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Customer Relationship Management Raghu Seelamonthula

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Customer Relationship Management

Customer Relationship Management Raghu Seelamonthula

  1. 1. CustomerRelationshipManagement Customer Relationship Management – Jill Dyche 1
  2. 2. Sales Force Automation Customer Relationship Management – Jill Dyche 2
  3. 3. Strategic Framework for CRM Customer Relationship Management – Jill Dyche 3
  4. 4. CRM as Cross Functional Activity• Collect and understand customer touch-points from its functional organizations and feed this new knowledge to its sales group for – Fostering relationship and – Revenue improvements. Customer Relationship Management – Jill Dyche 4
  5. 5. Sales Force Issues Sales Man Organization• Need to keep track of their • Need to keep up-to-date sales customers and manage their data, sales forecast etc., to accounts. communicate across the• Track & monitor opportunities organization. – Build sale pipeline. • Need to provide continuous• Need to record customer product information and sales information (contacts) and technique trainings. communicate critical account • Need to increases the sales data. person’s ratio of selling time to• Need regular updates from non-selling time. HQ about products, prices, • Need to better communication new offers etc. & co-operation between sales personnel Customer Relationship Management – Jill Dyche 5
  6. 6. Sales Force Automation• Sales Force Automation (SFA) systems are information systems used in marketing and management that help automate some sales and sales force management functions.• SFA drives to put account information directly in the hands of field sales staff, making them responsible for it, and ultimately rendering them more productive.• SFA helps in increasing productivity and provide consistent information as nothing short of competitive weapon. SFA Products Then SFA Products Today• Sales force Productivity • Cultivating Customer• Document & Communicate field Relationships activities. • Improving Customer Satisfaction• Client-Server based model -> • Web/Mobile model -> Two way One way communication -> communication between Organization to Salesman Organization and Salesman• Open loop information system • Closed loop information system Customer Relationship Management – Jill Dyche 6
  7. 7. Sales Force Automation – Key Components•Locate & store information andprovide users a means of Knowledge Managementcommunicating about andadding to its contents from asingle application.• Based on product Configuration Supportconfiguration and price quote,configuration tool providesforms for electronic Leadcommunication of info.•Provide foolproof strategies so Managementno sales task, document orcommunication falls through the • Organizing and managing datacracks. Contact across and within company’s client and prospect Management organizations. Sales & Territory •Effectively set up sales teams Management and link up individuals to accounts, regions and industries. Sales Process/ Activity •A sequence of sales activities that can guide sales reps thru Management each discrete step in sales process. Customer Relationship Management – Jill Dyche 7
  8. 8. Sales Process/Activity Management• Sale Process Management Tools help: – Sequence the sales activities that can guide sales reps thru each discrete step in the sales process. – Provides unified sales process throughout the company – Ensures follow-up activities are performed – assigned and schedules automatically. – Serves as effective training aid, minimize human error and result in greater productivity.• Sales Activity Management Tools help: – Assist in planning of key customer events – proposal presentations or product demonstrations. – Generate Alarms when important tasks are due, prepare documents when they are needed or make decisions based on user’s input. – Provide valuable post facto analysis of sales cycles, allowing for examination of durations and procedures involved in critical tasks. Customer Relationship Management – Jill Dyche 8
  9. 9. Sales & Territory Management• Sales Management Tools: – Offers data and reporting options on sales activities – before, during and after the order. – Setup sales teams and link individuals to accounts, regions and industries. • Field Account teams with Telesales or Web Sales • Field Account teams with Product Managers/Specialists or Industry Experts• Territory Management Tools: – Track territory assignments and monitor pipelines and leads for individual territories. – Limit activities of his/her own territory.• Allows Managers not only understand sales activities as they occur, but also optimize individual teams according to critical mass and skill sets appropriate for client or prospect, increasing the odds of closing the deal. Customer Relationship Management – Jill Dyche 9
  10. 10. Contact Management• Contact Management deals with organizing and managing data across and within the company’s client and prospect organizations.• Contact Management tools help in: – Tracking where customers are, who they are in terms of their influence and decision-making clout. – Interfacing with MS Outlook can help track customer mailings or automate workflow programs. – Interfacing with Sales Management function can optimize the number and skills of team members involved in high profile sales efforts.• Contain various modules: – Maintain local client databases – Display updated organization charts – Notepad for keeping notes on specific clients or prospects – Query remote databases for supplementary information – Communicate schedules of sales people to organization at large Customer Relationship Management – Jill Dyche 10
  11. 11. Lead Management• Lead Management or Opportunity Management or Pipeline Management aims to provide foolproof sales strategies so no sales task, document, or communication fails.• Lead Management Tools help in: – Tracking customer account history – Monitor leads, generate next steps and refine selling efforts online. – Automatically distribute or allocate client leads to field or telemarketing reps based on the rep’s product knowledge or territory. – Providing real-world view of each lead and converting into a sale by tracking prospects attributes • Product interests • Discretionary budget amounts • Likely competitors etc – Interfaced with other SFA module it can provide for metrics on: • Close rates and sales person productivity. • Compare campaign results to actual sales to refine future campaigns • With Sales forecasting module, it can result in accurate prediction of sales.• Advanced Lead Management Analysis tools help in: – Calculating the probability of the sale based on the success factor information stored in prospects profile – Alerts when similar problem arise with another prospect Customer Relationship Management – Jill Dyche 11
  12. 12. Configuration Support• Configuration Tool in CRM system aid salesperson to input client and prospect information to enable him “build” product for their customers.• Configurator tool helps to build unique product packages, brand them, and distribute them to sales staff in the field.• Based on the sales process of the company, when sales cycle reaches “order” stage: – Helps create a product configuration and price quote automatically. – Help provide forms that facilitate electronic communication of information to other areas of company, seek approval etc.• Dispenses stigmas of erstwhile manual practices leading to faster turnaround. Customer Relationship Management – Jill Dyche 12
  13. 13. Knowledge Management• Knowledge Management (KM) comprises a range of practices used by organizations to identify, create, represent, distribute and enable adoption of what it knows, and how it knows it.• Knowledge vaults contain plethora of Info an account rep can use during the sales life cycle. How effectively the sales rep use this disparate info depends on how easily they can access.• Systems that can locate and store information and provider user with a means of communicating about and adding to its contents from a single application are know as KMS. Customer Relationship Management – Jill Dyche 13
  14. 14. Sales Force Automation Dashboards Customer Relationship Management – Jill Dyche 14
  15. 15. Sales Force Automation Dashboards Customer Relationship Management – Jill Dyche 15
  16. 16. New Avatars of SFA From Client/Server to Web SFA goes Mobile• SFA functionality rests at HQ server • Handheld device technologies – PDAs, running CRM software and the sales Tablets, Web Phones, Cell phones have person can access server remotely: taken SFA to next level. – Information local to a single server is • Java & XML simply intersystem consistent across geographical regions communication with security. and multiple teams. • New Wireless protocols – WAP, GPRS, – Cumbersome synchronization is a thing of past. WiFi, Bluetooth, WiMax, allow for – Intranet infrastructure eliminates seamless communication of data traditional support costs between multiple devices. – Browser based technology shields the • Choice to select mode of access – company’s data assets. Customer contacts on Mobile phones• Sales forces are free to pursue their job while customer data and reports on PDA with IT folks work dedicatedly to maintain • Driving new ways of doing business. servers. Customer Relationship Management – Jill Dyche 16
  17. 17. Field Force AutomationCustomer Sales ForceService Automation• Service or repair Field Force • Leveraging on of customer emerging mobile workforce equipment on the Automation management customer premises technologies being widely adopted by corporate sales organizations A Hybrid System Customer Relationship Management – Jill Dyche 17
  18. 18. Field Force Automation• FFA comprises a set of customer touch-points that should be recorded as part of customer’s profile, so that the account rep has timely information for his sale pitch. Customer Relationship Management – Jill Dyche 18
  19. 19. Strategic Advantages & Disadvantages Advantages Disadvantages• Productivity will increase. • Difficult to work with• Field sales staff will send their • Require additional work inputting data information more frequently. The • Dehumanize a process that should be company will become more alert and personal more agile. • Require continuous maintenance,• Increase customer satisfaction if they information updating, and system are used with wisdom. upgrading – If the information obtained and analyzed • Costly with the system is used to create a • Difficult to integrate with other product that matches or exceeds management information systems customer expectations, and the sales staff use the system to service customers more expertly and diligently, then customers should be satisfied with the company.• Increased productivity and customer satisfaction will provide a competitive advantage because – Increased productivity can reduce costs, it can increase sales revenue, and it can increase market share. – Increased customer satisfaction leads to increased customer loyalty, reduced customer acquisition costs, reduced price elasticity of demand, and increased profit margins. Customer Relationship Management – Jill Dyche 19
  20. 20. SFA Advantages to Sales People• Rather than write-out sales orders, reports, activity reports, and/or call sheets, sales people can fill-in prepared e-forms. This saves time.• Rather than printing out reports and taking them to the sales manager, sales people can use the company intranet to transmit the information. This saves time.• Rather than waiting for paper-based product-inventory data, sales-prospect lists, and sales-support information, they will have access to the information when they need it. This could be useful in the field when answering prospects’ questions and objections.• The additional tools could help improve sales staff morale if they reduce the amount of record keeping and/or increase the rate of closing. This could contribute to a virtuous spiral of beneficial and cumulative effects.• These sales force systems can be used as an effective and efficient training device. They provide sales staff with product information and sales technique training without them having to waste time at seminars.• Better communication and co-operation between sales personnel facilitates successful team selling.• More and better qualified sales leads could be automatically generated by the software.• This technology increases the sales person’s ratio of selling time to non-selling time. Non-selling time includes activities like report writing, travel time, internal meetings, training, and seminars. Customer Relationship Management – Jill Dyche 20
  21. 21. SFA Advantages to the Sales Manager• The sales manager, rather than gathering all the call sheets from various sales people and tabulating the results, will have the results automatically presented in easy to understand tables, charts, or graphs. This saves time for the manager.• Activity reports, information requests, orders booked, and other sales information will be sent to the sales manager more frequently, allowing him/her to respond more directly with advice, product in-stock verifications, and price discount authorizations. This gives management more hands-on control of the sales process if they wish to use it.• The sales manager can configure the system so as to automatically analyze the information using sophisticated statistical techniques, and present the results in a user-friendly way. This gives the sales manager information that is more useful in : – Providing current and useful sales support materials to their sales staff – Providing marketing research data: demographic, psychographic, behavioral, product acceptance, product problems, detecting trends – Providing market research data: industry dynamics, new competitors, new products from competitors, new promotional campaigns from competitors, macro-environmental scanning, detecting trends – Co-ordinate with other parts of the firm, particularly marketing, production, and finance – Identifying your most profitable customers, and your problem customers – Tracking the productivity of their sales force by combining a number of performance measures such as: revenue per sales person, revenue per territory, margin by customer segment, margin by customer, number of calls per day, time spent per contact, revenue per call, cost per call, entertainment cost per call, ratio of orders to calls, revenue as a percentage of sales quota, number of new customers per period, number of lost customers per period, cost of customer acquisition as a percentage of expected lifetime value of customer, percentage of goods returned, number of customer complaints, and number of overdue accounts. Customer Relationship Management – Jill Dyche 21
  22. 22. SFA Advantages to the Marketing Manager• Understanding the economic structure of your industry• Identifying segments within your market• Identifying your target market• Identifying your best customers in place• Doing marketing research to develop profiles (demographic, psychographic, and behavioral) of your core customers• Understanding your competitors and their products• Developing new products• Establishing environmental scanning mechanisms to detect opportunities and threats• Understanding your companys strengths and weaknesses• Auditing your customers experience of your brand in full• Developing marketing strategies for each of your products using the marketing mix variables of price, product, distribution, and promotion• Coordinating the sales function with other parts of the promotional mix (such as advertising, sales promotion, public relations, and publicity)• Creating a sustainable competitive advantage• Understanding where you want your brands to be in the future, and providing an empirical basis for writing marketing plans on a regular basis to help you get there• Providing input into feedback systems to help you monitor and adjust the process Customer Relationship Management – Jill Dyche 22
  23. 23. Magic Quadrant for Sales Force Automation • Leaders demonstrate – Market-defining vision and – Ability to execute against that vision through products, services, demonstrable sales figures and solid new references for multiple geographies and vertical industries. • Challengers are often larger than the majority of vendors in the niche area (but not all) and demonstrate – A higher volume of new sales for SFA, where the sales buying center has had input in the selection decision. – understand their clients evolving needs, yet may not lead customers into new functional areas with their strong vision and technology leadership. • Visionaries are ahead of potential competitors in delivering innovative products and/or models. – Anticipate emerging/changing sales needs and move the market ahead in areas where it has not been yet. – Have a strong potential to influence the direction of the SFA market, but they are limited in execution or demonstrated track record. • Niche players all offer products for SFA functionality but may be missing some functional components. – May offer complete portfolios but demonstrate weaknesses in one or more important areas, such as distribution or understanding the needs of the sales buying center. – May have an inconsistent implementation track record or have not shown the ability to support large enterprise requirements.Source: Gartner (June 2007) Customer Relationship Management – Jill Dyche 23
  24. 24. End Note• Q&A• Adidas Sales Force Automation Case Study Customer Relationship Management – Jill Dyche 24
  25. 25. CRM in e-BusinessCustomer Relationship Management – Jill Dyche 25
  26. 26. Sales Force Automation - Review• Sales Force Automation (SFA) systems are information systems used in marketing and management that help automate some sales and sales force management functions.• SFA drives to put account information directly in the hands of field sales staff, making them responsible for it, and ultimately rendering them more productive.• SFA helps in increasing productivity and provide consistent information as nothing short of competitive weapon. SFA Products Then SFA Products Today• Sales force Productivity • Cultivating Customer• Document & Communicate field Relationships activities. • Improving Customer Satisfaction• Client-Server based model -> • Web/Mobile model -> Two way One way communication -> communication between Organization to Salesman Organization and Salesman• Open loop information system • Closed loop information system Customer Relationship Management – Jill Dyche 26
  27. 27. Sales Force Automation – Key Components•Locate & store information andprovide users a means of Knowledge Managementcommunicating about andadding to its contents from asingle application.• Based on product Configuration Supportconfiguration and price quote,configuration tool providesforms for electronic Leadcommunication of info.•Provide foolproof strategies so Managementno sales task, document orcommunication falls through the • Organizing and managing datacracks. Contact across and within company’s client and prospect Management organizations. Sales & Territory •Effectively set up sales teams Management and link up individuals to accounts, regions and industries. Sales Process/ Activity •A sequence of sales activities that can guide sales reps thru Management each discrete step in sales process. Customer Relationship Management – Jill Dyche 27
  28. 28. e-Business or e-Commerce• E-business is a term used to describe businesses run on the Internet, or utilizing Internet technologies to improve the productivity or profitability of a business.• The most common implementation of e-business is storefront - selling products and services online, able to reach a much wider consumer base than any traditional brick-and-mortar store could ever hope for.• E-business can also handle other traditional business aspects - technical and customer support, dispensing internal memos and white sheets etc. Customer Relationship Management – Jill Dyche 28
  29. 29. Issues in e-Business or e-Commerce• e-business organizations have: – No clear visibility of customers. – Assumed that all customer are created equal. – Focused more on website traffic than on their profitability. – Delayed their customer- focused initiatives till they turned profitable. – Marketing campaigns were focused on informational visitors or those who stumbled upon the site. – Invested heavily in basic infrastructure – warehousing/distribution, recruiting costs etc. Customer Relationship Management – Jill Dyche 29
  30. 30. eCRM Pure-Play dot-com Retailers Brick-n-Mortar Businesses • Mastered economies of scale,• With right CRM functionality, a offer wide variety of well-priced delivery service would know products to draw customers when to waive the surcharge to and get rid of non-productive keep the customer. inventory.• Invested less in analysis • Slowly embracing Internet to capabilities that would tell them drive new accounts and up who their good customers are. sales revenues. Multichannel CRM CRM in B2B • Use website to lure people into their • Business-to-Business (B2B) organizations stores – Tiffany sell to intermediaries in the consumer • Include store locators on website to distribution chain rather than directly to an enable customer go shopping – Levis & end consumer Dockers. • B2B companies have fewer customers • Offer specialized services – JCrew online and a smaller product line than large B2C purchase and storefront returns. organizations. • Value added feature to motivate • CRM systems for B2B need to establish customers to return back to website – links with multiple stakeholders/partners to Petco, Drugstore etc. service a single requirement. Customer Relationship Management – Jill Dyche 30
  31. 31. Enterprise Systems• Enterprise Resource Planning (ERP) systems • Interdependent software modules with a common central database that support basic internal business processes for finance and accounting, human resources, manufacturing and production, and sales and marketing • Enables data to be used by multiple functions and business processes for precise organizational coordination and control. Customer Relationship Management – Jill Dyche 31
  32. 32. Enterprise Resource Planning System• ERP System enables – Salespeople to access a single system to check inventory – Purchasing agent to look up supplier’s pricing history – Marketing Product Manager to track defects• Business Value of ERP Systems – A more uniform organization – More efficient operations and customer-driven business processes – Firm wide information for improved decision making• Marriage between ERP and CRM drives dramatic effects on downstream customer-facing business process – Get product delivered across faster, in turn increase customer satisfaction rates – Reduced out of stock situations, in enhance customer loyalty – Real-time supply chain and accounting information to help how to treat customers Customer Relationship Management – Jill Dyche 32
  33. 33. Supply Chain Management • Supply Chain – Network of organizations and business processes for procuring raw materials, transforming into products, and distributing them to customers – Materials, information, and payments flow through the supply chain in both directions. •Supply Chain Management –Coordination of business processes to speed information, product, and fund flows up and down a supply chain to reduce time, redundant effort, and inventory costs Customer Relationship Management – Jill Dyche 33
  34. 34. Supply Chain Process• SCOR (Chain Operations Reference Model) identifies five major supply chain processes: – Plan: Balancing demand and supply to meet sourcing, production, and delivery requirements – Source: Procurement of goods and services needed to create a product or service – Make: Processes that transform a product into a finished state – Deliver: Processes to manage order transportation and distribution – Return: Processes associated with product returns and post delivery customer support Customer Relationship Management – Jill Dyche 34
  35. 35. Supply Chain Management Applications• Supply Chain Management Systems: Automate flow of information between company and supply chain partners• Supply Chain Planning Systems: Generate demand forecasts for a product (demand planning) and help develop sourcing and manufacturing plans for that product• Supply Chain Execution Systems: Manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations in the most efficient manner Customer Relationship Management – Jill Dyche 35
  36. 36. Supply Chain Management & Internet• Internet-based supply chain • Business Value of Supply Chain management applications: Management Systems: – Provide standard set of tools – Improved customer service and – Facilitate global supply chains responsiveness – Reduce costs – Cost reduction – Enable efficient customer response – Cash utilization – Allow concurrent supply chains Intranets and Extranets for SCM The Future Internet-Driven SCM Customer Relationship Management – Jill Dyche 36
  37. 37. Supplier Relationship Management• Supplier relationship management is a comprehensive approach to managing an enterprises interactions with the organizations that supply the goods and services it uses.• The goal of supplier relationship management (SRM) is to streamline and make more effective the processes between an enterprise and its suppliers just as customer relationship management (CRM)• SRM practices create a common frame of reference to enable effective communication between an enterprise and suppliers who may use quite different business practices and terminology.• C-Commerce or Collaborative commerce – involves sharing of companies value information with its suppliers or partners so that all of them have same information and relevant data at all times.• SRM increases the efficiency of processes associated with acquiring goods and services, managing inventory, and processing materials.• Use of SRM software can lead to lower production costs and a higher quality, but lower priced end product.• SRM Tools allow to assess the relative cost, value, quality, reliability, and risk of individual suppliers, thus optimizing supplier qualification and selection. Customer Relationship Management – Jill Dyche 37
  38. 38. Supplier Relationship ManagementStrategic Sub-Processes Process Interfaces Operational Sub-Processes Review Corporate, Customer Relationship Differentiate Suppliers Manufacturing Management and Sourcing Strategies Prepare the Customer Service Supplier/Segment Management Management Team Identify Criteria for Categorizing Suppliers Internally Review the Demand Supplier/ Management Supplier Segment Provide Guidelines for the Degree of Customization Identify Opportunities Order Fulfillment in the Product/Service with the Suppliers Agreement Develop Product/Service Manufacturing Flow Agreement and Management Communication Plan Develop Framework of Metrics Implement the Product Development Product/Service & Commercialization Agreement Develop Guidelines for Sharing Process Improvement Measure Performance and Benefits Returns Generate Supplier Management with Suppliers Cost/Profitability Reports Customer Relationship Management – Jill Dyche 38
  39. 39. Supplier Relationship Management• So how does supplier relationship management help you? – Increased Productivity / Improved Performance – Improved Service Levels, Internally & Externally – Better collaboration with, and management of, providers – Reduced supplier selection risk – Utilization of best practices and governance structures – Reduced Decision Time – Cost Savings Customer Relationship Management – Jill Dyche 39
  40. 40. Partner Relationship Management• Automation of the firm’s relationships with its selling partners – channel partners, dealers, and resellers; using customer data and analytical tools to improve coordination and customer sales.• Partnership Relationship Management (PRM) is a subset of CRM that allows companies to ensure partner satisfaction by providing with the tools and information they need.• Partnership Relationship Management help in: – Qualification and recruitment of new partners by establishing desirable partner attributes and allow them to assign partner categories that might limit partners to specific products or sales strategies. – Provide partner profiles that enable company not only understand a business partner’s characteristics but also track the partner’s overall success and contribution – Improve partner relationships through training or joint marketing activities. – Facilitate automatic lead distribution to best partner Customer Relationship Management – Jill Dyche 40
  41. 41. CRM in e-BusinessMajor findings from research on CRM in e-Business indicates:• e-Business organizations CRM objectives can be divided into three categories, which are cost saving, revenue enhancement, and strategic impact objectives. However, those objectives are not very detailed, instead e- Business organizations view CRM objectives as a part of their daily work.• e-Business organizations concentrate in three areas when managing their customer relationships, which are implementation, initiatives, and channel management.• e-Business organizations evaluate the effectiveness of their CRM in four areas, which van be divided into customer knowledge, customer interaction, customer value, and customer satisfaction.• e-Business organizations consider improved customer satisfaction rates and establishing relationships with customers to be very important, but only measures and evaluate fragments of it. Customer Relationship Management – Jill Dyche 41
  42. 42. End Note• Q&A• Case Study – E-Business in Small Danish Furniture Manufacturers Customer Relationship Management – Jill Dyche 42
  43. 43. Analytical CRM or aCRM Customer Relationship Management – Jill Dyche 43
  44. 44. Stovepipe CRM• Majority of CRM products started off as point solutions, designed to solve specific business function. Customer Contacts Sales Revenues Customer Contacts Corporate Contacts Customer Segments Trouble Ticket History Product Lists Promotion History Survey responses Sales Revenues Campaign response Payment Data Payment Data Customer Value Scores SFA Marketing ContactDatabase Database Centre Database Customer Relationship Management – Jill Dyche 44
  45. 45. Case for Integrated Customer Data Demographics Survey Purchase DataresponsesCall Center Campaign Contacts Data Warehouse Responses Billing & Returns Payments Web Activity Customer Relationship Management – Jill Dyche 45
  46. 46. Data Analytics Architecture Customer Relationship Management – Jill Dyche 46
  47. 47. Data Marts• A data mart stores data for a limited number of subject areas, such as marketing and sales data. It is used to support specific applications.• An independent data mart is created directly from source systems.• A dependent data mart is populated from a data warehouse. Customer Relationship Management – Jill Dyche 47
  48. 48. Data Warehouses• Availing a complete customer profile to a range of different organizations often means storing data in a centralized, cross-functional database known as a Data Warehouse.• Data Warehouses are de facto platform on which companies store and analyze comprehensive data.• Though data warehouses can be used to store a wide cross section of subjects from sales compensation data to product specifications to geographic mapping, they are particularly valuable for offering an integrated view of the customer or, in data warehousing Customer Relationship Management – Jill Dyche 48
  49. 49. DW Characteristics & Fit with CRMData Warehouse Characteristics•Subject oriented -- data are organized around sales,products, etc.•Integrated -- data are integrated to provide acomprehensive view•Time variant -- historical data are maintained•Nonvolatile -- data are not updated by usersHow Data Warehousing Fits Into CRM?• A data warehouse isn’t needed to support “point solutions”• However, it is only through a data warehouse that it is possible to have a 360 degree view of customers, and to understand and interact with them in an integrated manner across all channels or touch points Customer Relationship Management – Jill Dyche 49
  50. 50. Emergence of Active Data Warehouses• The emergence of active data warehouse architectures has enabled a new generation of analytic applications in the business intelligence arena.• With traditional data warehouse implementations, the focus is on reporting and strategic decision-making applications. But with active data warehouse deployments, strategic decision support is augmented by tactical decision- making applications.1• The architecture of an active data warehouse is designed to acquire data in near real-time, deliver analytics for tactical decision support queries in seconds and provide 24/7 availability.• Provides opportunities for delivering applications that require more aggressive service levels in the areas of performance, availability and data freshness.• Analytic customer relationship management (CRM) applications have been among those most benefited by the emergence of active data warehouse implementations.• The ability to go beyond strategy development for CRM using a traditional data warehouse to using an active data warehouse delivers huge advantages for increasing effectiveness of CRM deployment.• The evolution of analytic CRM applications involves five distinct stages, each closely tied to the underlying capability of the data warehouse foundation.• The five stages are mass marketing, segment marketing, target marketing, event-based marketing and interactive marketing. Customer Relationship Management – Jill Dyche 50
  51. 51. Emergence of Active Data Warehouses Customer Relationship Management – Jill Dyche 51
  52. 52. Emergence of Analytical CRM• Customer information that can provide answers to various business questions can drive key decisions about customer treatments, sales techniques, promotion strategies etc.• Integrating operational CRM data with information from around the enterprise, companies began performing analytical CRM to make customer-centric business decisions.• Data Analysis varied from standard queries to statistical analysis to complex predictive modeling.• CRM Vendors started to add certain features to their offerings as part of Analytical CRM like predict modeling, purchase pattern recognition etc. Customer Relationship Management – Jill Dyche 52
  53. 53. aCRM: The Sum of its Parts• aCRM is the only means by which a company can maintain a progressive relationship with a customer across the customer’s relationship with the company – able to track a range of customer actions and events over time, using data from operational CRM systems as well as other enterprise systems. Customer Relationship Management – Jill Dyche 53
  54. 54. What is Analytical CRM or aCRM• Analytical CRM aids the preparation, support, and optimization of customer oriented decision processes• Goals of Analytical CRM: Analysis of customer behavior to aid product and service decision making (pricing, new product development)• Management decisions (Financial forecasting, Customer profitability analysis)• Design and execution of specific customer campaigns including customer acquisition, up-selling, cross-selling, retention• Design and execution of targeted marketing campaigns to optimize marketing effectiveness Customer Relationship Management – Jill Dyche 54
  55. 55. aCRM is a technology and a concept• Analytical CRM (aCRM) is both a technology and a concept. As such, it requires a multifaceted definition to encompass its different uses. The question remains How will businesses adopt aCRM - as part of a wider enterprise business intelligence (BI) initiative, or, as an independent customer-focused solution? The answer is both.• aCRM can be considered in terms of the technology which enables the concept. For a definition of these technologies we must look to the business intelligence (BI) market. – Extract, transform and load (ETL) tools: These solutions are concerned with the collection of data from disparate systems (enterprise solutions across the business), the standardization of data, and then population of the data warehouse (DW). – Data quality (DQ) tools: The usefulness of analysis of data from the DW depends on its quality. So-called dirty data can significantly reduce the value of aCRM, problems include duplicate records, incomplete records and issues relating to the formatting of data from different sources. DQ tools are focused on addressing these issues. – Data warehouses (DW): Acting as an enterprise-wide data depository, the DW should enable what has become widely referred to as the single customer view. The single customer view represents the full range of information a business holds on its customers and their interactions with the company. It should be held in a standardized format, and refreshed as appropriate for that companys needs – Business intelligence tools: Rather than attempt to create an exhaustive list of the different types of tool used to analyze data, Market defines the broad range as business intelligence tools. These may include online analytical processing (OLAP), data mining, reporting, dashboards, ad-hoc reporting and numerous other tools. Customer Relationship Management – Jill Dyche 55
  56. 56. aCRM Technologies• This range of technologies can be simplified further: – Analytical infrastructure, which include ETL and DQ tools; – Data warehousing and data management tools; – Business intelligence tools: The tools employed to analyze data collected by the first two components. Customer Relationship Management – Jill Dyche 56
  57. 57. Use CRM Analytics• Segment your customers by business value. Next, model them to predict their migration into a spectrum of value segments. Then, simulate and predict customer buying behavior based on a variety of promotion strategies.• Perform a marketing-influencers analysis to identify which customers can be influenced in their value migration then communicate to them in ways that move them in the right direction.• Make accurate assessments of each customer’s affinity to a message, product or service.• Learn how frequently you should contact each customer and which channel you should use for specific messages.• Perform very detailed analysis market-basket analysis, product structure analysis, cross-product correlation analysis, multiple campaign response models, customer growth models etc. Customer Relationship Management – Jill Dyche 57
  58. 58. Major Types of Data Analysis• On-line Analytical Processing or OLAP – Most popular type of decision-support analysis, allowing average business person to explore data online with the aim of focusing on detailed data at a lower and lower level of data hierarchy. – Focuses in providing a set of data attributes from a database organized around certain dimensions such as time and location. – Relies on data that has been summarized accordingly to particular dimension.• Data Mining – Data mining involves the identification of meaningful patterns and rules from detailed data, usually from large amounts of data, that increases company’s understanding of itself and its customers. – Helps identify clusters of customers who buy similar products. – Helps in uncovering a diverse set of new knowledge, from a customer’s next purchase to optimal store layouts to most favorable release date for a movie in preproduction. Customer Relationship Management – Jill Dyche 58
  59. 59. OLAP Vs. Data Mining• OLAP helps in analyzing customer segments to determine who is likely to churn while Data mining would examine individual customers, touching each of the millions of records in a database.• OLAP analysis requires the analyst to have a query or hypothesis however with Data mining can generate information to show patterns and relationships without analyst knowing about them.• With Data mining, analyst can identify clusters of customers who buy similar products while with OLAP tool, analyst would have to guess which products a home office work would purchase and then identify customers making such a purchase.• OLAP analysis examines category groupings like PCs, Printers, Toners etc but does not recognize out-of- category purchases such as coffee and waste baskets. Customer Relationship Management – Jill Dyche 59
  60. 60. Type of Data Mining Algorithms• Prediction – Uses historical data to determine future behaviors. – Predictive modeling generates output that populates a “model” or structure to present the results.• Sequence – Sequential analysis identifies combinations of activities that occur in a particular order. – Businesses use sequential analysis to determine whether customers are doing things in a particular order. – Help a business distill behavior from events captured from various operational systems around a company to determine patterns.• Association – Association analysis detects groups of similar items or events. – Used to detect items or events that occur together. – Association algorithm is applied to market-basket analysis to help business understand products being purchased together. – Understanding customer and product affinities, a company can make important decisions about which product to advertise or discount and which customers should get targeted for certain products. Customer Relationship Management – Jill Dyche 60
  61. 61. Uses of Data Mining• For Customer • Prospecting – Identifying good prospects Relationship Management – Choosing a communication channel – Picking appropriate messages – Matching campaigns to • Right Place to Advertise customers – Who fits the profile? – Segmenting the customer – Measuring fitness of Groups of Readers base • Improve Direct Marketing Campaigns – Response Modeling – Reducing exposure to credit – Optimizing Reponses to fixed budgets and campaign profitability risk – Differential Response Analysis – Determining customer • Using current customers to learn about Value New Prospects – Start tracking customers before they – Cross-selling, Up-selling become customers and Making – Gather information from new customers – Acquisition-Time variables can predict Recommendations future outcomes • Retention and Churn Customer Relationship Management – Jill Dyche 61
  62. 62. Data Mining Application – Clickstream Analysis• Clickstream Analysis – Clickstreams – the data that illustrates a web visitors footprint around the site. – Clickstreams connote how the user arrived at the site, how long he stayed, what he did during his visit and when he returned. – Clickstreams data is usually stored either in company’s data warehouse or in a dedicated clickstream data store called as Data Webhouse. – Clickstream data analysis can come out with patterns which indicate product affinities, suggest cross-selling or up-selling strategies. – When combined with customer demographics, psychographics, and past behaviors, clickstream data can bring the understanding of customer behavior to a whole new level. – When integrated with other key data from around the enterprise, enhances the opportunities to personalize customer communication. Customer Relationship Management – Jill Dyche 62
  63. 63. Data Mining Application – Personalization• Personalization – Practice of tailoring communications directly to a customer segment or, increasingly, to an individual customer. – Personalized communications is the principal technique via which companies can convince customers they understand them and that their information is mutually beneficial. – Personalization means not only maintaining customer loyalty, but also driving purchases higher. – Can take various forms: • Customization - Customizing actual web pages according to features favored by an individual visitor. • Localization – Localizing the site content to the particular geographic• Two Types of Personalization – Rules-based Personalization leverages established rules that dictate which products might be purchased together or whether a certain web page should precede or follow another. Mostly these rules are hard- coded into the software. – Adaptive Personalization or Collaborative Filtering – Learns as it goes as it observes customer behaviors and applies them to new circumstances. Uses the behavior of other “like” visitors as basis for its recommendations. Collaborative Filtering tools are complex and expensive. Customer Relationship Management – Jill Dyche 63
  64. 64. Personalization….Contd• Inferential Personalization – Practice in which companies use complex logic to infer a customer’s preferences.• Referential Personalization – Practice in which companies use customer responses to surveys or questions, making those answers part of his profile so that they can be used for cross-selling additional products.• Dynamic Pricing – Selling same product for different prices to different shoppers. It leverages CRM technology and detailed customer data to compare a shopper’s desire for product with his perceived ability to pay for that product. Customer Relationship Management – Jill Dyche 64
  65. 65. Evolution of Analytical CRM• Every organization has data about its customers. – Reporting & OLAP provide information about past customer interactions. – Data mining and real-time personalization are forward-looking and can be used to guide future interactions.• Over time, as companies move toward these predictive technologies, they increase the business value of their CRM information. Customer Relationship Management – Jill Dyche 65
  66. 66. Segmenting Customer Base Customer Relationship Management – Jill Dyche 66
  67. 67. Cross-Selling & Up-Selling• Critical Success Factors associated with successful cross-selling and up-selling: – Sell the right products to each of your customers. • In order for customer value to be optimized, products must be linked to individual customer needs and preferences. • Products must also be sold at an appropriate price point to achieve both profitability and customer satisfaction. – Personalize customer communications. • Cross-selling and up-selling is optimized when customers being communicated with the right frequency intervals. • Over-communication or irrelevant communication diminishes the impact of ongoing messaging and contributes to churn. • By ensuring that offers are targeted to specific customers, cross- and up-sell effectiveness and customer loyalty are increased. • Identifying appropriate channels of communication based on customer preference is critical, as well as ensuring that messages are highly relevant to the specific audience being targeted. – Measure cross-selling and up-selling in relation to the totality of the customer experience. • It is critical to understand the ROI and payback of cross-sell campaigns. It is important to project response rates and even consider other product lines that may be cannibalized by each campaign. • Further, increases or decreases in churn must also be measured, along with longevity and other standard customer metrics (such as MRC, ARPU and ARPC) if optimal results are going to be realized. Customer Relationship Management – Jill Dyche 67
  68. 68. Market-Basket Analysis• Market-Basket Analysis uses the information about what customers purchase to provide insight into who they are and why they make certain purchases.• Market-Basket Analysis also provides insight into the merchandise by telling us which products tend to be purchased together and which are most amenable to promotion.• Data Mining technique associated with market basket analysis is the automatic generation of association rules – what products are purchased together Customer Relationship Management – Jill Dyche 68
  69. 69. Credit-Risk Scoring• Not only banks have a credit-risk, everyone who accepts to deliver services or goods before he receives payment has one.• Models predicting credit-risk can be build from previous cases.• These models have to be applied on-line at the point-of- sales• They can be build off-line, but should be rebuild periodically• CRM Vendors build a predictive model for an advertisement supplier predicting non-payers with accuracy of 79% on the test set• This model is integrated into the customers point-of- sales application. Customer Relationship Management – Jill Dyche 69
  70. 70. Credit-Risk Scoring - How does it Work Offline Credit-Risk Modeling Mining Data Customer, Analysis Data PreprocessingCustomer history, DataBackground data Current Enriched Scored Transaction Transaction Transaction Online Credit-Risk Prediction Customer Relationship Management – Jill Dyche 70
  71. 71. Customer Life-cycle Analysis• The Business Problem: – Life insurances are profitable products of insurance-companies – Only a small percentage of all customers own one  Cross-sell life-insurances to customers• The Approach: – Transform the “state-description” Customer C (a ….) owns product P (with …) since X – into a life-cycle description A Customer C started with P1 at X1, X2 years later she bought P2, … – “Data Mine” typical states of customers when they bought a life- insurance – Rate customers based on their similarity with such prototypical states – Advertise a life insurance to the N highest rated customers• Resulted in one of the most successful campaigns Customer Relationship Management – Jill Dyche 71
  72. 72. Customer Lifetime ValueThree simple business goals of CRM Acquire the „right“ Customer Value of customer relation customers with high potential Retention value Customer Development Cross- and up-sell Retain profitable Customer by offering the customers and Acquisition right products at increase their the right time long-term value Evolution of customer relation over time Customer Relationship Management – Jill Dyche 72
  73. 73. Buying Age Distribution of Insurances 25% 20%Customers 15% Car Home 10% Life 5% 0% 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Age Customer Relationship Management – Jill Dyche 73
  74. 74. Who needs aCRM?• Power users: Usually the smallest group and by far the most advanced. They require the full flexibility BI tools can supply, and often provide other areas of the business with information from their own analysis.• Senior executives: Interest in aCRM is often limited to dashboards detailing performance against key performance indicators (KPIs). The breadth of this information, however, can be significant, with executives across different parts of the business having different priorities. While appearing simple, often the technology behind the dashboard is complex;• Marketing organizations: One of the larger groups and potentially one of the most advanced. They are in a position to become advanced users of aCRM, a process only just getting under way in most adopting businesses;• Sales organizations: A potentially significant user group. Their needs are often found in the output of other areas analysis. For example, the use of leads generated through marketing campaigns and timely information delivery, especially during closing periods when targets are either hit, or missed;• Customer-facing organizations: Predominately the call centre, but also retail environments. These users are dependent on timely and accurate delivery of information relating to the customers they are dealing with;• Customers: Offering customers intelligence about the way they use products purchased from that company can be a competitive differentiator. Simple, pre-defined queries and easy to understand delivery is key. Customer Relationship Management – Jill Dyche 74
  75. 75. Benefits of aCRM• Employees can quickly assign, manage and resolve incidents with automated routing, queuing and service request escalation• Reports help identify common support issues, evaluate customer needs, track processes and measure service performance• Employees can easily share sales and order information as well as support information and use it to identify top customers and prioritize service needs• Access to a centralized, customizable view of sales and support activity along with complete customer history either online or offline and from any location using a Web browser• Shorter sales cycles and improved close rates with tools that enable lead and opportunity management, workflow rules customization for automated sales processes, quote creation and order management• Comprehensive reports that forecast sales, measure business activity and performance, track sales and service success, as well as identify trends, problems and opportunities. Customer Relationship Management – Jill Dyche 75
  76. 76. How Companies with oCRM & aCRM changing Strategies?• Reward customers with personalized discounts and perks for using lower- cost channels.• Proactively offer products and services that fit a given customer’s needs based on what the customer has already purchased.• Increase purchase rates by dynamically personalizing content based on the web visitor’s profile.• Adjust per customer marketing expenditure based on lifetime value scores.• Analyze combinations of touch points across channels to predict a customer’s next likely purchase.• Relate high web traffic to individual visitors and customer segments to better understand web use and improve web design.• Tailor commissions and incentive programs for sales partners based on the value of the customer they bring.• Prevent customer from churning by offering incentives based on individual preferences.• Provide customers in the highest value tier with personal representatives who understand their history and preference. Customer Relationship Management – Jill Dyche 76
  77. 77. End Note• Q&A Customer Relationship Management – Jill Dyche 77
  78. 78. Delivering CRM – Planning your CRM Program Customer Relationship Management – Jill Dyche 78
  79. 79. Strategic Framework for CRM Customer Relationship Management – Jill Dyche 79
  80. 80. Planning your CRM Program• Planning a CRM program is rarely straight-forward. – CRM engenders business change – Requires a clear understanding of and company’s customer focus – Define CRM Success metrics – Quantifiable improvements in customer retention and satisfaction. – Requires Vigilant Adherence to detailed Goals – Need total Commitment from both executives and line workers and – Constant awareness of Customer’s View Point – Involves a cross-section of Customer Touch points, multiple organizations - Determining CRM Complexity – Crystal-clear Business Case• Three key areas for CRM preparation should focus on: – Establishing CRM project leadership – Analyzing business processes – Managing change Customer Relationship Management – Jill Dyche 80
  81. 81. Gauging the Factors for CRM Success• Initial Trigger – Understand how CRM benefits can result in competitive advantage.• Sponsorship – A cross-functional executive team behind the initiative.• Objective Definition – Increase customer loyalty, Better customer service, Additional sales revenue etc.• Solution Selection – Allowing corporate strategy and business drivers to dictate the CRM functionality and not letting the required functionality dictate the tool.• Operating Environment – Integration of CRM product into existing IT infrastructure.• User Community – Employees across at all level using CRM for different purposes but basing their decisions on same customer data.• Efficiencies – Process efficiencies and integrated data combined to deliver strategic decisions leading to achieving stated objectives.• Measurement – Clear shift or measurable improvements in customer responses across all touch points. Customer Relationship Management – Jill Dyche 81
  82. 82. Defining CRM Success• Research conducted by Yancy Oshita & Dr. Jay Prasad at University of Dayton identified four important measurements of CRM Success: – CRM’s ability to impact Corporate Strategy – Successful Technology Integration – Enhanced Strategic Partnerships – Assimilation of CRM-related Technologies – Overall Technology Architecture – User Skill sets – End-user Desktop Workstation Configurations – Technology (Data Warehouse) – Technology (Other) Customer Relationship Management – Jill Dyche 82
  83. 83. Defining CRM Success Customer Relationship Management – Jill Dyche 83
  84. 84. The Big PictureCustomer Relationship Management – Jill Dyche 84
  85. 85. From Operational to Enterprise Objective Organization Data CRM 4: • Track installations Field • Equipment outage • Track repair status • Order and repair data Service • Streamline Sales Process • Sales Activities • Quality Prospects based • Orders on Past Successes CRM 3: Sales • Contacts • Track Contact History • Prospects • More Targeted Mailings • Customer Satisfaction by • Customer Segments • Mailing History Segment Analysis • Refined Marketing CRM 2: Marketing • Response Rates Campaigns• Customer Satisfaction • Trouble Tickets Monitoring • Customer Name/Address• Self-service Efficiencies CRM 1: Call Center • Customer Satisfaction• Faster trouble ticket Scores resolutions • Rudimentary Web Details Customer Relationship Management – Jill Dyche 85
  86. 86. CRM Complexity Business Corporate Process Asset Support Focus Many •Range of new customer-oriented •Range of new business functions across business process the company. •Defining & documenting business •Requirements are complex – Variety ofQUALITY OF process development resources& range of CRM •New policies& end-user training technologies FUNCTIONS Complex type CRM – Multifunctional &• Single Function Multifunction CRM to Single Department Multidepartment or enterprise-wide• Many or handful of Single function CRM to one Department – Single function CRM function deployed functions Customer-focused Application across the company representing a newly institutionalized business function •Handful of Executives Single •Single Organization •Simple function takes additional •Leverage on in-home development & complexity due to multiple departments existing staff and thus varied requirements •Additional deployment resources and longer up-front planning Application Business Function Department Enterprise-wide RANGE OF USAGE • How many departments are slated to use the CRM system? • Implementing CRM for a single relatively small department is much less complex than deploying it to the entire enterprise. Customer Relationship Management – Jill Dyche 86
  87. 87. Prepare a CRM Business Plan• A CRM business plan includes several discrete components that, when combined explain value proposition and tactical implementation plan for CRM. – Approval process & Fund allocation – Requirement for new technologies – Impact on existing technologies – Ongoing support & maintenance requirements – CRM alternatives Customer Relationship Management – Jill Dyche 87
  88. 88. Defining CRM Requirements• Defining the set of business requirements which CRM should address – Specific & Granular.• Objectives must be customer focused and tactical in nature. – “Improve the supply chain”• Requirement gathering can be long and complex process – listing what CRM can do for business.• Relies on understanding the complexity of the ultimate CRM initiative.• CRM envisioned as a corporate-wide program or single department• Not only list customer-focused requirements but also map them to specific applicable CRM tactics. Customer Relationship Management – Jill Dyche 88
  89. 89. Mapping CRM Features to Business Requirements Customer Relationship Management – Jill Dyche 89
  90. 90. Cost-Justifying CRM• Possible financial outcomes of any CRM program are: – Increased profits – Break-even – Lost revenue• CRM fosters business practices that by nature are not measurable.• CRM often delivers ROI that is both hard and soft. – Soft Return – Can deliver significant payback (Enhanced employee satisfaction, workplace improvements, amplified market reputation, customer loyalty & customer satisfaction) – Hard Return – Can deliver in revenue or cost savings by: • More efficient customer-focused business process. • Decreased customer attrition • Increased sales. Customer Relationship Management – Jill Dyche 90
  91. 91. Investing in CRM - Costs & Returns• Current Cost Vs. Potential Cost• Cost of Implementation Vs. Cost of Delaying – Cost of lost marketing opportunities – Cost of supporting stove-pipe CRMs – Staffing losses – Attrition, Expertise etc.• Return on Investment (RoI) Vs. Return on Relationship (RoR) – RoR refers to the ability to compare the before and after effects of CRM on customer value and loyalty. – RoR can provide companies a ability to identify which components of CRM (change in business process or more targeted communications) help improve customer relationships• Real justification for CRM – Improving customer’s experience with company – Humanizing the experience – Making it easier to do business with company Customer Relationship Management – Jill Dyche 91
  92. 92. Understand Business Process• CRM basically designed to solve tactical & customer- facing business problems.• CRM-related business processes should be designed around the customer’s perspective with ultimate goal of improving the customer’s experience.• Business Process Re-engineering: Modeling Customer Interactions – Rule of modeling customer interactions is that every interaction, incoming or outgoing, should have potential to improve the customer’s experience. – Main goal is to improve traditional or broken process and thus enhance the customer interactions.• Analyzing Business Process – Analyze business processes from organizational point of view, time, market situation etc. – Designing and documenting new business processes will help in both understanding customer’s point of view and inherent complexity. Customer Relationship Management – Jill Dyche 92
  93. 93. Typical CRM Approval Factors• Program’s long-term value – Sustainable value for company• Adherence to company objectives – How CRM pertains to the company’s stated goals or overarching strategies.• Ability to deliver key business objectives – How specific business goals will be met with CRM?• Cost – Estimated cost of breakdown• Boundaries –CRM project deliverables• Staffing Requirements – List of staff for requirements gathering, technology acquisition, development, and rollout of CRM solution• Risk assessment – Potential risks involved in launching CRM program – timing? Customer Relationship Management – Jill Dyche 93
  94. 94. Constituents of CRM Business Plan Customer Relationship Management – Jill Dyche 94
  95. 95. CRM Business PlanCustomer Relationship Management – Jill Dyche 95
  96. 96. CRM Business PlanCustomer Relationship Management – Jill Dyche 96
  97. 97. Organizational CRM Readiness Checklist• Target business users display understanding of CRM and accompanying benefits.• Management displays understanding of CRM and accompanying benefits.• CRM application opportunities are identifiable.• Obvious stakeholdership exists for each discrete CRM opportunity.• Client has expressed a need for market differentiation.• Communicated strategic initiatives can be supported by CRM.• Stakeholders can articulate projected benefits for each discrete opportunity.• Stated opportunities can be improved with customer-related data.• Projected data sources are highly regarded for data accuracy and integrity.• Cross-functional customer data exists in a data warehouse or centralized database.• Organizations currently share cross-section of information requirements.• There is willingness to sustain the organizational wide impact of CRM.• Management is willing to empower key customer facing staff based on the increased information and improved process.• There is consensus that CRM is a process and not one-time only activity.• Business and IT stakeholders understand that CRM requires ongoing budget to support continued development and maintenance. Customer Relationship Management – Jill Dyche 97
  98. 98. End Note• Q&A Customer Relationship Management – Jill Dyche 98
  99. 99. Delivering CRM – Choosing your CRM Tool Customer Relationship Management – Jill Dyche 99
  100. 100. Choosing CRM Technology• CRM helps companies develop successful strategies based on a true understanding of customer needs, market developments and competitors.• Choosing the right CRM tools depends on the organization needs, budget and implementation factors.• Organization benefits will differ widely depending upon the market served and the type of organization (production, research, service, etc). Customer Relationship Management – Jill Dyche 100
  101. 101. Approaches to Choosing CRM Tools• “Bottom-up” Approach – CRM in vacuum, a project not requested by or socialized to the business. – Involves one organization or single manager – Allowing technology drive CRM – A CRM software tool or a specific functional goal to define the CRM deliverable – Knee-jerk & swift decision. – Risks • Limited consensus about CRM goals risks spending money on low priority capabilities. • Subjective interpretation of importance of a given functionality inviting rework and wasted resources. • Lack of integration with other technologies resulting in throwaway work. • Dependence on specific product features jeopardizing broader CRM adoption and growth.• “Requirements-Driven” Approach – Establishes a level of cross-functional consensus – Allows structured requirements to dictate your technology or tool decision. – Takes longer time to decide. Customer Relationship Management – Jill Dyche 101
  102. 102. Maintaining Customer Focus• Requirements-Driven Product Selection is a best CRM best practice. – Differs depending on type of CRM organization is planning to do.• Having a vision for the breadth of organization’s eventual CRM functionality. – Will this CRM system be cross-functional – touching more than one organization – or will it be a stovepipe CRM. – Understand the right technology choice and what the company will need to do in order to implement it.• Having a list of business requirements is not enough information to evaluate CRM technologies. – Business requirements should drive a series of functional requirements. • Business requirements describe the customer-focused “need, pain, or problem” CRM must solve • Functional requirements describe how to solve it. – Definition of functional requirements will make technology choices much clearer. Customer Relationship Management – Jill Dyche 102
  103. 103. Requirements Driven Product Selection Requirements Defining the business “need, pain or problem” Functionality Defining the functionality needed to meet the requirements Products Defining the products that support the identified functionality• A customer-focused business strategy drives a series of CRM requirements – “The ability to track success of target marketing campaigns”• Requirements elicit specific functional capabilities – “Campaign response modeling”• Functionality understood, a list of products can be mapped to each specific function. Customer Relationship Management – Jill Dyche 103
  104. 104. Steps in Product Selection• Defining CRM functionality• Narrowing down the technology choices• Defining Technical requirements• Talking to CRM vendors• Negotiating Price• Checking References Customer Relationship Management – Jill Dyche 104
  105. 105. Defining CRM Functionality• Requirements define the “WHAT”; Functionality defines the “HOW”• Best way to identify functionality is to map out your business process and identify the functions within it. Each function should map back to a business requirement.• Key question – “What aspect of customer-focused process need to be supported with technology? Requirements + Process = Functionality Customer Relationship Management – Jill Dyche 105
  106. 106. Narrowing Down the Technology Choice• When necessary functions are identified, you are ready to map the functions to candidate technologies by answering – “is there a CRM tool that can perform each of the functions?”• If the functionality available “out of box” or does it need for some level of customization?• Map strengths and weakness back to both critical functionality needs.• Involve IT Dept – Understand product technical features and standards – Offer guidance on how a given product fits into company’s systems and data management environments. – If products with similar capabilities have been evaluated earlier or whether other project needs similar CRM capabilities Customer Relationship Management – Jill Dyche 106
  107. 107. Defining Technical Requirements• Need a list of technical requirements to ensure the product will work in your company’s specific environment. – Integration and connection requirements • Ability of the tool to integrate into company’s unique technology infrastructure from hardware, software and networking perspective. – Processing and performance requirements • Indicate the product’s ability to support and control required operations – Security requirements • Products ability to define user access – Reporting requirements • Product’s versatility to provide company and user-requested info. – Usability requirements • Enabling end users to easily and intuitively accomplish required tasks. – Function-enabling features – Performance requirements – Availability requirements Customer Relationship Management – Jill Dyche 107
  108. 108. Grills your CRM Vendors• Vendor Expertise – What major CRM functions does product suite offer? – In cases of no functionality, does it partner with companies/products? – How their CRM product has evolved?• Technical Functionality – Is your product Web-based? – Product capability to handle voluminous data? – Product capability to handle transaction volumes? – Existing database or data warehouse product? – Migrate data from CRM product to other tools and vice versa? – Extraction of data?• Implementation Support – Average implementation time? – Implementation method – self or rely or partners? If partners, who are they? – Role of vendor is partner implements?• References – Past implementations? – Customized Vs. As-is implementation? Customer Relationship Management – Jill Dyche 108
  109. 109. Negotiating Price• Ensure a trial copy of CRM system and considerable time to evaluate: – Verify that the promised functionality actually exists – Ensure that the product works in the specific technical environments – Gauge the product’s usability – Verify that the product works with its data• Verify the existence of functionality and also how the product offers the functionality – input vs. output.• Comparing different CRM tools, determine the per-user cost of tool is worth the value it provides.• Verify if product delivers promised efficiencies that equals or exceeds it costs.• Plan a pre-purchase product installation – evaluation with proof-of-concept to deliver sample functionality and demo before stakeholders. Customer Relationship Management – Jill Dyche 109
  110. 110. Other Development Approaches• Alternative methods of developing and deploying CRM for a variety of reasons: – Home grown CRM – Using ASP or Application Service Provider Customer Relationship Management – Jill Dyche 110