Customer Relationship Management Prepared by: Larry Eisenberg Ron Fogarty Doug Marren.
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Transcript of Customer Relationship Management Prepared by: Larry Eisenberg Ron Fogarty Doug Marren.
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CCustomer ustomer RRelationship elationship MManagementanagement
Prepared by: Larry EisenbergRon FogartyDoug Marren
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Greenberg, Paul, CRM at the Speed of Light, McGraw Hill 2001
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Objective of Customer Objective of Customer Relationship Management Relationship Management
(CRM) Presentation(CRM) Presentation
Why topic is important to GM’s Define CRM Present a real world CRM case Learn about best practices to
implement CRM
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What Makes CRM What Makes CRM Important to GM’s?Important to GM’s?
Worldwide CRM Spending, in 2002, is estimated to be $14 billion and $20 billion for 2005 (1).
Why is spending increasing? Because being “customer centric” through technology increases revenues, cuts costs, and offers strategic competitive advantages.
Your company may have or will implement some CRM applications. As a result of change, or potential change, let there be understanding.
(1) Source: Aberdeen Group, July 2002
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What is CRM?What is CRM?
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2 Part Answer:2 Part Answer:
1. CRM Is a Business Strategy: Focus on profitability, revenue and customer satisfaction by:
– Organizing your customers.– Fostering customer-satisfying behaviors and
implementing customer centric processes.
2. And Also A Technology: Should enable greater customer insight, produce more effective customer interactions and should integrate of all customer channels and back-office functions.
Ed Thompson, Gartner Group, CRM: The Past, Present and Future: YEA Presentation 03/2002
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CRM GoalsCRM Goals
Cut Internal Costs– Improve your Processes
Ex: Remove customer hold times. Centralize data from every department
Increase sales– Automate the sales process– Perform more lucrative marketing campaigns
Gain A Competitive Advantage– Ex: Amazon.com Data Mining
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Traditional Customer Facing Traditional Customer Facing SystemsSystems
Data centerData center
DataCenterData
CenterData
CenterData
Center
SalesContact Center Service
CustomerCustomer
Marketing/AdvertisingMarketing/Advertising
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ContactCenter
ServiceSalesCustomer
DataWarehouse
DataWarehouse
DataWarehouse
Data
Warehouse
Patricia Seybold, An Executive’s Guide to CRM: How to EvaluateCRM Alternatives by Functionality, Architecture & Analytics, March 2002, pp 7-10.
Marketing
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With This Strategy:With This Strategy:
From a Customer-Viewpoint:– We present One Face to the Customer
From a Knowledge-Viewpoint:– We become more efficient.
If HP knew what HP knows, we would be three times as profitable.
From a Campaign Management-Viewpoint:– We target advertise based on demographics
Charles Despres and Daniele Chauvel, “How to Map KnowledgeManagement” Mastering Information Management, Prentice Hall 2000, pg 170
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Sales Force AutomationSales Force Automation
Contact Management Name, address, titles, etc.
Account Management Corporate Information
Sales Process Management A map that shows every step of sales process
Communication Tools generate quotations, proposals, trip reports, expense
reports, etc.
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SFA SFA continued…continued…
Store competitive information. Track customer and territory performance.Customer Interfacing Information
– When your customer called in for: help, orders, asked for on-site assistance, checked
order status.
Can see data from web access– e-Purchases, e-troubleshooting, etc.
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Contact CenterContact Center
Contact Center Applications:– Telephony Applications for service, sales and
marketing. Automated prompting software that helps the agent
solve the customer’s problems.
Centralized Database contains outside sales’ quotations, proposals, trip report, etc.
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Ex: Soffront SFAEx: Soffront SFA
www.soffront.com/ppdemos, viewed 27 September 2002
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Campaign Management with Campaign Management with CRMCRM
Creating Personalized Marketing Efforts – Helps retain good customers.
And reduces costs of new acquiring new customers.
– Identifies customers that are about to take their business elsewhere.
Plan and monitor all marketing activity from beginning to end.
Greenberg, Paul, CRM at the Speed of Light, McGraw Hill 2001
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Ex: Campaign ManagementEx: Campaign Management
Ex: Annual Marketing Budget is $12,000,000/year
10 Million customers in database:
Option 1: mail everyone: $.30/mailing = $3,000,000 * 4 mailings per yr.
campaign cost: $12,000,000 campaign results: $50M in revenue
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Ex: Campaign Management Ex: Campaign Management cont…cont…
Option 2: Make educated guess of who to mail to:
Deduce 6 M of 10M people should receive:6,000,000 * $.30 = $1.8M * 4 = $7.2 MCampaign Results: $50M in revenue
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Ex: Campaign Management Ex: Campaign Management cont…cont…
Option 3: Data Mine and Build a Model:Deduce only 3M of 10 M should receive3,000,000 *$.30 = $900,000 * 4 = $3.6M
Comparing Option 1 to Option 3: $8.4M savings to generate same revenue.– You are the company hero.
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In SummaryIn Summary
At the end of the day, it’s about being customer-centric.– Improve business deficiencies– Get a sales lift from existing customers– Find new customers
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Why Retain Customers? Why Retain Customers?
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source: Intermedia Interactive Solutions, www.intermediainc.com, viewed 11/2/02
Why Retain Customers?Why Retain Customers?
A 5% increase in customer retention can improve business profitability by 50%.
It costs 7 to 10 times as much to get a new customer as keep a current one.
A 2% loyalty increase can translate into a 10% across-the-board cost saving.
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source: Larstan Business Reports, www.larsten.net, viewed 11/2/02
Why Retain Customers?Why Retain Customers?
Recession Survival– In a down economy, repeat business is the most
secure and profitable source of revenue
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source: www.marketingprofs.com, viewed 10/23/02
Why Retain Customers?Why Retain Customers?
Repeat Customers Buy More– Research shows that the longer customers stay
with a firm, the more they spend per transaction
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source: www.marketingprofs.com, viewed 10/23/02
Why Retain Customers?Why Retain Customers?
Company Reputation– High retention rates enhance the firm’s
reputation within the industry and among potential customers
– Word of mouth marketing
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source: Susan Keaveney, Denver Business Journal, 4/8/02
Why Retain Customers?Why Retain Customers?
Repeat Customers are Forgiving– Loyal customers tend to be more understanding
when problems develop.
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source: www.marketingprofs.com, viewed 10/23/02
Why Retain Customers?Why Retain Customers?
Improved Morale and Productivity– Employees will be more satisfied, and in turn
more productive.
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CRM SpendingCRM Spending
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CRM Spending: Current / FutureCRM Spending: Current / Future
(1) Source: Aberdeen Group, July 2002
The CRM Market (2001 - 2005)
13,500 13,750 15,40017,500 19,600
05,000
10,00015,00020,00025,000
2001 2002 2003 2004 2005
US
$M
illio
n
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CRM Spending by IndustryCRM Spending by Industry
2002 Spending• Manufacturing $ 1.7 billion• Financial Services $ 1.4 billion• Retail and Distribution $ .95 billion• Business Services $ .78 billion• Government and Education $ .58 billion
(1) Source: Aberdeen Group, July 2002
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Source:Patricia Seybold Group, An Executive's Guide to CRM, 3/2002, p. 11
Suppliers of CRMSuppliers of CRM
Leading CRM Suite Suppliers– Oracle– PeopleSoft– SAP– Siebel
Small to Medium Enterprise Supplier– Front Range Solutions
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Source: Giga Information Group, YEA presentation, 3/02
Giga slideGiga slide
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Source: 2002 CRM Solutions Guide, June, 2002, www.crmguru.com, viewed November 1, 2002
OracleOracle
Over $9.4 billion annual revenue
World’s largest information software provider
Strong in ERP market
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Source: 2002 CRM Solutions Guide, June, 2002, www.crmguru.com, viewed November 1, 2002
PeopleSoftPeopleSoft
$2 billion annual revenue
ERP and CRM provider
CRM suite of over 22 products
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SAPSAP
$2 billion annual revenue
International business software provider
ERP and CRM provider
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SiebelSiebel
$1.7 billion annual revenue
Leader in High-end CRM market
Leads industry in specific application suites
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--
Small-Medium Enterprise CRM solution– Pioneered Sales Force Automation
Goldmine Front Office– Sales Force Automation
Heat– Customer Service
CustomerIQ– Web-based CRM
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Case Study - MotomanCase Study - Motoman
CRM Solution – Clarify CRM Suite
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General PurposeGeneral PurposeWorld SolutionsWorld Solutions
Clean Room Clean Room
Motoman
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Motoman, Inc.Motoman, Inc.
Headquartered in West Carrollton, OH.420 EmployeesAnnual Sales of $115M in North America30-40 different types of RobotsCustomers – Concentration on integrators
with specific market capabilities.
Gary Pope – Director of IT; Motoman, Inc. phone interview 23 Oct 2002
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Motoman Motoman continued…continued…
Gary Pope – Director of IS– Responsible for IS, telecommunications,
security systems.– Reports to the CFO– CFO Reports to the CEO– No IT outsourcing whatsoever.
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Annual BudgetAnnual Budget
IT Annual Budget– Expenses: $2.4M
Of that $1M of that is capital depreciation $700k: Manpower related – salaries, insurance, etc.
– Capital: $500k
Case Study: Motoman
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IT StaffIT Staff
10 people– Including Gary Pope, the Director of IS– 3 Programmers (at time of installation)– 6 individuals to provide desktop support,
telecommunications, network.
Case Study: Motoman
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Reasons for CRMReasons for CRMData securityWanted to more effectively communicate
with customerIncrease in Productivity/Efficiency
Case Study: Motoman
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IT’s Role In CRMIT’s Role In CRM
IT Assisted during evaluation and took lead during implementation.
CRM Evaluation Program Leader– Determined who Motoman should use, to what
extent it should be implemented.
Case Study: Motoman
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Prospective VendorsProspective Vendors
After a year of evaluation, it came down to:– Siebel, Clarify, PeopleSoft/Vantive, SAP
Toss-up between Clarify and PeopleSoft Finally selected Clarify’s CRM Package. Motoman evaluation team made the final decision.
Case Study: Motoman
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CRM CostCRM Cost
Clarify - $343,000– Includes: Software, license for 100 users,
Maintenance
External Consulting – $250,000, – 312 man days, 4 month schedule
Plus additional $80,000 from Clarify– Training for Integrator
Case Study: Motoman
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Clarify CRM ComponentsClarify CRM Components
Customer Service:– Helpdesk – ClearSupport: tracks cases – ClearLogistics: Field Operations, Depot Repair, Order
Operations.
Sales Force Automation Tools– ClearSales – Trip Reports – Traveler
Case Study: Motoman
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TimelineTimeline Timeline:
– Selection process – approx. 1 year.– Internal Audit – 6 months– February 2001
Purchased software, hardware and put out contract for the integration
9 July 2001 – Customer Service Group go-live date.
1 August 2001– Sales Force go-live date.
Case Study: Motoman
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ImplementationImplementation
Hired an integrator to help installTried to keep customization low
Wanted future software releases to still function. Quicker, cheaper.
– Some minor items had to be modified within the program.
Pull-down menus, options, etc.
Case Study: Motoman
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Implementation Implementation cont…cont…
This integrator had never implemented Clarify before.– This was known ahead of time.– Wanted to have opportunity to learn Clarify.– $330k cost incurred to use them.
Would have cost an additional $200k-$300k to go with a consultant that had the experience.
Case Study: Motoman
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Where The Program Falls Where The Program Falls ShortShort
Poor Ongoing Support from Clarify– Lack of support due to change of ownership that
occurred twice during Motoman’s implementation process.
– Clarify’s lack of focus on Motoman as a Customer Motoman paid for the system before the first sale of the
company occurred.
Field Sales force is not synchronizing reliably due to software bug.– Lack of development effort to correct synchronization
process.Case Study: Motoman
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Satisfaction LevelSatisfaction Level
From Customer Service view: Very satisfied.
Sales Force view: Not satisfied due to synchronization problems.
Upper-management: Not satisfied due to fragmented report content.
Case Study: Motoman
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8 Critical Success8 Critical SuccessFactors for Successful Factors for Successful CRM Implementation….CRM Implementation….
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According to the Gartner Group, 60% of companies implementing CRM in 2002 will fail—and that’s
expected to rise next year.
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8 Critical Success Factors…
1. Get Executive support up front◊ Any strategic initiative will need top down support
◊ Considerable financial investment
2. Establish measurable business goals◊ Sounds easy but often overlooked
◊ Goals should be measurable◊ Will better define needs
Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)
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8 Critical Success Factors…
3. Align Business & IT Operations◊ Requires the partnership of business sponsors and technical personnel.
4. Let Business Goals Drive Your Functionality
◊ All configuration decisions need to be based on business goals. If a feature doesn’t directly help your business goal, you probably don’t need it.
Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)
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8 Critical Success Factors…
5. Minimize customization◊ Number one reason for budget overruns and missed deadlines. ◊ Seek out-of-box functionality that fits your needs.
6. Actively involve end users in design
Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)
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8 Critical Success Factors…
7. Use a phased rollout schedule◊ Quicker ROI—get that first win.◊ Apply what you learn to subsequent phases ◊ Easier on resources (capital, training, personnel)
8. Measure, monitor, and track◊ Hard to measure without clear objectives◊ Survey customers◊ Share feedback with stakeholders
Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)
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CRM is about being customer centric, using technology to enable that strategy, with the goals of growing your business, cutting costs, and/or gaining a business
advantage