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Drivers of Change Technology Enablers Best Practices Guidelines to Success Agenda.

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Presentation on theme: "Drivers of Change Technology Enablers Best Practices Guidelines to Success Agenda."— Presentation transcript:



3 Drivers of Change Technology Enablers Best Practices Guidelines to Success Agenda

4 A confluence of pressures ….. T You Competitors Substitutes Suppliers Buyers New Entrants Traditional Sources of Competitive Leverage Source: Unleashing the Killer App Internet

5 E-ENABLED MARKET EXPLOSION Number of e-enabled businesses (000s) 2000 % Increase (1999-2000) Overall Internet transaction share is expected to increase to 32% by 2002 168,000,000 existing consumers online growing at a rate of 630,000 a day By 2003, net-based B2B will top $1.3 trillion and B2C $.3 trillion Http://

6 Today’s Customers: More Price Sensitive More Choices More Sophisticated More Convenience Higher Standards Different ways of Interacting Today’s Customers: More Price Sensitive More Choices More Sophisticated More Convenience Higher Standards Different ways of Interacting The Model has turned Upside Down Low Cost eTouch Traditional Sales/Support Higher Cost Specialty Sales/Support Value Low Cost eTouch Higher Cost Specialty Sales/Support Value Traditional Sales/Support The Age of Products & Services The Age of the Customer 1950’s-1990’s 2000’s Customers expect more and infrastructures need to catch up

7 Customer life time value Customer satisfaction / loyalty Transaction Dialog Relation Product Share of life Share of wallet Customer Acquisition Customer Retention Strategic Customer Relationship Management These Pressures are Driving the Need for eCRM AMR Research: 1998 = $2.3B 2003 = $16.8B

8 Moving from CRM to eCRM Old World Transaction Pushing (selling) Market to the masses Silo’d front office Building customer databases Front office buffers New World Interaction Personalized buying Mass marketing to 1-1 Integrated front office Leveraging customer information Customer direct access into the supply chain Marketing eStore Custome r Support Sales Force Infrastructure Technology vs

9 WEB Internet Web New Technologies Are Enabling “New” Customer-Centric Marketing Mass Market Rapid and powerful Cheap Easy to use Reliable Widely available Web PCs Telecom Networks Call Centres Data Warehouse/Data Mining

10 eCRM Bringing the Worlds of customer information and customer experience together Demographic profile # Leads # Hits $ Revenue Purchase history Click history Credit History Service records Life Time Value Campaign history Predictive Data Self sales Self service 800 service Personalization Customized 1 to 1 offers Cross selling Up selling Communities of interest Buying groups Segmentation Cross branding eCRM Information Reporting & Analysis Leveraging Customer Data Creating Customer Value Customer Information Results Lower cost of Service Lower cost of acquisitions Revenue Growth Higher levels of loyalty & satisfaction Effectively understanding transactions and developing rich customer experiences, provides a competitive advantage eCare /eStore/ eMktg

11 Cost And Growth Per Channel ChannelCost Annual growth rate Today2002** Telephone Email Chat* Message boards* Knowledge base/Web $33 $9.99 $7.80 $4.57 $1.17 90% 111% N/A 178% 407% 54% 9% <1% 37% 2% 4% 13% 87% * Low penetration among firms reporting Percentage of incidents handled through these channels Reported by 46 responding companies providing business-to-business customer service ** Projected Source: Forrester Report Dec 1999

12 Customer information will be at the core of developing intimacy with customers Forrester - Percent of 50 Fortune 1,000 companies interviewed 18% 52% 16% 48% 16% 34% Marketing Customer service Sales 1999 2001 How companies plan to use the information they gather from customers 20% 74% Increase revenue Forrester Research, B2B: 1998 = $43B 2003 = $1 Tb

13 Internet-Based Customer Service, Cost, Objectives, & Challenges “How much will you spend on improving your customer service site?” Percent of 44 responding companies using Internet-based customer service 39% 18% 11% 20% > $5 million $3 million - $5 million $1 million - $2.9 million $500,001 - $999,999 $0 - $500,000 Source: Forrester Report Dec 1999

14 eCRM - The Need for Speed is Ever Heightened The 1/2 life of a strategy used to be 3-5 years. Today, leading organizations operate in windows of 3-5 months as competitive pressures and the internet have taken hold Your Strategic Advantage Minimum eCRM Strategy Formulation Time eCRM Strategy Realization eCRM Strategy Deployment Maximum The “So What Zone” Time eats in to your Advantage Time is your enemy! Winners are focused to OPERATIONALIZE their eCRM strategies for competitive advantage Source: PwC CRM Practice

15 eCRM Challenges of Today How can we personalize & target our products, services and promotions more effectively? We have millions of customers hitting the site - Who are they? How should I blend my online/offline Marketing activities effectively? How do we integrate our eCare efforts w/ our call center? How can we effectively connect our Webstore w/ our Sales & Service areas How can we collect, analyze, measure and use customer information real (near-real) time across the firm eCRM We are already behind, how can we get going quickly and safely? How can we move beyond website stage 1 Source: PwC CRM Practice

16 Efforts associated with driving customers and prospects to the web site(s) Everything that affects the customer experience in the Internet Store prior to purchase including organizing the merchandise, pricing, content and site design The efforts associated with the purchase and delivery of products. (e.g. create, process, fulfill, handle returns) Efforts associated with serving the needs of the customer at any stage in the customer experience Customer experience Merchandising Site design E-mail promotions Direct mail promotions Online and offline advertising Telephone customer care E-mail customer care Returns Fulfillment Checkout Customer analysis To facilitate discussion on eCRM priorities, we developed an eCRM framework which organizes eCRM capabilities along 4 key quadrants: attract, present, process order, and e-care eCRM Capabilities Model

17 eCRM Core Areas eCRM “Leveraging the internet to drive competitive advantage through core CRM processes” Source: PwC CRM Practice ePersonalized Marketing Click Stream Analysis Personalization Customer Modeling Online/Offline Campaigns Shopping Basket Dynamic Content Data Warehousing Customization Communities of Interest Online Chat Loyalty/Affinity Programs Available to Promise eCustomerCareeCustomerCareeStoreeStoreeContenteContent

18 Capabilities Infrastructure eContent Content Management eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent eCare Collaboration Tools Self-Service Proactive Service E-mail Management Auto Response eStore ePersonalized Marketing Configurators Commerce Servers Real-Time Personalization Engines eMarketing Analytical Applications

19  Open 24 hours 7 days a week  Access from anywhere globally: onsite (brick and mortar), remotely with a PC; from a TV, from a cell phone  Access to entire inventory  Immediate sales, no waiting in line  Easy/automated access to various levels of service  Quick search of desired product  Shorter buying process Definition  eStores provide the consumer with easy access to purchase products quickly, efficiently and effectively  eStores efficiency provides the "best" price for consumers while providing higher profit margins for businesses  The most effective paradigm for most business will be "click and mortar" where the traditional brick and mortar storefront and website store best serve customers Point of View  B2B if growing at much faster rate than B2C  B2B is more profitable than B2C  Drivers for online buying 1) saving time, 2) demographics not important, 3) increased experience with the Internet, 4) higher numbers of hours online at home, 5) use of the Web for financial services, 6) significant reliance on e-mail  Need for better customer service  Etailers and retailers are partnering for more business. Etailers are learning that they can’t do without retailers. Many still will shop at stores.  More than 65% of all B2B e-commerce purchases made in the US by 2003 will be made in six sectors: retail, motor vehicles, shipping, industrial equipment, high tech, and government, according to BCG. Marketing Trends eStore

20  Help end users (inside sales reps or remote sales reps in “assisted” mode, or customers, prospects, and partners in “unassisted” mode) select, configure, and ultimately, purchase complex products and services while ensuring that each design is completely accurate  Significant product rework costs can be avoided because correct designs are created on the first try  Customer satisfaction improves dramatically because customers are no longer shipped a product that is incorrect or different from the one they ordered  End users can quickly configure complex products or services that meet their specific requirements, completing transactions via the Internet at a time convenient for them  Configurators collect invaluable data about customer preferences, providing the opportune time to deliver cross-sell/up-sell recommendations eStore Configurators

21  Sell-side commerce servers provide the ability for organizations to put up a Web storefront to their business that drives e-commerce transactions  Transition from Stage 1 (static content) to Stage 3 (dynamic, interactive content) Web sites demands a much more robust commerce server platform including sophisticated front-end and back-end features  The rapid growth in the number of corporate e-commerce initiatives and the rising number of transactions being conducted through e-commerce bode well for providers of commerce servers Blue Martini ATG Broadvision InterWorld OneSoft Netscape Microsoft IBMOpen Market Back-End Functionality Front-End Functionality eStore Commerce Servers

22  Definition  Collect information about your customer to make the buying experience simple, effective, and efficient  Provide highly customized buying experience for the customer.  Automation saves your customers' time. More sophisticated analysis and tracking software can give your business an understanding of who is coming to your site and what they're doing there.  Segment your market to deliver high client satisfaction  One-to-One Marketing ePersonalizedMarketing eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent  Point of View  Personalization will make the buying experience for a customer almost effortless because pertinent information about the consumer’s tastes will have been collected through prior visits  Personalization is key to the success of a web site  Market Trends  Personalization is growing and software tools that automatically do the work rather than forcing the customer to provide information and constantly update  Privacy is a major concern in the web world – web sites must seek permission from consumers on collecting information and provide explanation on how it will be used  Effortless service will keep customers coming back  Match the capabilities of the organization with the needs of the customer (e.g., mass customization)  Link management of supply chain using customer information

23  Used to slice and dice data (product, customer, etc.) to make more informed and more accurate real-time business decisions  Expansion in data warehousing has created immense repositories of data that need analytical applications to unveil customer buying behaviors  Analytical applications are mission critical to discovering optimal cross-sell and up-sell opportunities, with successful execution leading to tremendous ROIs  E-commerce traffic enables marketers to capture information on customers’ every move  Successful organizations will likely be those that have (1) higher quality data on products, customers, and competition,(2) instant access to such data, and (3) the analytical tools that quickly provide summary conclusions to drive actions out to customer touch points eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent Analytical Applications

24  The dynamic delivery of targeted content to specific end users based on any given number of business rules and the end user’s profile  The move from static Web sites to dynamic, interactive Web sites requires strong personalization capabilities  Personalized offers dramatically improve the success rate of cross-sell and up-sell marketing campaigns  Personalization is the killer technology that enables real-time, mass customization in the online world ePersonalizedMarketing Real-Time Personalization Engines

25  Response Rates and ROI are dramatically higher using e-channels as compared to traditional direct marketing techniques (e.g. direct mail)  E-mail is increasingly becoming end users preferred mode of communication as it has become a part of both consumers and businesses everyday life  Inexpensive, convenient, and rapid means to communicate with millions of end users  The ultimate platform for marketers to distribute information and communicate with extended enterprise eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent eMarketing

26  Definition  Service customer 24/7  Provide various levels of service: basic information, more detailed, more specific to client needs  Provide web resources complemented with human resources (CSR)  Provide direction to outlets (brick and mortar) for special needs eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent  Point of View  At the heart of success for a web site is the customer  A customer must feel that businesses understand their needs and will provide the human touch when necessary\  Market Trends  A successful web site is one that complements the online experience with easy access to “real life” interaction in order to clarify, serve, and/or simplify the buying process  Customer service experience has to be quick response, informative, and courteous to develop a pleasant buying experience that nurtures customer loyalty  Caring for the customer is critical to reduce current shopping cart abandon rates which are over 60%  With a wide range of CRM solutions now available, we should expect customer service options at e-commerce sites to improve substantially during the coming months eCare

27 Teleweb could become a killer eCRM application as it provides the level Of live interaction that is sorely missing in Internet sales and service situations Teleweb could become a killer eCRM application as it provides the level Of live interaction that is sorely missing in Internet sales and service situations Teleweb can be used to dramatically cut down on travel time and expense, in addition to improving communications with all members of the extended enterprise (including internal employees) Chat enables sales and service representatives to increase productivity by handling multiple “conversations” simultaneously Teleweb can become a critical element to the successful sale of complex goods and services over the Internet where detailed explanations and “hand holding” need to be delivered Leverages large investments already being made in contact centers while enhancing the success of Internet commerce initiatives eCare Collaboration Tools eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent

28 Customers are able to solve their own problems, getting the level of service they want, at the time they want and through the channel they want while avoiding the cost and time of proceeding through traditional channels (e.g., telephone) Organizations are able to dramatically lower cost structures by avoiding additional personnel costs Organizations can improve the productivity of internal contact center reps by allowing them to access the same problem resolution knowledgeable that is open to the public As the number of users on the Internet increases to the projected 320 million users by 2003, the level of end user technical expertise will become increasingly diluted and the importance of providing online help will rise in proportion Improving online service capabilities is needed to combat decreasing rates customer satisfaction with online shopping experiences and increasing rates of “dropped shopping carts” eCare Self-Service/Proactive Service eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent

29 The number of e-mail messages sent by consumers and businesses is expected to continue its rapid expansion for the foreseeable future Current e-mail response rates are horrible in every sense of the word, and corporations must quickly change this if they plan on being a successful e-business company E-mail support is much more productive and much less expensive than providing support through a call center E-mail is the preferred mode of communication in the e-world, making Purchase of this application category a necessity rather than an option eCare E-mail Management/Auto-Response eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent

30 E-Content  Definition Set of processes, people, and technologies that support content sharing and reuse across the entire corporation. Content management includes content authoring, versioning, searching, tracking, grouping, categorizing, and routing, in addition to the delivery of content to the ePublishing application. ePublishing: Places content into page templates based on established rules. Often content is personalized for a specific user/customer. Includes the design and development of the page templates in addition to the maintenance of navigation and personalization rules. eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent  Market Trends; very hot space - Vignette, Documentum and now Interleaf (just bought by Broadvision) making large progress  Key Issues: – To place increased control over the the information presented on the site to merchandise and marketing personnel. – To decrease the time-to-market and costs associated with releasing new functionality to the site. – To streamline the content promotion process by enhancing the application and technical architectures to more tightly integrate the Internet Store and jContent. – To integrate with and leverage eCRM information for target marketing and personalization.

31 The ability to deliver personalized content to all members of the extended enterprise will likely be a major source of competitive differentiation in the world of e- business Decentralized content management is complex but is increasingly becoming a necessity to avoid the “webmaster bottleneck” Creating Web sites that deliver dynamic, interactive content requires that content be updated much more frequently to keep Web sites fresh and engaging The size of corporate web sites is growing at an exponential rate as the number of Internet projects expands Infrastructure Application eCRM ePersonalized Marketing eCustomerCareeCustomerCareeStoreeStoreeContenteContent Content Management

32 One Technology Two Technologies Three Technologies Four Technologies Five Technologies Success Rate 35% 29% 64% 69% 68% The Challenge of CRM Integration Implementing a multi-channel integrated CRM technology solution is complex Source: Customer Relationship Management -- A Senior Management Guide to Technology for Creating a Customer-Centric Business; PricewaterhouseCoopers/DMA, October 1999

33 Easy Search Easy Sign- In Simple Navigation

34 Coming Full Circle w/ our Customers Permission costs time and money to acquire, and you have to know how much it costs Permission is instantly revocable and is nontransferable Permission doesn’t happen by accident Permission has to be nurtured Permission is selfish. What’s in it for me? Seth Godin 1999

35 Building the Customer Profile

36 Cross Sell & Upsell

37 Content Management Easy as “One-Click” Narrow Casting to Segments

38 Monitor prices on competitor sites and adjust accordingly

39 Improve the searching and browsing experience of the customer based on customer information trail Forge alliances for alliances/ bubble sites Communicate detail campaign information to ensure coordination of all channel campaigns Effective Practices: Lands’ End Web Examples

40 Back Office Business Applications Data Stores LeadsOpportunitiesCustomersInteractions Billing Finance, Accounting, HR Finance, Accounting, HR Procurement Manufacturing Distribution & Logistics Order Management Paper Electronic Fax Telephony IVR ACD CTI VRU Customer/ Prospect/ Employee Touchpoints Marketing Workbench Database Marketing Data Mining Content Mgmt Campaign Management Interactive Marketing Mgmt Analytics Service Workbench Sales Workbench Opportunity Management Proposal Generation Marketing Encyclopedia Configuration & Pricing Tele Sales Mgmt Analysis The CRM Framework Case Management Help Desk Dispatch Routing Scheduling Spare Parts Inventory Mgmt Analytics Face to Face PDA's Remote Laptops Handhelds Tablets Customer Managed WebKiosks Front Office Mail Data Warehouse & Operational Data Stores Front Office Back Office

41 Affirm Strategy and Confirm Project Objectives Assess Current eCRM Environment Produce Roadmap 3Conduct executive interviews 3Confirm consensus 3Conduct interviews with key functional areas 3Define key business requirements 3Identify points of customer interaction 3Inventory current eCRM technology, data sources, and processes 3Understand related initiatives (e.g., ePublishing) objectives and scope Current functional & technology environment Project Charter 3Conduct 3-4 visioning workshops to validate findings and outline current and future capabilities 3Identify and prioritize business requirements 3Identify and define technology, tools, and data sources to deliver business requirements 3Input known “effective” practices Identify gaps between current and target environments Coordinate findings with other initiatives Prioritize and phase projects based on user needs, potential business impact, and ability to deliver Gap AnalysiseCRM Roadmap Define eCRM initiatives, business benefit, resources, implementation time frames, and cost 3Validate recommendations with key stakeholders Define Target eCRM Environment Target functional & technology environment Conduct Gap Analysis eCRM Project Roadmap

42 Approach to Identifying Project Tracks eCRM Capabilities Model (Inventory of potential eCRM capabilities and performance measures) Our Experience Stakeholder Feedback Business requirements Current state findings “Effective” Practices Existing capabilities Capabilities that require improvement Identify OpportunitiesAssess Opportunities Define and prioritize project tracks Tracks to enable selected capabilities Deferred tracks to consider = Indicates gaps in current environment Feedback from workshops Our Analysis Potential tracks of work to enable capabilities Tracks for further investigation Combine experience, effective practices, feedback and experiences. Track Selection Criteria  Potential Impact on Revenues  Ease of completion  Contribution to baseline infrastructure requirements

43 An Example Potential Business Benefits & Investments Selections to support strong potential to drive incremental revenue and contribute to the aggressive plans for growth Note: (1) Hardware and software implementation costs are not included. Detailed assumptions are in the appendix. (2) Assumes leveraging Ceres (3) Assumes enhancement of Net Perceptions. Additional costs may apply for expansion of existing contract. Example of potential revenue lift Hardware Investment* Software Investment 1 Development FTEs Reporting, metrics, and drill-downBaseline infrastructure$100K to 250K$0 to $200K7 Campaign management Through improved targeting with segmentation, sales could increase by $6MM $0 to $100K2 Run-time repository for e- Merchandising/eMarketing An increase in frequency of purchases by 5% equates to an additional $13MM $0 to $100K3 Suggestive selling through collaborative filtering An increase in basket size of just 3%, from $98.86 to $101.83, can impact sales by $7.5MM 5 Clickstream analysis Baseline infrastructure$0 to $200K$100K to $600K6 eCare enhancements Saving 54,000 customers who would attrite can impact sales by $4.4MM $0 to $200K 2 Estimated Numbers Track º » ¹ · ¸ ¶ Ongoing FTEs 3 3 2 2 2 1 $0 2 $0 $0 3 $0

44 eCRM Priorities and Project Phasing Indicates parallel projects in progress that impact eCRM initiatives

45 Project Risks: “The Gotcha’s” Organizational implications will challenge traditional ways of thinking Initiatives will often lack the required resources to drive “business as usual” once the initiatives are implemented Multiple groups require involvement and “buy in” to support a successful eCRM implementation Often concurrent projects will challenge the bandwidth of key staff Ensure infrastructure readiness of data warehouse and content management systems Executives must lead this eCRM initiatives vs support them

46 Summary Internet leaders are winning by Value Creation and Growth, while leveraging cost advantages eCRM is the at the heart of competitive advantage – dynamic, personalized interactions to support loyalty and growth This is complex and new territory - know when to get external experts to support your efforts Take a multi-stage view on implementation Move swiftly and get started to acquire ability to drive organizational learnings

47 Extra slides follow:

48 Main Customer Contact Channels Internet Paper Mail Facsimile E-Mail Voice Call

49 Customer Contact Routing Internet E-Mail Voice Call Each type of customer contact is routed to the appropriate CSR based on the their skill set (method of contact and knowledge) and database values related to the customer contact (e.g., market segment, assigned CSR, transaction, etc.).  customer entered information.  content of the web page from which the customer initiated the contact request.  customer entered digits.  subject(s) selected in structured e-mail.  text content of the e-mail.

50 Relationship Marketing Segmentation of your customer database allows you to better serve your customers based on their value to your organization. Segment 3 Segment 2 Segment 1 High Low Value to Organization Tier 0 Automated Service Internet Self-Service Tier 1 Automated Service Internet Self-Service Option to Speak with general agent from IVR or internet Tier 2 Direct routing to agent with highly skilled agents.

51 Sales Force Automation Customer Service and Sales activities should be shared to maximize the organization’s service capabilities and value of the customer to the organization.  contact center/internet self-service opportunities/activities result in… valuable leads and knowledge of recent customer activity for sales force  sales force opportunities/activities lead to… better customer service through awareness of recent sales activities Sales Customer Service Opportunities Customer Activities

52 CRMLive Architectural Overview

53 CRMLive Architectural Overview - Voice Call Routing

54 CRMLive Architectural Overview - Web Collaboration

55 CRMLive Architectural Overview - E-Mail

56 CRMLive Architectural Overview - eStore Integration

57 CRMLive Architectural Overview - Legacy Integration

58 CRMLive Architectural Overview - Relationship Marketing

59 CRMLive Architectural Overview - Automated Service

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