CustomerRelationshipManagementWorkshopCustomerRelationshipManagement(CRM)Workshop21stOctober,2000Shanghai,ChinaCustomerRelationshipManagementWorkshopWhy-CRM•Today,businessesaresubjecttostronger,morerapidlychangingforces:–Globalization;–Deregulation;–Convergenceofindustries•Moreoveraninfluentialnewcomerishere–e-business,theInternetandtheWebCustomerRelationshipManagementWorkshopWhy-CRM•Today’scustomersask–Notonlyforsuperiorquality–ButalsoforresponsiveserviceThiscanonlybeprovidedbyCustomerRelationshipManagement(CRM)CustomerRelationshipManagementWorkshopWhy-CRM•CRMisnot–Aconcept–AprojectCustomerRelationshipManagementWorkshopWhy-CRMCRMisabusinessstrategythataimsto–understand,–anticipateand–managetheneedsofanorganization’scurrentandpotentialcustomersCustomerRelationshipManagementWorkshopWhy-CRMInpractice,CRMisaprocessof–Acquiring–Retainingand–GrowingprofitablecustomersCustomerRelationshipManagementWorkshopWhy-CRMCRMrequire–Ajourneyofstrategicdevelopment,–Processmanagement,–Organizationaland–TechnicalchangeWherebyacompanycanbettermanageitsownenterprise(frontandbackoffice)aroundcustomerbehaviorsCustomerRelationshipManagementWorkshopWhy-CRMTobeeffectiveinmanagingthecustomerrelationship,anorganizationmust•Defineitscustomerstrategy•Createachannelandproductstrategy•UnderstandtheimportanceofarobustandintegratedinfrastructurestrategyCustomerRelationshipManagementWorkshopWhy-CRMAdvantagesovertraditionalmass-mediadrivenmarketing•Reducesadvertisingcost•Makesiteasiertotracktheeffectivenessofagivencampaign•Allowsorganizationstocompeteforcustomersbasedonservice,notpriceCustomerRelationshipManagementWorkshopWhy-CRM•Preventsoverspendingonlow-valueclientsorunderspendingonhigh-valueones•Speedsupthetimeittakestodevelopandmarketaproduct(themarketingcycle)•Improvesuseofthecustomerchannel,thusmakingthemostofeachcontactwithacustomerCustomerRelationshipManagementWorkshopASmallPercentageoftheCustomerBaseProvidesaMajorityoftheRevenuesandProfits1Source:TheAdvisoryBoardCompany,“RetailLending,VisionoftheFuture”CouncilonFinancialCompetition,1994;“AllConsumersAreNotCreatedEqual”,GarthHallberg,199584%RevenuesProfitsUSDietCokeDrinkers%TotalDietCokeVolumeConsumed33.3%33.3%33.3%13%3%20%76%CreditCardRelationshipsCreditCardProfitsHigh-usage,high-revolvercardrelationshipsProfitsproducedbyhigh-usage,highrevolveraccounts1CustomerRelationshipManagementWorkshop14%22%24%40%53%36%14%3%DollarsSpentPerMonthSegmentIV$100+SegmentIII$50-100SegmentII$25-50SegmentI$25Asmallpercentageofcustomersaccountforalargepercentageofprofits.36%89%Source:PricewaterhouseCoopersresearchDISTRIBUTIONOFCUSTOMERSESTIMATEDPROFITDISTRIBUTIONCustomerRelationshipManagementWorkshopWhy-CRM•FourtypesofCRM–Prospecting–Loyalty–Cross-sell/Up-sell–WinbackandsaveCustomerRelationshipManagementWorkshopCustomers’LifeStageAdvocateSupporterCustomerProspectLoyaltysegmentRetailStorePhoneDirectMailInternetChannelSingleAdultsChildlessCouplesYoungFamiliesEstablishedFamiliesMatureAdultsLifeStageMediaCampaignCustomerRelationshipManagementWorkshopCustomerAcquisitionandManagementStageIBroadcustomersegmentsidentifiesStageIICustomerneedsbehaviorsandvaluesclarifiedStageIIIVirtualintimacywithindividualsachievedCustomerRelationshipManagementWorkshopTheValueProcessRelationperceivedashighlyvaluableHighdegreeofcustomersatisfactionHighdegreeofloyaltyValueofrelationhighforbothpartiesSelectedCustomersCRMStrategyCustomerRelationshipManagementWorkshopThePathtoStrategicCustomerCareCustomerSatisfaction/LoyaltyCustomer’sLifetimeValueTheMarriageTheRelationshipTheCourtshipCustomerRetentionStrategicCustomerCareCustomerAcquisitionCustomerRelationshipManagementWorkshopMeasuringLoyaltyintheCRMProcessCustomerSatisfaction/LoyaltyCustomer’sLifetimeValueCustomerRetention(2)StrategicCustomerCare(3)CustomerAcquisition(1)DialogShareofLifeRelationShareofWalletTransactionProductCustomerRelationshipManagementWorkshopTransformedcustomeracquisitionandmanagementTransformationofOrganizationInvolvesSixCrucialAreasTechnicalArchitectureandToolsInformation,FeedbackandLearningStrategyandGoalsProcessesSkillSetsOrganizationCustomerRelationshipManagementWorkshopSixCrucialAreas•StrategyandGoals–Establishingstrategiesandgoalsinfocusingonthemostprofitableprospectsandcustomersandproperlyhandlingthelessprofitableone–Segmentsofcustomersarechosenspecificallyforacquisition,management,cross-salesandretention–Shouldbecommittedbythecompany’sCEOortheboardCustomerRelationshipManagementWorkshopSixCrucialAreas•SkillsSets–Expertassessmentandimplementationofevolvingtechnology(currenthardwareandsoftwareavailability,customeranalysisapplication)allowforCRMprogram–Marketingknowledge(DM,mediaemploymentandTelemarketing)andcustomeranalysisskillsarerequiredtoblendintoatotalskillsetinmanagingtheCRMprogramCustomerRelationshipManagementWorkshopSixCrucialAreas•Organization–Existing•Product–orchannel-oriented–New•Addinginfunctionalexpertisesuchasrisk,decisionscienceandinformationtechnology•Performingstatisticalmodeling,designuniquevaluepropositionsChangesmayinvolvemulti-departmen