood of no second purchase

Projected time to second purchase:

Remaining time to second purchase:

Propensity to defect next 30 days:

Propensity to defect next 60 days:

Propensity to defect next 90 days:

Propensity to defect next 120 days:

Propensity to defect next 180 days:

Propensity to buy next 30 days:

Propensity to buy next 60 days:

Propensity to buy next 90 days:

Propensity to buy next 120 days:

Propensity to buy next 180 days:

Next most likely purchase: (product/service)

Next most likely purchase category:

Next most likely purchase channel:

Next most likely purchased: amount

Optimize ROI at Each Transaction Revenue Growth: Up-sell Customer Ensure customer Satisfaction Extend Customer Lifecycle Accelerate Customer Value Maturity Revenue Enhancement: Sell Prospect /Customer Name Sell Customer Information (exclude name) Refer Community/Partner Services/Products Warranty Services Cost Reductions: Invest accordingly Accelerate resolution Identify alternative lower cost solution

Customer Experience Map + Triggers + Enabling Technology Differentiated service at every point of contact Reduced cost through call diversion and improved responsiveness Increased revenue through more selling opportunities and better targeting Increase retention of best customers Create additional revenue opportunities through customization Better 3 rd party relationships Higher Acquisition hit rates Higher yield per customer

Differentiated service at every point of contact

Reduced cost through call diversion and improved responsiveness

Increased revenue through more selling opportunities and better targeting

Increase retention of best customers

Create additional revenue opportunities through customization

Better 3 rd party relationships

Higher Acquisition hit rates

Higher yield per customer

Customer Viewpoint: Fulfillment Acquisition Selection Contract Use Collection Delivery Logistics Services Support receive email offer place order consume receive & pay bill receive shipment product question Customer View CEM stage

Company Viewpoint Fulfillment Acquisition Selection Contract Use Collection Delivery Logistics Services Support receive email offer place order consume receive & pay bill receive shipment product question Customer View marketing, ecommerce ecommerce, operations operations operations operations Department CEM stage Campaign, eDialog Web site, Order Billing Ship Customer Service System

CRM Viewpoint Outsourced Fulfillment Acquisition Selection Contract Use Collection Delivery Logistics Services Support receive email offer place order by phone consume receive & pay bill receive shipment product question Customer View marketing, ecommerce Call Center operations operations operations Department CRM BPM stage Campaign, eDialog Web site, Siebel 3 rd Party Billing Outsourced PeopleSoft Technology cross sell up sell, survey data exceed, resell resell, referral cut cost, feedback cross sell, resell solve, extend, survey Objective product, list, email, content product, offer, history product billing, inserts, messages product, survey insert product, shipping, inserts history, script, agents Requirements promo cost entry cost revenue, bill cost, entry cost ship cost prod cost, promo cost service cost Value

Customer Experience Focus – High ROI Activities Protect and Grow High Value Customers – Retention Identify High Potential Low Yield Customers – Development Create Second Purchasers Build/Support Buyer Communities Preemptive Retention Campaigns ***AT EACH STAGE FOR RIGHT CUSTOMERS

Protect and Grow High Value Customers – Retention

Identify High Potential Low Yield Customers – Development

Create Second Purchasers

Build/Support Buyer Communities

Preemptive Retention Campaigns

Description Focus Success Data Transactions, raw data , operational Operation efficiency Low error, failure rate, speed of transaction Information raw data reorganized for reporting, internal measurement Reporting Timely reports, good general information, trend reports, focus on variances Knowledge bench mark industry, vertical numbers, management performance numbers - still internal Departmental knowledge sharing, very small part of business justification Adoption of measures beyond trends, use of information in strategic plans, counts of new customers v.s. product sales, opportunities for cost reduction at customer level Customer Intelligence Blend of raw data tied to customer, some enhancement, still the purview of marketing Discovery, measuring opportunities, retention, acquisition, acquisition, loyalty Dawn of household/customer level reporting, non-customer - prospect and lost customer metrics, Lifetime Value, Retention Rate, Customer: Prospect: Channel: Fitness become measured Market Wisdom Customer/prospect value as business performance metric Best practices adopted at lowest cost - efficiency, marketing automation, human capital & discovery used to differentiate, metrics gain executive & Wall Street awareness 20% of activities which create 80% of returns are adopted via new technology as "best practices" are systematized, Emphasis shifts to Customer/market proposition ROI/ROC optimization; new business performance metrics

Michael Hoffman, President Client X Client CRM Perception and Reality Michael R. Hoffman, ClientXClient, [email_address] , 908 542-1134 Thank You

CRM Perception and Reality