1. Customer Relationship Management
Week 9

2. CRM Framework
Source : Andersen Consulting

3. Customer Relationship Management
Technology
Marketing
Direct, Interactive
Dialog, Real time
Warehousing
Online data store
User tools
Analytics
Business
Customer
Financial

5. Buzzword Alert
CRM: Often used to describe any business or marketing approach that claims to target customers, not transactions. Sometimes confused with Customer service, account management, sales force automation, e-commerce, predictive modeling, data mining, data warehousing, database management, database marketing, direct marketing, and wide variety of marketing activity. Used here to describe a systematic business approach using information and on-going dialogue to build long lasting mutually beneficial customer relationships.
Customer centric: Sometimes used to refer to any awareness that a business has of its customers. Used here to describe an approach to business that uses the customer (not the transaction) as the building block of data management, reporting, goal setting and measurement as well as business and marketing strategy organization and technical infrastructure, and corporate culture and values over time and across sales, marketing, IT, analysis, service, management and support business units.

6. CRM working definition
CRM is the
Systematic use of information
To attract and keep customers
Through on-going dialogue
To build long lasting mutually beneficial relationships

7. Systematic Use of Information
Database of customer information
The customer is the base level of data for storage,reporting,analysis and measurement
Analysis of customer data to predict likely future behavior
Modeling uses past behavior to predict future behavior and identifies other predictors as well.
Identifying and evaluating each relationship
CR are identified, evaluated reevaluated and continually managed according to current information

8. To attract and keep customers
Cost efficient customer acquisition
Profiles used to select likely new customers and offers for specific customer segments
Retention efforts focused on most profitable and at risk customers
Continuous process of solidifying relationship with profitable customers, converting less profitable customers to more profitable and attempting to convert at risk customers before they are lost.
Shared information across channels for consistent communications
Customer receives consistent offers, service and messages across sales and service channels

9. With or Without Without CRM CRM in practice
Customer re-enters information about music preferences every time at log-in
Customer re-identifies CI every time at CS
Call center and stores have different pricing from web site
Customer must return defective CD through the delivery channel-cannot switch between electronic channels and stores.
CRM in practice
Customer logs onto the Internet and finds information on favorite music group, advertisements featuring specials on new CDs and dates with ticket offers to next concerts in local area, plus s telling them about new groups with a similar style or from the same record company.
Customer reads about CD’s on the Internet, orders through the CS,exchanges at a local record store if CD is defective.

10. Through on-going dialogue
Continuous interaction with customers based on analysis
Interactions,offers and messages are planned,personalized and delivered according to analytic insights
Real time response on the Internet
Immediate changes in advertising, information, recommendations, product features and even pricing based on web or behavior
Listening to create a sense of intimacy with the customer
1:1 dialogue through appropriate responses delivered real time

11. Web Telephony Integration

12. Email Integration Capability

13. To build long-lasting mutually beneficial relationships
Success measured in customers and customer value
Goals, results even incentives measured in terms of customers and customer value,not transactions
Continual reevaluation of customer relationships
On-going measurement to identify profitable, at risk and underserved customers
Continual learning about customer needs
Satisfied customers make good business sense

14. Customer Strategy should be defined and driven by Customer needs
Shopping
Buying
Using
Repeat
Purchasing
Evangelizing
Complaining
Is it easy to
find what I am
looking for?
Do I want to
come back
here?
Did I learn
anything
new?
Do I trust this
Company?
What made
them
different from
everyone
else?
Was the offer
just right for
Me?
Did they add
value to the
product with
information?
Did they
follow up?
What should I
expect after
this sale?
Is it safe to
buy here?
If I tell them
about myself
will they
make their
product
better?
Was the
information I
gave them
last time used
with integrity?
Did it add value?
Was it easy to
buy?
Do they
remember
me?
Did I have to
answer the same
questions
again?
Did they use
information
made during
the sale to
make the
after-sale
experience
pleasant?
Can I trust
them to
provide a
consistent
experience?
Do they know
when I have
made a
referral?
Do they care?
Was my
complaint
satisfied?
that I
complained
when I called
next?
annoy me
with
additional
marketing
after I
complained?

15. At its simplest
CRM refers to the use of information about a customer to make decisions about how to treat the customer.

16. Personalized Campaign
The Learning Loop
Customer Strategy
Collect and Distribute CI
Analyze and mine
Dialogue and
Personalized Campaign
Track and Learn
Making the Business Case
Building the CRM Organization

17. At it is most complex CRM comprises an interconnected web of sophisticated, high tech hardware software, strategies and processes designed to help business quickly, efficiently and voluminously determine how to treat each customer in order to create a valued experience for both the business and the customer.

18. Analytics Operations Distribution Partner Sales Force Automation
Call
behavior
analysis
Campaign
Management
Customer
Valuation
Monitoring
Integrated
Customer View
Quality of
Service
Analysis
Segmentation
And profiling
Customer
Service
Risk
Analysis
Behavioral
Modeling
Profitability
analysis
Web
Intelligence
Needs
analysis
Sales
analysis
Call Center
E-commerce
Web

19. A data warehouse builds a strong foundation for CRM infrastructure

20. Example of warehouse processes architected for CRM
Sales Force
Automation
Web
Applications
Call Center
Profitability
Legacy
Systems
Prospect Lists
Data transformed and loaded in MD
Information from legacy sources normalized
Into member and household tables.
Time series information kept for historical analysis
Profiling/Segmentation
Opportunity Identification
Campaign management
Performance measurement
Predictive modeling
Adhoc and DSS reporting
Marketing
Database
Real time data feeds
Real-time
Database
Business
Intelligence
Results from P, S
DM, M loaded into MD and RT DB
To enable real time personalization
and decisioning. Single repository for
Contact History
Staging area for data
Daily batch reporting
Real time campaign management
Newsletters
Personalization&Decisioning
Campaign
Management
Real time data feeds
Site
Tracking
Reporting
Log
Files
Data Mining
Example of warehouse processes architected for CRM

21. Extract, Transfer, Load (ETL)
Customer data should be moved into the warehouse in an consistent and efficient manner
Extract, Transfer, Load (ETL)
Extract data from legacy
systems, other sources
Sources: Surveys,response
history,online behavior
Transform data into consistent,
clean, customer-level,
knowledge according to pre-set
data definitions
Data dictionary designed during
warehouse design through
enterprise-wide participation and
made available enterprise-wide
Load and manage data
efficiently
Batch processing during off-
hours,predefined queries
Examples: Standardize addresses
set aside an untouchable control group
Condition Data

22. What Customers Want Treat me as an individual (not a number)
Demonstrate that you can use information about me in a way that makes working with you valuable
( don’t abuse my information)
Show me that you really know me no matter where I talk to you.
Care about my needs/try to anticipate them.

23. Creating the CRM organization

24. Buzzword Alert Politics Change Management Organizational design
The result of opposing business priorities across different units that compete for a finite pool of resources
Change Management
Guiding an organization and its members through significant alterations in organizational direction and individual responsibilities as quickly and effectively possible
Organizational design
Managing human systems and hierarchies, with supporting technical and process infrastructure, in order to most effectively deliver on the mission of the enterprise

25. Organizing around the Customer
Who thinks about the customer?
Who advocates the customer?
Who doesn’t think about the customer?
Competing
Distribution
Competing
Products
Competing
Sales Territories
Competing
Channels
Competing
Business Units

26. Everyone in an organization needs to think about the customer
Everyone in an organization needs to think about the customer. To achieve this, an organization must encourage change by providing the tools to make the changes steadily and surely
Changing how an organization thinks
Customer centric metrics
Changing organizational processes
Pilots,business rules and business case
Changing organizational structure
Evolutionary not revolutionary
Changing culture
Short term and long term success

27. Customer Centric Metrics
Volume Metrics
Customer Centric Metrics
Call Duration
Encourages TSRs to make calls as short as possible, keep costs low
Creates dissatisfaction
Customer Retention
Encourages TSRs to satisfy customers
Creates loyalty
Sales Volume
Encourages cannibalization
Encourages short term product pushes instead of long term CR
Customer Value Impact
Increases customer value following interaction
Includes additional information gathered which is useful for future campaigns
To persuade managers to think about customers, it helps to start with something they value – Customer profitabilty

28. Changing Processes
There are several ways to change processes without creating fear within an organization
Pilot projects: Enable teams to test processes in an atmosphere that fosters innovation and resourcefulness.
Business rules:
Privacy: Do not share names with third parties
Fatigue: Do not call customers more frequently than “n” times.
Channel preference: Do not force a customer to a channel
Dialogue: Record every question that a customer answers and do not ask the same question more than once every two years
The business case
Through questions and expectations, it is possible to drive existing organizational units to use customer data in decision making
Should you close unprofiateble stores?
Should you market to selected customers?

29. Evolutionary Not Revolutionary
Why not just reorganize everyone from Marketing, IT and other teams contributing resources to the CRM effort?
Why the evolutionary small step approach?
Why not revolution?
Power may continue to reside in areas without the data, without the metrics or even without the C
Focus on bureaucratic issues detracts from C focus

30. Tools that make data easy to access
Gives time to build infrastructure for:
Centralized data
Tools that make data easy to access
Skilled analysts who can mine the data
Metrics that validate C centric programs
Training to bring staff up to speed
Setting senior management expectations and educating them
Winning kudos for early successes
Creating external enthusiasm rather than resistance.

31. Changing Structure To maintain the momentum of a CRM initiative:
Continually demonstrate value to all stakeholders
Create a hunger among senior managers for customer centric and customer value information
Use input from anyone thinking about the customer.

32. Forms follows Function
Let structure experts worry about structure which CRM specialists focus on cross functional initiatives.
Constructing data centers from pilot databases to an enterprise-wide data warehouse
The data warehouse is accessible and easy to use across organization
Fielding campaigns that includes tests and data mining
Sharing results across channels,units and levels of management
Creating more and more complex campaigns involving more and more areas of the enterprise.
Monitoring and reporting results all along the way.

33. E-channels Complicate Simplify
E-channels both complicate and simplify CRM execution:
Complicate
Simplify
- Stability
- Maintenance
- Real time
- Personalization
- Collaborative filtering
- B&M to the web
- Branding
- E-strategy
- Competing channels
- Privacy
- Security
- Loyalty
- Information
- Real time
- Cost saving
- Interactive
- Profit driver
- Convenience
- Customer tracking
- Services
- Transaction/sales tracking

34. Are we there yet? You know you have a CRM culture when:
Everyone in the organization thinks about the C
Everyone in the organization listens to the customer
Reliable service is delivered to C consistently across all channels
Success is measured in terms of C relationships ( Value, duration, acquisition )

35. Where Are You on the Road to CRM?
Short term goals
Long term goals
Think like a customer
Be a customer
Build infrastructure to centralize data
Analyze customer data
Determine C centric program goals and strategies
Educate senior management and set expectations
Identify bottlenecks
Have owners over customers
Have centralized customer centric business rules
Listen to the customer
Track C behavior across all channels
Show consistent reliable service across all channels
Assign value to each customer
Create loyalty programs
Have established C centric incentives
Organizations
Transitioning to
CRM culture
Think like a C
Listen to the C
Provide consistent reliable service across all channels
Track C behavior across all channels
Assign value to each C relationship
Create loyalty programs
Reduce bottlenecks
Have owners over customers
Real-time personalized dialogue with customers
Anticipate customer needs
Measure success of each relationship
Share C information with all areas of the enterprise
Build and maintain long term profitable relationships with C
Organizations
With existing
CRM culture

36. Summary
Organizational change is an evolutionary process, not a revolution.
Choose the parts of the organization that can be changed to focus on first.
Implementing CRM program also means changing thinking, processes, structure and engraining a customer centric culture in an organization.
Depending on where your organization stands, there are short and long term steps to take to transition to a CRM company.

37. Long Term Planning
Develop a two year plan for making your company more customer centric.
Include measurable deliverables every three to six months.
Change from product centric to customer centric metrics.
Create cross functional teams to develop and manage customer strategy.
Implement tools that allow people from all areas to access the same CI.

38. Obstacles Getting participation from all areas
Technical problems centralizing data in a data warehouse
Inter-unit conflict (Marketing-IT)
Managing anxiety and resistance in an environment change
Focusing resources on new developments and existing responsibilities.