What is CRM? Created August 5, 2004 Core Principles Clients are focusing on the top line by focusing on their customers. Revenue -Expense $Profit$ Revenue -Expense $Profit$ Why CRM? Three ways to increase profitability of customer base: 1.Acquire more customers 2.Optimize value of existing customers 3.Retain right customers longer Core Principles Evolution of CRM in the Marketplace. Product Centric Customer Centric Offering Products Solutions Measurement Cost Profitability Process Focus Internal Customer Segmentation Broad Granular Outcome Customer Acquisition Customer Retention Selling Model Formula Consultative Service Model Reactive Proactive Interactive Core Principles Customer Relationship Management (CRM) places greater emphasis on the customer during the lifecycle of a business relationship. There are three central components to CRM, all of which work in concert: Market Serve Sell Key Questions Each component of the CRM Triad comes with key questions: •Marketing •What are my customers buying? •How do I need to change my products to convince my customers to buy them? •Sales •How do I learn more about my customers to facilitate selling? •How do I sell more efficiently (better, faster, more)? •How well am I selling compared to my goal? Others? Competition? •Service •How can I better serve my customers to foster loyalty and retention? Customer Lifecycle A strategy is needed to guide how customers are managed over the course of the customer lifecycle Four Phases of the Customer Relationship Target Customers Who do we want to target? What segments are the most profitable?  How do we leverage customer relationships to build brand?  How do we reach our customers?  What to we spend on targeting customers?  How do we improve our hit rate?   Acquire Customers  What is the best channel for each segment?  What channels do our customers want to use? When? Why?  What is the acquisition cost for a channel / segment?  Should we be worrying about retaining existing customers more than getting new ones?  What channel approach is most effective? Retain Customers  What service levels are required by each customer segment  What is the best way to provide service to each segment?  What is the impact of service on retention and expansion?  What does it cost to service our customers? Is it justified by their value?  How can we improve retention? Expand Customers  How many products does our average customer buy ?  How can we induce our current base to buy more products?  How have customers changed their usage over time?  How can we get referrals from our customers? CRM and Technology Three reasons why CRM’s adoption has been so rapid: 1. Fierce competitive economic environment 2. Economics of customer retention is proven 3. Technology allows organizations to do this more effectively and profitably Core Principles Becoming a customer focused organization is an evolution. The CRM Evolution CRM Diagnostic Internalize the Determine the Imperative State to be customerfocused of CRM evolution your company is in Develop a Strategy for customer investments Design the Operations required by the strategy Create a Execute Roadmap Build based on program prioritization programs Develop a Mindset for your organization Continual Evaluation and Renewal Capability Process Organization Technology Knowledge Uses/Goals Customer Relationship Management tries to accomplish much and means different things to organizations. Deloitte Consulting clients that have adopted a Customer Relationship Management philosophy have done so for some of the following reasons: Improve Sales Effectiveness Improve Customer Service/Loyalty Improve Communications Improve Forecasts Provide Current Information Increase Revenues Support Team Selling Increase Selling Time Improve Sales Management Improve Marketing Effectiveness Increase Margins Decrease Sales Costs 0% 10% 20% 30% 40% 50% 60% 70% Enablers In order to adopt a customer-centric strategy, businesses implement CRM enablers. Opportunity Manager Contact Manager Office Suite E-mail Lead Tracking Call Reporting Again, of organizations we surveyed, the top enablers used were: Sales Analysis Forecasting Internet Access Proposal Generators Marketing Encyclopedia Customer Support Presentations Order Entry Back Office Link Telemarket Training Configurator 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Users There are also a variety of end-users for Customer Relationship Management systems: Field Sales Sales Management Marketing Customer Support TeleBusiness Senior Management Channel Partners Finance Other 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Functional Architecture – Core Principle The core principle which any comprehensive CRM strategy is built on is customer insight. Knowing one’s customers brings many benefits: • Increased quality of customer interaction • Ability to segment customer base ($$$$$ - pricing!) • Up-sell and cross-sell capabilities (understanding internal customer relationships) • Competitive analysis • Product customization • Increased and personalized customer service Functional Architecture – Components The ideal CRM system combines Sales, Marketing, and Customer Service Systems in one integrated architecture: Marketing Field Sales Phone, Internet, Personal Contact Intranet Tele Sales Customer Service Customer Technology is an Enabler for CRM CRM links front-office strategies, operations, technologies, and people with customer interaction channels to present “one face” to customers BEST PRACTICES LIBRARY Launch pad CORE DESIGN PRINCIPLES Channels Broadcast Media Mail Field Operations Agents/Distributors Call Center Retail Internet Marketing Value Brand Personalization Seamless Real-time Dynamic Sales Service TV, Radio, Newspaper and Signage Advertising Interactive TV Sales Programs Broadcast Informational Spots Direct Mail, Product Teasers, Catalog Direct Mail, Catalog Spare Parts Fulfillment, Product Info, Returns Product Demos, Conferences, Expos, Education Events Direct Sales, Inside Sales Field Service, Training Customer Groups/Cubs, VARs, Wholesalers Wholesalers, VARs, Resellers Outsourced Product Support and Repair In/Outbound Telemarketing, Info Cntrs Inbound and Outbound Telesales In/Outbound Service Call Center, IVR, Fax-back Instore Signage, Coupons, Info Kiosks POS Brick and Mortar Locations, In-store and Distributed Kiosks Brochureware, Advice/Community Sites, eMail Marketing Interactive Sales Sites, Auction Sites, Market Sites, Portals Integration Best Practices General CRM Integration Areas SBU to SBU Integration Business Partner Integration Service Centers Information Sites, Interactive Service Sites, e-Mail Folllowup Back Office to Front Office Integration Conceptual CRM Architecture Access Channels In person Telephone IVR Customer Chooses the channel Telephone Call Center Fax & E-Mail Electronic Web Commerce/ self-service Internal & External Data Sources Functionality • Account/Contact Mgmt • Service Mgmt • Workflow Mgmt • Campaign Mgmt Business Objects • Account • Contact • Policy • Asset • Opportunity • Service Request Business Integration Services (Middleware) Sales automation Customer Interaction Systems Functional Architecture – Customer Information Repository The key to customer insight is a centralized (or centrally organized) store of customer data. This will allow all business entities to share a common view of what a customer is: Marketing/Analytics Customer Information Repository Customer Service Sales Functional Architecture – Marketing Solution The marketing solution will extract key interactions from the sales/customer interaction database: Customer Service Application • • • • • Telemarketing Telesales Customer Care Order Mgmt. Help Desk Customer Service Middleware •Billing •Inventory •Fulfillment •Order Management •Etc… Database Server Application and Web Server(s) SFA Application • • • • • • Accounts Contacts Activities Opportunities Product Config. Reports Sales Legacy Systems Data Extraction Data Application Server Data Warehouse Marketing Application • Customer Segmentation • Campaigns • Analytics (Sales, Product, Service) Marketing Functional Architecture – Sales Solution A sales solution consists of several key components: Legacy Systems Middleware •Billing •Inventory •Fulfillment •Order Management •Etc… Database Application and Web Server(s) SFA Application • • • • • • Accounts Contacts Activities Opportunities Product Config. Reports Sales Functional Architecture – Customer Service Solution The customer service solution will utilize the same core data as the sales solution: Customer Service Application • • • • • Telemarketing Telesales Customer Care Order Mgmt. Help Desk Customer Service Legacy Systems Middleware •Billing •Inventory •Fulfillment •Order Management •Etc… Database Server Application and Web Server(s) SFA Application • • • • • • Accounts Contacts Activities Opportunities Product Config. Reports Sales Summary • Start with a clear vision of a customer-centric, versus a product-focused approach. • Retain business focus, do not get distracted by the technology. Technology is an enabler, not the driver. • Ensure that the technology infrastructure can support the CRM strategy. • Recognize that multiple steps may be required to move from the current state to the ideal. • A marketing warehouse infrastructure should exist for any serious CRM initiative. • Understand the business problem. • Benefits should outweigh costs. • KISS (Keep It Simple S_ _ _ _ _).