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CR! With CRM Roger Blackwell


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CR! With CRM Roger Blackwell

  1. 1. CR! With CRM Roger Blackwell How to Pinpoint, Acquire and Retain the most profitable customers in the long run
  2. 2. The Two Commandments <ul><li>Know Thy Customers </li></ul><ul><li>Know Thy Data -- CRM </li></ul>
  3. 3. CRM: Also Known As <ul><li>Contact Management (CM) </li></ul><ul><li>Sales Force Automation (SFA) </li></ul><ul><li>Data Mining (DM) </li></ul><ul><li>Automated Marketing Processes (AMP) </li></ul><ul><li>Enterprise Marketing Automation (EMA) SAS </li></ul><ul><li>Electronic Commerce Solution (USA Networks ) </li></ul>
  4. 4. Where are business and e-commerce going and where does my firm fit in? What is happening in the consumer marketplace? Who is keeping track of these trends and developing tools to help me grow profits? What is on the minds of your customers?
  5. 5. C.R.M.
  6. 6. C.R.M. The Foundation is Consumer Behavior
  8. 8. MODEL OF CONSUMER BEHAVIOR - PURCHASE AND OUTCOMES INPUT INFORMATION PROCESSING DECISION PROCESS VARIABLES INFLUENCING DECISION PROCESSES <ul><li>Environmental Influences </li></ul><ul><li>Culture </li></ul><ul><li>Social Class </li></ul><ul><li>Personal Influence </li></ul><ul><li>Family </li></ul><ul><li>Situation </li></ul><ul><li>Individual </li></ul><ul><li>Differences </li></ul><ul><li>Consumer Resources </li></ul><ul><li>Motivation and Involvement </li></ul><ul><li>Knowledge </li></ul><ul><li>Attitudes </li></ul><ul><li>Personality </li></ul><ul><li>Lifestyle </li></ul><ul><li>Demographics </li></ul>Need Recognition Search Internal Search <ul><li>Stimuli </li></ul><ul><li>Marketer Dominated </li></ul><ul><li>Other </li></ul>Exposure Attention Comprehension Acceptance Retention Memory Beliefs Attitude Intention Alternative Evaluation Satisfaction Dissatisfaction Outcomes Purchase External Search
  9. 9. Problem Recognition Search Alternative Evaluation Choice/Purchase/Consumption Satisfaction/ Dissatisfaction CONSUMER BEHAVIOR MODEL
  10. 10. PURPOSE OF CRM <ul><li>1. Identify all customers and the nature of contacts with them </li></ul><ul><li>2. Identify which types of customers are most profitable </li></ul><ul><ul><li>by sales </li></ul></ul><ul><ul><li>by profit contribution </li></ul></ul>
  11. 11. PURPOSE OF CRM <ul><li>3. Identify and understand the behaviors of the most profitable customers </li></ul><ul><ul><li>how to encourage behaviors of most profitable customers </li></ul></ul><ul><ul><li>how to encourage those behaviors among other segments of the customer base </li></ul></ul><ul><ul><li>how to cross-sell other products to customers </li></ul></ul>
  12. 12. PURPOSE OF CRM <ul><li>4. Manage contacts with most profitable customers </li></ul><ul><li>5. Manage activities of the firm that will please most profitable customers </li></ul><ul><ul><li>strategies </li></ul></ul><ul><ul><li>tactics </li></ul></ul>
  13. 13. The Century of THE CUSTOMER
  14. 14. How many customers will there be? Will your markets be growing or slowing? CRM MARKETING IN THE CENTURY OF THE CUSTOMER
  15. 15. REQUIREMENTS FOR PROFITABLE MARKETS <ul><li>People with needs and/or problems </li></ul><ul><li>People with ability to pay </li></ul><ul><li>People willing to spend funds </li></ul><ul><li>People with authority to spend </li></ul>
  16. 16. Targeting Segments For Increased Profits Segmenting Individuals Is e-tailing a Mass Market or Niche Market application? Data Mining and CRM
  17. 17. GATHERING CONSUMER INFORMATION 1. Give them feedback as to how information has affected company 2. Don’t waste their time--make process easy and quick 3. People want to be able to access information about their preferences, etc.
  18. 18. IMPLEMENTING CRM 1. Shift from batch process environment to real-time environment 2. Shift from Product Centric Environment to Customer Centric Environment 3. Measures of: recency, frequency, volume of purchases.
  19. 19. The Implementation Triad 1. Functional knowledge of the data being analyzed 2. Programmer to manipulate data 3. Analyst/statistician (to build predictive algorithms ( 80% data prep, 20% data analysis )
  20. 20. CHANGING LIFESTYLES Demographics Psychographics Behavioral (Bayesian)
  21. 21. CRITERIA FOR SELECTING CRM SOLUTIONS 1. Improve productivity 2. Add sophisticated functionality 3. Ease of maintenance 4. Flexibility for growth 5. Scalable performance 6. Reliability (of provider, not just software)
  22. 22. ORGANIZATIONAL GOALS 1. Integration of multiple divisions 2. Integration of Multiple Channels
  23. 23. CASE EXAMPLE: USA NETWORKS USA Entertainment USA Electronic Retailing USA Information and Services USA Network (SciFi Channel) USA Studios (Law & Order, etc) Home Shopping Network Ticket Master Hotel Reservations (B2B Web Design for NASCAR, etc.) Barry Diller, CEO
  24. 24. USA NETWORKS GOAL: Convert Sales into an IMC Acxion (Little Rock) cleansing data and updating 45 million addresses (provides ID for every customer that never changes, regardless of address or name changes) Precision Response Group (operates customer call centers) PRC handles telephone sales, HSN handles fulfillment TicketMaster handles NBA tickets, upsells Sports Illustrated SAS Enterprise Miner (modelling, campaign planning execution--DM, catalogs, e-mail. Calculates lifetime value and cross selling opportunities (1 or 365 emails a year?) Delano software (e-mail execution, HTML enabled, inbound marketing, Click through tracking --those who delete, read, go to web site, go to web site and buy NASCAR-- from 100,000 names to a few million prospects
  25. 25. CASE EXAMPLE: U.S. MARINE CORPS 275,000 force, 14,253 leave MC each year without completing contract Cost $35,000 to train each one; a 1%improvement saves $5 million/year CRM identified factors causing people to leave: Billet MOS, Age, duty status leave Don’t recruit the ones that will drop out 2,600 person years lost awaiting training (shipped to schools but not in them)
  26. 26. U.S. MARINE CORPS CRM RESULTS Retain more, recruit less Recruit less, train less Train less, wait less, retain more Continue upward spiral of career process: Career process better, money saved Saved $10-12 million on first 3 data mining projects Implemented by SAS (SAIC), nation’s largest employee owned r and d firm
  28. 28. GLOBAL INFORMATION SOCIETY Information/Mass Ratio
  29. 29. GLOBAL INFORMATION SOCIETY + Higher Value to Customer Information/Mass Ratio
  30. 31. GLOBAL INFORMATION SOCIETY + Higher Value to Customer - Lower Operations Costs Information/Mass Ratio
  31. 32. GLOBAL INFORMATION SOCIETY + Higher Value to Customer - Lower Operations Costs MORE MARGINS Information/Mass Ratio
  32. 33. CR! With CRM Roger Blackwell How to Pinpoint, Acquire and Retain the most profitable customers in the long run