Transcript C R M ustomer

Customer Relationship
Management
Prepared by: Larry Eisenberg
Ron Fogarty
Doug Marren
Greenberg, Paul, CRM at the Speed of Light, McGraw Hill 2001
Objective of Customer
Relationship Management
(CRM) Presentation
 Why
topic is important to GM’s
 Define CRM
 Present a real world CRM case
 Learn about best practices to
implement CRM
What Makes CRM
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
What is CRM?
2 Part Answer:
1.
CRM Is a Business Strategy: Focus on
profitability, revenue and customer satisfaction
by:
–
–
2.
Organizing your customers.
Fostering customer-satisfying behaviors and
implementing customer centric processes.
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
CRM 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
Traditional Customer Facing
Systems
Data
center
Data
Center
Data
Center
Sales
Contact
Center
Service
Customer
Marketing/Advertising
Data
Warehouse
Data
Warehouse
Contact
Center
Sales
Data
Customer
Service
Marketing
Warehouse
Warehouse
Data
Patricia Seybold, An Executive’s Guide to CRM: How to Evaluate
CRM Alternatives by Functionality, Architecture & Analytics, March 2002, pp 7-10.
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 Knowledge
Management” Mastering Information Management, Prentice Hall 2000, pg 170
Sales Force Automation

Contact Management


Account Management


Corporate Information
Sales Process Management


Name, address, titles, etc.
A map that shows every step of sales process
Communication Tools

generate quotations, proposals, trip reports, expense
reports, etc.
SFA 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.
Contact 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.
Ex: Soffront SFA
www.soffront.com/ppdemos, viewed 27 September 2002
Campaign Management with
CRM

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
Ex: 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
Ex: Campaign Management
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 M
 Campaign Results: $50M in revenue
Ex: Campaign Management
cont…
Option 3: Data Mine and Build a Model:
 Deduce only 3M of 10 M should receive
 3,000,000 *$.30 = $900,000 * 4 = $3.6M

Comparing Option 1 to Option 3: $8.4M
savings to generate same revenue.
– You are the company hero.
In Summary

At the end of the day, it’s about being
customer-centric.
– Improve business deficiencies
– Get a sales lift from existing customers
– Find new customers
Why Retain Customers?
Why Retain Customers?

A 5% increase in customer retention can improve
business profitability by 50%.
 It costs 7 to 10 times as much to get a new
customer as keep a current one.
 A 2% loyalty increase can translate into a 10%
across-the-board cost saving.
source: Intermedia Interactive
Solutions, www.intermediainc.com,
viewed 11/2/02
Why Retain Customers?

Recession Survival
– In a down economy, repeat business is the most
secure and profitable source of revenue
source: Larstan Business Reports,
www.larsten.net, viewed 11/2/02
Why Retain Customers?

Repeat Customers Buy More
– Research shows that the longer customers stay
with a firm, the more they spend per transaction
source: www.marketingprofs.com,
viewed 10/23/02
Why Retain Customers?

Company Reputation
– High retention rates enhance the firm’s
reputation within the industry and among
potential customers
– Word of mouth marketing
source: www.marketingprofs.com,
viewed 10/23/02
Why Retain Customers?

Repeat Customers are Forgiving
– Loyal customers tend to be more understanding
when problems develop.
source: Susan Keaveney, Denver
Business Journal, 4/8/02
Why Retain Customers?

Improved Morale and Productivity
– Employees will be more satisfied, and in turn
more productive.
source: www.marketingprofs.com,
viewed 10/23/02
CRM Spending
CRM Spending: Current / Future
US$Million
The CRM Market (2001 - 2005)
25,000
20,000
15,000
10,000
5,000
0
13,500
13,750
15,400
2001
2002
2003
(1) Source: Aberdeen Group, July 2002
17,500
2004
19,600
2005
CRM Spending by Industry
•
•
•
•
•
Manufacturing
Financial Services
Retail and Distribution
Business Services
Government and Education
(1) Source: Aberdeen Group, July 2002
2002 Spending
$ 1.7 billion
$ 1.4 billion
$ .95 billion
$ .78 billion
$ .58 billion
Suppliers of CRM

Leading CRM Suite Suppliers
–
–
–
–

Oracle
PeopleSoft
SAP
Siebel
Small to Medium Enterprise Supplier
– Front Range Solutions
Source:Patricia Seybold Group, An
Executive's Guide to CRM, 3/2002,
p. 11
Giga slide
Source: Giga Information Group,
YEA presentation, 3/02
Oracle

Over $9.4 billion annual revenue

World’s largest information software provider

Strong in ERP market
Source: 2002 CRM Solutions Guide,
June, 2002, www.crmguru.com,
viewed November 1, 2002
PeopleSoft

$2 billion annual revenue

ERP and CRM provider

CRM suite of over 22 products
Source: 2002 CRM Solutions Guide,
June, 2002, www.crmguru.com,
viewed November 1, 2002
SAP

$2 billion annual revenue

International business software provider

ERP and CRM provider
Siebel

$1.7 billion annual revenue

Leader in High-end CRM market

Leads industry in specific application suites
-
Small-Medium Enterprise CRM solution
– Pioneered Sales Force Automation

Goldmine Front Office
– Sales Force Automation

Heat
– Customer Service

CustomerIQ
– Web-based CRM
Case Study - Motoman
CRM Solution – Clarify CRM Suite
Motoman
General Purpose
World Solutions
Clean Room
Motoman, Inc.

Headquartered in West Carrollton, OH.
 420 Employees
 Annual Sales of $115M in North America
 30-40 different types of Robots
 Customers – Concentration on integrators
with specific market capabilities.
Gary Pope – Director of IT; Motoman, Inc. phone interview 23 Oct 2002
Motoman 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.
Annual 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
IT 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
Reasons for CRM

Data security
 Wanted to more effectively communicate
with customer
 Increase in Productivity/Efficiency
Case Study: Motoman
IT’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
Prospective 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
CRM 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
Clarify 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
Timeline

Timeline:
–
–
–
Selection process – approx. 1 year.
Internal Audit – 6 months
February 2001


9 July 2001
–

Purchased software, hardware and put out contract for the
integration
Customer Service Group go-live date.
1 August 2001
–
Sales Force go-live date.
Case Study: Motoman
Implementation

Hired an integrator to help install
 Tried 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
Implementation 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
Where The Program Falls
Short

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
Satisfaction 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
8 Critical Success
Factors for Successful
CRM Implementation….
According to the Gartner Group, 60% of
companies implementing CRM in 2002
will fail—and that’s expected to rise
next year.
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)
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)
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)
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)
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