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Chp06 Crm


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Chp06 Crm

  1. 1. Chapter Six Integrating Processes to Build Relationships: Customer Relationship Management
  2. 2. Introduction <ul><li>Customer dissatisfaction with service widespread </li></ul><ul><ul><li>Expectations of customers higher than ever </li></ul></ul><ul><ul><li>“ Does your company deserve my patronage and loyalty?” </li></ul></ul><ul><ul><li>Starting point today: What was exceptional yesterday </li></ul></ul><ul><li>Organizations with long-standing customer bases find they lack the info and data to make good service decisions </li></ul><ul><ul><li>90% companies don’t have sales and service integration </li></ul></ul><ul><li>Companies must view their service encounter through the eyes of their customers </li></ul><ul><ul><li>To maintain ongoing relationships strong </li></ul></ul><ul><ul><li>Acquisition and selling costs of new customer very high </li></ul></ul><ul><ul><li>Dissatisfied customers primarily due to lack of customer service </li></ul></ul><ul><ul><li>70% of complaining customers will do business again if their complaint quickly addressed </li></ul></ul>
  3. 3. The Basics of CRM <ul><li>Timely delivery of excellent service </li></ul><ul><li>Combination of business process and technology </li></ul><ul><li>When competition is fierce, companies go back to basics: create value for customer </li></ul><ul><li>Execs must ask </li></ul><ul><ul><li>Can their companies’ infrastructures allow value creation? </li></ul></ul><ul><ul><li>Can their companies’ existing CRM infrastructures support doing business in the e-world </li></ul></ul><ul><li>Only by integrating sales and service infrastructure with all aspects of operations can management see change in customer relationships </li></ul>
  4. 4. Top Demand Drivers in CRM Verticals <ul><li>Telecommunications – Primary CRM applications include: </li></ul><ul><ul><li>Multi-channel contact centers </li></ul></ul><ul><ul><li>Business intelligence </li></ul></ul><ul><ul><li>Customer data integration and analysis </li></ul></ul><ul><ul><li>Web-based billing systems </li></ul></ul><ul><ul><li>Marketing automation/campaign management systems </li></ul></ul><ul><ul><li>Mobile CRM </li></ul></ul><ul><li>Banking and Financial Services – Primary CRM applications include: </li></ul><ul><ul><li>Profitability analysis </li></ul></ul><ul><ul><li>Target marketing </li></ul></ul><ul><ul><li>Data mining </li></ul></ul><ul><ul><li>Product personalization </li></ul></ul>Source: Gartner Group, 2001
  5. 5. Top Demand Drivers in CRM Verticals <ul><li>Retail – Primary CRM applications use e-commerce transaction and point-of-sale data to drive: </li></ul><ul><ul><li>One-to-one marketing </li></ul></ul><ul><ul><li>Cross selling </li></ul></ul><ul><ul><li>Personalized content management and merchandizing </li></ul></ul>Source: Gartner Group, 2001 Few retailers are providing improved interaction but many customers are demanding it --- this is an opportunity for companies to distinguish themselves.
  6. 6. Strategic Business Drivers <ul><li>Are these “hot buttons” that influence your business? </li></ul><ul><ul><li>Customer-driven businesses </li></ul></ul><ul><ul><li>360-degree customer view </li></ul></ul><ul><ul><li>Personalization/one-to-one marketing </li></ul></ul><ul><ul><li>Complex and more diverse channels </li></ul></ul><ul><ul><li>Automated sales </li></ul></ul><ul><ul><li>Shrinking margins due to product commoditization </li></ul></ul><ul><ul><li>Scattered global customers </li></ul></ul>These are strategic level questions aimed at CxO and other senior level executives to uncover CRM opportunities.
  7. 7. Strategic Business Drivers <ul><li>This chapter </li></ul><ul><ul><li>Clarify the concept of multi-channel organization </li></ul></ul><ul><ul><li>Discuss apps supporting customer-focused business model </li></ul></ul><ul><ul><li>Discuss how marketing practices and systems must be reworked to support ecommerce environment </li></ul></ul><ul><li>Service levels on the Web today often leave a lot to be desired. As buyers jump from site to site -- only to ultimately abandon the shopping cart without buying anything from anyone -- revenues slip away. </li></ul>
  8. 8. Defining CRM <ul><li>Integrated sales, marketing, and service strategy </li></ul><ul><ul><li>precludes lone showmanship </li></ul></ul><ul><ul><li>depends on coordinated enterprise-wide actions </li></ul></ul><ul><li>CRM software suite </li></ul><ul><ul><li>Helps better manage customer relationships by tracking customer interactions of all types </li></ul></ul><ul><ul><li>Automates selling and customer service cycle </li></ul></ul><ul><ul><ul><li>direct-mail marketing campaigns, telemarketing, telesales, lead qualification, response mgmt, lead tracking, opportunity mgmt, quotes and order configuration </li></ul></ul></ul>
  9. 9. Defining CRM <ul><li>Business Goals </li></ul><ul><ul><li>Using existing relationships to grow revenue </li></ul></ul><ul><ul><li>Using integrated information for excellent service </li></ul></ul><ul><ul><li>Introducing consistent, replicable channel processes and procedures </li></ul></ul>CRM is an integrated framework and strategy, not product
  10. 10. Managing the Customer Life Cycle: The Three Phases of CRM <ul><li>Metrics </li></ul><ul><li>Direct and indirect sales </li></ul><ul><li>Customer service improvements </li></ul><ul><li>Metrics </li></ul><ul><li>Tangible and intangible benefits </li></ul><ul><li>Brand equity gains </li></ul><ul><li>Metrics </li></ul><ul><li>Lifetime value </li></ul><ul><li>Share of wallet </li></ul><ul><li>Differentiation </li></ul><ul><li>Innovation </li></ul><ul><li>Convenience </li></ul>Acquire Enhance Retain <ul><li>Bundling </li></ul><ul><li>Reduce Cost </li></ul><ul><li>Customer Service </li></ul><ul><li>Adaptability </li></ul><ul><li>Listening </li></ul><ul><li>New Products </li></ul>
  11. 11. The New CRM Architecture: Organizing around the Customer <ul><li>To determine how CRM and supporting tech will work together for your firm, ask these questions </li></ul><ul><ul><li>Are most of company’s apps designed simple to automate existing departmental processes? </li></ul></ul><ul><ul><li>Are these apps capable of identifying and targeting best customers, those who are the most profitable? </li></ul></ul><ul><ul><li>Are these apps capable of real-time customization of products and services? </li></ul></ul><ul><ul><li>Do these apps track when the customer contacts the company, regardless of the contact point? </li></ul></ul><ul><ul><li>Are these apps capable of creating a consistent user experience across all contact points the customer chooses? </li></ul></ul><ul><li>If answers to each is no, seriously consider CRM architecture </li></ul>
  12. 12. The New CRM Architecture: Organizing around the Customer Cross-Functional Processes Breaking Down Departmental Walls Acquire Enhance Integrated CRM Applications { Retain Direct Marketing Sales Force Automation Cross-Sell & Up-Sell Customer Support Proactive Service Complete Integrated Solutions Partial Functional Solutions Customer Lifecycle
  13. 13. Features of the New CRM Architecture <ul><li>Integrates solutions spanning entire customer life cycle </li></ul><ul><ul><li>Proactive marketing </li></ul></ul><ul><ul><li>Customer care </li></ul></ul><ul><ul><li>Call centers </li></ul></ul><ul><li>Automated transaction management capabilities </li></ul><ul><li>Personalization and one-to-one marketing </li></ul><ul><li>Customer analytics and business intelligence </li></ul><ul><li>Field sales automation </li></ul>
  14. 14. Portfolio of CRM Process Competencies Customer Service and Billing Loyalty & Retention Programs Field Sales and Service <ul><li>Sales </li></ul><ul><li>Cross-sell </li></ul><ul><li>Up-sell </li></ul><ul><li>TeleSales </li></ul>Marketing and Fulfillment Prospect or Customer Fax Email Telephone VRU Web Contact Management Technical Infrastructure
  15. 15. How it Fits Together Source: Microsoft Corporation, 2000
  16. 16. What Capabilities Make Up Leading Edge CRM? <ul><li>Operational excellence </li></ul><ul><ul><li>Ensuring responsiveness and accurate delivery </li></ul></ul><ul><ul><li>Providing seamless interaction s across all interaction channels </li></ul></ul><ul><li>Analytical insight </li></ul><ul><ul><li>Sales planning and forecasting </li></ul></ul><ul><ul><li>Analyzing, predicting and driving customer value and behaviour </li></ul></ul><ul><ul><li>Identifying the right time to make the right offer to the right market </li></ul></ul><ul><ul><li>Consistently enhancing the customer experience in virtual channels </li></ul></ul><ul><li>Collaborative optimization </li></ul><ul><ul><li>Involving customer s to better accommodate their needs </li></ul></ul><ul><ul><li>Demand driven supply chain and fulfillment integration </li></ul></ul>C Collaborative A Analytical O Operational
  17. 17. Integration Requirements of Next Gen CRM Infrastructure <ul><li>Closed loop CRM infrastructure must integrate </li></ul><ul><ul><li>Customer content </li></ul></ul><ul><ul><li>Customer contact information </li></ul></ul><ul><ul><li>End-to-end business processes </li></ul></ul><ul><ul><li>The extended enterprise or partners </li></ul></ul><ul><ul><li>Systems </li></ul></ul>Less than 2% of companies provide on-demand cross-channel integration of website and call center 42% of top-ranked Web sites took longer than five days to reply to customer emails or never replied at all Source: Cisco Systems ENGAGE SERVICE FULFILL TRANSACT
  18. 18. Next Generation CRM Trends <ul><li>The multi-channel integrated experience </li></ul><ul><li>The rise of the call center as a multipurpose customer contact point </li></ul><ul><li>Listening portals: Next-generation CRM capabilities </li></ul><ul><li>CRM portals, sales force ASPs, and hosted applications </li></ul>Back Office Application Integration Customer Partners Purchases History Operations Marketing Billing Front Office Touch Points Web E Mailrs Call Center SFA POS Direct Mail Wireless Customers
  19. 19. Multi-Channel CRM <ul><li>Multi-channel shopping behavior has become mainstream; yet widespread retailer excellence remains elusive ( some catalog retailers are exceptional) </li></ul><ul><li>Women and young adults are multi-channel shoppers </li></ul><ul><li>The role of the catalog has never been more important (Sears recently bought Lands-End) </li></ul><ul><li>Analytical CRM -- Segmentation and personalization capabilities are becoming more critical </li></ul>
  20. 20. Multi-Channel Shopper Profiles Store Online Catalog Store + Catalog Online + Store Online + Catalog <ul><li>Tri-Channel Shoppers are demanding (well-informed) consumers; </li></ul><ul><li>Servicing Tri-Channel Shoppers is very challenging-requires high-levels of coordination! </li></ul>
  21. 21. Primary Reasons for Tri-Channel Shopper Displeasure <ul><li>Late delivery </li></ul><ul><li>Poor product information </li></ul><ul><li>Product out-of stock </li></ul><ul><li>Product misrepresentation </li></ul><ul><li>Website performance issues </li></ul><ul><li>High shipping and handling charges </li></ul>How can CRM applications help address these issues?
  22. 22. Roadmap for Managers <ul><li>Involve top management </li></ul><ul><li>Define a vision of integrated CRM </li></ul><ul><li>Establish the CRM strategy and specify its objectives </li></ul><ul><li>Understand the customer </li></ul><ul><li>Review cultural changes that will need to occur </li></ul><ul><li>Develop a business case </li></ul><ul><li>Evaluate current readiness </li></ul>
  23. 23. Roadmap for Managers <ul><li>Evaluate appropriate applications with an uncompromising focus on ease of doing business </li></ul><ul><li>Identify and target quick wins </li></ul><ul><li>Put ownership of the end-to-end project in the hands of a single manager </li></ul><ul><li>Implement in stages </li></ul><ul><li>Be sure to create a closed-loop CRM environment </li></ul><ul><li>Create concrete measurement goals </li></ul>
  24. 24. Roadmap for Managers <ul><li>CRM Scorecard </li></ul>
  25. 25. Anticipate Organizational Changes <ul><li>Organizational resistance to CRM inevitable </li></ul><ul><ul><li>Current incentive systems work against CRM as they reward performance that deals with only part of the customer’s relationship with organization </li></ul></ul><ul><ul><li>Requires careful transition from existing silo-centric infrastructure to an integrated customer-centric infrastructure </li></ul></ul><ul><ul><li>Organizations with global operations must manage customer interactions in different languages, time zones, currencies, and regulatory environments </li></ul></ul><ul><li>Impact on corporation’s front line staff particularly evident </li></ul>
  26. 26. CRM Key Benefits <ul><li>Deeper understanding of customers </li></ul><ul><li>Increased marketing and selling opportunities </li></ul><ul><li>Identifying the most profitable customers </li></ul><ul><li>Making it easier for sales and channel partners to sell </li></ul><ul><li>Faster response to customer inquiries </li></ul><ul><li>Increased efficiency through automation </li></ul><ul><li>Receiving customer feedback that leads to new and improved products or services </li></ul><ul><li>Obtaining information that can be shared with business partners </li></ul>
  27. 27. Measuring Success or ROI <ul><li>Accelerated revenue growth </li></ul><ul><li>Fewer product returns </li></ul><ul><li>Increased sales conversion per sales channel (the ratio of leads to customer sales) </li></ul><ul><li>Reduced cost per customer order </li></ul><ul><li>Increased profit per sales person </li></ul><ul><li>Reduced technical support time </li></ul>
  28. 28. CRM Assessment – Gather Information <ul><li>What do your customers expect from you? </li></ul><ul><li>What percentage of product and services sales come from your current installed base? </li></ul><ul><li>How much do your customers know about the products and services you offer? </li></ul><ul><li>Are your employees equipped with the information they need to understand your customers’ preferences, needs and interests? </li></ul><ul><li>How effective are your marketing efforts compared to your competitors? </li></ul>
  29. 29. Tell Us More <ul><li>Are your product life cycles shrinking and are you getting new products to market faster? </li></ul><ul><li>Can you provide real-time customer data to your sales force? </li></ul><ul><li>Have you found a cost-effective method of converting prospects into profitable customers? </li></ul><ul><li>How do your customers prefer to be contacted? </li></ul><ul><li>Are you prepared to support your customers if your customer base doubles? </li></ul><ul><li>Is your sales force prepared to scale effectively as growth occurs? </li></ul>
  30. 30. E-Business Strategies, Inc. [email_address] 678-339-1236 x201 Fax - 678-339-9793