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C R M Seminar Presentation


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IITB SJMSOM course slides

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C R M Seminar Presentation

  1. 1. Customer Relationship Management <ul><li>Ground rules </li></ul><ul><li>Two way communication </li></ul><ul><li>No stupid questions </li></ul><ul><li>Two way learning </li></ul><ul><li>We will cover CRM </li></ul><ul><li>We will also discuss Customers, relationships and management </li></ul>
  2. 2. Customer Relationship Management <ul><li>What you hear, you forget </li></ul><ul><li>What you see, you remember </li></ul><ul><li>What you do, you learn </li></ul>
  3. 3. Customer Relationship Management <ul><li>Class participation 10% </li></ul><ul><li>Group project 1 20% </li></ul><ul><li>Group project 2 35% </li></ul><ul><li>End term exam 35% </li></ul>
  4. 21. Changes Over The Years 100 10000 100000 1000000 100000000 Number of customers handled by single firm Level of Individual Customer Dialog & Service 1 2 3 5 4
  5. 22. Pre - 1900s <ul><li>Local market – owner knows customers personally </li></ul><ul><li>Owner aware of needs of his customers. </li></ul><ul><li>Pool of potential customers was less </li></ul><ul><li>Competition was much less </li></ul><ul><li>Lot of cottage/small scale technologies </li></ul>1
  6. 23. 1900 – 1950s <ul><li>Technology – mass production technologies </li></ul><ul><li>Competition – low, focus on low cost and economies of scale </li></ul><ul><li>Customer – basic expectations </li></ul><ul><li>To deal with size, companies created division of labour in both manufacturing and management </li></ul><ul><li>Distribution channels- companies began to manage channel expectations, and not customer expectations </li></ul>2
  7. 24. 1950 – 1970s <ul><li>Technology – Further advances, information technology began, faster communication </li></ul><ul><li>Competition – product differentiation strategies began to emerge </li></ul><ul><li>Customer – began to look for more in terms of product </li></ul><ul><li>Emergence of mass media </li></ul>3
  8. 25. 1970 to early 1990s <ul><li>Technology – information and communications – less costly, significantly faster response times, necessary but not sufficient condition to compete </li></ul><ul><li>Competition – cut throat, core product replicable, service emerging as differentiator </li></ul><ul><li>Customer- more demanding, aware of options, image, service, styling more critical </li></ul><ul><li>Media saturation </li></ul><ul><li>Channels have evolved and become more powerful </li></ul>4
  9. 26. Mid 1990s – Till Date <ul><li>Technology – database and communication technologies </li></ul><ul><li>Customisation and size no longer contradictory </li></ul><ul><li>Competition- searching for new ways to add value </li></ul><ul><li>Customers – demand speed, value and individualisation </li></ul><ul><li>Many companies mired in old world mindsets </li></ul><ul><li>Emerging social media redefining communication possibilities </li></ul><ul><li>Stage is set for CRM </li></ul>5
  10. 27. Customer Loyalty Score (5 point scale) Average retention rate (1 year later) 5 Very Satisfied 92%-97% 4 Satisfied 80%-85% 3 Neither 60-65% 2 Dissatisfied 15-20% 1 very dissatisfied 0-5%
  11. 28. Customer Loyalty Rating Total customers out of 100,000 Customers lost Very Satisfied 20,000 600-1600 Satisfied 20,000 3000-4000 Neither 20,000 7000-8000 Dissatisfied 20,000 16000-17000 Very dissatisfied 20,000 19000-20000 TOTAL 45600-50600
  12. 29. Customer Lifecycle Profit Pattern Case of Credit Card Industry
  13. 30. Why Loyal Customers are Profitable
  14. 31. The Business Imperative <ul><li>Create customers for life </li></ul><ul><li>Increase share of customer </li></ul><ul><li>Greater percentage of word of mouth inquiries </li></ul><ul><li>Lower advertising costs </li></ul><ul><li>Lower cycle times-inquiry to closure </li></ul>
  15. 32. C R M <ul><li>Customer Relationship Management </li></ul><ul><li>Treat different customers differently </li></ul><ul><li>Move from a transaction view to a relationship view </li></ul><ul><li>Identify </li></ul><ul><li>Differentiate </li></ul><ul><li>Interact </li></ul><ul><li>Customise </li></ul>
  16. 33. What CRM can do ? <ul><li>Create customers for life </li></ul><ul><li>Increased cross selling </li></ul><ul><li>Your customers are your best salespeople </li></ul><ul><li>Reduce advertising costs </li></ul><ul><li>Build your brand </li></ul><ul><li>Learning relationships with your customers </li></ul>
  17. 34. Laying the Ground for CRM To fully realise benefits from CRM it is imperative to get the core service right
  18. 35. Customer Service <ul><li>Service as seen by the customer </li></ul><ul><li>Satisfaction is a function of the expectations </li></ul><ul><li>Expectations are a function of the existing levels of service </li></ul>Negative Positive As Per Expectations When Present Upset The Customer Absence Means The Customers Are Not Upset When Present Please & Delight The Customer Absence Means The Customers Are Not Pleased & Delighted Order Of Memorability Dissatisfiers Satisfiers
  19. 36. Customer Service – Some Numbers <ul><li>96% of the customers do not complain – they just switch ! </li></ul><ul><li>Dissatisfied customer tells 10 times as many people as a satisfied customer </li></ul><ul><li>70% of the complaining customers will give repeat business if complaint is satisfactorily resolved </li></ul><ul><li>It costs 7 times as much to attract a new customer as compared to retaining an existing customer </li></ul>
  20. 37. The Service Encounter <ul><li>Moments of Truth - a moment of truth occurs any time the customer comes in contact with some aspect of the organization and uses that opportunity to judge the quality of the service the organization is providing. </li></ul>The remote encounter - Customers interact with a service, or part of it, through the Mail, ATM, Brochures etc. The indirect personal encounter - where customers interact with a service by telephone The direct personal encounter - where customers interact face-to-face with the service provider. Types of Encounters
  21. 38. The Service Encounter Repeatable closed loop Sequence of Moments of Truth CYCLE OF SERVICE
  22. 39. Using the MOT Concept <ul><li>Identify key moments of truth and customer expectations </li></ul><ul><li>How are you doing- use mystery customers as well as surveys of people who have made inquiries </li></ul><ul><li>Identify key gap areas </li></ul><ul><li>Process redesign, training of frontline employees </li></ul><ul><li>This is a continuous process </li></ul>
  23. 40. Moments Of Truth – B2C Advertisement Locating the store Parking for vehicle Baggage counter Entrance to store Signage Rest rooms Trial room Billing counter Cafeteria Alteration Exit point
  24. 41. Moments of Truth – B2C Advertisement Calling the Company Meeting the DSA Application Form Submitting Documents Verification by Company Delivery of Credit Card Using Card Across Establishments Billing by Company Payment of Bill Complaint Handling
  25. 42. Moments of Truth – B 2 Channel Sales person visits Scheme communication Promotional materials Order placement Order delivery Communication with commercial staff Phone calls to company Complaint handling & resolution (product/service related) Credit notes Damages/replacements Month end order pressure
  26. 43. Moments of Truth B 2 B Understanding customer requirement Converting requirements into deliverables Accessibility of contact person Paperwork Information about dispatch schedule Delivery as per schedule After sales support Complaint handling/resolution Damages/claims Re-order Updating on manufacturing schedule
  27. 44. Strategic Segments for an Airline
  28. 45. WOW Service <ul><li>A prospective car buyer was having test rides on the various car models short–listed by him. During one such ride on a Toyota Lexus model, on his return back to the car showroom he was very surprised – actually delighted – to find that the dealer had fully cleaned his car while he was test driving the new car. </li></ul>
  29. 46. WOW Service <ul><li>When the delegates for a seminar in Glasgow reached the hotel, they were pleasantly surprised to find in their rooms along with a hand written welcome note; a list of rooms and internal phone number for all the delegates. Thus the party was able to contact each other directly without needing to go through the hotel reception. </li></ul>
  30. 47. WOW Service <ul><li>During a seminar in a hotel, the hotel staff made their guests very happy by a small thoughtful gesture – they sharpened their pencils during every break. </li></ul>
  31. 48. Service Strategy <ul><li>Identify a key customer expectation on which you want to differentiate yourself </li></ul><ul><li>Bring people and processes in synch with this strategy </li></ul><ul><li>Create and share performance measures </li></ul><ul><li>A non trivial statement of intent </li></ul><ul><li>Noticeably differentiates you from others </li></ul><ul><li>Has value in your customer’s eyes </li></ul><ul><li>Is deliverable by the organisation </li></ul><ul><li>Fresh pizzas to doorstep in 30 minutes </li></ul>
  32. 49. Welcome to Southwest Airlines <ul><li>Flying is a Fun Experience </li></ul><ul><li>The Strategy </li></ul><ul><ul><li>Point - to - Point vs. Hub & Spoke </li></ul></ul><ul><ul><li>Lowest Cost Provider </li></ul></ul><ul><ul><li>Expand the market - </li></ul></ul><ul><ul><li>We are in the transportation business </li></ul></ul><ul><ul><li>Cater to the business and holiday </li></ul></ul><ul><ul><li>Superior Customer Service </li></ul></ul>
  33. 50. Welcome to Southwest Airlines <ul><li>Implementation </li></ul><ul><ul><li>Low fare </li></ul></ul><ul><ul><li>Dual pricing </li></ul></ul><ul><ul><li>Turnaround times </li></ul></ul><ul><ul><li>No fixed seating </li></ul></ul><ul><ul><li>No computerized reservation systems </li></ul></ul><ul><ul><li>Peanuts </li></ul></ul><ul><ul><li>Ticket phone in </li></ul></ul><ul><ul><li>Only Boeing 737s </li></ul></ul>
  34. 51. Welcome to Southwest Airlines <ul><li>Internal Environment </li></ul><ul><ul><li>Executive Committees future scenario generation </li></ul></ul><ul><ul><li>Innovative recruitment practices </li></ul></ul><ul><ul><li>Employee profit sharing </li></ul></ul><ul><ul><li>The cutting edge </li></ul></ul><ul><ul><li>In-house magazine </li></ul></ul><ul><ul><li>Celebrations </li></ul></ul><ul><ul><li>Customer comes second </li></ul></ul>
  35. 52. The Nordstrom Culture <ul><li>Empowerment & Delegation </li></ul><ul><li>Encourages, preaches and demands individual initiative from it’s frontline people. </li></ul><ul><li>Full inventories are a measure of Customer Service. </li></ul><ul><li>Wide and Deep range. </li></ul><ul><li>Buyers work closely with manufacturer </li></ul><ul><li>Buying at Nordstrom is decentralized. </li></ul><ul><li>Salespeople encouraged to provide input to their manager and buyer </li></ul>
  36. 53. The Nordstrom Culture <ul><li>Promoting from within. </li></ul><ul><li>A fast career track created through expansion </li></ul><ul><li>Customer before the company. </li></ul><ul><li>Organized as an INVERTED PYRAMID </li></ul><ul><li>Unconditional money-back guarantee </li></ul><ul><li>Nordstrom tears down barriers. </li></ul>
  37. 54. The Nordstrom Culture <ul><li>Department managers begin their careers as salespeople. </li></ul><ul><li>Managers are encouraged to have a feeling of ownership and are expected to spend time on the shop floor </li></ul><ul><li>A force of veteran NORDIES carry the culture to new territories and impart it to new employees </li></ul><ul><li>Nordstrom doesn’t acquire other chains and convert them into stores </li></ul>
  38. 55. The Nordstrom Culture <ul><li>Employee Compensation is based on sales commissions. </li></ul><ul><li>The employee profit sharing retirement plan </li></ul><ul><li>Goal Setting is essential to the Nordstrom Culture. </li></ul><ul><li>Employees have access to all sales figures/ information from all departments </li></ul><ul><li>Top salespeople are encouraged to help others with their sales technique and building a customer base </li></ul>
  39. 56. The Nordstrom People <ul><li>Nordstrom Employees fall into two categories </li></ul><ul><ul><li>Exceptional people </li></ul></ul><ul><ul><li>Average people who work at an exceptional level </li></ul></ul><ul><li>Hire the smile and train the skills </li></ul><ul><li>Well-versed with the product </li></ul><ul><li>Entrepreneurial Self Starters </li></ul><ul><li>Associates are judged on their performance not obedience to orders </li></ul><ul><li>Enjoy working in the unrestricted environment </li></ul>
  40. 57. The Nordstrom People <ul><li>Individual creativity is a by-product of freedom </li></ul><ul><li>Use their good judgement in all situations </li></ul><ul><li>Have a do-what-ever it takes mindset; incompatible with a union structure </li></ul><ul><li>Motivated employees perform “HEROICS” outstanding acts of customer service </li></ul>
  41. 58. The Nordstrom Store <ul><li>The layout, design, fixtures, amenities, and merchandise is another facet of customer service the Nordstrom way! </li></ul><ul><li>Convenience and Openness. 15 seconds to get customers excited </li></ul><ul><li>Ease for the customers to circulate and shop throughout the entire store - and for sales associates to help them </li></ul><ul><li>Nordstrom stores feature more seating, better lighting, larger fitting rooms, wider aisles, and a more residential feeling. </li></ul><ul><li>Display window contribute to the feeling of openness and brightness </li></ul>
  42. 59. The Nordstrom Principles <ul><li>Priority is on selling </li></ul><ul><li>Key to successful selling = outstanding customer service </li></ul><ul><li>Not just selling shoes and clothes they are also selling service. </li></ul><ul><li>Personal customer book to keep track of pertinent information on every customer </li></ul><ul><li>Salespeople are committed to nurturing an ongoing business relationship. </li></ul><ul><li>The telephone is a powerful tool for generating business. </li></ul>
  43. 60. Customer Identification <ul><li>The first step in a successful CRM initiative is customer identification. </li></ul><ul><li>To “identify customers” means to recognise your customer in every interaction, through every channel, across all divisions and functions. </li></ul>
  44. 61. Definition: Who Is Your Customer? <ul><li>B2C </li></ul><ul><li>B2B </li></ul><ul><li>B2CH </li></ul><ul><li>B2I </li></ul>
  45. 62. Identifying MVCs <ul><li>Cellular – MOU, Billing, usage of high end services </li></ul><ul><li>Credit card – Monthly billing, presence of supplementary cards, usage of international card </li></ul><ul><li>Dealer – Shop potential, new product volumes </li></ul><ul><li>Architect – Number of large projects/year </li></ul>
  46. 63. What Kind of Data Should I Collect <ul><li>Name, gender, contact details, date of birth, occupation, details of family members. </li></ul><ul><li>Frequency of purchase. </li></ul><ul><li>Preferences / specifications. </li></ul><ul><li>Quantities bought during each purchase. </li></ul>
  47. 64. Which Sources Can I Use <ul><li>Billing and invoicing records. </li></ul><ul><li>Sweepstakes and contest entry forms. </li></ul><ul><li>Warranty records. </li></ul><ul><li>Coupon redemption and rebate forms. </li></ul><ul><li>Customer comments / feedback forms. </li></ul><ul><li>Sales force records. </li></ul><ul><li>Repairs and service records. </li></ul><ul><li>Frequency program / loyalty user card </li></ul><ul><li>Mailing lists. </li></ul>
  48. 65. Customer Information <ul><li>What is the customer information that is currently available in electronic format ? </li></ul><ul><li>What information is available on file but not in an electronic format ? </li></ul><ul><li>What is the information you would like to maintain on your customers ? </li></ul><ul><li>How would you collect this information and when ? </li></ul><ul><li>How can you update this information for existing customers ? </li></ul><ul><li>Frequency of updation of database. </li></ul>
  49. 66. Touchmap <ul><li>A visual diagram of all points of contact between customer and organisation. </li></ul><ul><li>At every point of contact, there is exchange of either of the following three: </li></ul><ul><ul><li>Information </li></ul></ul><ul><ul><li>Value </li></ul></ul><ul><ul><li>Product/service </li></ul></ul>
  50. 67. Touchmap <ul><li>Objective – </li></ul><ul><ul><li>maximise value & information collected from customers at various points of contact. </li></ul></ul><ul><ul><li>Respond to the customer with a compelling product/service. </li></ul></ul><ul><li>A touchmap helps in diagnosing various points of customer contact where information/service could be captured but lost. </li></ul>
  51. 68. Using Customer Identification Models <ul><li>Customer identification models can be used to answer basic marketing questions: </li></ul><ul><ul><li>Should I promote to some customers more often than others?  </li></ul></ul><ul><ul><li>How much incentive should I provide to get a customer to do something? </li></ul></ul><ul><ul><li>How can I tell when I’m losing a customer? </li></ul></ul><ul><ul><li>How can I put a value on my customers and the business as a whole? </li></ul></ul><ul><ul><li>Is my business strong and healthy, or becoming weaker? </li></ul></ul><ul><ul><li>What can I expect in future </li></ul></ul>
  52. 69. What is Customer Differentiation <ul><li>Treat different customers differently. </li></ul><ul><li>Break up basic product / service offerings into sub components so that each customer can choose what he wants. </li></ul><ul><li>Mass customisation a la “My Yahoo”. </li></ul>
  53. 70. Issues & Stages in Differentiation <ul><li>Issues </li></ul><ul><ul><li>What is the customer worth to my enterprise? </li></ul></ul><ul><ul><li>What does the customer want? </li></ul></ul><ul><li>Stages </li></ul><ul><ul><li>First: Rank your customers by their value to your enterprise. </li></ul></ul><ul><ul><li>Then: Differentiate them by what they need from your enterprise. </li></ul></ul>
  54. 71. Types of Customers <ul><li>M V Cs ( Most Valuable Customers ) = those with the highest LTVs. </li></ul><ul><li>M G Cs ( Most Growable Customers ) = those with the most unrealised strategic value. </li></ul><ul><li>B Zs ( Below Zero Customers ) = Unprofitable customers. </li></ul>
  55. 72. M V Cs <ul><li>What is your share of customer </li></ul><ul><li>Try to grow the total value – increase purchase frequency/value of single purchase </li></ul><ul><li>Unfulfilled needs – can we develop new offerings </li></ul><ul><li>Augmenting product with service –maintenance, training etc </li></ul><ul><li>Upgradation, augmentation </li></ul>
  56. 73. M G Cs <ul><li>Why is my share low-offering, awareness, competitor awareness </li></ul><ul><li>Cross selling and relationship management </li></ul><ul><li>Partnership </li></ul><ul><li>Incentivise share of customer </li></ul><ul><li>Like to like contact </li></ul>
  57. 74. B Zs <ul><li>Problem of potential, turnover, growth etc </li></ul><ul><li>If they can be upgraded to other categories, rapid action must be taken </li></ul><ul><li>Expectations to be spelt out. </li></ul><ul><li>Do not shy from tough decisions </li></ul><ul><li>State conditions for profitability and continued service, let them decide. </li></ul>
  58. 75. Why Interact ? <ul><li>Increase understanding of customer </li></ul><ul><li>Deepen the value proposition </li></ul><ul><li>Cross sell services </li></ul><ul><li>Exceed expectations </li></ul><ul><li>Set the base for customisation </li></ul><ul><li>Understand changing expectations/ be proactive </li></ul>
  59. 76. Customers’ Point of View <ul><li>Have respect for my time </li></ul><ul><li>Have respect for my privacy </li></ul><ul><li>Don’t interact unless you have something worthwhile to say </li></ul><ul><li>Don’t try to sell me things I don’t need </li></ul><ul><li>Don’t try to sell me things I already have </li></ul>
  60. 77. Every Interaction Should - <ul><li>Minimise customer inconvenience </li></ul><ul><li>Outcome should be of real benefit to the customer </li></ul><ul><li>It should influence your specific behaviour towards the customer </li></ul>
  61. 78. While Interacting Remember <ul><li>Make it easy for your customer to interact with you </li></ul><ul><li>Interaction should recognise the customer as an individual </li></ul><ul><li>Each interaction must draw upon learnings from past interactions </li></ul><ul><li>Interaction should be in a medium of the customer’s convenience </li></ul><ul><li>Where interactions cut across departments, ensure an integrated view of the customer </li></ul>
  62. 79. Why Customise ? <ul><li>Valuable customers have distinct needs </li></ul><ul><li>Barrier to entry for competition </li></ul><ul><li>Barrier to exit for customer </li></ul><ul><li>Greater understanding- scope for cross selling </li></ul><ul><li>High degree of learning from each customer </li></ul><ul><li>Technology makes it cost effective </li></ul><ul><li>Today’s new application is tomorrow’s expectation </li></ul>
  63. 80. What to Customise <ul><li>Identification and recognition </li></ul><ul><li>Interactions </li></ul><ul><li>Actual offering </li></ul><ul><li>Add on services </li></ul><ul><li>New features/Bundling </li></ul><ul><li>Involvement of customer in manufacturing process </li></ul>
  64. 81. Loyalty Programs <ul><li>Who is the target customer </li></ul><ul><li>What is the objective of the program </li></ul><ul><li>What are the rewards and value added benefits </li></ul><ul><li>How do I recognize/ make my preferred customer feel special </li></ul><ul><li>How do I keep the excitement going in the loyalty program </li></ul><ul><li>How do I design interactions to enrich the relationship </li></ul>
  65. 82. Case Study – Unilever Umang <ul><li>Issues </li></ul><ul><ul><li>7% of the outlet universe in Mumbai control 60% of the turnover </li></ul></ul><ul><ul><li>P&G has already tried to tailor their system to recognise the fact of key accounts </li></ul></ul><ul><li>Objective: </li></ul><ul><ul><li>Relationship building: to emerge the most preferred supplier in rational, tangible terms as well as emotional, intangible terms </li></ul></ul><ul><ul><li>How do I increase his loyalty to me </li></ul></ul><ul><ul><li>How do I increase his customer’s loyalty to his shop-relationships will develop if i can build his customer franchise </li></ul></ul>
  66. 83. Umang - Details <ul><li>Understanding Retailer Expectations </li></ul><ul><ul><li>Retailer’s emotional needs – does not spend much time with his family </li></ul></ul><ul><ul><li>Respectability is a very important consideration for the retailer </li></ul></ul><ul><li>Launch with a bang – meeting with 100 retailers and manager & stockist </li></ul><ul><li>Each retailer given an Umang card – designed like a credit card – discounts at numerous establishments </li></ul><ul><li>Jazzy audio-visual presentation – Lucky draws and gifts </li></ul>
  67. 84. Umang – Details <ul><li>Monthly newsletter (in local language) </li></ul><ul><li>Various events – launches/ relaunches – feature </li></ul><ul><li>Education – how should he look at his business </li></ul><ul><li>Scheme information – equivalent of a frequent flyer program </li></ul><ul><li>JC target – based on historical points </li></ul><ul><li>Monthly surprise bonuses </li></ul><ul><li>Special schemes on niche products </li></ul><ul><li>Higher level of input on niche products for these outlets </li></ul><ul><li>Top 10 in frequent flyer program mentioned in every newsletter </li></ul>
  68. 85. Umang – Details <ul><li>Number of initiatives to address retailer’s desire for a better quality of life </li></ul><ul><ul><li>Elephanta caves excursion with family </li></ul></ul><ul><ul><li>Booking of 90% of seats at premium theaters for first week movies for retailers and their families </li></ul></ul><ul><ul><li>Mahabaleshwar – 2 hotels booked at Rs. 500/ month for members of this category </li></ul></ul>
  69. 86. Umang – Servicing Aspects <ul><li>Special cross promotions only in these outlets </li></ul><ul><li>Separate key account person- exclusive servicing- moves across stockists </li></ul><ul><li>Separate distributor salesman for key accounts within each stockist </li></ul>
  70. 87. Umang – Database Management <ul><li>SKU’s which give 80% of business + Niche SKU’s </li></ul><ul><li>C/S, O/S, Secondary Sale, recorded on each visit </li></ul><ul><li>Keyed in to computer </li></ul><ul><li>Combining and recombining allowed </li></ul><ul><li>Sellout is also looked at </li></ul><ul><li>Will extend to other brands and become a market share track </li></ul>
  71. 88. Umang – Results <ul><li>28% growth in Umang outlets over three month period </li></ul><ul><li>Market growth is of order of 3 - 5% </li></ul>
  72. 89. Interaction Media <ul><li>Face to face </li></ul><ul><li>Telephone </li></ul><ul><li>Internet </li></ul><ul><li>Direct email / direct mail </li></ul>
  73. 90. Face to Face Interactions <ul><li>Typically the domain of sales and service personnel </li></ul><ul><li>Interaction with dealers, distributors and retailers – consumer marketing </li></ul><ul><li>Interaction with end customers – direct sales force – high value products sold directly to the household </li></ul><ul><li>Interaction with corporate customers – decision makers, users etc </li></ul><ul><li>Interaction with influencers – architects, contractors, carpenters, consultants etc </li></ul>
  74. 91. Face to Face Interactions <ul><li>Segment customers by lifetime value/ correlate </li></ul><ul><li>Have a clearly defined frequency of interaction </li></ul><ul><li>Does the salesperson/service person have integrated, up-to-date customer information </li></ul><ul><li>A clear objective for every interaction </li></ul><ul><li>Does the interaction get documented in a way that increases the company’s knowledge of the customer </li></ul><ul><li>Do your incentive plans balance between rewarding retention and acquisition </li></ul>
  75. 92. Face to Face Interactions – Channels <ul><li>Do we know names of dealer/dealer personnel </li></ul><ul><li>Are we proactive in resolving pending issues </li></ul><ul><li>Do we analyse pending issues to devise ways to eliminate recurring issues </li></ul><ul><li>In case of an intermediary, how do we add value to his interaction with his customers </li></ul><ul><li>In case of a dealer/retailer, do we interact with both the shop owner as well as the shop personnel </li></ul><ul><li>Are incentives customised to issues at an individual intermediary level </li></ul>
  76. 93. Face to Face Interactions – Corporates <ul><li>Have we mapped the account systematically and understood the buying decision process </li></ul><ul><li>Do we maintain contact with decision makers once the sale is over </li></ul><ul><li>Do we know what users feel about our products/services </li></ul><ul><li>Are users aware of the identity of our customer contact person </li></ul><ul><li>Do we tailor our behaviour to individuals within a corporate account </li></ul>
  77. 94. Face to Face Interactions – End Consumers <ul><li>Do we have a defined visit frequency after the sale is closed </li></ul><ul><li>Do we have a structured system for drawing references from existing customers </li></ul><ul><li>Do we make it a point to update customers of changes in policy/ pricing which affect them positively or negatively </li></ul><ul><li>Do we track warranty expiry dates etc and use it to drive interactions </li></ul><ul><li>Do we use current information about the customer in subsequent interactions </li></ul>
  78. 95. Face to Face Interactions – Influencers <ul><li>Do we capture data on their activities and needs-is this information current-do we access it prior to interaction </li></ul><ul><li>Do we have a clear purpose for every interaction </li></ul><ul><li>When handing over promotional materials,do we carry items that are specific to his requirements </li></ul><ul><li>Do we stay abreast on relevant trends in his industry and use this information in our interactions </li></ul>
  79. 96. Interactions On the Phone <ul><li>Software or other mechanism to remember the customer and his transaction history </li></ul><ul><li>Do not ask the customer things that you should know </li></ul><ul><li>Do not make the customer repeat his information </li></ul><ul><li>Mechanisms to update product knowledge of call handlers </li></ul><ul><li>Secretaries and receptionists may not work in a call center, but they need to understand all of the above </li></ul><ul><li>Call center health check- to check and benchmark performance </li></ul>
  80. 97. Interactions On the Phone <ul><li>Call centre applications – Automotive industry </li></ul><ul><ul><li>Targeting – outbound telemarketing to prospect list </li></ul></ul><ul><ul><li>Acquisition – booking test drive,ordering(?) </li></ul></ul><ul><ul><li>Welcoming – welcome and introduction call for every purchase </li></ul></ul><ul><ul><li>Account management – retention – replacement cycle calling at appropriate times </li></ul></ul><ul><ul><li>Account management – development – campaigns to cross sell/up sell(services) </li></ul></ul><ul><ul><li>Service – complaint handling </li></ul></ul>
  81. 98. Interactions On the Phone <ul><li>Call centre applications – Automotive industry </li></ul><ul><ul><li>Customer needs – proactive calling – need change, satisfaction – can be based on modeling </li></ul></ul><ul><ul><li>Divorce – outbound call to identify problem/offer a route back </li></ul></ul><ul><ul><li>Win back – outbound telemarketing </li></ul></ul>
  82. 99. Interactions on the Web <ul><li>Make it easy for customers to register </li></ul><ul><li>Capture the customer’s transaction history with the site </li></ul><ul><li>Use the web to take load off other channels </li></ul><ul><li>Customise the information provided </li></ul><ul><li>Website can be used to track status on orders </li></ul><ul><li>Content should incentivise customer to keep coming back </li></ul><ul><li>Web and cellphone can be blended for customised alerts / IVR based selling </li></ul>
  83. 100. Interactions on Email / Direct Mail <ul><li>Ensure your customer databases are up-to-date </li></ul><ul><li>Ensure you do not promote products the customer already has </li></ul><ul><li>Customise and personalise the message </li></ul><ul><li>Customise and personalise the timing of the message </li></ul><ul><li>Make it easy for the customer to respond </li></ul>
  84. 101. Case Study – American Airlines <ul><li>A major airline in the US </li></ul><ul><li>The company had around 32 million ‘most profitable customers’ – i.e. members of its AAdvantage frequent flyer program. </li></ul><ul><li>The website was initially used primarily for imparting standard information. </li></ul>
  85. 102. <ul><li>Created Website for MVC, allowing them to: </li></ul><ul><ul><li>Plan their trip online </li></ul></ul><ul><ul><li>Book reservation for travel </li></ul></ul><ul><ul><li>Real time flight information </li></ul></ul><ul><ul><li>Fare information </li></ul></ul><ul><ul><li>Answering queries </li></ul></ul><ul><ul><li>Track ‘frequent flyer points’ status </li></ul></ul>
  86. 103. AAdvantages <ul><li>Identifying what their MVC need & value: </li></ul><ul><li>Majority of frequent flyers are tech-savvy and lead a busy life. </li></ul><ul><li>These customers would prefer to do their own travel planning: </li></ul><ul><ul><li>On their own time and At their most convenient time </li></ul></ul><ul><ul><li>Make it convenient & cost-effective for customers </li></ul></ul><ul><li>Directing customers using toll free service, call centers onto the website – COST SAVING </li></ul><ul><li>For all tickets booked via web, special bonus points accrued to frequent flyer program </li></ul>
  87. 104. NetSAAvers <ul><li>Proactive email notification </li></ul><ul><li>Listing ‘specials’ including discount tickets </li></ul><ul><li>Informing customers each Wednesday about excess inventory for the upcoming week </li></ul><ul><li>These email information were sent to all customers but only AAdvantage members privileged to book online </li></ul><ul><li>Increase in number of AAdvantage members </li></ul>
  88. 105. Other offerings <ul><li>Customer reassurance - Need for Reassurance much higher when transaction is totally online: </li></ul><ul><ul><li>AA began sending confirmation email to all pre-email group. </li></ul></ul><ul><li>Identifying restaurant in destination city, based on types of cuisine, expense, geographic location etc. </li></ul>
  89. 106. Case Study - Novartis <ul><li>Novartis CP, a Latin American unit of Novartis AG, the Swiss Life Sciences firm. </li></ul><ul><li>Sells crop protection products (e.g. herbicides, fungicides, insecticides etc.) to farmers in Argentina through a dealer network. </li></ul><ul><li>Customer relationships were largely ‘owned’ by dealers. </li></ul><ul><li>Rural dealers – more knowledgeable about each farm’s unique set of problems. </li></ul><ul><li>Novartis had very little contact with end consumers of their products. </li></ul><ul><li>Agrochemicals market was growing steadily for 10 years. </li></ul>
  90. 107. Then everything changed in Brazil ! <ul><li>Pest resistant Bioengineered crops were introduced. </li></ul><ul><li>Crops began to require less pesticides, herbicides, etc. </li></ul><ul><li>Farmers did not need to spend huge sums on crop protection. </li></ul><ul><li>Brazilian agrochemicals market began to shrink. </li></ul><ul><li>Brazilian agrochemical manufacturers started tapping Argentine markets. </li></ul>
  91. 108. Then everything changed in Brazil ! <ul><li>Parallely, Argentine farmers also began to use Bioengineered crops. </li></ul><ul><li>Novartis CP suddenly found itself in a highly competitive arena. </li></ul><ul><li>For Example, within one year, </li></ul><ul><ul><li>The total market for herbicides dropped from $850 Mn to $750 Mn. </li></ul></ul><ul><ul><li>The average spend on heribicides for a Soyabean farmer fell from $32 to $12 per hectare. </li></ul></ul><ul><li>Novartis found that demand had evaporated overnight. </li></ul>
  92. 109. The Strategy <ul><li>Novartis felt the need to act quickly and change its strategy. </li></ul><ul><li>Carlos Weiss, Novartis CP’s CEO defined what was called the company’s “Primero el Productor” or “The Farmer First” strategy: </li></ul><ul><ul><li>Build farmer loyalty. </li></ul></ul><ul><ul><li>Build Reciprocal Agreements with Dealers. </li></ul></ul><ul><ul><li>Build Customer Share and Market Share. </li></ul></ul>
  93. 110. Critical Step : Involve Dealers <ul><li>Novartis appealed to dealers offering them incentives to share customer information. </li></ul><ul><li>Early attempts to involve dealers served two purposes: </li></ul><ul><ul><li>Speeding the customer identification process for Novartis. </li></ul></ul><ul><ul><li>Erecting a roadblock against competitors. </li></ul></ul><ul><li>Each of the 80 dealers got a personal visit from a Novartis CP manager. </li></ul>
  94. 111. Step 1 : Customer Identification <ul><li>Novartis began with lists obtained from the Ministry of Agriculture. </li></ul><ul><li>It then continuously added to the list through inputs from dealers. </li></ul><ul><li>Data was collected from company sales records, agricultural county maps, etc. </li></ul>
  95. 112. Step 2 : Ranking by Value <ul><li>The top 20% of Novartis’ customers were divided into a four tier pyramid using the following formula: </li></ul><ul><ul><li>Yield per hectare X total spending in dollars </li></ul></ul><ul><li>Thus if two farmers spend the same amount on chemicals for their acreage, the the farmer with the richest yield will be considered a more valuable customer. </li></ul><ul><li>Using the formula, Novartis identified its Most Valuable Customers or “Primero el Productors”. </li></ul>
  96. 113. Customer Management Strategy Value Tier PEP Top Farmers Important Farmers Productores del Comercio No. of customers 104 2600 6500 10800 Customer Mgmt Strategy “ Belly-to-Belly”; Completely customised offer Face-to-face; Mass customised offer Group meetings; Mass customised offer Indirect; Through dealers and call centre
  97. 114. Customer Management Strategy Value Tier PEP Top Farmers Important Farmers Productores del Comercio Manageable Customers per sales rep 4 100 250 0 Frequency of contact 10+ times annually 4 times annually 1, then hand off to call centre 0 Interaction costs High Medium Low Minimal
  98. 115. Step 3 : Ranking by Needs <ul><li>Novartis launched a survey to understand how farmers viewed their own needs. </li></ul><ul><ul><li>What did the farmers actually want? </li></ul></ul><ul><ul><li>What did they value? </li></ul></ul><ul><ul><li>What factors did they consider before making a purchase? </li></ul></ul><ul><ul><li>How did they view themselves? </li></ul></ul>
  99. 116. Step 3: Ranking By Needs Cluster Key Personal Needs Craves leadership role, must be a winner, Needs to see ROI Needs a feeling of success, strives to win recognition from peers Wants latest technology, wants to learn more, improve abilities. Concerned about the environment. Demands high quality service, puts a premium on satisfaction, but enjoys a challenge. Needs to feel secure, wants to belong and to be sociable. Wants technical help and support, but is very loyal to current to current dealer.
  100. 117. Preparing The Sales force – Upsizing <ul><li>Novartis focused on hiring people with a mix of technical and social skills likely to be appreciated by their customers. </li></ul><ul><li>They were culled from local agricultural colleges rather than from big-city universities. </li></ul><ul><li>The new sales reps were called “ Delegados Tecnicos Comerciales ” (DTC), a combination of a salesperson and a technician. </li></ul>
  101. 118. Preparing The Sales force -Training <ul><li>DTCs needed to know more than the farmer about crop protection. </li></ul><ul><li>Without continual training, DTCs cannot keep up to date on new technology. </li></ul><ul><li>Novartis has a fierce concentration on formal training. </li></ul><ul><li>A series of three-day training sessions are held eight times annually. </li></ul><ul><li>Structured internal dialogues between the DTCs and the R&D team are held. </li></ul>
  102. 119. Case Study – GM Vauxhall UK Division <ul><li>Average market share averaging 13 percent –1998 </li></ul><ul><li>Loyalty rate-repeat purchases by same individual household – 50 percent </li></ul><ul><li>Build tighter customer relationships while offering its 450 dealers services that would enhance profitability. </li></ul><ul><li>‘ We want to wrap the customer in the Vauxhall blanket’ </li></ul>
  103. 120. GM Vauxhall UK Division <ul><li>Dealer first point of contact for purchasing and servicing </li></ul><ul><li>Third parties involved in warranty extension </li></ul><ul><li>GM subsidiary- GMAC handled financing.. </li></ul><ul><li>Although Vauxhall had collected basic customer information, only application was direct mail campaigns </li></ul>
  104. 121. GM Vauxhall UK Division <ul><li>Date base updated and made comprehensive-sources – old database, car ownership records, results from lead generation campaigns </li></ul><ul><li>All partners were working off the same database </li></ul><ul><li>Proactive CRM program explained by management to dealers – buy in of dealers obtained. </li></ul>
  105. 122. LifeCycle CRM Program <ul><li>Time of first servicing – (12,000 miles or 12 months) customer called for a tune up reminder, warranty extension </li></ul><ul><li>When financing deal reaches trigger point, ‘car valet’ service plus new loaner car. </li></ul><ul><li>When returning old car, contract for new car brought along </li></ul><ul><li>Warranty cross sells – 11 % to 30% - 9 months </li></ul><ul><li>Dealers service business – 60% increase </li></ul><ul><li>90% who took valet service bought new cars </li></ul>
  106. 123. The Internet <ul><li>1999 – Vauxhall BuyPower – pre-configure their cars online, selecting options and pricing </li></ul><ul><li>Pre-qualified customers delivered as leads to dealers </li></ul><ul><li>1999 – Specific, internet only car models </li></ul><ul><li>Configure and order via the net </li></ul><ul><li>Delivered and serviced by dealer </li></ul><ul><li>Each car had a distinctive “chrome dot-com” logo on the side. </li></ul>
  107. 124. The Internet <ul><li>Presentation made to dealers about internet, why company needed to sell online </li></ul><ul><li>Permission for one year pilot program </li></ul><ul><li>Company provided sales support through configuring online and special call center for internet customers </li></ul><ul><li>Dealer – similar commission, different role – demo car, test drive, disposal of old car. </li></ul><ul><li>If anything goes wrong, we’ll reimburse you. </li></ul><ul><li>1000 cars sold over internet in two months (2% of volumes) </li></ul>
  108. 125. Case Study – Dell <ul><li>Account Management Strategy </li></ul><ul><li>Sales and Marketing processes organised around individual customers not products. </li></ul><ul><li>U.S. customer base organised into 11 separate “business segments”. </li></ul><ul><li>Structure designed to meet different needs of different customers. </li></ul>
  109. 126. Dell’s Account Management Strategy <ul><li>Key Principle : Companies’ IT needs are distinguished by their IT procurement & management function rather than the industry they are in. </li></ul><ul><li>Exception : Healthcare </li></ul><ul><li>Size of the Company, although not overtly considered for segmentation, does emerge as a factor since a Company’s IT needs still tend to depend more on it’s size than anything else. </li></ul>
  110. 127. The Business Segments Business Segment Criteria Relationship Group Global Companies with 18,000+ employees that have headquarters outside the U.S. and operations in the U.S., or have headquarters in the U.S. and significant operations in other countries. Relationship Group Enterprise Accounts Companies in the U.S. with 18,000+ employees.
  111. 128. The Business Segments Business Segment Criteria Relationship Group Large Corporate Accounts Companies with 3,500-18,000 employees. Relationship Group Preferred Accounts Division Companies with 400-3,500 employees. Relationship Group Internet Partner Division Internet Service Providers, Application Service Providers and Web Hosting Companies.
  112. 129. The Business Segments Business Segment Criteria Relationship Group Healthcare Hospitals, HMOs, medical provider groups, medical labs. Public Federal Government Federal Agencies, federal employees and APO / FPO orders Public State & Local Government State, County and Municipal agencies and organisations.
  113. 130. The Business Segments Business Segment Criteria Public Education Students, faculty, staff, K-12 & Higher Education institutional purchases. Home & Small Business Small Business Centre Cos. Based in the U.S. with fewer than 400 employees Home & Small Business Consumer (Home & Home Office) Home users, both professional & recreational.
  114. 131. Servicing <ul><li>Relationship Group : Dedicated sales reps assigned to all accounts. </li></ul><ul><li>Healthcare Segment : Dedicated sales reps for all accounts. </li></ul><ul><li>Education & Govt. Accounts : Dedicated sales reps depending on size and complexity. </li></ul><ul><li>Sales reps rewarded for products sold plus for increases in share of wallet for a customer account. </li></ul>
  115. 132. Hunters and Developers Account Management Phase Status Goals Account Manager Type Acquisition Prospect, little or no current business Establish relationship with potential client; close initial sale. Hunter Development On client’s approved vendor list; client buys atleast one Dell product. Sell multiple product lines; sell into different departments. Developer
  116. 133. Hunters and Developers Account Management Phase Status Goals Account Manager Type Retention Client buys frequently; uses Premier to compile reports, tracks history, make online purchases. Extend reach into client’s organisation; increase client’s LTV to Dell. Developer
  117. 134. Handoff <ul><li>No matter how complex the sales organisation becomes, the sales process must continue appear “simple” to the customer . </li></ul><ul><li>Handoff from Hunters to Developers is absolutely critical. </li></ul><ul><li>Expectations from both types of account managers are established with the customer at the outset. </li></ul><ul><li>Dell ensures there are overlaps between Hunters and Developers at an account level. </li></ul>
  118. 135. Handoff <ul><li>Single point of contact for each customer ensures </li></ul><ul><ul><li>Better customer communication </li></ul></ul><ul><ul><li>Lower cost of sales </li></ul></ul><ul><ul><li>Less confusion over who is responsible for the customer. </li></ul></ul><ul><li>For the customer </li></ul><ul><ul><li>Less uncertainty </li></ul></ul><ul><ul><li>Higher confidence </li></ul></ul><ul><ul><li>Better service </li></ul></ul>
  119. 136. Premier <ul><li>An initiative to manage B2B customer relationships via the World Wide Web. </li></ul><ul><li>An end user can log onto his organisation’s Premier site and </li></ul><ul><ul><li>Shop for Dell products. </li></ul></ul><ul><ul><li>View his company’s contracted prices for various Dell products. </li></ul></ul><ul><ul><li>See a list of preapproved compatible components and computer accessories. </li></ul></ul><ul><ul><li>Review past purchases. </li></ul></ul><ul><ul><li>Find contact information for Dell sales and service reps. </li></ul></ul>
  120. 137. Customers For Life – Carl Sewell Story <ul><li>How to turn that one time buyer into a lifetime customer </li></ul><ul><li>It all starts here – How Good Do You Want to Be? </li></ul><ul><li>Sewell Village: Established in 1912. </li></ul><ul><li>Largest dealer for Cadillac, Lexus, and Hyundai </li></ul><ul><li>Carl Sewell took over the dealership in 1967 and then </li></ul><ul><ul><li>1968 – turnover US$ 10 million </li></ul></ul><ul><ul><li>Today – turnover US$ 450 million </li></ul></ul>
  121. 138. Customers for Life <ul><li>It all starts here-How good do you want to be? </li></ul><ul><li>From 3rd to 1st </li></ul><ul><li>ICHIBAN - The Japanese Drive to be No.1 </li></ul><ul><li>Ask your customers what they want and they will be more than happy to tell you. </li></ul><ul><li>Make it easy for them to tell you; Create a short questionnaire </li></ul><ul><ul><li>No more than 5 questions, preferably 3 </li></ul></ul><ul><ul><li>Questions focused on the most important parts of doing business with you from the customers point of view. </li></ul></ul>
  122. 139. Customers for Life <ul><li>The moment the customer says, “Can You…” you should be prepared to say yes even if you cant immediately figure out how to do what he or she wants </li></ul><ul><li>The Customer is always right - up to a point. </li></ul><ul><ul><li>Your job is to figure out what that point is. It’s profitable to stretch pretty far in the customer’s favor. </li></ul></ul><ul><li>Don’t charge for this “extra” service if you can help it. If it’s something that a friend would do for another friend don’t charge. </li></ul><ul><ul><li>Don’t worry you’ll more than make up the money in the future business </li></ul></ul>
  123. 140. Customers for Life <ul><li>One call should do it. Make it easy for your customers to get that good service </li></ul><ul><li>Let the customers help you provide good service. </li></ul><ul><ul><li>Teach them how to get the best service, when it’s a good time to come see you; and what they need to tell you in order to get the job done right the first time </li></ul></ul><ul><li>Explain to your customers how you do things </li></ul><ul><li>Reward your customers for doing business with you. </li></ul>
  124. 141. Customers for Life <ul><li>Don’t worry about people taking advantage of you . </li></ul><ul><ul><li>As a rule they’ll only call when they really need help. </li></ul></ul><ul><li>Customers are good. </li></ul><ul><ul><li>If a customer tells you he has a problem, the chances are 99 out of hundred that he really does. Don’t let the other 1% make you mistreat everyone else. </li></ul></ul>
  125. 142. Customers for Life <ul><li>Systems not smiles: Doing a good job = </li></ul><ul><ul><li>Doing a job right the first time </li></ul></ul><ul><ul><li>Having a plan in place to deal with things when they go wrong </li></ul></ul><ul><li>Keep the service promise: doing what you are supposed to do, when you are supposed to do it, is the very minimum required to provide good customer service </li></ul>
  126. 143. Customers for Life <ul><li>When things go wrong: </li></ul><ul><ul><li>Apologize profusely, </li></ul></ul><ul><ul><li>and then fix it, Immediately. </li></ul></ul><ul><li>Make it easy for your customers to complain. It’s unpleasant but at least you’ll have the chance to set things right </li></ul>
  127. 144. Customers for Life <ul><li>Have what your customers want; </li></ul><ul><ul><li>monitor your inventory carefully you’ll be able turn your merchandise faster. </li></ul></ul><ul><ul><li>measure your order to delivery cycle, and work towards having a just-in-time inventory system </li></ul></ul><ul><li>If the customer asks for something you don’t have, try to get it by calling a competitor and working out a trade. </li></ul><ul><ul><li>You don’t want a potential customer leave just because you don’t have what he wants in stock </li></ul></ul>
  128. 145. Customers for Life <ul><li>Good enough never is! </li></ul><ul><ul><li>Set high goals and keep raising them once they are achieved. If you don’t somebody will blow right by you while you are telling yourself what a great job you’ve done.Periodically review every part of your operation. </li></ul></ul><ul><li>Account for more than money </li></ul><ul><ul><li>Make sure your measurements are relevant and can be stated in a positive manner. People prefer to shoot at goals rather than avoid making a mistake </li></ul></ul>
  129. 146. Customers for Life <ul><li>Borrow, Borrow, Borrow </li></ul><ul><ul><li>Why reinvent the wheel, just improve it. It’s quicker, and cheaper, and borrow from the best! Actively search for new ideas to borrow </li></ul></ul><ul><li>The Life Time Value Of A Customer </li></ul><ul><ul><li>Ask yourself how much could this customer spend with me in a lifetime. </li></ul></ul><ul><li>Keep Score </li></ul><ul><ul><li>Know who your lifetime customers are and treat them accordingly. </li></ul></ul><ul><li>Look beyond selling as a one time experience, look at having your customer’s business for ever! </li></ul>
  130. 147. To Sum it Up <ul><li>If you are good to your customers they’ll keep coming back to you because they like you. </li></ul><ul><li>If they like you, they’ll spend more money. </li></ul><ul><li>If they spend more money, you’ll want to treat them better. </li></ul><ul><li>And if you treat them better, they’ll keep coming back to you and the circle starts again </li></ul>
  131. 148. Implementation <ul><li>The first step is getting buy in </li></ul><ul><li>Articulate the context for change </li></ul><ul><li>Articulate the benefits of change </li></ul><ul><li>Articulate the consequences of not changing </li></ul><ul><li>Communicate,communicate,communicate </li></ul><ul><li>Internalisation of CRM vision and mission across the group </li></ul><ul><li>Creating internal change agents </li></ul><ul><li>Breaking down department barriers-team work among department heads </li></ul>
  132. 149. Training <ul><li>Senior managers – perspective, CRM vision and their role, mindset </li></ul><ul><li>Customer contact people – mindset, skill inputs, practical aspects of CRM implementation </li></ul><ul><li>Technical skills – ensure all users have level of technological familiarity required to operate the software </li></ul>
  133. 150. Training <ul><li>Training must be tied in to concrete actionables which are monitored </li></ul><ul><li>Training is a continuous process </li></ul><ul><li>Internal training in terms of mindset/ perspective and skills must happen before implementation of software and prior to training provided by vendor </li></ul>
  134. 151. Processes <ul><li>Use research and process redesign to ensure core service is in place </li></ul><ul><li>Regularly track core service measures and customer expectations </li></ul><ul><li>Reengineer processes wherever required. </li></ul><ul><li>Prepare data systems for transition to an electronic format </li></ul><ul><li>Focus on data collection points and quality of data capture </li></ul>
  135. 152. People <ul><li>Hire the smile and train the skill </li></ul><ul><li>What you measure is what you get – redesign performance measures to reflect the new initiatives </li></ul><ul><li>Redesign incentive structures to reflect the new priorities </li></ul>
  136. 153. What Can Go Wrong <ul><li>Not communicating the context – no buy in </li></ul><ul><li>Not accounting for interdepartmental resistance </li></ul><ul><li>Not using internal change agents </li></ul><ul><li>Not addressing core processes </li></ul><ul><li>Training strategy and CRM strategy not integrated </li></ul>
  137. 154. What Can Go Wrong <ul><li>Using a off the shelf software – no customisation </li></ul><ul><li>CRM positioned as a technology initiative and not as a strategic initiative </li></ul><ul><li>Wrong people in key customer facing positions </li></ul><ul><li>Applying sophisticated software to poor data </li></ul><ul><li>Over reliance on external consultants </li></ul>
  138. 155. Designing an Information System <ul><li>Identify objectives of the CRM systems </li></ul><ul><ul><li>Building Customer Loyalty </li></ul></ul><ul><ul><li>Devising value added services for existing customers </li></ul></ul><ul><ul><li>Cross selling products/services to existing customers </li></ul></ul><ul><ul><li>Reduce attrition amongst M V Cs </li></ul></ul><ul><li>Identify information on the customer required for meeting these objectives. </li></ul><ul><li>Check for existing inventory of information. </li></ul><ul><li>Define additional information fields. </li></ul><ul><li>Identify the sources for collecting the required data. </li></ul><ul><li>Define the system components – hardware and software for data capture, storage & analysis. </li></ul>
  139. 156. Role of Technology <ul><li>Moore’s Law </li></ul><ul><li>Cost of computing power and storage have gone down significantly over the decades. </li></ul><ul><li>Communication technologies have made immense power available for everyone. </li></ul><ul><li>Internet has offered an all new way of interaction & customisation </li></ul><ul><li>Technology skills are available in plenty </li></ul><ul><li>Technologies being developed have become more user centric / friendly. </li></ul>
  140. 157. Building the Database <ul><li>Utility </li></ul><ul><ul><li>For what are we collecting the data? </li></ul></ul><ul><ul><li>What were we doing so far for this? </li></ul></ul><ul><li>Volume </li></ul><ul><ul><li>What type of customer will be tracked? </li></ul></ul><ul><ul><li>What level of details will we keep on each customer </li></ul></ul><ul><ul><li>How frequently will we update this data? </li></ul></ul>
  141. 158. Building the Database <ul><li>Storage / Retrieval / Updation </li></ul><ul><ul><li>Where will the data be stored: centrally or distributed? </li></ul></ul><ul><ul><li>What data will change with time and with what frequency: daily/ weekly/ monthly/ quarterly/ yearly </li></ul></ul><ul><ul><li>How frequently will we update? </li></ul></ul><ul><ul><li>How will we filter duplicate or dead data. </li></ul></ul><ul><ul><li>Who will have control on the quality of stored data </li></ul></ul><ul><ul><li>Do we need real time access of data </li></ul></ul><ul><ul><li>Do we provide free access or limited access </li></ul></ul>
  142. 159. Building the Database <ul><li>Analysis & Presentation </li></ul><ul><ul><li>Correlating application and data extraction </li></ul></ul><ul><ul><li>For what level of decision making: operational / strategic </li></ul></ul><ul><ul><li>Statistical processes </li></ul></ul><ul><ul><li>Projective information / Forecasts </li></ul></ul><ul><ul><li>Customisability by user </li></ul></ul><ul><ul><li>User level updation – access to main data fields </li></ul></ul>
  143. 160. Database Transition <ul><li>Don’t ever try to do all of it at once. </li></ul><ul><li>Is the data available elsewhere within the organisation? </li></ul><ul><li>How best to extract it with limited resources </li></ul><ul><li>Does the existing data require large amount of re-formatting to become useful. </li></ul><ul><ul><li>Different treatment of data already stored </li></ul></ul><ul><ul><li>Variety of formats used for data capture & storage </li></ul></ul><ul><ul><li>Inadequate information attributes while capture </li></ul></ul><ul><ul><li>Legacy data in incompatible forms. </li></ul></ul>
  144. 161. Database Transition <ul><li>Identify the following for data conversion </li></ul><ul><ul><li>Time </li></ul></ul><ul><ul><li>Finances </li></ul></ul><ul><ul><li>Human Power </li></ul></ul><ul><li>Decide whether you want to do it in-house or outsource based on </li></ul><ul><ul><li>Sensitivity of the data </li></ul></ul><ul><ul><li>Availability of skills & resources in-house </li></ul></ul><ul><ul><li>Complexity of the solution required </li></ul></ul><ul><ul><li>Whether your application is generic enough for an off-the-shelf solution </li></ul></ul><ul><ul><li>Availability of outside expertise </li></ul></ul>
  145. 162. ROI on CRM Investments <ul><li>Cost Savings </li></ul><ul><ul><li>Internal Process Improvements </li></ul></ul><ul><ul><ul><li>More efficient order handling </li></ul></ul></ul><ul><ul><ul><li>Lower sales cycle time </li></ul></ul></ul><ul><ul><ul><li>Less rework </li></ul></ul></ul><ul><ul><li>Service Centre Efficiencies </li></ul></ul><ul><ul><ul><li>Quicker problem resolutions </li></ul></ul></ul><ul><ul><ul><li>Lower number of people to man the centre </li></ul></ul></ul><ul><ul><li>Reduction in Marketing Expenditure </li></ul></ul><ul><ul><ul><li>Better targeting of customers </li></ul></ul></ul><ul><ul><ul><li>Lower number of promos, ads required to reach the target customer </li></ul></ul></ul><ul><ul><ul><li>Lower expenses per customer identified. </li></ul></ul></ul>
  146. 163. ROI on CRM Investments <ul><li>Revenue Increases </li></ul><ul><ul><li>Salesperson efficiency improves </li></ul></ul><ul><ul><ul><li>More informed sales people </li></ul></ul></ul><ul><ul><ul><li>Able to make more number of calls </li></ul></ul></ul><ul><ul><ul><li>Conversion rates increase </li></ul></ul></ul><ul><ul><ul><li>Increased revenues per salesperson </li></ul></ul></ul><ul><ul><li>Growing order size </li></ul></ul><ul><ul><ul><li>Customised offerings to customers – prompted to buy in larger quantities </li></ul></ul></ul><ul><ul><ul><li>Ability to cross sell to existing customers. </li></ul></ul></ul><ul><ul><li>Increased Customer Profitability </li></ul></ul><ul><ul><ul><li>Taking more and more customers up the value ladder </li></ul></ul></ul><ul><ul><li>Improvement in Response to Promotions/Offers </li></ul></ul><ul><ul><ul><li>More targeted marketing campaigns lead to improved response. </li></ul></ul></ul>
  147. 164. ROI on CRM Investments <ul><li>Other Benefits </li></ul><ul><ul><li>Lifetime Customers </li></ul></ul><ul><ul><ul><li>More value from lifetime customers </li></ul></ul></ul><ul><ul><ul><li>Selling costs more economical as compared to those for new customers </li></ul></ul></ul><ul><ul><li>Protecting Existing Investments </li></ul></ul><ul><ul><ul><li>CRM systems riding on existing infrastructure will lead to faster ROIs. </li></ul></ul></ul><ul><ul><li>Customer Satisfaction </li></ul></ul><ul><ul><ul><li>Higher loyalty </li></ul></ul></ul><ul><ul><ul><li>Better retention </li></ul></ul></ul><ul><ul><ul><li>More long-term value </li></ul></ul></ul>
  148. 165. ROI on CRM Investments <ul><li>Other Benefits </li></ul><ul><ul><li>Employee Turnover </li></ul></ul><ul><ul><ul><li>Enough tools for employees to deliver better customer service </li></ul></ul></ul><ul><ul><ul><li>Customer data is systematically captured, hence no loss of expensive customer insight when an employee leaves. </li></ul></ul></ul><ul><ul><ul><li>Could also reveal why employees are leaving. </li></ul></ul></ul>
  149. 166. CRM Market View Retail VAR Direct <ul><li>Siebel </li></ul><ul><li>SAP </li></ul><ul><li>Onyx </li></ul><ul><li>SalesLogix </li></ul><ul><li>Pivotal </li></ul><ul><li>Commence </li></ul><ul><li>ACT! </li></ul><ul><li>Goldmine </li></ul>$ 2000+ $ 695 - $ 1500 $ 99 - $ 299 Price Per User License Mid-Market High End Small Business Largest & fastest Growing Segment
  150. 167. Categories of CRM Solutions High Complexity Moderate Complexity Low Complexity Processes Covered – Sales, Marketing, Customer Service All of the three Two of the three One of the three Degree of Customised Applications Very High Moderate Low No. of application screens 70 + 30 – 70 30 - No. of Data Integrations 10 + 2 – 8 2 or less No. of user seats 1000 – 5000 500 – 5000 100 – 5000 Cost per user license USD 50,000 – USD 15,000 USD 30,000 – USD 10,000 USD 15,000 – USD 10,000
  151. 168. Measurement <ul><li>Identify the parameters for measuring effectiveness. For e.g.. </li></ul><ul><ul><li>Selling </li></ul></ul><ul><ul><ul><li>Number of calls to complete the sale </li></ul></ul></ul><ul><ul><ul><li>Number of customers buying more than one product/service from us </li></ul></ul></ul><ul><ul><ul><li>Time spent in the market by sales people </li></ul></ul></ul><ul><ul><li>Loyalty </li></ul></ul><ul><ul><ul><li>Number of repeat customers </li></ul></ul></ul><ul><ul><ul><li>Number of referrals generated from each customer </li></ul></ul></ul><ul><ul><ul><li>Lower churn rates amongst high value customers. </li></ul></ul></ul><ul><ul><li>Marketing Efforts </li></ul></ul><ul><ul><ul><li>Identification of target customers </li></ul></ul></ul><ul><ul><ul><li>Marketing campaigns – more directed ? </li></ul></ul></ul>
  152. 169. Questions You Should Ask the Vendor? <ul><li>Does the vendor have a good track record of working with other companies like mine ? References ? </li></ul><ul><li>Is the system developed from ground up for small & medium sized players ? (As against a stripped version of large enterprise system) </li></ul><ul><li>Is data integration included in the proposal ? What time frames have been considered for that ? </li></ul><ul><li>Is legacy system support included in the basic proposal ? </li></ul>
  153. 170. Questions You Should Ask the Vendor? <ul><li>Will there be a pilot stage before implementation across the organisation ? </li></ul><ul><li>How quickly can the system be implemented and modified ? </li></ul><ul><li>Does the solution allow for in-house modifications / small customisations? </li></ul><ul><li>Will the system grow with my business in a simple and seamless way? </li></ul><ul><li>Will the vendor help train my people for implementation and smooth transition ? </li></ul>
  154. 171. Some career tips <ul><li>Expect no favours. Start at ground zero. </li></ul><ul><li>Acceptance as a boss requires conscious effort. </li></ul><ul><li>Keep your inner child alive. </li></ul><ul><li>Ask fundamental questions (the four year old child test) </li></ul>
  155. 172. Some career tips <ul><li>You are the change you want to see. </li></ul><ul><li>Do not accept status quo. Handle this with tact, homework and self belief. </li></ul><ul><li>If you spend fifteen days where work is mechanical, talk to someone. </li></ul><ul><li>Have the courage to dream.... </li></ul>
  156. 173. Some career tips <ul><li>Master communication. Talk to people in a language they understand. </li></ul><ul><li>Find a complete answer to “How does my business make money” </li></ul><ul><li>Your mind, like your body requires nourishment. Breadth of reading and experience help. </li></ul><ul><li>Always work on your strengths. </li></ul><ul><li>You do not fully know what you are good at. Take some personal risks. </li></ul>
  157. 174. Building Relationships <ul><li>There is something to learn from everyone you work with. </li></ul><ul><li>Listen and ask questions. Talk less... </li></ul><ul><li>Keep promises. Religiously. </li></ul><ul><li>Are you approachable? </li></ul><ul><li>Leadership is earned by behaviour, not by position. </li></ul><ul><li>Authenticity is important. The ability to communicate authenticity is equally important. </li></ul><ul><li>Give respect to get it back. </li></ul>
  158. 175. Building Relationships <ul><li>Leadership is earned by behaviour, not by position. </li></ul><ul><li>Authenticity is important. The ability to communicate authenticity is equally important. </li></ul><ul><li>Give respect to get it back. </li></ul><ul><li>The three month biodata test. </li></ul><ul><li>Be clear about your non negotiable values. Let values be your relationship compass. </li></ul>
  159. 176. Building Relationships <ul><li>Be genuinely interested in other people. </li></ul><ul><li>Stay in touch with people you respect. </li></ul><ul><li>Cultivate mentors. </li></ul><ul><li>Be a mentor to others. </li></ul><ul><li>The best way to learn something new is to teach it. </li></ul>