Presented by Team JJEMS A Framework for Customer Relationship Management by Russell S. Winer Presented by Team JJEMS John Follett Article Synopsis Matt Baker The Business Case for CRM Judi DeBord How to Implement CRM Eric Nill Infrastructure and Examples

What is Customer Relationship Management (CRM)? Some say the new “mantra” of Marketing Tracking Customer Behavior Predicting Future Customer Communicating with Customers Results: Allows Management to better focus marketing effort 1:1 Marketing LCV “Lifetime Customer Value” “The essence of the information technology revolution and, in particular, the World Wide Web is the opportunity afforded companies to choose how they interact with their customers.” Russell Winer

Customer Relationship Management Model (7 basic components) Create a Database Analysis Customer Selection Customer Targeting Relationship Marketing Privacy Issues Metrics

Tools for Building Customer Relationships The Business Case for CRM Who Are Our Profitable Customers? Data Driven Approach ! Retention = Net Profits Customer Buying Data  LCV Analysis  Customer Segmentation  Customer Focus Strategy CRM Reichheld Repeat vs. New Customer 2X Gross Income Mckinsey Tools for Building Customer Relationships 1:1 Marketing Develop Relationship Cost Effective Begin Dialog Customer Service Proactive v. Reactive Touch Points Customers have Choices Loyalty Programs Cost Effectiveness Switching Costs Web Shopping – Loyal Behavior Community Connect to Peoples Interests Support Communities

The Business Case for CRM You can’t manage what you can’t measure; If you can’t see it, you can’t measure it; If you can’t measure it, you can’t understand it; If you can’t understand it, you can’t improve it. The First Axiom about Improvement CRM enables the systemization of a sales process Unconscious  Conscious, Repeatable, Predicable Sales Process Visibility Predictability Consistency Scaleability Sustainability Visibility Drives sales execution and discipline Visibility enables performance coaching Visibility and ubiquity of information drives predicability along with a formal process Consistency is the ability to review performance across the sales organization Scalability. A process based upon CRM will be more easily scalable than a process without the CRM. Sustainable. Ingrain the process into the sales culture. moving to a process mentality should force the sharing of best practices across the sales organization. This should have the effect of raising the effectiveness of the middle 60% of the organization into higher performance regions.

How to “Do” CRM Develop a customer-centric strategy You’ll be listening to your customer rather than ‘telling’ them Reorganize internal functions and systems to support your customer (ERP) Cultivate cross-functional cooperation within your business Overcome the inevitable internal resistance to change Although the article focused primarily on the benefits of Web-based CRM initiatives, JJEMS identified several implications for a senior management team to consider when looking at launching a CRM program. As Jim mentioned several times, don’t even dream of a wildly successful CRM program if you don’t have the infrastructure to support and exploit it. ERP is just one of those supporting structures. Business strategy, marketing strategy and sales operations also are supporting infrastructure. Budgeting for CRM is another infrastructure component. JJEMS found several strategic prerequisites for a successful CRM program. In some companies, the entire workflow of customer identification, recruitment, sales and support could be changed by a CRM program.

How to “Do” CRM Assess technical capabilities Define the desired outcome of your CRM initiative – establish metrics Define your programs: Reward, Community, Loyalty, etc. Build teams to select and implement the software to get you to your destination After orienting your processes toward the customer, plenty of important planning activities remain. Assessing your technical capabilities, the current and desired states of your information systems and infrastructure, and the gap analysis. Defining the desired outcomes and functional requirements, and metrics. Notice that the last item on the list is to go out shopping for your new system.

How CRM Gets “Done” Physical Layer (Hardware) Data Source Internally Managed Hosted Externally (Application Service Provider) Data Source Sales History Opt-in Lists Surveys/Kiosks Purchased List

How CRM Gets “Done” Contact Types 3rd Party Services Marketing campaign (Broad coverage vs. Spam) B2C <--> B2B Portal, Affinity Site 3rd Party Services Clickstream analysis (Customer metrics) AdWords/banner ads (Customer acquisition)

How CRM gets “Done” System Security Data Management External Threats “You sold us on the price, mileage, and safety features… it’s the company’s IT performance we’re still mulling over”. System Security External Threats (Hackers, ID Theft) Internal Threats (Info as Co. Asset) Data Management Organization of Desired Info. Back up & Restore Business Continuity

How CRM gets “Done”

How CRM gets “Done” As part of integrated part of data base management. Primary for close customer contact and business retention tool. Cost effectiveness of technology and growth of Internet makes Customer Acquisition through this electronic media something to consider.

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