chp06 crm
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e-bussinessTRANSCRIPT
Chapter Six Chapter Six Integrating Processes to Build Relationships: Customer Relationship Management
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IntroductionIntroduction
Customer dissatisfaction with service widespread– Expectations of customers higher than ever– “Does your company deserve my patronage and
loyalty?”– Starting point today: What was exceptional yesterday
Organizations with long-standing customer bases find they lack the info and data to make good service decisions
– 90% companies don’t have sales and service integration
Companies must view their service encounter through the eyes of their customers
– To maintain ongoing relationships strong– Acquisition and selling costs of new customer very high– Dissatisfied customers primarily due to lack of customer
service– 70% of complaining customers will do business again if
their complaint quickly addressed
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The Basics of CRMThe Basics of CRM
Timely delivery of excellent service
Combination of business process and technology
When competition is fierce, companies go back to basics: create value for customer
Execs must ask– Can their companies’ infrastructures allow value creation?– Can their companies’ existing CRM infrastructures support
doing business in the e-world
Only by integrating sales and service infrastructure with all aspects of operations can management see change in customer relationships
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Top Demand Drivers in CRM VerticalsTop Demand Drivers in CRM Verticals
Telecommunications – Primary CRM applications include:
– Multi-channel contact centers – Business intelligence– Customer data integration and analysis– Web-based billing systems– Marketing automation/campaign management systems– Mobile CRM
Banking and Financial Services – Primary CRM applications include:
– Profitability analysis– Target marketing– Data mining – Product personalization
Source: Gartner Group, 2001
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Top Demand Drivers in CRM VerticalsTop Demand Drivers in CRM Verticals
Retail – Primary CRM applications use e-commerce transaction and point-of-sale data to drive:
– One-to-one marketing– Cross selling– Personalized content management and
merchandizingSource: Gartner Group, 2001
Few retailers are providing improved interaction but many customers are demanding it --- this is an opportunity for companies to distinguish themselves.
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Strategic Business DriversStrategic Business Drivers
Are these “hot buttons” that influence your business?
– Customer-driven businesses– 360-degree customer view– Personalization/one-to-one marketing– Complex and more diverse channels– Automated sales– Shrinking margins due to product commoditization– Scattered global customers
These are strategic level questions aimed at CxO and other senior level executives to uncover CRM opportunities.
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Strategic Business DriversStrategic Business Drivers
This chapter– Clarify the concept of multi-channel organization– Discuss apps supporting customer-focused
business model– Discuss how marketing practices and systems
must be reworked to support ecommerce environment
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.
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Defining CRMDefining CRM
Integrated sales, marketing, and service strategy
– precludes lone showmanship – depends on coordinated enterprise-wide actions
CRM software suite– Helps better manage customer relationships by
tracking customer interactions of all types– Automates selling and customer service cycle
• direct-mail marketing campaigns, telemarketing, telesales, lead qualification, response mgmt, lead tracking, opportunity mgmt, quotes and order configuration
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Defining CRMDefining CRM
Business Goals– Using existing relationships to grow revenue– Using integrated information for excellent service– Introducing consistent, replicable channel
processes and procedures
CRM is an integrated
framework and strategy, not
product
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Managing the Customer Life Cycle: Managing the Customer Life Cycle: The Three Phases of CRMThe Three Phases of CRM
Differentiation• Innovation• Convenience
Acquire
Enhance Ret
ain
Bundling• Reduce Cost• Customer Service
Adaptability• Listening• New Products
Metrics•Direct and indirect sales•Customer service improvements
Metrics•Tangible and intangible benefits•Brand equity gains
Metrics•Lifetime value•Share of wallet
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The New CRM Architecture: Organizing The New CRM Architecture: Organizing around the Customeraround the Customer
To determine how CRM and supporting tech will work together for your firm, ask these questions
– Are most of company’s apps designed simple to automate existing departmental processes?
– Are these apps capable of identifying and targeting best customers, those who are the most profitable?
– Are these apps capable of real-time customization of products and services?
– Do these apps track when the customer contacts the company, regardless of the contact point?
– Are these apps capable of creating a consistent user experience across all contact points the customer chooses?
If answers to each is no, seriously consider CRM architecture
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The New CRM Architecture: Organizing The New CRM Architecture: Organizing around the Customeraround 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
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Features of the New CRM ArchitectureFeatures of the New CRM Architecture
• Integrates solutions spanning entire customer life cycle
– Proactive marketing– Customer care– Call centers
• Automated transaction management capabilities
• Personalization and one-to-one marketing
• Customer analytics and business intelligence
• Field sales automation
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Portfolio of CRM Process CompetenciesPortfolio of CRM Process Competencies
Customer Service and Billing
Loyalty & Retention Programs
Field Sales and Service
Sales Cross-sell Up-sell TeleSales
Marketing and Fulfillment
Prospect or
Customer
Fax
Telephone
VRU
Web
Contact Management
Technical Infra
structure
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How it Fits TogetherHow it Fits Together
Source: Microsoft Corporation, 2000
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What Capabilities Make Up Leading Edge What Capabilities Make Up Leading Edge CRM?CRM?Operational excellence
– Ensuring responsiveness and accurate delivery
– Providing seamless interactions across all interaction channels
Analytical insight– Sales planning and forecasting– Analyzing, predicting and driving
customer value and behaviour– Identifying the right time to make the
right offer to the right market– Consistently enhancing the customer
experience in virtual channels
Collaborative optimization– Involving customers to
better accommodate their needs– Demand driven supply chain and
fulfillment integration
CCollaborative
AAnalytical
OOperational
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Integration Requirements of Next Gen CRM Integration Requirements of Next Gen CRM InfrastructureInfrastructure
Closed loop CRM infrastructure must integrate
– Customer content– Customer contact information– End-to-end business
processes– The extended enterprise or
partners– Systems
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
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Next Generation CRM TrendsNext Generation CRM Trends
The multi-channel integrated experience
The rise of the call center as a multipurpose customer contact point
Listening portals: Next-generation CRM capabilities
CRM portals, sales force ASPs, and hosted applications
Customer Service and Billing
Loyalty & Retention Programs
Field Sales and Service
Sales Cross-sell Up-sell TeleSales
Marketing and Fulfillment
Telephone
Customer Service and Billing
Loyalty & Retention Programs
Field Sales and Service
Sales Cross-sell Up-sell TeleSales
Marketing and Fulfillment
Telephone
Back Office
Ap
plic
atio
n In
teg
rati
on
Customer
Partners
Purchases
History
Operations
Marketing
Billing
Front Office
To
uch
Po
ints
Web
E Mailrs
Call Center
SFA
POS
Direct Mail
Wireless
Customers
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Multi-Channel CRMMulti-Channel CRM
Multi-channel shopping behavior has become mainstream; yet widespread retailer excellence remains elusive ( some catalog retailers are exceptional)
Women and young adults are multi-channel shoppers
The role of the catalog has never been more important (Sears recently bought Lands-End)
Analytical CRM -- Segmentation and personalization capabilities are becoming more critical
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Multi-Channel Shopper ProfilesMulti-Channel Shopper Profiles
Store
OnlineCatalog
Store + Catalog Online + Store
Online + Catalog
• Tri-Channel Shoppers are demanding (well-informed) consumers; • Servicing Tri-Channel Shoppers is very challenging-requires high-levels of coordination!
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Primary Reasons for Tri-Channel Shopper Primary Reasons for Tri-Channel Shopper DispleasureDispleasure
•Late delivery
•Poor product information
•Product out-of stock
•Product misrepresentation
•Website performance issues
•High shipping and handling charges
How can CRM applications help address these issues?
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Roadmap for ManagersRoadmap for Managers
• Involve top management
• Define a vision of integrated CRM
• Establish the CRM strategy and specify its objectives
• Understand the customer
• Review cultural changes that will need to occur
• Develop a business case
• Evaluate current readiness
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Roadmap for ManagersRoadmap for Managers
• Evaluate appropriate applications with an uncompromising focus on ease of doing business
• Identify and target quick wins
• Put ownership of the end-to-end project in the hands of a single manager
• Implement in stages
• Be sure to create a closed-loop CRM environment
• Create concrete measurement goals
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Roadmap for ManagersRoadmap for Managers
CRM Scorecard
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Anticipate Organizational ChangesAnticipate Organizational Changes
Organizational resistance to CRM inevitable– Current incentive systems work against CRM as
they reward performance that deals with only part of the customer’s relationship with organization
– Requires careful transition from existing silo-centric infrastructure to an integrated customer-centric infrastructure
– Organizations with global operations must manage customer interactions in different languages, time zones, currencies, and regulatory environments
Impact on corporation’s front line staff particularly evident
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CRM Key BenefitsCRM Key Benefits
• Deeper understanding of customers
• Increased marketing and selling opportunities
• Identifying the most profitable customers
• Making it easier for sales and channel partners to sell
• Faster response to customer inquiries
• Increased efficiency through automation
• Receiving customer feedback that leads to new and improved products or services
• Obtaining information that can be shared with business partners
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Measuring Success or ROIMeasuring Success or ROI
• Accelerated revenue growth
• Fewer product returns
• Increased sales conversion per sales channel (the ratio of leads to customer sales)
• Reduced cost per customer order
• Increased profit per sales person
• Reduced technical support time
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CRM Assessment – Gather InformationCRM Assessment – Gather Information
What do your customers expect from you?
What percentage of product and services sales come from your current installed base?
How much do your customers know about the products and services you offer?
Are your employees equipped with the information they need to understand your customers’ preferences, needs and interests?
How effective are your marketing efforts compared to your competitors?
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Tell Us MoreTell Us More
Are your product life cycles shrinking and are you getting new products to market faster?
Can you provide real-time customer data to your sales force?
Have you found a cost-effective method of converting prospects into profitable customers?
How do your customers prefer to be contacted?
Are you prepared to support your customers if your customer base doubles?
Is your sales force prepared to scale effectively as growth occurs?
E-Business E-Business Strategies, Inc.Strategies, Inc.
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