 How to Optimize Customer Relations with Customer Care / Service Center Intergration ? [ Paper by Prof. Dr. Daniel Baier and Detlef Dimkowsky, M.A. ] A Short Introduction Methods of Resolution Conclusions Main Focus

A Short Introduction [ 2 ] FIRST OF ALL – INTRODUCING MYSELF… contact information phone +49 (0) 341 / fax +49 (0) 341 / mobile +49 (0) 172 / internethttp:// bitonic systems GmbH founded| January 2002 locations | Leipzig / Halle (Saale) competence| Marketing and sales, scientific consulting line of business| Life Science industries (Pharma, Biotech) projects| Pharma CRM / Patient Relationship Management (pharmaceutical companies); Pharma analytical applications – finance, marketing, sales / sales force controlling … KnowBIT – Knowledge Management Biotech, Weinberg Campus, Halle. Detlef Dimkowsky, M. A. * Study of African Linguistics, Economics and Social Science. University of Hamburg | University of Leipzig1993 – 2001 Managing director | bitonic systems2002 –

A Short Introduction [ 3 ] Customer Relationship Management (CRM): Current trends Integrated Customer Relationship Management (CRM) „in times of stress“? See your chance! 40% of companies are going to plan the introduction of CRM in the next one or two years. Today about 75% of the companies investigate reinforced in keeping their customer relations. Though: About 80% of the CRM projects are aborted during the past years. [Upon what grounds ?] Integrated CRM is an efficient instrument to generate the competitive advantages, especially in times of stress! [What effects can be generate by CRM ?] Notwithstanding: The change from the product to the customer oriented approach is a central point of CRM and a business critical factor in highly competitive and complex markets. [How CRM can be successfully created ? Which factors and measures are most important ?]

A Short Introduction [ 4 ] Customer Relationship Management (CRM): Definition Customer Relationship Management (CRM) DEFINES: Corporate strategy and its implementation ‚Living Customer Orientation‘ within the enterprise ‚Ecosystem‘ [Gartner, 2001], which pervades all parts of the enterprise Customer Relationship Management (CRM) CONTAINS: All customer oriented processes (360 degree view) All functions / departments within the enterprise All communication channels from / to the customer All processes in marketing, sales and service The entire IT infrastructure of the enterprise, in particular the stock of customer information (communication systems, ERP, eBusiness, eCommerce)

A Short Introduction [ 5 ] Customer Relationship Management (CRM): Current business environment Business environment in the today markets / essential factors of CRM projects: Tightened competition in increasingly saturated and transparent markets Lack of differentiation of products and services offered Increasing demands concerning the IT infrastructure of the enterprise (CRM, ERP, eCommerce, eProcurement) Targeting as a business critical factor (market share / segmentation, customer value) Integrated communication by grouping all relevant channels of customer interaction „We are drowning in information and starve for knowledge“ Naisbett, J. and Aburdene, P. (1980) „Information gap“ – lots of gathered information in different data bases and systems, but… … the covered knowledge is frequently not available for customer operations, decision support and management information processes in the enterprise Insufficiant resources within the customer care / fulfillment processes Current shortcomings and bottleneck factors: Increased costs (of complexity / infrastructure) / increasing cost pressure

A Short Introduction [ 6 ] Customer Relationship Management (CRM): Objective target Registered customers: Increase of customer retention Higher customer satisfaction (by customer care services) Selective prevention of customer loss Increase of highly profitable customers Tap the full potential of customer relations (cross / up selling) Customer value based organisation of sales and service channels (field service, service center, self services – internet) New business / potential customers: Market research (branding / publicity, profiling of attitudes / demands, creation of target groups) New business Methodology – selective and systematic approach (to tap the full potential of the target market) Precondition – comprehensive knowledge of market and customer behavior Basis – customer data bank system (specific customer profiling / creation of target groups)

Main Focus [ 7 ] Service Center vs. Field Service: Advantages and disadvantages + Tele Marketing and Sales / Service Center High affinity for the medium telephone (?) Relatively low costs (especially HR) High level of interaction with „forced“ feedback Fastest achievement of a broad market reach Spatial independent and versatile (by substitution / support of personal calls) – Telephone service Difficult accessibility Increasing number of Tele Marketing Agencies; higher frequency of total calls per customer (tends to result in higher rejection rates) + Field service / Personal call Personal interaction Strong personal relation is possible Highest level of interaction Direct and private response / feedback Construction of confidence – Field service / personal call Time consuming preparation process High personell costs and travel expenses Relatively low range

Main Focus [ 8 ] Service Center: Central questions and known problems Is the service center established in conjunction with the whole business communication process ? >> Y/N Is a central customer data bank established to collect all relevant customer information ? >> Y/N Are the service processes co-ordinated in the entire company ? >> Y/N

Main Focus [ 9 ] Service Center: … high complexity (business processes I – Inbound Service Center)

Main Focus [ 10 ] Service Center: … high complexity (business processes II – Outbound Service Center)

Main Focus [ 11 ] Service Center: Objective target (8) Early-warning systems and opportunity management (1) Targeting (sales effort in selected market segments) (2) Centrally managed services for time consuming, routine work (inbound call services and management in particular) (3) Increasing hit quota / high frequency of customer contact (4) Prompt reply in customer interaction process (5) Integrated data processing / handling (6) Business process integration and workflow management (7) The ‚proactive service unit‘ (9) Planning and control at customer level (10) Classification (ABC) at potential level

Main Focus [ 12 ] Service Center: Target deployment – Example I (3) Increasing hit quota / frequence of customer contact (4) Prompt reply in customer interaction First example – optimized service quality (with registered customers): Measure = customer value Determining factors = turnover potential (cross / up selling) and recommendation potential; Further factors like customer satisfaction or operating figures are considered. Analysis methods = customer value, ABC classification Results (selection) = A customers shall „rewarded“ with cost intensive premium services; Customer contact occurs regular and active via field service / high frequency of sales calls, supported by service center activities / tele services; corporate publishing activities with high quality customer journals will be added. B/C customers will be addressed with basic services at low cost level; like self services via internet and newsletter; service center activities shall occasionally applied. >> Efficient customer care services as a result of fact based service level management

Main Focus [ 13 ] Service Center: Target deployment – Example II (9) Planning and control at the customer level (10) Classification (ABC) at the potential level Second example – optimized sales performance (with registered customers): Measure = customer value Determining factors = turnover potential (cross / up selling) and recommendation potential; Further factors like customer satisfaction or operating figures are considered. Analysis methods = customer value, ABC classification Results (selection) = A customers shall further addressed with high frequent sales calls; sales force will be supported by service center activities / tele services. B/C customers will be addressed with a lowered frequency of sales calls; high frequency of service center activities / tele services; >> Efficient sales performance as a result of fact based sales controlling

Main Focus [ 14 ] Service Center: Target deployment – Example III (9) Planning and control at the customer level (10) Classification (ABC) at the potential level Third example – campaign optimization [Call – Mail – Call] (for new customer acquisition / (re)launch of a product): Measure = potential (interested person, customer profile), response behaviour (test mailing + mailing) Analysis methods = response analysis, ABC classification, conjoint analysis Results (selection) = significant high response rates (up to 35 % are possible!); considerable cost saving effects as a result of detailed targeting in the campaign setting process (reduced amount of total mailing output, less handling costs of the campaign) >> Efficient campaign / direct marketing activities as a result of fact based targeting / campaign processing

Methods of Resolution [ 15 ] FIRST CLASS CUSTOMERS ! – Fact based customer knowledge I >> Business Intelligence (BI) forces ‚turning-off‘ spread sheet applications! >> Integrated analytical application (Data Warehouse, OLAP, Data Mining) as central parts of both Decision Support (DSS) and Management Information Systems (MIS). Is the systematic and overall gathering of market and customer information realized at the enterprise ? Is the entire data set which is relevant for the customer management process available in the company ? Are analytical applications deployed in the entire organisation to answer and report specific questions / problems ?

Methods of Resolution [ 16 ] FIRST CLASS CUSTOMERS ! – Fact based customer knowledge II Relevant internal data sources as part of the customer data management (selection): Customer data bank(s) / CRM, log files from enterprise web portals / CMS, ERP systems. Integration of external data sources, for example: customer and campaign data – call / service center, external market research data, purchased adress data, tracking data from internet market places and portals.

Methods of Resolution [ 17 ] FIRST CLASS CUSTOMERS ! – Fact based customer knowledge III

Conclusions [ 18 ] FIRST CLASS CUSTOMER COMMUNICATION ! – AT A GLANCE The COMMUNICATION CENTER (inhouse or service provider) is an essential and cost effective instrument for both customer service and the acquisition of new business in today‘s markets. INTEGRATED COMMUNICATION SERVICES (inbound / outbound calls, management, fulfillment) are increasingly important within the marketing mix of a company. INTEGRATED ANALYTICAL APPLICATIONS are an business critical factor on the way to FIRST CLASS CUSTOMER COMMUNICATION!

Conclusions [ 19 ] FIRST CLASS CUSTOMER COMMUNICATION ! – BY EXAMPLE [bitonic iDetailing]

Conclusions [ 20 ] FIRST CLASS CUSTOMER COMMUNICATION ! – SUMMARY FIRST CLASS APPROACH AND METHODS: Identify! FIRST CLASS CUSTOMERs / POTENTIALs by ANALYZING CUSTOMER PROFILES >> Success factor(s)! Address and tap the full potential! Realize! FIRST CLASS SERVICES FOR FIRST CLASS CUSTOMERs with FACT BASED SERVICE LEVEL MANAGEMENT >> Success factor(s)! Selected premium services and high quality programs to reach customer satisfaction for A customers; Addressing B/C customers primary via cost effective instruments like electronic self services and newsletter. Measure! FIRST CLASS COMMUNICATION FOR FIRST CLASS CUSTOMERs with ANALYTICAL APPLICATIONS (as an essential requirement for targeting and customer process performance measurement) >> Success factor(s)! Comprehensive market and customer knowledge is a necessary condition for market success. Relevant customer data / information is often gathered but not available in the enterprise! Enhance hidden knowledge and make it available in the management / decision process of your organisation.