Customer Relationship Management (CRM)

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Customer Relationship Management (CRM). Nancy Prives Julien Couilloud Eric Meyer Jon Stegen April 22, 2004. Agenda. Introduction of CRM Discussion of CRM Components Critical Success Factors for CRM Implementation of CRM Case Study of Nexstar Conclusion. What is CRM?. - PowerPoint PPT Presentation

Text of Customer Relationship Management (CRM)

  • Customer Relationship Management(CRM)Nancy PrivesJulien CouilloudEric MeyerJon Stegen

    April 22, 2004

  • AgendaIntroduction of CRMDiscussion of CRM ComponentsCritical Success Factors for CRMImplementation of CRMCase Study of NexstarConclusion

  • What is CRM?CRM isa long-term commitment, best when initiated in a well-defined scope and with clear objectives, and then slowly grown and expanded as successes and failures are realized.

    Kay Mandati, Relationship Manager for BMW North America

    McKim, Bob, The differences between CRM and database marketing Journal of Database Management, Vol. 9, 4, July 2002, pp. 371 375.

  • What is CRM?CRM is not a tool or a technology; it is a business practice that utilizes technology and requires organizational evolution.

    Joe Rapolla, CRM Manager for Venvidi Universal Music Group

    McKim, Bob, The differences between CRM and database marketing Journal of Database Management, Vol. 9, 4, July 2002, pp. 371 375.

  • CRM DefinedCRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty. True CRM brings together information from all data sources within an organization (and where appropriate, from outside the organization) to give one, holistic view of each customer in real time.

    What is CRM? from www.destinationcrm.com/articles/default.asp?ArticleID=1747 , viewed 3/11/04

  • What CRM is Not

    A Database Marketing SystemA Software PackageA Pure Marketing StrategyA Pure IT Strategy

    What is CRM? from www.destinationcrm.com/articles/default.asp?ArticleID=1747 , viewed 3/11/04 and Howlett, Dennis, and Keith Rodgers, What is CRM? from http://www.destinationcrm.com/articles/default.asp?ArticleID=3293 , viewed 3/11/04

  • Why CRM?Higher costs associated with getting new customersFive to oneIndustrial sales: 8-10 calls vs. 2-3 callsMarketing for Web customers: $34 vs. $6.80

    Better to retain customers & build loyaltyUp-sellCross sell

    Howlett, Dennis, and Keith Rodgers, What is CRM? from http://www.destinationcrm.com/articles/default.asp?ArticleID=3293 , viewed 3/11/04 and Byun, Jongbok and Paul Gray, Customer Relationship Management from http://crm.ittoolbox.com/documents/document.asp?i=2629 , viewed 3/11/04

  • Size of CRM Market

    Chart1

    2.243.271.310.12

    3.155.41.610.21

    4.457.91.980.38

    6.2711.52.440.68

    8.8516.831.2

    12.4726.543.692.14

    17.5941.944.543.8

    Aberdeen Group

    AMR Research

    Forrester Research

    Yankee Group

    Year

    Billions of $

    Sheet1

    1999200020012002200320042005

    Aberdeen Group2.243.154.456.278.8512.4717.59

    AMR Research3.275.47.911.516.826.5441.94

    Forrester Research1.311.611.982.4433.694.54

    Yankee Group0.120.210.380.681.22.143.8

    Sheet1

    Aberdeen Group

    AMR Research

    Forrester Research

    Yankee Group

    Year

    Billions of $

    Sheet2

    Aberdeen Group

    AMR Research

    Forrester Research

    Yankee Group

    Year

    Billions of $

    Sheet3

  • Size of CRM MarketHewson Group reported $8.8 billion in 2003Aberdeen Group projects $17.7 billion in 2006Key point to remember: market is in the billions

    http://www.crm2day.com/library/EpZZEEuEluLDzGsHRc.php , viewed4/10/04 and http://www.destinationcrm.com/articles/default.asp?ArticleID=3293 , viewed 4/15/04

  • CRM VendorsSiebel SystemsPeopleSoftOracleNortel Networks (Clarify)SalesLogixE.piphany

    http://www.crm2day.com/library/EpZZEEuEluLDzGsHRc.php , viewed 4/10/04 and http://www.destinationcrm.com/articles/default.asp?ArticleID=3293 , viewed 4/15/04

  • Dealing with Channels

    Phone

    ATM

    Internet

    Teller

    Personal banker

    Mail

  • End to End CRM InfrastructureDyche, Jill, The CRM Guide to Customer Relationship Management, Addison-Wesley, Boston, 2002

    Integrated database

    Sales

    Billing

    Accounts

    Call center

    Business Intelligence

    Process Improvement

    Refined Business Processes

    Call Center

    Fax

    Direct Sales

    Store

    E-mail

    Web Access

    .

  • Scope of CRMCRM modules:Sales Force Automation Marketing AutomationCall centerAnalytics/Datamining

  • Sales Force AutomationContact managementName, address, phone number Organization charts, behavior characteristics

    Account ManagementMultiple links to other information

    Opportunity ManagementSpecific opportunitiesSales rep working on caseAssigned revenue creditPotential for closingCompetition

  • ContdExample: Contact Management

    Saleslogix.com

  • ContdSales forecasting

    Saleslogix.com

  • SFA Benefits$$Increase revenue/reduce costsCustomer retentionThrough relationshipSynchronizationUp to date info everywhere

  • Marketing Automation (EMA)e-version of marketing campaignsExecuteMonitorRefine

  • Traditional Marketing CampaignGreenberg, Paul, CRM at the speed of light, Mc Graw-Hill, California 2001.

    Marketing Campaign

    Registr.

    Campaign Refinement

    Other

    Marketing Campaign

    Other

    Phone

    Email

    Phone

    Email

    Registr.

    Campaign Refinement

    Time

  • EMAGreenberg, Paul, CRM at the speed of light, Mc Graw-Hill, California 2001.

    E-Marketing Campaign

    EMA tools Campaign refinement

    Direct mail

    Feedback

    Registr.

    Phone

    Email

    Refinement

    Refinement

    Feedback

    Feedback

    Time

  • Application courtship process:Offer incentive to receive emailTeach customer about product & serviceReinforce incentiveOffer additional incentives = more permissionsLeverage permission to change consumer behavior

  • EMA BenefitsInformation gathering, extraction, and analysis reducedRefinement of campaign in midstreamFree up labor

  • Call CentersCustomer Service Counter

    Helpdesk

    Call Center

  • ExampleGreenberg, Paul, CRM at the speed of light, Mc Graw-Hill, California 2001.

    1

    2

    3

    4

    5

    Customer Profile

    CRM Server/datawarehouse

  • FunctionalitiesAutomated Intelligent Call RoutingIdentify who is calling and whyUse caller historyRoute the caller

    Workforce Management SoftwareCall volume forecastAgent scheduling

  • Call Center BenefitsService ConsistencyCall-scriptingMonitoringFeedback on serviceCSR efficiencyCost cuttingTime spent reduced

  • Analytics/Data miningHow to get a single version of the Customer Truth ?Greenberg, Paul, CRM at the speed of light, Mc Graw-Hill, California 2001.

    MARKETING

    CONTACT CENTER

    SFA

    Customer contactCorporate contactProduct listSales revenuesPayment data

    Sales revenuesCustomer segmentsPromotion historyCampaign responseCustomer score

    Customer contactsTrouble-ticket historySurvey responsesPayment data

  • Need for integrationRisk of CRM stovepipesEx: Client receives cross sell promo after complain

    Motivating customer to come back?Preferred productsConsumption rateValuesLifestyleLife stageBehavior outside your company

    Impossible with information snapshots!Build central data warehouse

    Dyche, Jill, The CRM Guide to Customer Relationship Management, Addison-Wesley, Boston, 2002

  • Need for analysisDyche, Jill, The CRM Guide to Customer Relationship Management, Addison-Wesley, Boston, 2002. Dont let your data seat in a data warehouse! Use software solution for analysis

    Operational CRM-Activity Mgt- Contact Mgt- Campaign Mgt- Pricing-Customer support

    Enterprise data

    Analytical CRM

    Work Force Optimization

    Customer profiling

    Customer segmentation

    Channel analysis

    Churn analysis

    Risk scoring

    Campaign measurement

    Prospect qualification

    Revenue analysis

    Non CRM data:- ERP- Financial- Billing

  • Implementation rate42% of CRM licenses not installedDiscountsImplementation (5 times cost of license)Maintenance costs (1/4 of license cost/seat)Inadequate resources

    Martin Schneider, Customer Relationship Management, 2004

  • Success rate5 years agoHigh failure rate (70% Tafti, 2002)Reason: Boil the ocean! + Techno first

    TodayMost projects see payback

  • Critical Success FactorsPlanning & setting the directionCRM-focused visionReasonable & specific expectationsReasonable & specific time tableExplain importance & relevance of CRMNeed support & involvement of managementNeed support & involvement of staff

    Dyche, Jill, The CRM Guide to Customer Relationship Management, Addison-Wesley, Boston, 2002.Gordon, Ian. Best Practices: Customer Relationship Management Ivey Business Journal Online, 2002, pp. 1-6.Swift, Ronald, Accelerating Customer Relationships: Using CRM and Relationship Technologies, Prentice Hall PTR, Upper Saddle River, 2001.

  • Critical Success FactorsPlanning & setting the direction (Cont.)Resource allocationAlign individual goals with CRM goals

    Dyche, Jill, The CRM Guide to Customer Relationship Management, Addison-Wesley, Boston, 2002.Gordon, Ian. Best Practices: Customer Relationship Management Ivey Business Journal Online, 2002, pp. 1-6.Swift, Ronald, Accelerating Customer Relationships: Using CRM and Relationship Technologies, Prentice Hall PTR, Upper Saddle River, 2001.

  • Critical Success FactorsService & communication managementHigh quality service for customersHigh quality support for employeesCommunication integration

    Dyche, Jill, The CRM Guide to Customer Relationship Management, A