Got customers? Healthcare IT Strategy

It’s called VRM, Vendor Relationship Management

“ Retention is for wimps. We measure the percentage of customers who have our name tattoed on their body.” (Harley Davidson Annual Report) “ 80% of CEOs believe their brand provides a superior customer experience… 8 % of their customers agree“ (Bain & Company)

“ Retention is for wimps. We measure the percentage of customers who have our name tattoed on their body.”

(Harley Davidson Annual Report)

“ 80% of CEOs believe their brand provides a superior customer experience… 8 % of their customers agree“

(Bain & Company)

CRM – A Matter of Perspective Is your firm looking from the inside-out or from the outside-in?

Is your firm looking from the inside-out or from the outside-in?

Are your customers coming or going?

Does Your Firm Stand Out? “ We retail electronics” “ We’re in pharmaceuticals” “ We offer professional services” “ We manufacture dry goods” "We're not in the xyz business. We're in the decommodification business.”

“ We retail electronics”

“ We’re in pharmaceuticals”

“ We offer professional services”

“ We manufacture dry goods”

"We're not in the xyz business. We're in the decommodification business.”

It’s not your father’s CRM…or is it?

CRM Alone Won’t Grow Revenues 98% of Coupons Get Thrown Away It is 10x More Expensive to Generate Revenue from a New Customer A 5% Increase in Retention Can Increase Company Profits by 60% – 100% It is 6x More Expensive to Service Customers Through a Call Center than it is via the Internet and Website Customers Who Refer Another Customer Generate Revenue at No Cost Loyal and Referred Customers Stay Longer, Buy More Products and Services

98% of Coupons Get Thrown Away

It is 10x More Expensive to Generate Revenue from a New Customer

A 5% Increase in Retention Can Increase Company Profits by 60% – 100%

It is 6x More Expensive to Service Customers Through a Call Center than it is via the Internet and Website

Customers Who Refer Another Customer Generate Revenue at No Cost

Loyal and Referred Customers Stay Longer, Buy More Products and Services

It’s time to color outside the box C O L O R

It’s time to break a few coconuts

CRM Logical Left Brain Customer’s Value to Enterprise Systems and Transactions Functional Value CEM Emotional Right Brain Enterprise’s Value to Customer People and Interactions Emotional Value

CRM

Logical Left Brain

Customer’s Value to Enterprise

Systems and Transactions

Functional Value

CEM

Emotional Right Brain

Enterprise’s Value to

Customer

People and

Interactions

Emotional Value

CRM is an “inside-out” view CRM involves heavy applications of technology: CRM applications Enhanced IVR and ACD applications Outsourcing call center operations Off-shoring Sales force automation

CRM involves heavy applications of technology:

CRM applications

Enhanced IVR and ACD applications

Outsourcing call center operations

Off-shoring

Sales force automation

CRM is technology employed for user convenience…

CRM is a shotgun approach

CRM is Multiple channels, customers in a box. STORE (FACE TO FACE) WEB (COMPUTER TO COMPUTER) PHONE (PHONE TO PHONE)

Is there a Better Way?

Fixing CRM Customer Management should focus on value creation, not cost reduction, effectiveness, not efficiency. CRM should have revenue targets. Value creation through CRM initiatives comes from: Growing the customer base Maintaining the customer base – retention, cross-sell & up-sell Servicing customer segments Maximizing channel effectiveness

Customer Management should focus on value creation, not cost reduction, effectiveness, not efficiency. CRM should have revenue targets.

Value creation through CRM initiatives comes from:

Growing the customer base

Maintaining the customer base – retention, cross-sell & up-sell

Servicing customer segments

Maximizing channel effectiveness

Change of Focus The focus is changing from enterprise to single customer, from technology to process, to… Customer Acquisition (number of new "quality" customers) Customer Retention (percent of existing customer retained) Customer Satisfaction (question results from survey and/or focus groups) Customer Segmentation (percent of profit by customer demographics) Customer Profitability (average profit per customer/per household) Customer Servicing (average response time for customer complaint/inquiry resolution, first call resolution) Customer Referrals (Net)

The focus is changing from enterprise to single customer, from technology to process, to…

Customer Acquisition (number of new "quality" customers)

Customer Retention (percent of existing customer retained)

Customer Satisfaction (question results from survey and/or focus groups)

Customer Segmentation (percent of profit by customer demographics)

Customer Profitability (average profit per customer/per household)

Customer Servicing (average response time for customer complaint/inquiry resolution, first call resolution)

Customer Referrals (Net)

Where is business headed? Non-store retailing. The customer acquisition cost, clicks versus bricks is much lower. Some retailers employ a bricks CRM strategy to meet the needs of their clicks customers. An M x N relationship exists among customers and their preferred retail channel. Market leaders are deploying joint solutions of CRM and CEM – customer experience management. CEM employs an “outside-in” view of the company/customer relationship .

Non-store retailing.

The customer acquisition cost,

clicks versus bricks is much lower.

Some retailers employ

a bricks CRM strategy to meet the

needs of their clicks customers.

An M x N relationship exists among

customers and their preferred retail channel.

Market leaders are deploying joint solutions of CRM

and CEM – customer experience management.

CEM employs an “outside-in” view of the company/customer relationship .

How are your customers connected to each other? To you?

Customers have many purchase and channel choices

Customers Solicit Bids I want to notify the whole market that I want to buy a SONY plasma TV. In effect, I want to issue a personal RFP that goes out to every retailer of SONY plasma TVs.

The customer is channel agnostic, and how the customer is cared for must be infrastructure agnostic. Customer Experience Management is the New Marketing

The customer is channel agnostic, and how the customer is cared for must be infrastructure agnostic.

To decommodify, become the customer… …Reengineer

From what to what?

Customer Management Evolution CRM evolves to CEM Customer Experience = Vendor Performance – Customer Expectations The value add is transforming CEM to Customer Equity Management – the total lifetime discounted value of all the firm’s customers.

CRM evolves to CEM

Customer Experience = Vendor Performance – Customer Expectations

The value add is transforming CEM to Customer Equity Management – the total lifetime discounted value of all the firm’s customers.

Customers vs. Vendors – who is winning? How many hits does Google Reader display for your firm? How many for FaceBook? MySpace? YouTube?

How many of those interactions are you managing?

Managing customers is like herding cats…not much bang for your buck. (of course I’ve heard of cats)

While you manage them, they are managing you It’s not a fair fight…

It’s called Vendor Relationship Management, VRM

Still with us?

Two worlds have collided, customers and vendors Did either survive intact?

It’s not easy… but important ventures rarely are.

Where do you need to go? How do you get there?

Need Help?

(EASY button not included}

Healthcare IT Strategy can lead the way

It’s called VRM, Vendor Relationship Management

First, write the playbook… CRM to CEM: Define goals/objectives Evaluate the situation Define expectations Develop a plan CRM CEM VRM Social networking Implement

CRM to CEM:

Define goals/objectives

Evaluate the situation

Define expectations

Develop a plan

CRM

CEM

VRM

Social networking

Implement

Define Goals & Objectives

Evaluate your situation

Develop a plan

Social Networking

Contact: Paul Roemer, Partner, Clinton Rubin LLC [email_address] (484) 885-6942 Paul Roemer, Managing Partner Healthcare IT Strategy, LLC +1 (484) 885-6942 +1 (610) 384-1811 [email_address]