PowerPoint PresentationAction Percent
Other 8
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Traditional giants such as IBM, Oracle and PeopleSoft
Siebel Systems, which now has a 21% share of the CRM market
E.piphany
instant chat provider LivePerson.com, Broadbase, Quintus and Firepond
plus many others.
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Customer Relationship Management
direct customer interaction
Jupiter reports that
76% of respondents say e-mail is an indispensable part of customer service.
a listed phone number (65%) and
a FAQ section (53%).
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Customer Relationship Management
That's why IDC believes the worldwide market for CRM products and services will explode to $125 billion by 2004, from $34 billion last year.
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1-6 hrs 40% 12%
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customer retention
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Current
Current
Customer Relationship Management can be simply defined as everything involved with managing the customer relationship.
The Value of the Relationship
Who Do we target
What segments match our Value Proposition
What is the best segmentation strategy for us / our industry
What is the best channel for each segment
What is the acquisition cost for a channel / segment
Do certain channels deliver certain types of customers
Cost effective acquisition
What is our average customer relationship length
How can we hold customer for as long as possible
What is the most cost effective method of retention
How many products does our average customer buy
How can we induce our current base to buy more products
Who are the prime targets for expansion
What is the cost of expansion
Duration of Customer Relationship
Islands of Automation Need To Be Bridged
$
Why CRM?
It costs six times more to sell to new customer than to sell to an existing one.
A typical dissatisfied customer will tell 8-10 people
By increasing the customer retention rate by 5%, profits could increase by by 85%
Odds of selling to new customers = 15%, as compared to those for existing customers (50%)
70% of the complaining customers will remain loyal if problem is solved
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Scope
Depth
Are we making the right level and type of marketing, sales, and service investments in each of our customer segments?
Customer Relationship
Strategies
Are we taking a holistic approach to our customers across processes and channels?
Customer Relationship
Customer Relationship
Customer Relationship Management and Shareholder Value
Customer Life Time Value (LTV) is defined by a customer’s Life Time worth to the firm and is measured by the net present value (NPV) of the cash flows generated over the Life Time of the relationship.
Cost of Service
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The Benefits of Customer Relationship Management
In addition to LTV of the customer, likelihood to recommend is another important benefit of CRM.
The customer value analysis should be performed for each segment individually. The perceived importance of price and service drivers can differ significantly by segment.
Retention
Lift/upsell
Acquisition
Customer Relationship Management
The Five Key Drivers of the Lifetime Value of a Customer
Cost of Targeting;
Cost of Acquisition;
Duration of relationship.
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Customer Relationship Management Process
The building blocks of CRM allow an organization to manage this cycle and use the knowledge on customers to enhance the Life Time value of the customer portfolio.
No organization has perfect information on its customers. Knowledge of customers is continuously enhanced through the CRM dynamic.
Capture Customer Data and Measure Results
The Customer
Take Action to
Enrich the Customer
Build and Manage
Store Data, Mine and Make Information Accessible
The CRM Dynamic
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Implementing CRM must be approached from an Integrated Perspective
All areas must be implemented, to some degree, to effectively manage the customer relationship. When pieces are implemented in isolation, the benefits are less than overwhelming.
Capture Customer Data and Measure Results
The Customer
Take Action to
Enrich the Customer
Build and Manage
Store Data, Mine and Make information Accessible
CRM without an Integrated Approach
A data warehouse full of data without the tools to extract knowledge is nothing more than expensive inventory.
Sophisticated mining tools only produce results only as good as the data they mine.
Developing insights on how to improve the value of the customer relationship without having the infrastructure to take action has no impact on the bottom line. In addition, there is no opportunity to test the ‘theoretical’ analysis.
Implementing new technologies without the knowledge on how to enrich the relationship is likely to yield a return below the cost of the capital expenditure.
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Deployment and Support
Enabling
Technologies
Data
Warehousing
Data
Capture
People
Organization
Knowledge
Management
The building blocks of CRM are the things that need to be in place for an effective Customer Relationship management program
e-Business
Customer Behaviour
Product Portfolio
Integration with company legacy platforms
Billing & Meter Reading
CRM
Technologies
Automated product and service information
WEB based sales and support through standard menus and automated help screens.
WEB based training
Increase revenue from your customer base
Customer satisfaction measure
CRM Technologies on the Rise
The implementation of CRM technologies is projected to accelerate over the next few years
“The overall use of technology for selling is growing by more than 50% annually.”
– Gartner Group
“Sales Force Automation is the fastest growing segment of the high-growth Client/server market, estimated to represent $3 billion in revenues by 1997.”
– Market Intelligence Research Corp.
“Sales Force Automation will become a major driver behind enterprise-wide BPR (inexorably linked to development of the customer-focused organization)”
– META Group
“Customer Management is a major initiative at nearly 80% of Fortune 500 companies and will grow to a $4.8 billion market by 1999.”
– Aberdeen Group, Inc.
Source: IDC 1996
(Dollars In Millions)
Product & service information, packages, prices
Marketing hints, reports, promotions
Leads tracking update, customer tracking updates
Call statistics, inquiries, etc.
Information
Call centres are a key enabling arm of Customer Relationship Management. A well designed call centre will integrate people, process, and technology to improve operational efficiency and maximize the value of the customer relationship for both inbound and outbound contact.
Call Centre
Automated Scripting of Call Handling & Wrap-up
Flexibility to Add New Products, Services, and Customer Service Opportunities
Scripted Cross-Selling
Legacy Integration
Customer Relationship Management
There is a major transition to integrated delivery channels and to provide “one face” to the customer.
Old Rule
New Rule
Paradigm Shifts
Minimal technology
Single product
Multiple products
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Sales Process Automation - Definition
Sales Process Automation (SPA) is the approach for helping organizations dramatically improve their sales and marketing effectiveness through the reengineering and automation of their sales and marketing processes, with the ultimate goal of increasing revenues. SPA combines a working knowledge of the market’s best ideas, technologies, and vendors with a practical, relentless focus on implementation to deliver outstanding shareholder and customer value.
Intranet - as an alternative sales channel
Electronic catalog - On-line self served service ordering
Commission - Effective tracking of performances and accurate commissioning
Opportunity Management - tools such as automated customer data analysis and pop-up screens will assist in up-selling
Competitor Data - effective analysis of competitive data and automated access for sales force
Contact Management - Effective tracking and follow-up of leads
Customer Data - Sales people will have a complete analysis of the customer before their eyes when attending to a customer. No wait, no repeated questions, no frustrated customers
News Service - Optional news sorting and reporting will result in informed sales people
Order Entry Quoting - On the spot quoting will not give the client a chance to shop around and be hunted
Proposal Development - Automated document creation based on corporate standards
Pricing - Automated on-line prices based on company rules
Product - On-line and easily accessed
Just-in-Time Training - Automated training, WEB based training, and self training through information sharing
Electronic Kiosk - WEB page shopping.
Basic Features
% of Survey Responses (N=295)
Improving sales force productivity and effectiveness by implementing field technology is a key goal for many organizations
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e-Business - Definition
e-Business is all about integrating the internal and external processes between business partners and customers.
Business Processes
Business
Solutions
Integrating more directly with the business processes of customers and partners
Tailoring products and services to customers needs and values
Business
Processes
Business Partner
e-Business - Benefits
On average, it costs about $5 - $50 per query to support via phone
On average, it costs about $1 - $3 per query to support via E-mail
On average, it cost less than $1 per query to support via WWW
Internet technology can improve the level of customer care, while reducing the cost of maintaining the customer base.
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For both business-to-business and business-to-consumer sales, there are five key elements to
e-Business — product offer, order capture and validation, payment processing, order
management, and product fulfillment.
Inventory management
Order tracking
Customer preferences
4. Order Management
5. Product Fulfillment
Customer Relationship Management is an integral part of successful convergence
Network Management Systems
Enterprise Management Systems
Service Management Systems
Customer Management Systems
Business Management Systems
CRM Marketplace - Fast Growth To-Date with a Bright Future
Worldwide Front-office Applications, 1998, US$b
Vendor Revenue (Software and Services)
The software and service revenue from
CRM vendors will reach $19 billion by
2003 (0.6 probability).
53.9%
22.4%
18.5%
6.0%
39.5%
30.0%
$1.46
$2.02
$0.83
$2.02
$1.52
$1.83
$5.33
$5.49
$1.83
$3.70
$2.53
$2.18
The CRM Market - No Clear Market Leader
60% of the $2.0B CRM software license market is controlled by 3 vendors
Siebel
Trilogy
Baan/Aurum
60% of the Top 3 share is controlled by Siebel
No vendor will have complete CRM functionality until 2003 (Gartner)
The 1998 consulting market for CRM is estimated to be $4.0B (2:1)
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Enterprises or Divisions of Large Enterprises
Tier 1: CSS Applications for
Large Enterprises
assets
(3) Broadway & Seymour: Banks only
(4)
Chordiant
function sets
applications license revenue and strategy is uncertain
(a) GWI: Lotus Notes platform
(b) Many mid-market ERP vendors express a vision of creating
full-featured CSS applications, but have not executed yet
ERP
Vendors
(7)
Clarify
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1100 Screens
Current Information
Improve Forecasts
Enterprises or Divisions of Large Enterprises
Tier 1: CSS Applications for
Large Enterprises
assets
(3) Broadway & Seymour: Banks only
(4)
Chordiant
function sets
applications license revenue and strategy is uncertain
(a) GWI: Lotus Notes platform
(b) Many mid-market ERP vendors express a vision of creating
full-featured CSS applications, but have not executed yet
ERP
Vendors
(7)
Clarify