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CRM Customer Relationship Management Rich DuBose, Arnold Kelly, Rich DuBose, Arnold Kelly, Mellisa Thom and Ben Mellisa Thom and Ben Wylie Wylie

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CRM Customer Relationship Management. Rich DuBose, Arnold Kelly, Mellisa Thom and Ben Wylie. Outline. General elements of CRM Spending and trends CRM ROI Why some company succeed and others fail at CRM Industry uses 12 key applications Top 5 providers of CRM - PowerPoint PPT Presentation

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Page 1: CRM Customer Relationship Management

CRMCustomer Relationship

Management

Rich DuBose, Arnold Kelly, Rich DuBose, Arnold Kelly, Mellisa Thom and Ben WylieMellisa Thom and Ben Wylie

Page 2: CRM Customer Relationship Management

Outline General elements of CRM Spending and trends CRM ROI Why some company succeed and others fail at

CRM Industry uses 12 key applications Top 5 providers of CRM Mini case studies - Square D and Graybar Argosy Gaming case study Don’ts of CRM Best practices

Page 3: CRM Customer Relationship Management

CRM Defined

“CRM is a technology-enabled business strategy whereby companies leverage increased customer knowledge to build profitable relationships.”(1)

CRM is first and foremost a business strategy, not merely a software package.

(1) A Strategic Framework for CRM, by Patrick Sue and Paul Morin. February 2001

Page 4: CRM Customer Relationship Management

Marketing

• Market Research

• Product Development

• Market Assessment

• Market & Customer Segmentation

• Product Lifecycle Management

• Product Pricing and Profitability

Sales

• Sales Automation and Management

• Customer Profiling

• Account Management

• Opportunity Management

• Product, Price, and Contract Negotiation

• Sales Alignment and Incentives

Customer Service • Customer Inquiry

• Customer product support

• Customer Information Management

• Call Center Effectiveness

• Trouble Analysis & Resolution

• Billing

• Data Warehouse Management and Decision Support• Integrated Customer Management Systems

Customer Relationship Management Solutions

Functional Elements of CRM

Page 5: CRM Customer Relationship Management

"Half the money I spend on advertising is wasted; the trouble is I don't know which half." John Wanamaker, the department store pioneer, stated in 1886

A CRM can greatly enhance a company’s marketing efforts in the areas of :

Market research Price planning Product development Market assessment Customer segmentation Product lifecycle

Marketing Functionality

Page 6: CRM Customer Relationship Management

Marketing Functionality Cont... Example: Hewlett-Packard

Previously, HP sent out mass emails to update customers on sales offers, new products, technical support, etc.

After implementing a CRM, these efforts become much more customers specific

85% of customers said they were satisfied with the content of the emails and additional revenue increase by $15M

Page 7: CRM Customer Relationship Management

Sales Functionality Common functions implemented:

Provide the sales force with detailed and current information, such as:

Buying preferences Pricing Inventory levels Billing information

Automate the sales processing activities (SFA).

Page 8: CRM Customer Relationship Management

Sales Functionality Cont...

Example: Empire Blue Cross and Blue Shield Extremely complex and highly manual sales

process 33 redundant audit checks and took

approximately 27 days On-line quote system developed Sales processing steps streamlined and

automated

Page 9: CRM Customer Relationship Management

Service Functionality

CRM can be used to capture such things as: Customer’s complaint history Outstanding customer services requests Billing information Customer preferences Tracking unresolved issues

Service representatives are much more prepared to service their customers

Page 10: CRM Customer Relationship Management

Service Functionality Cont... Example: Marriott International

Collect data on customer preferences and spending

Data shared by all Marriott Hotels nationwide

Once you check in they already know your smoking preference, which floor you prefer, any allergies, complaint history, whether you drink, etc.

Page 11: CRM Customer Relationship Management

Enable Enterprise-wide Information Integration

Marketing and Sales Support

Customer demographic and purchased services data.

Marketing campaign tracking and offer development

Customer and profitability data matched for service development and pricing

Attrition data for retention modeling

Customer value and preference information for customized experience.

CustomerSales Support

Front line

Phone

BranchMobile Sales

ForceInternet

Collecting and integrating data from every point in the organization will allow customer Collecting and integrating data from every point in the organization will allow customer relationship, life cycle and event information to be analyzed and driven through the relationship, life cycle and event information to be analyzed and driven through the marketing organization to the front-line, enhancing sales and retention. marketing organization to the front-line, enhancing sales and retention.

Page 12: CRM Customer Relationship Management

Enable Enterprise-wide Information Integration

Collecting and integrating data from every point in the organization will allow customer Collecting and integrating data from every point in the organization will allow customer relationship, life cycle and event information to be analyzed and driven through the relationship, life cycle and event information to be analyzed and driven through the marketing organization to the front-line, enhancing sales and retention. marketing organization to the front-line, enhancing sales and retention.

CustomerSales Support

Front line

Phone

BranchMobile Sales

ForceInternet

Back Office Operations

Customer relationship information and contact history available for issue resolution

Information gathering follow-up or alert messaging to front line

Rules development for value-based decisioning for all product support

Page 13: CRM Customer Relationship Management

Enable Enterprise-wide Information Integration

Collecting and integrating data from every point in the organization will allow customer Collecting and integrating data from every point in the organization will allow customer relationship, life cycle and event information to be analyzed and driven through the relationship, life cycle and event information to be analyzed and driven through the marketing organization to the front-line, enhancing sales and retention. marketing organization to the front-line, enhancing sales and retention.

Customer Touch Points Customer relationship data

gathering Delivery of customized

service delivery or sales offers

Customer value information available for decisions

Product information and sales process automation enables effective targeted sales efforts

Relationship and contact information allows sales reps “know” each customer

CustomerSales Support

Front line

Phone

BranchMobile Sales

ForceInternet

Page 14: CRM Customer Relationship Management

DemonstrationDemonstration

Page 15: CRM Customer Relationship Management

Based on report by Aberdeen Group entitled “Worldwide CRM Spending: Forecast and Analysis 2001 - 2005”.

-

5,000,000,000

10,000,000,000

15,000,000,000

20,000,000,000

25,000,000,000

30,000,000,000

2001 2002 2003 2004 2005

Years

Worldwide CRM Spending

Page 16: CRM Customer Relationship Management

Forces Driving Spending

“Only 7% of global companies have reached mature CRM deployments, indicating more spending to come.” (1)

According to Gartner Group “CRM remains one of the top three, if not number one, business priorities in 2001.”

“The average company loses 20% of their customers each year and the number is rising.” (2)

(1) Data Warehouse Institute survey. CRM is Anything but Dead CRM Industry. June 2001(2) Maximizing CRM Performance with Strategic Performance Measurement by James Brewton

Page 17: CRM Customer Relationship Management

Forces Driving Spending Cont... “It costs up to 10 times as much to

acquire a new customer as it does to keep an existing one.”

Reasons growth is not higher: Hard to prove ROI Expensive customization High failure rate Slow economy has force IT budgets to

tightenMaximizing CRM Performance with Strategic Performance Measurement by James Brewton

Page 18: CRM Customer Relationship Management

Trends in CRM

Mobile CRM (mCRM) PalmPilots, web phones, and pagers are

becoming less expensive and more widely used

Siebel and Sprint recently signed a join venture selling wireless CRM

Domestic businesses are expected to spend $74B on wireless service by 2005

Wireless CRM: Strings Attached by Marc Songini Computer World, November 2001

Page 19: CRM Customer Relationship Management

Trends in CRM Cont...

Netsourcing - Application Services Providers (ASPs) ASP work better in smaller organizations -

less customization CRM applications are the second largest

segment of hosting sales, led only by E-commerce applications

By 2003, Forrester predicts hosted CRM applications will account for almost $2.5 billion in revenue

The Forrester Report by Stacie S. McCullough. December 1999

Page 20: CRM Customer Relationship Management

CRM ROI

Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies

Page 21: CRM Customer Relationship Management

CRM ROI Cont… Possible Returns

Up to 10 X’s more costly to generate revenue from new customer than existing customer

5% Increase in retention rate can increase company profits by 60-100%

6 X’s more costly to service customer through a call center than via the internet

Loyal customer referrals generate business at little or no cost

Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies”

Page 22: CRM Customer Relationship Management

CRM ROI Cont…

InvestmentsUpfront costsTakes timeNeed to create measuring metrics

It is marketing rather than sales Switching from product focus to

customer focus

Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies”

Page 23: CRM Customer Relationship Management

Succeeding VS Failing

Keys to Success Managing the data Managing the customer Business process before

implementation All levels must buy in Flexibility on the company’s side Relationship vs database

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”

Page 24: CRM Customer Relationship Management

Succeeding VS Failing Cont… CRM Mistakes

Implementing CRM before creating a customer strategy

Rolling out CRM before changing your organization to match

Assuming that more CRM technology is better

Stalking, not wooing, customers

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”

Page 25: CRM Customer Relationship Management

BMC “Learning from Failure” BMC Software

Systems-management software provider

Based in Texas Failed Two Times Before

Succeeding

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”

Page 26: CRM Customer Relationship Management

BMC’s Failures

No research No top-management involvement Software would change culture

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”

Page 27: CRM Customer Relationship Management

BMC’s Successes

Recreated the strategy Communicated benefits across the

company Changed the culture not just the

process

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”

Page 28: CRM Customer Relationship Management

Industry Uses

Airlines AA Aadvantage Frequent Flyer Program

Banks Barclays Realize profitability of customers

Car Rental Companies Enterprise ECARS System

Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies”

Page 29: CRM Customer Relationship Management

Enterprise Computer Assisted Rental System (Ecars) - introduced in 1992 now supports 1.4 million transactions logged every hour Locates cars, tracks customer preferences,

measures customer satisfaction ratings Uses Enterprise Service Quality

Index(ESQI)to measure satisfaction - compensation for management is tied to results

Page 30: CRM Customer Relationship Management

Enterprise uses its Automated Rental Management System (ARMS) to allow insurance companies to access rental information Allows agent to book reservations, EFT, and

reporting to support claims processing Allows electronic monitoring of repair shop

progress(CIO Magazine - Nov 2000)

Page 31: CRM Customer Relationship Management

Gartner’s 12 Key Application Components

Page 32: CRM Customer Relationship Management

Gartner’s 12 Key Application Components

Opportunity Management System (OMS)

Sales Configuration System (SCS) Partner Relationship

Management (PRM) Interactive Selling Systems(ISS)

Gartner Nov 2001

Page 33: CRM Customer Relationship Management

Gartner’s 12 Key Application Components

Incentive Compensation Management

Content Management E-Service Call Management

Gartner Nov 2001

Page 34: CRM Customer Relationship Management

Gartner’s 12 Key Application Components

Field Service and Dispatch(FS/D) Personalization Data Mart/Analytical Campaign Management System

Gartner Nov 2001

Page 35: CRM Customer Relationship Management

Today, for a B2B CRM application suite, three vendors can deliver features across all 12 key functionality components:

Siebel, Oracle and SAP

•Gartner Nov 2001

Page 36: CRM Customer Relationship Management

The scores in Figure 1 are based on vendors scoring 1 point for a 1/4 circle rating, 2 points for a 1/2 circle, 3 points for a 3/4 circle and 4 points for a full circle with 48 points equal to 100 percent. In the past year, SAP's scores improved the most, followed by Amdocs/Clarify, Siebel, PeopleSoft then Oracle (see Figure 2). Today, Gartner estimates that Siebel still provides almost twice as many features as the next closest competitors; and Siebel remains the only vendor to meet more than 50 percent of the horizontal functionality requirements for a B2B large enterprise CRM application suite.

Feature ratings are based on the current shipping versions of the following vendors' CRM suite offerings:

•Clarify eFrontOffice v.10 by Amdocs (i.e., an agreement for Amdocs to purchase Clarify CRM products from Nortel E-Business is expected to close by February 2002.)

•E.5, release 5.5 by E.piphany

•Kana iCARE by Kana

•Oracle CRM 11i v.5 by Oracle

•PeopleSoft 8 CRM by PeopleSoft

•SAP CRM 3.0 by SAP

•Siebel 2000 by Siebel Systems

•Gartner Nov 2001

Page 37: CRM Customer Relationship Management

North American CRO Magic Quadrant - Gartner March 1,

2002

http://www.gartner.com/reprints/ncr/104847.html

CRO stands for customer relationship optimization, and it is the alleged potential new direction for customer relationship management (CRM). "It's no longer about managing your customers," the NRF session description stated. "It's about strategically investing in customer segments that will make the most money."

http://www.computerworld.com/itresources/rcstory/

0,4167,STO67518_KEY51,00.html

Page 38: CRM Customer Relationship Management

Key CRM Providers

PeopleSoftPeopleSoft SiebelSiebel SAPSAP OracleOracle ConvergysConvergys

Page 39: CRM Customer Relationship Management

Leading provider of enterprise applications that tie together customers' back-office operations

Software addresses such tasks as accounting, human resources, manufacturing, and supply chain management

Services such as consulting, maintenance, and training account for about two-thirds of sales

Customer relationship management software has rekindled licensing sales growth and helped offset a slowdown in the broader enterprise software market, but it has also exposed PeopleSoft to more direct competition with companies such as Oracle and Siebel Systems. (www.hoovers.com)

Headquarters: Headquarters: Pleasanton, CA Pleasanton, CA

2000 revenue: $1.7 2000 revenue: $1.7 billion billion

Customers: 4,600 Customers: 4,600

Employees: 8,000 Employees: 8,000 WorldwideWorldwide

Page 40: CRM Customer Relationship Management

World's leading provider of eBusiness applications software

Provides an integrated family of eBusiness applications software, enabling multichannel sales, marketing, and customer service systems to be deployed over the Web, in call centers, in the field, through reseller channels, and across retail and dealer networks

Sales and service facilities are located in more than 32 countries.

Founded: 1993 Founded: 1993

2001 revenue: 2001 revenue: $2.05 billion $2.05 billion

2001 net income: 2001 net income: $255 million $255 million

Employees: 7,400+Employees: 7,400+

Page 41: CRM Customer Relationship Management

29 Years in the Business of E-Business

10 Million Users, 44,500 Installations, 1,000 Partners, and 21 Industry Solutions.

Founded in 1972 - recognized leader in providing collaborative e-business solutions

Headquartered in Walldorf, Germany

World's largest inter-enterprise software company, and the world's third-largest independent software supplier overall

Employs over 27,800 people in more than 50 countries

2000 Sales (mil.): 2000 Sales (mil.): $5,881 $5,881 1-Yr. Sales Growth: 1-Yr. Sales Growth: 14.3% 14.3%

2000 Net Inc. (mil.): 2000 Net Inc. (mil.): $596 $596 1-Yr. Net Inc. Growth: 1-Yr. Net Inc. Growth: (1.6%) (1.6%)

2000 Employees: 2000 Employees: 24,480 24,480 1-Yr. Employee 1-Yr. Employee Growth: 12.8% Growth: 12.8%

Page 42: CRM Customer Relationship Management

World's leading supplier of World's leading supplier of software for information software for information management, and the world's management, and the world's second largest independent second largest independent software companysoftware company

Headquartered in Redwood Headquartered in Redwood Shores, CaliforniaShores, California

First software company to First software company to develop and deploy 100 percent develop and deploy 100 percent Internet-enabled enterprise Internet-enabled enterprise software across its entire product software across its entire product line: database, server, enterprise line: database, server, enterprise business applications, and business applications, and application development, and application development, and decision support tools. decision support tools.

2001 Sales (mil.): $10,860 1-Yr. Sales Growth: 7.2%

2001 Net Inc. (mil.): $2,561 1-Yr. Net Inc. Growth: (59.3%)

2001 Employees: 42,927 1-Yr. Employee Growth: 3.9%

Page 43: CRM Customer Relationship Management

(CVG) is a provider of outsourced billing and customer management solutions, which encompass activities such as targeting, acquiring, serving and retaining customers on behalf of its clients.

Employees:Employees: 46,000 46,000

Market Cap (Mil) $ :Market Cap (Mil) $ : 5,155.2265,155.226

Complete Financials:Complete Financials: Dec Dec 20012001Updated:Updated: 04/05/2002 04/05/2002

Revenues For the FY ended Revenues For the FY ended 12/31/0112/31/01, , increased 6% to increased 6% to $2.32B. $2.32B.

Net incomeNet income decreased 27% to decreased 27% to $138.8M$138.8M..

Page 44: CRM Customer Relationship Management

Mini-Case Studies

Page 45: CRM Customer Relationship Management

Began in 1902 , is a market-leading supplier of electrical distribution, industrial control and automation products

A new safety switch with the company's new logo, a "D" (for Detroit) inside a square became the industry standard and many customers began asking for "the square D switches." The trademark was developed in 1915 and the name Square D Company was formally adopted in 1917. To this day, Square D is one of the few companies ever named by its customers.

On May 24, 1991, Square D Company merged with Schneider Electric of Paris, France the world's leading manufacturer of electrical distribution and industrial control and automation products and systems, and the only manufacturer dedicated to the distribution and control of electricity.

(www.squared.com)

Page 46: CRM Customer Relationship Management

Information Technology Web server-enabled equipment for the plant floor

Equipment, including power monitors and PLCs, can automatically alert plant officials to emerging problems by audible alarm or e-mail

Built-in server technology allows plant personnel to remotely monitor, diagnose and correct equipment problems and remotely change set points

E-Way Online quote and order management system for distributor network Check pricing, stock availability, and obtain shipping information

Digest Plus Selector Online product selection with more than 66,000 part numbers Search an electronic version of Square D's catalog based on the

electrical characteristics of the application Generates a bill of materials to send to the distributor of choice for

pricing and ordering

(http://www.controleng.com/archives/news/2000/july/gm0720a.htm)

Page 47: CRM Customer Relationship Management

An employee Intranet Powered by an Infoseek Corp. search engine. The site includes

everything from employee telephone directories to spec-writing tools and news on customer-segment marketing activities. Employees can access the site remotely

Customer Information Center Uses sophisticated customer relationship management (CRM)

technology to give technicians instant access to a complete customer history, and knowledge management and case management tools to access a database of technical solutions to almost any question

Links customer service representatives and technical experts around the country in a virtual technical support center through Soft Phone technology from Lucent.

Extended nationwide in late 1999, the CIC now answers more than 13,000 calls each week from customers, distributors and employees.

(http://www.controleng.com/archives/news/2000/july/gm0720a.htm)

Information Technology

Page 48: CRM Customer Relationship Management

Began in 1993, after Schneider Electric acquisition Reorganized the company’s three basic business units

around customer segments - Industrial, Residential, Construction, and OEM

Only after internal systems were refocused on the customer did Square D start using high-tech applications to upgrade its customer-facing processes

According to Chris Curtis, VP of US marketing, managers were taken out of their line jobs for months at a time to understand issues involved in implementing the software

In 1996, $75 million was invested in an order-management system that let sales engineers create proposals for customers based on what the factory floor could deliver

(Harvard Business Review - Feb 2002)

Successful CRM Implementation

Page 49: CRM Customer Relationship Management

•World leader in collaborative (CRM) solutions that increase customer revenue, profitability, and customer loyalty

•Transformed how organizations support their customers, partners and associates at more than 500 organizations representing over 100,000 users.

•Relavis eBusinessStreams - CRM automation that allows an organization to efficiently and effectively interact with their customers, prospects, partners and internal associates

•Received the 2001 IBM Beacon award for "Greatest Business Impact," and the 2001 Lotus Beacon Award for "Best eBusiness CRM Solution." Relavis is honored to have won the Beacon Award seven times

(www.relavis.com)

"A tremendous benefit from using OverQuota is that we are able to use existing infrastructure for workflow communications. We have been using Lotus Notes in our worldwide operations since 1998," said Lee Chong Leong, telecommunications manager, Asia Pacific, Schneider-Electric.

Page 50: CRM Customer Relationship Management

In 2001 Graybar selected the mySAP.com(R) e-business platform to run its business systems applications

One of the largest ERP projects in U.S. industry Will deploy the entire suite of mySAP.com

solutions including mySAP(TM) Customer Relationship Management mySAP(TM) Supply Chain Management mySAP(TM) Human Resources mySAP(TM)Enterprise Portals mySAP(TM) Business Intelligence

Graybar’s new platform will run on IBM hardware DeLoitte Consulting is assisting in implementation

Page 51: CRM Customer Relationship Management

A Fortune 500 service provider of wholesale distribution of electrical and comm/data equipment and integrated supply services

Serves contractors, industrial plants, telephone companies, power utilities and commercial users

One of the largest employee-owned companies in the US, with approximately 9,500 employees and 275 stocking locations

In business 131 years Annual sales in 2001 - $4.7 billion

Page 52: CRM Customer Relationship Management

Graybar plans to go live with “just a sliver of mySAP CRM,” Graybar VP Beatty D'Alessandro told CRMDaily. “We were advised by our implementation partner, SAP and other companies in our industry that CRM implementations can be a bear.”

"We seriously considered both companies," (Siebel) Beatty D'Alessandro, vice president IT strategy for Graybar Electric, told CRMDaily.com. "But in the final analysis we bought the whole mySAP suite."

D'alessandro added: "Our feeling was that a completely integrated solution was preferable to a bolt-on (CRM) strategy."

Another consideration, he added, was that SAP appeared to be committing a significant amount of corporate resources to its CRM product.

"So, in whatever areas there were perceived inequities between SAP and Siebel, it was clear to us that SAP was spending the money to catch up with Siebel," D'Alessandro said.

(http://www.crmdaily.com/perl/story/16309.html)

Page 53: CRM Customer Relationship Management

Argosy Case Study

Page 54: CRM Customer Relationship Management

Company OverviewCompany OverviewCEO: James PerryCEO: James PerryRevenue: $595 MillionRevenue: $595 MillionStock: NYSE Symbol-AGY Stock: NYSE Symbol-AGY

$40.65$40.65Employees:4,900Employees:4,900

Source: www.argosycasinos.com

Page 55: CRM Customer Relationship Management

Jeff Poure, MIS Director

CIO

CEO

Page 56: CRM Customer Relationship Management

Current System

Player Tracking System Built primarily as accounting/slot

system, not marketing Only provide us with transactional

data Not customer centric, slot machine is

center of universe Not flexible

Difficult ad-hoc queriesSource: Argosy Marketing Report

2001

Page 57: CRM Customer Relationship Management

CRM Strategy

Use knowledge of customers profiles

to develop offers and programs

which appeal to our most

profitable customersSource: Argosy Marketing Report

2001

Page 58: CRM Customer Relationship Management

How Argosy’s Goal was Defined Committee

Property Operating Committees Executive Committee Legal Staff Marketing Staff MIS Staff (including IT Supplier

Representation)Source: Interview with Jeff Poure, Argosy Gaming Co. MIS

Director

Page 59: CRM Customer Relationship Management

Argosy Partners with NCR Terradata for CRM Development

Why NCR? “Value Added Supplier”

Harrahs (1998) Application Server Evaluation Model

(ADEM) Evaluates IT Supplier on the basis of

Technology, Market Momentum, Best Practice, & Database

NCR won Technology & Database, and was second in Best Practices – Overall highest scoreSource: Interview with Jeff Poure, Argosy Gaming Co. MIS

Director

Page 60: CRM Customer Relationship Management

CRM Application Scope

7,724 Hours (3+ Man years) Only NCR Applications and Database

Developers time Estimated Cost = $849,640

Not including Software Licenses or Servers

Two new full time MIS positionsSource: Interview with Jeff Poure, Argosy Gaming Co. MIS

Director

Page 61: CRM Customer Relationship Management

CRM Application Operation Data collection during registration

– Data Card Player Data

Name Address SSN License No Age And More! Source: Interview with Jeff Poure, Argosy Gaming Co. MIS

Director

Page 62: CRM Customer Relationship Management

CRM Application Operation Data collection during the visit

Wins / Losses Tables vs. Slots

Preferences / History Restaurants Smoking vs. Non-Smoking Magazines

Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director

Page 63: CRM Customer Relationship Management

CRM Application Operation•Prior to CRM Application

•Archaic Marketing campaigns based on recent nature of ones visit

Group A(280+) Group B(200-279) Group C(130-199)Number of Patrons Mailed To 5,821 4,144 8,205Number of Patron Coupons 1,973 1,140 1,511

Mail Response Rate 34% 28% 18%

Slot Patrons 1,537 979 1,301Table Patrons 419 177 202Total Patrons 1,956 1,156 1,503

Casino Revenue $736,376 $218,550 $205,715Win Per Patron $373 $192 $136

Source: Argosy Marketing Report 2001

Page 64: CRM Customer Relationship Management

CRM Application Operation•Allows a more granular view at customers

•Greater Market Segmentation to identify most profitable customers

•Redirect Resources away from marginal customersFemale Unknown Male Female Unknown Total Total

Age Total Male Female Unknown Male Slot Slot Slot Table Table Table Slot Table21-24 835 405 417 13 179 311 7 226 106 6 497 33825-29 852 423 409 20 191 277 6 232 112 14 494 35830-34 934 449 467 18 219 326 12 230 141 6 557 37735-39 966 448 496 22 261 377 15 187 119 7 653 31340-44 1,043 446 561 36 290 438 20 156 123 16 748 29545-49 1,004 403 573 28 254 446 18 149 127 10 718 28650-54 958 391 540 27 261 395 20 130 145 7 676 28355-59 708 285 403 20 174 298 18 111 105 6 486 22260-64 520 216 291 13 137 215 20 79 76 3 362 15865+ 1,060 399 624 37 209 321 14 190 303 9 558 502

TOTAL 8880 3865 4781 234 2175 3404 150 1690 1357 84 5749 3132

Source: Argosy Marketing Report 2001

Page 65: CRM Customer Relationship Management

CRM Application Operation Better understanding of Customers and Revenue Sources Customer Lifetime Value = CONFIDENTIAL Identification of most profitable customers

40 to 50 + Years Old with disposable income and time – retirement age

Average player spends $25-$30 a time and comes frequently, at least once a week…seeking social setting

80 percent of Argosy’s Revenue comes from slot machines

Source: Argosy Marketing Report 2001

Page 66: CRM Customer Relationship Management

CRM Application Operation Rewards Programs

Customized for individual market segments

Right Offer, Right Customer, Right Time, Right Decision

Targeted mailings

Based of points Incentive Programs

Source: Argosy Marketing Report 2001

Page 67: CRM Customer Relationship Management

Implementation Argosy is implementing CRM

Package in two phases Phase I – June 4, 2001 to October 4,

2001 Phase II – October 5, 2001 – June 8,

2002

Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director

Page 68: CRM Customer Relationship Management

October 2001,Lawrenceburg, IN

February 2002,Sioux City, IA

March 2002,Alton, IL

December 2001,Riverside, KS

March 2002,Baton Rouge, LA

Property Implementation TimelinePhase I

Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director

Page 69: CRM Customer Relationship Management

Implementation Phase I Criteria for Success

Have increased ability to view, analyze and act upon detail player data down to the transaction level by individual player, player segments or groupings.

Develop and agree to a methodology and calculation for the “Lifetime Value” of a player.

Have the ability to analyze and evaluate Argosy customers’ hotel, restaurant, entertainment, and offer preferences at the customer level.

Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director

Page 70: CRM Customer Relationship Management

Implementation Phase I Criteria for Success - cont.

Capture and maintain customers’ needs and preferences for the purpose of determining offers/programs, which will appeal to out most profitable customers.

Increase analytical capabilities to drive more complex segmentation and communication strategies for the purpose of increasing customer trips/rate-of-pay, frequency of visits, and for finding new/profitable opportunities.

Ability to have a unified/consistent customer reward program across the enterprise.

Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director

Page 71: CRM Customer Relationship Management

Is Phase I a Success?“Yes, this phase has been considered a success. It(the

CRM package) has given us the ability to more efficiently identify our key customers, anticipate their needs and respond to them quickly.”

“…the application has allowed us to better serve our customers”

“…give us the ability to improve customer retention”

-Jeff Poure, MIS Director

Page 72: CRM Customer Relationship Management

Don’ts of CRM

Data is ignored Politics rule IS organization and business users

do not work together No plan exists CRM is implemented for the

enterprise, not the customer

Source: Gartner, “Seven Key Reasons Why CRM Fails – And How to Avoid Them”

Page 73: CRM Customer Relationship Management

Don’ts of CRM Cont…

Flawed process is automated No attention is paid to skill sets

Source: Gartner, “Seven Key Reasons Why CRM Fails – And How to Avoid Them”

Page 74: CRM Customer Relationship Management

CRM Best Practices

Customer Involvement Involve the correct sources early to develop

CRM Strategy Understanding of Information Technologies

place CRM Organizational Culture Incremental Implementation

CRM Best Practices consists of the following:

Page 75: CRM Customer Relationship Management

CRM Best Practice

Focus Groups Prior to, during, and after CRM implementation

Customer Survey If Feedback being passed to Top Management is

being acted on, then change will happen Concentrate on your customer Lifecycle value

Which Customers repay investment? Which Customers just take up resources and should

be considered competitors? Segmentation Analysis

Customer Involvement

Source: www.CRM-forum.com

Page 76: CRM Customer Relationship Management

CRM Best Practices

Marketing Provide means of determining our

customers? Business Strategists

What are our organizational goals (i.e. growth)?

Involve the “Right” People

Source: www.CRM-forum.com

Page 77: CRM Customer Relationship Management

CRM Best Practices

“Value-Added” IT Suppliers (If required) Practical experience in CRM CRM experience in same/similar industry

Can provide knowledge of CRM application(s) to allow Marketing and Business strategists to evaluate the opportunities

To often companies allow technology vendors to dictate the manner they manage customers because the vendor has implemented CRM CRM is to be customized, not for software but for

strategy

Involve the “Right” People

Source: “Avoid the Four Perils of CRM,” Darrell K. Rigby, Frederick F. Reichheld, Phil Schefter; Harvard Business Review, Feb 2002

Page 78: CRM Customer Relationship Management

CRM Best Practices

Involve TOP MANAGEMENT from the start For CRM to be successful, Top Management must…

Clearly communicate a vision for the future of the organization that indicates the benefits of CRM

The will power to make CRM work across functional boundaries

Without Top Management participation or a Strong Top Management A common result is that a strong-willed committee

member will shape the final implementation that will address their desires and not the organizations as a whole

Involve the “Right” People

Source: “Avoid the Four Perils of CRM,” Darrell K. Rigby, Frederick F. Reichheld, Phil Schefter; Harvard Business Review, Feb 2002

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CRM Best Practices

Should not expect to be able to implement CRM in one major undertaking Implement CRM in increments

Each Increment should have…• Its own business case• Measures of success• Evaluation of how customers perceive the results

of this step

Implementation

Source: www.CRM-forum.com

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CRM Best Practices While Top Management successful within

ones organization, employees make CRM successful with your customers Companies serious about CRM tie employee

incentives to customer indicators such as retention and satisfaction. The more serious a firm is about CRM, the sooner they will adjust the compensation plan.

No less than 100 percent user buy in is acceptable..

Source: www.CRM-forum.com

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Conclusion

Expect a continuing evolution of CRM As it evolves, customers will become more and

more familiar with what it can do for them If we an organization adopts CRM they must

understand that the strategy will not be delivered by IT alone

The primary CRM objective is to improve the interface between an organization and its’ clients. In doing so, for a CRM initiative to be successful substantial re-organization of the organization dealing with customers may occur

What must we understand?

Source: www.CRM-forum.com

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QUESTIONS

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