& Ogilvy & Mather 1 Ogilvy Interactive Team Customer Relationship Management (CRM) Vladimir M Jordanov December 2 nd, 2000 Oglivy Interactive Beijing Boot-camp

& Ogilvy & Mather 2 Customers? Who are these guys?

& Ogilvy & Mather 3 What is CRM?  In-depth analysis of customer behavior and attributes.  Applying of the achieved knowledge in the formulation of marketing campaigns, strategies and treatment plans.  More than just a set of technologies – it is a process.

& Ogilvy & Mather 4 Why CRM?  Company existence – quest for profit.  Three ways to increase the profitability of the customer base  Acquire more customers  Optimize the value of the existing customers  Retain the right customers longer  Acquiring new customer cost 5-10 times more that retaining the existing one  Loyal customers will will buy more and are willing to pay premium prices  20/80 rule – 20% of the customers generate 80% of the revenue

& Ogilvy & Mather 5 Why CRM? (continued)  Service leaders enjoy the following advantage over their low- service competitors:  They grow twice as fast.  They experience a 6% annual growth vs. a 1% share loss (they take customers away from their competitors).  They can charge 10% more from their products and still take customers away.  They enjoy 12% vs. 1% average return on sales.  Industry statistics show that 68% of customers walk away because of poor customer service.

& Ogilvy & Mather 6 Evolution of CRM  Mass Marketing  Target Marketing  CRM

& Ogilvy & Mather 7 Mass Marketing  Replaced the intimacy of direct sales  One way communication  Wide geographic distribution  Lost is the personal touch with the customer  Mass marketing was enabled trough the technological improvements in TV, radio, printed press

& Ogilvy & Mather 8 Target Marketing  Direct mail, telemarketing  Receiving customer response  Lack of specific data, average response rate  Islands of information

& Ogilvy & Mather 9 CRM  Next evolutionary step, back to intimacy  Customer loyalty build on:  Understanding of customers wants, needs and values  Interactivity with the customer in the way customer prefer

& Ogilvy & Mather 10 CRM Cycle  Assess l Who are the customers – demographics and lifestyle? l Where do they live? l What are they worth? What is their lifetime value potential? l What and how do they buy? l How can they be reached? How have they responded to promotions in the past and trough which channels they prefer to be reached?  Plan  Execute l Execution and management of the marketing campaigns and customer treatment plans. l Data gathering.

& Ogilvy & Mather 11 CRM Critical Success Factors  Architecture  Data warehouse  Data structure and architecture – 80% of the service cost  Analysis, Profiling  Customer Interaction  Sales force automation system.  Call center  The Internet

& Ogilvy & Mather 12 CRM Components  Two basic set of tools  Data collection tools  Analytical and data delivery tools  Data warehouse  Data archeology  Depth and breadth of data  Contact information  Household information  Group information  Customer history  Promotion history  Product purchase/usage history  Transaction rollup  Customer service history  Survey and customer response data  Demographic, psychographics, firmographic and/or credit data  Customer interaction information

& Ogilvy & Mather 13 CRM Components (continued)  Data extraction and cleansing  Data management and storage  Scalability and open technologies

& Ogilvy & Mather 14 CRM Environment  Applications, Platforms  Vignette, Websphere, Broadvision etc…  Communication channels  Traditional direct marketing, Electronic direct marketing, call center  Data mining, customer profile building  Data warehousing  Oracle, SQL, DB2, Sybase etc…  Data analysis and profiling  eSpective, Webtrends etc…

& Ogilvy & Mather 15 CRM Building Blocks

& Ogilvy & Mather 16 Ogilvy and CRM  Focused on CRM  Electronic Data Marketing (EDM)  M Oglivy

& Ogilvy & Mather 17 Ogilvy Interactive China and CRM  Does Ogilvy Interactive manage the relations with its clients?  How?  How can we improve?  How our competition manage the relationship with its customers?

& Ogilvy & Mather 18 The Technology road ahead 2001  Technology strategy objectives  Technology – Strategic key focus  Key technologies and skills  Training Plan  Technology Laboratory  Work with other companies and organizations  Services provided by the Technology group

& Ogilvy & Mather 19 Objectives  To be a technology center of excellence among the Interactive groups in the region and worldwide.  To excel best practices and technologies in the region and worldwide.  To be on the leading edge of the new technologies.  To be innovative.  Improve, improve, improve

& Ogilvy & Mather 20 Technology – Strategic key focus  Currently used technologies  Content Management System  Active Server Pages and Web Applications Development  Light and Medium Backend Database Development  Future technologies  Mobile  CRM  ASP Model  Consulting technologies  Heavy backend database development.  Full scale transaction based e-commerce solutions.  ERP and on-line supply chain management

& Ogilvy & Mather 21 Key Technologies and skills  Operating Systems – Linux, Sun Solaris, Windows NT etc…  Platforms and Web Application Servers – Zope, Domino, Netscape, Apache  Database – MS SQL, My SQL, Oracle, DB2  Programming – Perl, Python, C, Java, Java Script, HTML, DHTML, VBS  Tools & Utilities – WebTrends, WebBench  Technologies – CMS, CRM, E- Commerce, One-To-One

& Ogilvy & Mather 22 Training Plan The training plan for 2001 will be developed in accordance of the Technology Strategic Key Focus The training plan for 2001 will be developed in accordance of the Technology Strategic Key Focus

& Ogilvy & Mather 23 Technology Laboratory  New technologies  Skills improvement  Pet projects

& Ogilvy & Mather 24 Partnership with third parties  Heavy back-end database development  CRM, ERP, E commerce  Internship with leading Beijing Universities  Partnership with leading technology companies (such as Motorola, Nokia, IBM etc.)  Partnership with leading software companies (Vignette, BroadVision, Oracle etc.)  ASP model

& Ogilvy & Mather 25 Services Provided by Tech. Group  Content management solutions design and implementation  Front-end programming  Back-end programming  Site architecture and integration  Site hosting and administration  Internet technology and strategy consulting

& Ogilvy & Mather 26