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Brief description of the CRM system in Vodafone. Suitable for CRM project during MBA. Watch in SLIDESHOW (F5).
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CRM System in VODAFONE
Under guidance of Dr Chabbi Sinha Chavan
SECTION 2BAnand Tuteja-40
Ankuj Chaudhury-42Sunil Albal-61
Nandita Katiyar- 54Raswinder Singh-31
Rupal Nimbhorkar-33Shoumen Choudhury-58
I. Introduction – Vodafonea. Company Profileb. Vodafone in Indiac. Market Shares in India
II. Gartner’s Eight Building Blocksa. CRM Visionb. CRM Strategyc. Valued Customer Experiencesd. Collaborative Effortse. CRM Processf. CRM Informationg. CRM Technologyh. CRM Metrics
AGENDA
III. Benefits to Vodafone from CRM
IV. Issues Faced in CRM Implementation
a. Programb. Peoplec. Processesd. Technology
V. Consumer Research
VI. Best CRM Practices in the Industry
I. INTRODUCTION
Name VODAFONE comes from “Voice”, “Data” & “Phone”
Largest telecom company in the world (turnover)
2nd largest telecom company in the world (subscriber base) after China Mobile
Public limited company
Operations in 31 countries & partner networks in another 40 countries
Listed on NYSE
Founded : 1983 as RACAL TELECOM, Demerged from Racal Electronics (parent
company) in 1991 and named VODAFONE
HQ : Newbury, England
Revenues : US $ 69 bn (2008)
Profits : US $ 6.75 bn (2008)
Employees : ~ 79,000 Source :
WIKINVEST
COMPANY PROFILE
2005 : Acquired a 10 % stake in Bharti Airtel
2007 : Acquired a controlling 67 % stake in Hutchinson Essar for US $ 11.1 bn.
Sold back 5.6% of its Airtel stake back to the Mittals & retained 4.4%
In September, Hutch was rebranded to Vodafone in India.
Source : WIKINVEST
Vodafone UKVodafone EssarVodafone AustraliaVodafone IrelandVodafone New ZealandVodafone EgyptVodafone Italy
Vodafone SpainVodafone PortugalVodafone TurkeyVodafone GermanyVodafone NetherlandsVodafone HungaryVodafone Sweden
Important Subsidiaries :
VODAFONE IN INDIA
Airtel 24%
Vodafone18%
BSNL / MTNL13%
Tata 9%
Idea11%
Aircel5%
Reliance19%
Others1%
MARKET SHARE IN INDIA
Source : TRAI Report JUN’09
VODAFONE’S OFFERINGS
Enterprise Central
Telecom Management
Global Device Portfolio
Managed Mobility Services
Mobile Money Transfer
Vodafone Live
Vodafone Mobile Connect
Vodafone Connect to
Friends
Vodafone Passport
Vodafone Freedom Packs
Vodafone At Home
Vodafone Media Systems
Source : vodafone.com
1 2 3 4
5 6 7 8
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1st Block CRM Vision
2nd Block CRM Strategy
3rd Block
Valued Custome
r Experien
ce
4th BlockCollabora
tive Efforts
5th Block CRM Process
6th BlockCRM
Information
7th BlockCRM
Technology
8th Block CRM Metrics
II. GARTNER’S MODEL
Snapshot
(i) CRM VISION
CUSTOMERS FOR LIFE !
To earn our customers' loyalty, we will anticipate their needs and act to create superior value in their eyes.
We want to be known for Cons i s tency
Re l i ab i l i t y
F lex ib i l i t y
Respons iveness
I nnova t i ve Se rv i ces
We will make this happen in an enriching environment of trust, cooperation and mutual respect.
VODAFONE’S CRM PHILOSOPHY
Involving Customers as Co-innovators
(ii) CRM STRATEGY
5 POINT STRATEGY FOR
CRM IMPLEMENTATION
BROAD CRM OBJECTIVES
EnrichingService
Experience
VODAFONE’S CUSTOMER STRATEGY IN INDIA
(iii) VALUED CUSTOMER EXPERIENCE
Vodafone has taken advantage of strong presence of Hutch Essar in Metros.
It has LEADERSHIP IN CONTRACT SEGMENT.
It has STRONG CUSTOMER FOCUS
Mass market PREPAID FOCUS : e.g. low value 10/- sachet recharge.
Innovative Value Added Services :
Easy e-recharge
E-recharge using SMS
Premium SMS
Ringback Tones
International Voice & Data Roaming
Vodafone plans to bring ULTRA LOW COST handsets to India.
Introduced VODAFONE LIVE! In India.
Introduced BALANCE TRANSFER for the first time.
Introduced UNIQUE OFFERS FOR MULTINATIONAL CORPORATE ACCOUNTS.
Introduced SINGLE BILLING SYSTEM in 2007.
Comprehensive approach across call centers, retail, internet & automated systems.
Industry leading PROCESS IMPROVEMENT based on extensive customer research.
(iv) COLLABORATIVE EFFORTSThe program was built on 4 major pillars :
Strategy
I T
Culture
ProcessCOLLABORATIVE EFFORTS
Senior Managers of Vodafone personally supervised the FEEDBACK COLLECTION from customers which they used to prioritize customer related issues, and reinforced the CRM vision of “ANTICIPATING NEEDS & THEREBY CREATING SUPERIOR VALUE”.
INDUS TOWERS are operating at 95,000 sites !Network Expansion : 2,600 sites per month !Vodafone is committed to its objective of providing low cost services to its customers. For this it is expanding network aggressively to reduce its total cost of network ownership.
Vodafone’s ability to chart out an average life cycle allows it to market different services. It prospects aggressively through advertizing.
2nd stage combines provisioning and verification. Vodafone activates a customers account and makes a first rating of the customer based on the application.
Vodafone’s well planned welcome process includes a call informing clients of the Vodafone help line & various value added services. At the end of this stage their first
bill is generated.
(v) CRM PROCESS
The first collection marks the start of up-selling and cross selling. Analytical module steps in, CRM has to make every attempt count since clients can only be approached
only a fixed number of times.
This stage may see a client wishing to leave. To keep churn down , Vodafone uses retention policies and loyalty processes to bring clients back to the fold. Many clients
are won back.
(vi) CRM INFORMATION
Custom analytics provide meaningful insight for personalized customer communications & interactions. Now, VODAFONE can:
Identify customers’ value segments
Understand customer needs and preferences
Create targeted marketing & sales campaigns for specific customer segments
Monitor customer responses
Apply experience to future campaigns
Steer customers’ buying behavior
(vii) CRM TECHNOLOGY
ProfileAffiliates
Credit ProfileOrg. Structure
SRs
Sales PipelineCustomer PipelineQuantity Pipeline
Loss AnalysisConversion Ratio
Applications
ProfilePersonal Profile
Credit ProfileSRs
PricingPrice Components
Taxes
(vi) CRM METRICS1. Cases closed same day.
2. Number of cases handled by agent.
3. Number of service calls.
4. Average time for resolution.
5. Average number of service calls per day.
6. Percentage of service renewals.
7. Customer satisfaction level. (CLTV)
8. Complaint time-to-resolution.
9. Average number of service requests by type.
10. Percentage compliance with service-level agreement (SLA).
11. Revenue coming from Commercial Partners.
12. Complaints handling (e-mail/letter).
13. Brand image.
14. Customer Categorization.
Year 0 Year 1 Year 2 Year 3 Year 4
Number of Customers 100 90 80 72 60
Revenue / Customer 1,200 1,320 1,440 1,500
Variable Cost / Customer 840 864 900 912
Margin / Customer 360 456 540 588
Acquisition Cost / Customer 100 - - - -
TOTAL PROFIT -10,000 32,400 36,480 36,480 35,280
Present Value -10,000 29,455 30,150 27,410 24,100
CALCULATING CUSTOMER LIFETIME VALUE
CLV = ∑
Where m = margin for time t
i = discounting rate for time t
If margins and retention rate stay constant over time then :
mrt
(1+i)t
∞
t=1
CLV =
Where is the margin multiple.
m r ( 1 + i – r )
r ( 1 + i – r )
10% 12% 14% 16%
60% 1.2 1.5 1.11 1.07
70% 1.75 1.67 1.59 1.52
80% 2.67 2.5 2.35 2.22
90% 4.5 4.09 3.75 3.46
Discount Rate
Margin Multiple :
Retention Rate
800 – 2000 /- for 10 consecutive months
> 2000 /- for 10 consecutive months
200 – 800 /- for 10 consecutive months
< 200 /- for 10 consecutive months
CUSTOMER CATEGORIZATION
III. BENEFITS ACHIEVED
The main and overall result is that the new CRM solution has helped Vodafone to REDUCE ANNUAL CUSTOMER CHURN BY ~ 7 %. ASIAN E-BUSINESS MARKET WATCH
CRM solution has helped Vodafone employees to synchronize & coordinate all customer interactions across multiple channels, including telephone, e-mail, face to face, post & fax.
The CRM solution has also enabled employees to improve customer service, increaseproductivity and maximize revenues.
The workflow automation capabilities of the CRM solution have enabled the company to manage each and every one of these calls efficiently and professionally. Sales agents are now automatically connected to customers and prospects based on product & service expertise, named account, availability and geography. They can also check the status of a calling subscribers’ request or inform him/her of the status of the request.
Call scripting and profiling further improved agent productivity. A workflow-based user interface presents the appropriate questions and information as needed, guiding agents through a sequence of steps based on customers’ individual requirements.
IV. ISSUES FACED
PROGRAM•Difficult to change existing technical and organizational structures
PEOPLE•Need to work harder to create processes and re-engineer systems around new implementation.•Training for all related employees.
PROCESS•Integration of services across all 23 circles.•Maintaining existing service levels at the time of transition.
TECHNOLOGY•Integration of independent systems.•Porting data from each system which went into terabytes.•Design proper work flow automation.•Facilitating and enabling knowledge sharing.
Monitoring how customers interact using various modules of CRM.
Visibility of business transactions across India.
Monitor Service Level Agreements.
Maintenance and modification of CRM system.
Inconsistent data flow sometimes.
Change Management.
Aligning CRM to Vodafone’s vision and growth objectives.
Finding the right CRM managers in India.
ISSUES FACED POST IMPLEMENTATION
V. CONSUMER RESEARCH
20 Vodafone customers were surveyed. Response format chosen : 5 point likert scaleRESULTS : 50% rated promptness of service at 5. Satisfaction levels were rated 5 by 65%. No. of calls before problem is sorted
1 to 2 calls by 60%> 2 calls by 20% (area of concern)
20% people complained that they were charged for services they had not subscribed.
Team Work Simplicity Effective
Communication
Staff Empowerment
Process Automation
Defining & Mapping Data Requirements
Proper Data Collection
Data Standardization
Integrated Customer Strategy
Customer Engagement
Programs
Continuous Monitoring
Developing Successful
Metrics
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VI. BEST CRM PRACTICES
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THANK YOU