4. The Hype Cycle!
§ Over 65% of companies expect CRM
to increase sales revenue by more
than 10% -- Analyst report
§ CRM performance accounts for 28% to
Idea Cult Popular
60% variance in company performance
Chasm Acclaim
– Research report (July 2001)
Concept Early Integration
Prototypes
è “Do something” or be “Amazoned”
è Built on HYPE and FEAR and more often “bumper sticker” justification
è Still using the concept of the 1980s to justify investment
– Costs 6 times to win a customer than to retain one
– 10% spike in repeat customers would add 10% to the bottom line
è Technology seen as a quick-fix solution
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5. Reality Stuck!
§ Redundant spending will cost Global 2000
companies a total of between US$3 and US$4
billion over the next two years - Jupiter
§ Research of 200 CRM projects in the US last
year found 30 % delivered no return to the
business - Management Information Principles
Tragedy of misguided intentions !!
Confusion § Study identified that in 32 percent of sales
technology projects, little or no use was made
of the technology 12 months after deployment –
Deployment, Gartner
Change
Management § Misalignment between actual performance and
the promised returns hyped up by vendors -
Frost & Sullivan
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6. Measurement challenges !
Permission Marketing
Permission Marketing Seth Godin
Seth Godin
Customer Intimacy
Customer Intimacy Fred Wiersama
Fred Wiersama
Real-time Marketing
Real-time Marketing Regis McKenna
Regis McKenna
Continuous Relnship Marketing
Continuous Relnship Marketing McKinsey
McKinsey
è Only 11% of CRM
implementation claim to have
Over 80% cite very positive ROI
organizational and è More than two third of the
adoption challenges to CRM implementation are not
successful
measurement Source : Jupiter mediametrix
Sept 2001
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7. Why CRM Implementation fails?
Emotional
Justification
Why blame failure on the tool when
Process
CRM
Mindset
Failures and
technology is only an enabler !
Optimization
Skepticism
issues
Technology
Deployment
Results:
è “Returns by early adopters of CRM has been minimal or non-existent.
è “Me-too” copycats made decisions on faith
è Businesses are reticent to talk of failure, yet when we are looking for
return, it is just not there!
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8. Where Are We Now?
WE
ARE
HERE!
$$
Idea Cult Popular
Confusion
Chasm Acclaim Chasm Reality
Concept Early Integration Deployment, Renaissance
Prototypes Change
Management
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10. And the approach is getting different !
In The Past … … In The Future
Align strategy, process,
Implement Technology
technology and people
Justification based on faith Logical framework
Interaction/channel Analytical and Business
functionality Intelligence
Local optimization Process Integration
Incremental and learning
“Big Bang” approach
approach
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11. For CRM to be successful, CRM
For CRM to be successful, CRM
initiatives must be ALIGNED with
initiatives must be ALIGNED with
corporate goals and vision and
corporate goals and vision and
EXECUTED systematically in a step by
EXECUTED systematically in a step by
step approach
step approach
The Balanced Scorecard (Kaplan and
Norton) is an EXCELLENT TOOL not only
for strategy implementation but also
performance management.
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13. Four Processes to Manage Strategy
Articulating
the Vision
§ Clarifying
§ Consensus
§ Commitment
Linking the Feedback
Vision
§ Setting goals § Review
§ Performance BALANCED § Tracking
§ Compensation § Change
SCORECARD Management
Business Planning
§ Setting specific targets
§ Aligning initiatives
§ Allocating resources
§ Establishing milestones
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14. How Do You Measure Strategy?
VISION The Balanced Scorecard
converts strategy into an
“To satisfy our
SCORECARD integrated system of
shareholders,
Objectives Measures Targets Initiatives
objectives, measures, targets,
Financial what financial Profitability
and initiatives defined across
objectives must Growth
we accomplish?” Shareholder
Value
four business perspectives
SCORECARD
“To achieve our
Objectives Measures Targets Initiatives
financial
Customer objectives, what Image
customer needs Service
must we serve?” Price/Cost
“To satisfy our SCORECARD
customers & Objectives Measures Targets Initiatives
shareholders,
Internal/Process which internal
Cycle Time
Quality
processes must
Productivity
we excel?”
SCORECARD
“To achieve our
Objectives Measures Targets Initiatives
goals, how must
Learning and Growth our organization Mkt Innov.
learn and Cont. Learn
innovate?” Intellectual
Assets
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15. Commit to a Future Direction
From Strategy to CRM Drivers
Mission & Strategy
Balanced Scorecard
Learning &
Financial Customer Internal Process
Growth
1.1 Profitability 2.1 Image 3.1 Cycle Time 4.1 Mkt Innovation
1.2 Growth 2.2 Service 3.2 Quality 4.2 Cont. Learning
1.3 Shareholder 2.3 Price / Cost 3.3 Productivity 4.3 Intellectual Desired
Value Assets
Outcomes
CRM Business Case
and ROI Model
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17. Learning &
Financial Customer Internal Process
Growth
1.1 Profitability 2.1 Image 3.1 Cycle Time 4.1 Mkt Innovation
1.2 Growth 2.2 Service 3.2 Quality 4.2 Cont. Learning
1.3 Shareholder 2.3 Price / Cost 3.3 Productivity 4.3 Intellectual
Value Assets
CRM
Business Drivers
Visioning Defining Assessment
From BSC to CRM
Gap Analysis
Blue Print Required Execution
Investment
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18. These analytics often don’t exist
n n
LTV = å (Ry - Cy) max LTV = å ( max Ry - min Cy)
(1+r)y
y=0 (1+r)y y=0
è LTV is driven by 3 variables
§ Tenure (n),
Lifetime Value
§ Revenue (R)
§ Cost (C)
è Difference between LTV and
maximum LTV is Potential
è Getting a strategy for realizing
Time maximum customer potential, by
maximizing tenure and minimizing
cost is the challenge
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19. What we measure is important, but what we don’t.. is
critical !
Emotional § Emotional alignment § Advocates
§ Is forgiving § Can’t buy them over
R
e
s
Rational
§ Rational Alignment § Transactional
p § Tenuous § Negotiable
§ Ruled by
the“heart”
o
n
s § Ruled by
Transactional
§ Functional attributes
the“head”
e § Performance attributes
§ Ruled by the purse
Satisfaction Loyalty Fidelity
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21. This case study highlights how a Telco translate its
strategy into scorecards and map them to CRM Drivers
• Industry Background • Strategy Map
– Consumers’ Preference – How the CRM goals and
– Chasm Indicator business case was
conceived
– Challenges
– How CRM goals were
• Competition
congruent to the BSC
• Trends metrics
– How the CRM business
case is translated into
implementation blue print
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22. Key Success Factors Case Study:
The scorecard Telco
FINANCIAL Vision
#1 Return on Capital
Employed
“Major Telco #2 Profitability
#3 Growth and Cash flow
in Asia Pacific”
CUSTOMER FINANCIAL
#1 More Value for Money ROCE
Gross
Margin
Strategy #2 Best in customer service
#3 Meets everyone’s needs
New
Product CUSTOMER
• Service as a Rev (%) Vol
Indicators
differentiator #4 Quick deployment Cust
Cust
Acquisition/
Perception Retention
• To deliver PROCESS
Product
Attractive-
ness
External
“tailored Ranking
service #1 New Service rollouts
bundles” to #2 Internal / External SLA Product
ensure
Development
#3 Cycle time (cash realisation) Cycle Sales
Effectiveness
customer #4 Change management Product
satisfaction
Milestone
Effectiveness Operations
Costs
• To ensure DEVELOPMENT Suggestions
maximum New Product Implement-
ation PROCESS
#1 Staff morale Introduction
network #2 Motivated staff
coverage Technical
Staff
Attitudes
#3 Staff productivity Skills
DEVELOPMENT
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23. Translate Vision to Strategy
Vision
To be the leading Telco
providing wide range of
innovative services
STRATEGY
§ Service as a differentiator
§ Best network coverage
§ Tailored service bundles
Scorecard Scorecard Scorecard Scorecard
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24. Convert Strategy to Scorecards’ Objectives
To be the leading Telco providing
wide range of innovative services Vision
§ Service as a differentiator
§ Best network coverage
Strategy
§ Tailored service bundles
FINANCIAL CUSTOMER PROCESS DEVELOPMENT
R.O.C.E. Value for money Service Rollout Staff Motivation
Profitability Best Customer SLA (internal Staff
Services and external) Productivity
Growth & Cash Meet Functional Cycle Time Staff
flow Needs Satisfaction
Quick Deploy Change
Management
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25. Strategy Map
Vision Business Goal
iv
e Improve Customer
rat Services to drive
st
Ill
u profitability
Strategy improvement
FINANCIAL CUSTOMER PROCESS DEVELOPMENT
R.O.C.E. Value for money Service Rollout Staff Motivation
Profitability Best Customer
Best Customer SLA (internal and Staff
Profitability Services
Services external) Staff Productivity
Productivity
Growth & Cash flow Meet Functional Cycle Time Staff
Staff Satisfaction
Needs Satisfaction
Quick Deploy Change
Management
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26. Linking Scorecard Objectives to GOALS!
Vision Business Goal
Provide tailored
and structured
Strategy value bundles
FINANCIAL CUSTOMER PROCESS DEVELOPMENT
R.O.C.E. Value for money
Value for money Service Rollout
Service Rollout Staff Motivation
Staff Motivation
Profitability Best Customer SLA (internal and Staff Productivity
Services external)
Growthflow Cash
Growth Cash flow
& & Meet Functional
Needs Cycle Time Staff
Staff Satisfaction
Satisfaction
Quick Deploy Change
Management
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27. Linking Scorecard Objectives to GOALS!
Vision Business Goal
Improve Service
Quality &
Strategy Reliability
FINANCIAL CUSTOMER PROCESS DEVELOPMENT
R.O.C.E. Value for money Service Rollout Staff Motivation
Staff Motivation
Profitability Best Customer
Best Customer SLA (internal
SLA (internal and
Profitability Services
Services and external)
external) Staff Productivity
Growthflow Cash
Growth Cash flow
& & Meet Functional
Meet Functional
Needs
Needs Cycle Time Staff Satisfaction
Quick Deploy Change
Management
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28. Linking Scorecard Objectives to GOALS!
Vision Business Goal
Introduce New
Services and meet
Strategy competition
FINANCIAL CUSTOMER PROCESS DEVELOPMENT
R.O.C.E.
R.O.C.E. Value for money Service Rollout Staff Motivation
Best Customer SLA (internal and Staff
Profitability Services external) Staff Productivity
Productivity
Growth & Cash flow Meet Functional Cycle Time
Cycle Time Staff Satisfaction
Needs
Quick Deploy
Quick Deploy Change
Management
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29. nd
Scorecard ––22ndlevel
Scorecard level
Detailed Strategy Map of Detail
of Detail
FINANCIAL CUSTOMER PROCESS DEVELOPMENT
R.O.C.E. Value for money Service Rollout Staff Motivation
• Outsource • Create Svc Bundle • Introduce Bundle • Motivation Index
• Increase ARPU • Increase Retention • Support Readiness • VOC Score
• Target Cust Segment
Profitability Best Cust Services Service Level Agr Staff Productivity
• Improve Gross Margin • Increase F.C.R. • Internal Governance • Productivity Index
• Reduce Staff costs • Improve Svc Quality • Vendor Accountability • Training
• Cross-Fx Experience
Growth & Cashflow Meet Fx Needs Cycle Time Staff Satisfaction
• á high value segment • Increase VAS • Delivery2Cash Cycle • Achievements
• á prepaid • Compare Quick & Act • Business Delay Cycle • Recognition
• Reduce DSO • Cash Realization • Compens & Benefits
Quick Deploy Change Mgmt
• Specific Cust Request • Project Mgmt
• Content & Service Prov • Risk Assessment
• Implementing initiatives
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30. CRM Business case
• Improving Customer service -- # 1 priority
– Improving FCR from current 55% to industry standard > 90%
– Reducing customer service costs by 20%
• Reducing churn in M, M-H and High segment
– Proactively anticipating churn and contract renewal rates by 20%
– Save the customer program (win back selective customers)
• Gain market share for prepaid with reduced churn
– Create more attractive service-price bundles
– Reduce campaign management costs by 25%
• Functional benefits to M, M-H and H segment (postpaid)
– Improve cross-sell and up-sell ratios by 30%
– Reduce marketing costs by 15%
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31. CRM initiatives
Customer Service Despite a projected 13% increase in customer contacts,
Improvement at 90 % FCR level, customer satisfaction was expected
impact to increase by 4%, reducing costs by 8%
Key Actions taken:
§Detailed metrics tracking (operational to financial metrics)
§SLA revised internally with Billing, Network operations, Distribution network
§Staff training, revised and different compensation model proposed
§Call centre overhauled, with new set of CTI / IVR applications to reduce calls
Overall Impact: §Process re-design, workflow management
§CRM software customized to increase greater customer visibility
Emp sat score : +
Major Challenges
Cust sat score : same
•Process redesign and implementation •Administering the SLA internally
Fin ROI(annual): 34% •People skills, training and motivation •Co-ordination mechanisms
•Projecting the impact on customer sat •Communicating metrics and impact
•CRM customisation and CTI applications •Raising profile of Customer service
Results:
qCustomer contacts increased by 19% (expected 13%)
qFCR moved from 55% to 82% (targeted 90%)
qCustomer satisfaction – No change
qCost reduction of customer service – 7% (expected 8%)
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32. Conclusion
• The BSC helped articulate strategy and improve alignment
– Developing the lead and lag indicators was a challenge
– Cascading the scorecard and developing ownership took time
• CRM goals got better agreement and commitment
– Software functionality was less of an issue
– Process and people challenges were more difficult issues
• Investment in Analytic CRM proved beneficial
– Modeling and simulation helped get a better perspective
– Understanding segmentation and relationship drivers
• Linking metrics back to BSC helped get executive support
• The journey just started.. It’s still a long way to go !
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