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How BI and CRM How BI and CRM Can Work for youCan Work for you
Sheryl Kingstone, Program Manager, CRM Strategies,
The Yankee Group
How BI and CRM How BI and CRM Can Work for youCan Work for you
Sheryl Kingstone, Program Manager, CRM Strategies,
The Yankee Group
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Agenda
The State of Traditional CRM
Customer Centric CRM--Rethinking CRM From the Outside
Conclusions and Recommendations
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Businesses Initiate CRM Projects for a Variety of Reasons The essence of customer relationship management is
to balance the following desires:• Increase revenue through differentiated products and services• Decrease sales, marketing and service costs through better
execution• Enhance the customer experience for improved loyalty
Many CRM implementations have done very little to meet the top goals and objectives of the many businesses
Effective implementations of CRM are critical to the success of just about every company
Customers, after all, are any company’s most important asset
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Technology Executives Are Realigning IT Resources Accordingly…
-0.38%
-1.13%
-1.53%
1.63%
-2.00%
-1.50%
-1.00%
-0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
Foundation
Core
Other
Edge
2004 Versus 2003 IT Budget Allocation: Enterprise are allocating more IT spending to edges of the enterprise at the expense of foundational, core and other internally facing technologies.
Source: The Yankee Group 2003 Edge of the Enterprise Survey
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The State of the CRM in Organizations
Priority to be more customer centric and understanding
behavior and needs is leading to fewer failures around many
CRM projects, but disillusionment remains
CRM remains important, but current initiatives are being reevaluated and alternative approaches are being considered more seriously
Leveraging and integrating existing IT investments and focusing on more digestible projects and implementations
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The Shortcomings of Traditional CRM: Too much M and not enough C and R
Customer: Internally focused deployments in silos are not customer-centric
Relationship: Limited customer-centric processes and in-context information didn’t enhance the relationship or improve loyalty
Management: Only management-level employees can leverage operational data
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Traditional CRM Implementations do Little to Improve the Quality of Customer Care Businesses that do not prioritize customer centricity as a
necessary initiative will see a negative impact on corporate performance• high customer churn • low customer satisfaction• plummeting employee moral• decrease in market share• increase in cost through fragmented business processes
Happy customers buy more than unhappy ones and they do so for a much longer period of time
Unhappy customers cannot only decrease future wallet share, but also inhibit the growth for potential new customers
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Marketing and Analytics Are Critical for Customer-Centric CRM
Departmental CRM Operational CRM Customer Centric CRM
Past Present Future
Siloed applications for sales and service
Tactical marketing automation
Disconnected campaign activity
Basic personalization
Query-driven analysis
Current or historical reporting
Semi-integrated enterprise application
Data-driven marketing
360-degree view of operational customer data
Analytical-based decisioning
Combining current with historical
Near real-time blended enterprise
Role/contextual driven interactions
Dynamic navigation and content based on analytic infrastructure
Predictive and pro-active notification
Quantitative and qualitative real-time decisioning
Customer-Centric CRM requires all business processes throughout the extended enterprise be optimized around customer lifecycle care
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Delivering on Customer-Centric CRM Shift focus from internal fragmented processes towards a
seamless 360-degree view of customer-facing processes
aligned with every customer, partner and employee
Leverage customer data for differentiation to improve
customer satisfaction, retention, loyalty and corporate
performance
Integrate CRM metrics and key performance indicators
into an overarching customer strategy to optimize
business processes and make better decisions on both a
tactical and strategic level
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A Natural Extension of CRM Initiatives Many enterprises value their CRM initiatives but don’t
understand how to maximize the value of their CRM investments.• More than 75% of enterprises have a CRM strategy as well as
the necessary data for a 360-degree view of the customer • CLC builds upon current CRM initiatives by delivering high value
information across the customer relationship lifecycle using the 360-degree view
Customer-centric companies use every customer touch-point to stimulate interest, close business, satisfy a need or demonstrate commitment to the relationship. It ensures that every customer contact produces value. • Improve revenue by targeting customers specific desires and
increasing customer wallet share• Reduce costs through more efficient and effective execution
since not all customers are created equal• Enhance the customer experience by providing differentiated
products and services
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The Driver of Business Intelligence & Analytics
Significant investments in operational systems have delivered value primarily through automation and efficiency
Focus shifting toward gaining insight from those systems
Explosive growth in data volumes and data source proliferation
Insight and predictive analytics necessary to derive next level of value from these investments
Maximum value created by implementing insight and predictive directly into business processes
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Stages of Analytics
TransactionalTransactional
Query-based Reports
Flat data with point in time information, inventory status and revenue breakdown
1.
2.ExploratoryExploratory
OLAP
Historically “what if”
analysis based on
multiple dimensions?
3.
4.
PerformancePerformance
Analytical
What do I do next based on known facts and various
recommended options?
DynamicDynamic
Predictive
What do I do now based on pervasive real-time data?
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Effectiveness of Data Warehousing and & Analytics
Impact of Data Warehousing and Analytics
Biggest Bang for the Buck
14%
Very Positive Impact32%Positive Impact
32%
Very Little Impact11%
Negative Impact11%
Biggest KPI ImpactImprove
Customer Profitability
10%
Improve Decision Making
26%
Increased Deal Size
14%Improve Win Rate11%
Increase New Sales
14%
Improve Customer Retention
17%
None of these8%
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The Good: We Have the Data and Analysis
Has most or all of the
information85%
Has some or none of the information
15%
The majority have the necessary data and ability to analyze the information ……….
60%
61%
63%
70%
73%
82%
Cross SellOpportunities
CustomerProfitability
Customer LifetimeValue
CustomerSegmentation
CustomerRetention
CustomerSatisfaction
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The Bad: Companies Have Data, but Lack Actionable Information
The larger the organization, the more data and analysis is being leveraged. Manufacturing organizations were less advanced than other verticals such as banking and telecommunications.
19%
24%
29%
37%
41%
50%
77%
79%
80%
85%
86%
87%
Customer Profitability
Customer Lifetime Value
Past Channel Use
Call History
Services
Name
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The Ugly:Critical Data Still Locked away
We still have too many places to find information
Challenge64%
Not a Challenge36%
Very efficiently28%
Somewhat to not at all efficient
72%
We cannot efficiently get the right information at the right time
Investments in the 360-degree view have not increased efficiency
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Analytics Powers Customer-Centric CRM
Smart businesses understand that the only
way to offer profitable, differentiated
services and products is to better
understand their customers
By gaining insight into both individual
customers and target market segments,
these companies can boost sales and
optimize business performance
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Analytics and Business Intelligence Increases Sales and Profitability Improve pipeline visibility and
forecast accuracy
Align sales personnel and resources with largest potential opportunities
Enable fact-based selling
Optimize product and pricing mix
Match optimal product/offer to customer segment or individual customer
Maximize share of wallet with real-time information and recommendations
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Increase Marketing Effectiveness and ROI Tailor marketing offers based on projected
customer value to expand future revenues
Identify product and market opportunities
Increase the lifetime value of your most important customers
Identify high potential customer segments or groups
Deliver dynamic, real-time offers based on customer behavior
Measure and improve lead to sales acceptance & closure
Measure campaign effectiveness based on true success metrics
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Retain and Maximize Value of Existing Customers
Achieve operational efficiency by managing to key service performance metrics
Increase customer loyalty and lifetime value by tailoring service levels
Track customer satisfaction by product, segment and cost to serve
Increase customer satisfaction and decrease costs by predicting service issues
Maximize installed base revenues through identification & intervention of customers about to churn
Turn service calls into sales opportunities through enhanced cross-selling
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SAP CRM 4.0 Come of Age for CRM
SAP Sales
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SAP CRM 4.0 Come of Age for CRM
SAP Marketing
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SAP CRM 4.0 Come of Age for CRM
SAP Customer Interaction Center
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SAP Summary
SWOT Summary
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Technology, Data and Processes Create the Foundation
Profit&
Competitive Advantage
TechnologyFoundation
Quality Data
People/Process
Performance Effectiveness
ProcessEfficiency
ActionableInsight•Customer-facing
•Seamless beyond corporate boundaries
•Rea- time analytics
•Value-added information
•Consistent
•Real-time across all channels
•KPI’s and metrics aligned w/corporate goals
•Differentiated products and services
•Seamless processes
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True 360° View of Customer Interactions Cross Channel, in Real-Time Receive
Marketing Promotion
Browse Site,Request Information
Sales RepContact
In-PersonMeeting
Approve Quote,Place Order
Receive Notification of Fulfilled Order
Track Order Shipment
Re-orderOnline
ServiceInquiry
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Success Demands Integrated Insight
Without integration across corporate and departmental boundaries, business can’t answer these questions:• Which prospects look like my most profitable customers?
• Which promotions produced the most qualified leads?
• Which products are the most profitable over 3-5 years?
• Which customers are likely to respond to which new product offering?
• What product and service mix will increase customer satisfaction and reduce churn?
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Case Study—Real Time Visibility
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Case Study—An Optimized Process
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Case Study—Focus on Customer Experience
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Recommendations Dialogue is not simply more effective automation and
integration of basic analytics and marketing campaign processes.• Effective dialogue must incorporate some planned campaign activity
as a starting point and more situational sequences of messages. Each interaction contributes to a more dynamic customer profile and a more productive set of subsequent interactions.
Meticulous data-management technology and processes is critical to success.• The famous line “garbage in, garbage out” fits perfectly. It is
critical to ensure the integrated view of the customer is not only consistent across the entire organization.
Closed-loop programs are critical to reduce marketing waste, but only deliver “short term” ROI.• Even the most impressive closed-looped marketing ROI figures do
not guarantee long- term business success.• Understanding revenue growth and market position requires long
term analysis of brand balanced against acquisition and retention.
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Recommendations
Enterprises must put an end to business as usual and optimize the CRM investment around the customer lifecycle.• Customer-centric CRM optimizes the customer experience
across sales, marketing and service interactions. With effective CRM, customer relationships can be appropriately managed to maximize revenue and lifespan while keeping operational costs low.
Sales must create strategic account plans across all departments based on customer-facing qualitative and quantitative metrics that can be analyzed against corporate goals.• In a customer-centric company, the sales department is aligned
with strategic customers and prospects. The tools maximize sales efficiency (such as ease of use and integrated productivity tools) as well as sales effectiveness tools that help guide and optimize each interaction.
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Recommendations Marketing must have real-time analysis for creating a
profitable and enhanced customer experience both online and through assisted channels such as contact center.• Marketing needs to incorporate a combination of planned
campaign activity as a start, and more situational sequences of messages where greater understanding of the customer is achieved through channel- and context-specific interactions to optimize any cross-sell opportunities.
Service must deliver higher customer satisfaction at a lower cost by improving agent productivity and effectiveness.• It’s critical to provide guidance and in-context information not
only through improved customer self-service, but also through assisted service channels such as customer service representatives. Customers and the employees need to get at the right information at the right time to maximize the profitability of each interaction.
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Thank You!Thank You!
Sheryl Kingstone, Program Manager, CRM Strategies
Thank You!Thank You!
Sheryl Kingstone, Program Manager, CRM Strategies