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0 Managing Critical Customer Relationships in Higher Education May 13, 2002 – CUMREC 2002 – Minneapolis, MNCopyright Joe Burkhart, Mark Danis and Kwok Lam, This work is the intellectual property of the author. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright appears on the reproduced materials and notice is given that the copying is by permission of the author. To disseminate otherwise or to republish requires written permission from the author.
1 For further information or copies of this presentation PresentersMark DanisSenior Vice President, Higher EducationJoe BurkhartManager, Higher EducationKwok LamSenior Manager,Higher EducationFor further information or copies of this presentationContactJoe Burkhart at:
2 Presentation AgendaWhat is Customer (Constituency) Relationship ManagementIssues facing the InstitutionStudent For LifeEnabling TechnologyBenefitsQ&A
3 Corporations Are Beginning To Understand Their Customers The turn of the millennium has shown corporate America’s renewed focus on what is most fundamental to business: The Customer“We have only two sources of competitive advantage:1. The ability to learn more about our customers faster than the competition.2. The ability to turn that learning into action faster than the competition.”Jack WelchGeneral ElectricThe turn of the century has generated a renewed focus on what is fundamental to business: the Customer.The late 90’s was about getting your back-office in order: Manufacturing, Finance, HR – all the functions that customers don’t see.The 2000’s are about the front-office – optimizing on the opportunities in those functions customers see: Sales, Marketing, Customer Service.At the turn of the millennium there was an article in the Wall Street journal by Jack Welch – one of our favorite clients – about the need to refocus on the customer. He stated that every major initiative on his agenda for the next five years would be focused on customer-centric improvement.His comments above provide a theme that resonates throughout the presentation….learning more about customers and acting faster than the competition.(By the way – we are GE’s integrator of choice for CRM)
4 Harvard Business Review What CRM really is ...Entire new markets have emerged to address the issues of Customer Relationship Management. This has created confusion on what CRM really is ...CRM is…CRM aligns business processes with customer strategies to build customer loyalty and increase profits over time. (Note that the words “technology” and “software” are conspicuously absent from the definition.This concept of re-focusing on the customer has created an entire industry and spawned new markets and many players (for example software companies such as Siebel, Epiphany, Broadvision, etc). This often confuses our clients. They ask us: What is CRM? Is it Siebel? Is it Epiphany? Is it BV?The answer is that each is one small part of CRM.CRM is not just technology. It is a comprehensive set of business models, processes, strategies and technologies that address one or many customer facing functions in a way that builds sustainable customer loyalty and business value.They key word here is sustainable. A real CRM initiative creates a competitive advantage that can not easily be duplicated by your competitor.Harvard Business ReviewFebruary 2002
5 Customer Relationship Management (CRM) The market is driving Institutions to focus on Customer Relationship Management to deliver business performance.DRIVERSCompetitionConstituent ExpectationsIncreasing Service Delivery CostsComplex Institutional InfrastructureMultiple Service Touch PointsBENEFITSRevenue generationCost ReductionSustained Customer LoyaltyCompetitive AdvantageThe market is driving CRM as a vehicle to deliver business performance. What is driving this? The competitive landscape has changed. The internet has created demanding buyers with little tolerance for poor customer service. Their expectations for price, availability and convenience have risen dramatically. If customers aren't satisfied they wont wait – they will go somewhere else. Globalization is also contributing. Customers expect the same level of service regardless of where they are in the world.What about benefits? CRM systems are unique in that the business benefits derived from properly implemented systems give you a “double whammy” effect.CRM systems are designed to be revenue engines (unlike ERP systems which are focused on cost reduction – e.g. running the business more efficiently).However, when CRM initiatives are properly implemented they also result in cost savings (cost take-out in call centers, shifting of workload to lower cost channels, reduction in SG&A).This gives you a “double whammy” effect by increasing revenues and decreasing costs simultaneously.
10 Life Cycle Capability Needs Pre-AttendingAttendingAbility to project recruitment and retentionAbility to deliver personalized serviceAbility to deliver proactive serviceAbility to manage serviceAbility to support self-serviceAbility to integrate technologies for a seamless and blended customer experienceAbility to determine effectiveness of programs and services.Ability to deliver personalized serviceAbility to deliver proactive serviceAbility to manage serviceAbility to provide “One-Stop-Service”Ability to support self-serviceAbility to integrate technologies for a seamless and blended customer experienceAbility to determine effectiveness of programs and services.
11 Life Cycle Capability Needs Post-AttendingAbility to identify supportive alumni and donorsAbility to manage solicitations of supportive alumni and donorsAbility to deliver personalized serviceAbility to deliver proactive serviceAbility to manage serviceAbility to support self-serviceAbility to integrate technologies for a seamless and blended customer experienceAbility to determine effectiveness of programs and services.
12 CRM is to the “Front Office” as ERP is to the “Back Office” CRM vs. ERPCRM is to the “Front Office” as ERP is to the “Back Office”ERP applications are designed to reduce costs and improve transaction efficiency.CRM applications enable an institution to:Improve Market Promotion for the InstitutionIncrease Customer SatisfactionPromote Loyalty to the Institution
15 Customer Satisfaction Donation Volume and Cycle Time CRM BenefitsSource: Survey of 295 companies by Insight Technologies GroupCost of RecruitmentBeforeAfterCost of Sale35%Customer SatisfactionBeforeAfter20%Donation Volume and Cycle TimeBeforeAfterSales Cycle Time25%Performance MeasuresCommercialSectorThere are no benchmarks in Higher Ed, however in commercial applications recent studies have shown:Up to 42% increase in REVENUEUp to 35% decrease in COST OF SALEUp to 80% decrease in ORDER ERRORSUp to 25% reduction in the length of SALES CYCLEUp to 2% increase in MARGINSUp to 20% increase in CUSTOMER SATISFACTION ratingsThese could translate into:Increase revenue through improved recruitment and retentionReduction in recruitment costsImproved customer serviceQuicker yield conversionsImproved student satisfactionSource: Survey of 295 companies by Insight Technologies GroupHigher EdPotential
16 Other Potential Benefits Benefits to CustomerSingle Point of Contact “One-Stop-Shopping”Self ServiceProactive ServiceImproved Response Time“End to End” ServiceMore “One and Done” ContactsPositive 1st impression
17 Other Potential Benefits Benefits to InstitutionsConsolidated view of customerLower Cost to RecruitIncrease RetentionReduced churn on service deliveries – improved efficienciesWorkflow ManagementPerformance ManagementQuality AssuranceService TrackingService BenchmarkingIncrease Retention of StaffCustomer ProfilingConsistent responsesEffective Volume managementReduced Training costs
18 Singular Customer Experience Questions & AnswersSingular Customer ExperienceWEBFaxPhoneIn PersonMulti-ChannelUnified ChannelsFor further information or copies of this presentationContactJoe Burkhart at: