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- 1. CRM Overview Module 1: CRM Fundamentals TCS CRM Practice Draft D October 7, 2010 TCS Confidential
- 2. Agenda • Introduction • Building Blocks of CRM • Benefits of CRM • CRM Market • CRM Success Factors October 7, 2010 2
- 3. What is the purpose of a business? • Ted Levitt, Harvard Business School Marketing professor How do we create and keep a customer? October 7, 2010 3
- 4. What is CRM? Customer A Customer is someone who makes use of or receives the products or services of an individual or organization Relationship A Relationship is a way in which customers and organizations are connected to each other Management Management is the process by which the relationship between customers and organizations is handled efficiently and effectively CRM is Management of Relationship with the Customers. October 7, 2010 4
- 5. Some CRM definitions… CRM is a business strategy designed to optimize Revenue - Sales Profitability - Marketing Customer satisfaction - Service • CRM is a business strategy to select and manage the most valuable customer relationships • It requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes • CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy and culture – www.crmguru.com • Customer Relationship Management (CRM) includes the methodologies, strategies, software, and web-based capabilities that help an enterprise organize and manage customer relationships. Companies utilize this approach to gain a better understanding of their customer's wants and needs. – www.ITtoolbox.com • A comprehensive approach for creating, maintaining and expanding customer relationships. – Customer Relationship Management by Anderson Keer October 7, 2010 5
- 6. Typical CRM Activities in a Telco Integrated CTI Case Management • State-of-the-art telephony integration with STAPI • Create, track, and manage customer service requests • Rules-based routing with contextsensitive screen-pops • Integrated with contract management • Outbound dialing and support for call scripting Email Management Service Process Workflow • Auto acknowledgements with rules-based personalization • Case queues to manage agent workload • Library of email responses • Rules-based case assignment • Email tracking and monitoring • Customizable business processes • Integration with leading email clients Unified Agent Desktop SLA Tracking & Management • Single desktop for all supported channels • Contract management and service level commitments • Simple and intuitive user interface • Escalations and notifications • Follow-the-sun support October 7, 2010
- 7. Typical CRM Activities in a Telcom contd.. • Telecommunications industry offers attractive opportunity to call centers, with almost all carriers, cellular operators and Internet Service Providers - setting up call centers. • Intense competition and low customer loyalty force service providers to invest heavily in call center and customer care operations. • Multi-modal applications get popular amongst the mobile operators as a source of high revenue generation. • In-house or captive call centers more popular among service providers as they can set up the centers in their existing premises, tapping into their available network resources and expertise. • However,with phenomenal increase in the number of subscribers for basic and cellular services - opportunities to arise for outsourcing the services to third party contact centers. • Call center applications gain increasing level of complexity as most large carriers have installed integrated customer support and help-desk solutions that enable customer selfhelp, and multi-channel support • Industry more inclined to a multi-channel contact center scenario thereby opening all channels of communication for its customers. As such these service providers are likely to invest in unified solutions for their contact center applications. October 7, 2010
- 8. Need for CRM Technology Business Challenges Political & Economic Scenario Want Prompt Service Want High Quality Want Delivery Now Lowest Price $ $ Low Customer Loyalty Have Wide Choice Reduced Profit Margin Increase In Cost Policies & Regulations Global Competition $ Shortened Product Lifecycle $ P R O F I T $$$$ October 7, 2010 8
- 10. Know the Customer What? How? Demography •Collect and Analyze Customer Data and Information Contacts Activities •Plan Customer Centric Activities •Offer ‘Best Fit’ products and services Communication Channel Response Psychography •Support at all stages in Customer Lifecycle •Propose and Enhance Customer Satisfaction October 7, 2010 10
- 11. Building a Customer Focused Enterprise Enterprise Manufacturing IT Procurement Finance Admin HR October 7, 2010 11
- 12. Customer Centric Processes What should we offer them? ge na Ma ads Le e at tiv ic e Ac erv S Con f Quo igure te s How can we deliver superior customer service? t en ts gm e c Se osp Pr Ass u Ser re vice Who are our customers? Develop Offerings How can we best communicate our offers? Lau nch Ca mp aig ns How do we ensure service is delivered on time? Manage Orders How can we eliminate order rejects? e ur pt rs Ca de Or How can we increase our win rate? How can we quickly deliver valid quotes? How can we accelerate capture of accurate sales orders. October 7, 2010 12
- 13. CRM : Marketing "...the management process of anticipating, identifying and satisfying customer requirements profitably" - Chartered Institute of Marketing Campaign Design Campaign Execution Product/ Offer Definition Creative Development Execution / The Fulfillment Marketing Loop Segmentation/ Budget Allocation Response/ Order Mgmt. Pre-Analysis ROI Analysis Analytics Calls Web Outboun d Direct Calls Web Campaign Tracking Direct Inbound Source: Oracle October 7, 2010 13
- 14. CRM : Sales • Sales Cycle consists of: – Planning Process – Execution Process – Analysis Process • Feedback loop: – Plans Execution Activities Results Analysis Control Plans • A Sales Process is a systematic methodology for performing product or service sales October 7, 2010 14
- 15. CRM : Services Customer service (also known as Client Service) is the provision of service to customers before, during and after a purchase. - Wikipedia Self Service Smart Device IVR/ Speech Web Portal Email/ IM Contact Center Assisted Service ATM/ Kiosk Field Agents Partners/ Dealers Field Service October 7, 2010 15
- 16. Agenda • Introduction • Building Blocks of CRM • Benefits of CRM • CRM Market • CRM Success Factors October 7, 2010 16
- 17. The Eight Building Blocks of CRM 1. CRM Vision 2. CRM Strategy 3. Valued Customer Experience 4. Organisational Collaboration 5. CRM Processes 6. CRM Information 7. CRM Technology 8. CRM Metrics Source: Gartner October 7, 2010 17
- 18. 1. Creating the CRM Vision The CRM vision is a picture of what the company wants to be to its target customers. The vision is the "what" and the "why." October 7, 2010 18
- 19. 2. CRM Strategy: Setting the objectives right! •New Product Launch •Prospecting and Lead generation •Lead Qualification •New Sales Acquire New Customers •Channel Migration •Results Measurement •Product Stratification What are the Optimize Customers Existing & objectives of a Customers Prospects CRM Strategy? Optimize Margins •Cross-Sell •Up-Sell •Increase Product Usage Retain Existing Customers Source: LEAPthought •Retention & Loyalty •Customer Care & Service •Win-back October 7, 2010 19
- 20. 2. Developing a CRM Strategy Setting the destination, auditing the current situation and mapping the journey is an iterative process that may require several revisions before a final CRM strategy is developed Based on: •CRM Vision •Goals/ Objectives By Assessing: •Skills •Resources •Competitors •Partners •Customers Map The Journey To Be: •Continuous •Dynamic •Up-to-date CRM Strategy Set the Destination Audit the Current Situation October 7, 2010 20
- 21. 3. Customer Experience Management: Before, During and After the Experience 4. Repeat Act on feedback Company CVP Feedback 3. After 1. Before Collect feedback Set expectations Experience Feedback Customers 2. During Focus on what customers care about October 7, 2010 21
- 22. 3. Customer Experience (contd…): Economics of Poor Customer Experience More than 80 percent of CRM strategies will fail to articulate the brand values in the customer experience; the result will be a large decrease in benefits from CRM (0.8 probability). Case Study: Company with 2,000,000 customers Revenue = $200,000,000 per year Average Revenue per Customer = $100 per year Complain 2% Poor experience 22% Positive experience 78% 440,000 customers 8,800 customers At risk: 34% Issue not resolved 2,992 customers $299,200 Defect: 28% 2,464 customers $246,400 Resolved: 38% Do not complain 98% 431,200 customers At risk: 55% Decline in wallet share 237,160 customers $23,716,000 Defect: 45% 194,040 customers $19,404,000 October 7, 2010 22
- 23. 4. Creating Organisational Collaboration: Five Elements Direction and Trust Leadership and Partnership Sense of Purpose Brand Values Management Style Supportive Team Leadership Motivation for Joint Decision-Making Innovation and Renewal Skills and Competencies Knowledge and Learning Interpersonal Professional Customer Facing Positive Reinforcement Customer Understanding Build Creativity Coaching Collaboration New Technology Agile and Aligned Organisation Recognition and Incentives Fluid Teams New Roles Matrix Community Decision Making Objectives Cascade Relevant Metrics Creative Compensation October 7, 2010 23
- 24. 5. Processes: Generic, Industry-Specific, Inside-Out and Outside-In Inside-out Outside-In Generic-departmental Generic cross-department Industry-specific Field engineer scheduling Campaign management Complaint management Market segmentation Proposal generation Case management Sales forecasting Account planning Invoicing Welcoming Death Change address Quote to cash Campaign to compensation Order management Feedback collection Service management Cross-sell or up-sell Incentive compensation Available to promise Engineer to order Billing Mortgaging Provisioning Retail pricing Build-to-order Grant approval Stock replenish Trade promotions Claims management Attributes Greater integration complexity More expensive Slower to implement More difficult political battles Higher level of customisation Increased competitive advantage October 7, 2010 24
- 25. 5. Processes: Customer Process Re-engineering Identify Key Processes 1. Audit and map the touch points and processes that affect customers 2. Identify key processes from the customers' perspective 3. Quantify then prioritise processes by impact on CRM strategy goals 4. Measure key processes by their contribution to customer value Re-engineer Processes 5. Implement changes in back office and front office, where necessary. 6. Give each key process a cross-functional owner. 7. Examine how changes may affect suppliers and partners. 8. Set up a customer service-level agreement (SLA) for the key processes. 9. Segment the customer base, reassess key processes and redefine SLAs. October 7, 2010 25
- 26. 6. Information: Creating the Single View of the Customer Single View of the Customer Consumer Personal Information Medical History Physician Benefits: Social InformationCitizen Professional History Company Cost Savings — Reducing Duplication Increased Revenue — Retention and Cross Selling Improved Service, Customer Experience and Security October 7, 2010 26
- 27. 7. Technology: Sourcing CRM Application Types Integrated ERP CRM CRM Suite CRM Best of Frameworks Breed Build It Yourself Value Proposition Provide an integrated companywide suite from a single platform. Most breadth of CRM functionality in a single suite. Freedom to control own architecture and differentiate processes. Best functionality for a department. Freedom to control own architecture. Suites too expensive and do not fit. No other option. Web-hosted solutions with access from anywhere, anytime Processes Integrated CRM and ERP processes. "Best practice." Integrated Re-express CRM own processes. processes. "Best practice."Workflow engine. Limited process integration. "Best practice." Re-express own processes at application level. Streamlines business processes and ensures easy system integration Builds on established data model(s). Imposed data Imposed data Designed to fit Some impose Builds on own data established model covering model established CRM and ERP. covering CRM. data model(s). model. Others data model(s). fit to established data model(s). Software E.piphany AIT Group, Comergent Representative Intentia, Onyx Software,Chordiant Technologies, infrastructure Vendors Microsoft, vendors (BEA Oracle, Pivotal, Siebel Software, NCR, Systems, IBM, PeopleSoft, Systems. Graham Selectica, Microsoft, SAP. Technologies, Unica. Oracle, Sun) Pegasystems. and ESPs. Data Model ESP = External Service Provider CRM On Demand SFDC, Siebel OnDemand, Saleslogix, Salesboom October 7, 2010 27
- 28. 8. CRM Performance Metrics Hierarchy Bottom-Line Results Shareholders Corporate Executives Management Employees Stakeholder Customer Strategic Feedback on Strategy Effectiveness Operational and Process Infrastructure Input Level Efficiency Focus October 7, 2010 28
- 29. 8. CRM Performance Metrics Hierarchy : Few Examples ... Market Share Corporate Profit Growth Margin Growth Revenue Growth Cost Ratios Customer Loyalty Objective: Increase shareholder value (external) Lifetime Value Customer Customer Profitability Strategic Cost to Serve Acquisition Development Retention Risk Profile Staff Satisfaction Objective: Enhance customer value (external) Response Levels Operational RFM Measures Complaints NPD Times Conversion Ratios Staff Turnover Cross-Sell Ratio Recommendation Levels Channel-Specific Measures Objective: Effective strategy implementation (internal) Call Infrastructure Answering Times Customer Data Accuracy Response Times "Do Not Mail" Markers Staff Qualifications Staff Sickness Objective: Process optimisation (internal) Acronym Key October 7, 2010 NPD = new product development RFM = recency, frequency, monetary 29
- 30. Recommendations Vision: Define CRM, find a leader, answer "why," set the CVP Strategy: Develop the customer base as an asset, answer "how," set objectives, seek to align with broader strategies Customer Experience: Design, then refine constantly based on feedback Organisational Collaboration: Change organisational structures, skills, incentives and the company culture to deliver the customer experience Processes: Re-engineer to meet customers' expectations, provide competitive differentiation and work from the outside inward Information: Treat customer information as an asset and a "blood supply," focus on tighter integration between operational and analytical systems Technology: Outline the company's CRM architecture first, consider CRM as one large integration exercise, assess the best style of CRM application for the company Metrics: Set CRM metrics at multiple levels. Consider this the most difficult part; without performance management, a CRM strategy will fail October 7, 2010 30
- 31. Agenda • Introduction • Building Blocks of CRM • Benefits of CRM • CRM Market • CRM Success Factors October 7, 2010 31
- 32. Benefits of CRM : 1+1=3! Shorten Sales Cycles Business Unit or Functional Benefits Integrate Sales Channels Sales Order Configuration Sales Opportunity Management Unique CRM Benefits Customer Profitability E-Commerce Transactions Demand Chain Mgmt. Channel Optimizing Campaign Mgt. Channel & Campaign Analysis Source: Gartner E-Business Enablement CRM Increased Customer Knowledge Complete View of Customer Marketing Customer Segmentation & Targeting Customer Service Reduction of “Talk Time” Call Pattern Analysis Call Center Efficiency October 7, 2010 32
- 33. Benefits of CRM •Increased Sales Revenue •Decreased Sales & Marketing Administrative Costs Mutual B e •Increased Productivity n •Increased Win rate e •Increased Margins Mutual f i •Improved Customer Satisfaction Ratings t •Increased Market Share s •Faster Decision Making Mutual •Improved Product and Service offerings •Improved quality of products and service •Better quality at a reduced price •Prompt service •Superior Customer Lifecycle Support & Service •Improved Customer Satisfaction $ October 7, 2010 33
- 34. Agenda • Introduction • Building Blocks of CRM • Benefits of CRM • CRM Market • CRM Success Factors October 7, 2010 34
- 35. CRM : Industry Relevance The Industries that are benefited most from CRM are the ones that have high ability to gather & process customer information and generate value HIGH Car Manufacturers DET ARE NE G E UL AV Consumer Goods Manufacturers White Goods Manufacturers Telecommunication Retail Banking & Financial Services Banking & Financial Services can benefit the most from CRM Direct Marketing Companies LOW LOW HIGH ABILITY TO GATHER & PROCESS CUSTOMER INFORMATION Source: McKinsey & Co. October 7, 2010 35
- 36. CRM Products Available Degree of Customization Custom Build Compose -J2EE -ASP.net -C#.net -Chordiant -mySAP -Oracle -PeopleSoft -Clarify -E.epiphany Out-of-the-Box - Siebel OnDemand - SFDC - SalesLogix -Siebel On Premise Deployment Options Hosted Source: Gartner October 7, 2010 36
- 37. CRM Software Revenue by Function Areas CRM Software Market share based on functionality, 2005 Customer Service and Support 40% Sales 39% Marketing 21% Customer Service and Support 32% Sales 42% Marketing 26% CRM Total Software Revenue by Functionality, 20052010 • By 2010, ‘Marketing’ is expected to increase its market share from 21% to 26% (CAGR of 15.9%) 5,000.0 Million USD CRM Software Market share based on functionality, 2010 4,000.0 3,000.0 • The Market Share of ‘Customer Service’ is expected to drop from 40% to 32% (CAGR of 6.2%) 2,000.0 1,000.0 0.0 2004 2005 Sales 2006 Marketing 2007 2008 2009 2010 Customer Service and Support • ‘Sales’ is expected to grow at a CAGR of 13.1% Source: Gartner October 7, 2010 37
- 38. CRM Software Revenue by Geography CRM Software Market share based on region, 2005 Middle East and Africa 1% Asia/Pacific 5% Japan 4% CRM Software Market share based on region, 2010 Asia/Pacific Middle East 7% Japan and Africa 3% 1% Europe 34% Europe 31% Latin America 2% North America 54% Latin America 2% North America 56% • North America is expected to maintain its position as biggest market for CRM Software with 56% market share for 2004-2010 (CAGR of 12%) • Asia Pacific is going to be the fastest growing region increasing its market share from 5% to 7% (CAGR of 17.9%) • The slowest growing region is Japan (CAGR of 4.2%) Source: Gartner October 7, 2010 38
- 39. Overall CRM Software Market Forecast 2004-2010 12,000.0 CRM Software Revenue Forcast for 2005-2010 ($M) 9,691.6 10,000.0 8,000.0 6,000.0 5,012.8 5,698.0 6,500.1 7,244.8 7,986.0 8,830.3 4,000.0 2,000.0 0.0 2004 2005 2006 2007 2008 2009 2010 • Expected CAGR for 2005 - 2010 is 11.2% • The YoY growth rate is expected to be highest in 2006 at 14.1% • The YoY growth rate is expected to fall below 10% by 2010 Source: Gartner October 7, 2010 39
- 40. CRM Services - Market Segmentation By Geography UK 11% Ibero 5% India MEA 1% 2% Software Support 14% Americas 44% APAC 11% By Services IT Management 11% Development & Integration 56% Consulting 19% Europe 26% Source: TCS Consolidated Market View 07 Source: TCS Consolidated Market View 07 By Product SAP 26% Others 37% Microsoft 1% SAS 3% Amdoc 5% Salesforce.com 5% Oracle (Including PeopleSoft) 6% Siebel 17% Source: Gartner, September 2006 October 7, 2010 40
- 41. CRM Services - Market Size Market Size ($B) Worldwide CRM Services Market Size 40.0 35.0 30.0 25.0 20.0 15.0 10.0 5.0 - 20.5 21.8 2004 2005 24.0 2006 31.6 29.0 26.4 2007 2008 2009 34.4 2010 Year Worldwide CRM Services Revenue by Geographic Region, ($B) Worldwide CRM Services Revenue by Engagement Type, ($B) By Services CY11 CRM Market Size (USD bn) % Consulting 6.336 18% Development and Integration 20.416 58% IT Management 3.872 11% Software Support 4.756 13% TOTAL 35.2 100% Source: Gartner 2009 Geography Telecom CRM Market (CY10) Telecom CRM Market (CY11) North America 1258.1 1447.7 APAC 511 570.5 EMEA 1179.6 1400.7 LATAM 189.6 211.7 Total 3138.4 3630.6 Source: Yankee Group 2009 October 7, 2010 41
- 42. CRM Service Providers - Competitive Environment Source: Gartner October 7, 2010 42
- 43. Agenda • Introduction • Building Blocks of CRM • Benefits of CRM • CRM Market • CRM Success Factors October 7, 2010 43
- 44. Demystifying CRM • Myth: CRM is just another Technology Reality: It is a strategy composed of tactics, processes and people (employees, customers ) • Myth: Successful CRM initiatives are driven by IT Reality: Successful CRM is driven by business in conjunction with IT • Myth: Executives buy-in of CRM initiatives is a key Reality: Top Management, Customers, Employees, Partners buy-in is a key • Myth: CRM is Call center Reality: CRM is about Marketing, Sales and Service across multiple channels • Myth: Implementation of CRM is the goal Reality: Implementation of CRM is a mile stone. Goal is to continuously work towards true customer-centric organization October 7, 2010 44
- 45. CRM Success factors • Establish measurable business goals – Define the specific business benefits that are expected from the CRM project – Prioritize the objectives • Align business and IT operations – Select your CRM technology based on the established measurable business goals • Get executive support up front – Top executives, from the CEO down, must drive that message. • Let business goals drive functionality – Just as a CRM project must be driven by business goals, so must every configuration decision. • Minimize customization by leveraging out-of-the-box functionality – Never over-customize as it may lead to budget overruns and missed deadlines – Understand the CRM application’s existing functionality before customizing Source: Oracle: Siebel October 7, 2010 45
- 46. CRM Success factors (contd…) • Use trained, experienced consultants – Select trained, certified and experienced consultants • Actively involve end users in solution design – Incorporate the knowledge of the end users into the system design • Invest in training to empower end users – Training should teach employees how to effectively execute the business processes enabled by the CRM system. • Use a phased rollout schedule – Phase your deployment schedule each based on the CRM objectives – Each successive phase leverages the work and experience from prior phases to produce a “quick win” • Measure, monitor, and track – Once a CRM system goes live, the organization must measure, monitor, and track the system’s effectiveness, with an eye to continuously improving performance. Source: Oracle: Siebel October 7, 2010 46
- 47. CRM Resources Books Magazines & Journals CIO Magazine (www.cio.com) Customer Relationship Management (www.crmmagazine.com) Information Week (www.informationweek.com) Web Resources Dyche, Jill. The CRM Handbook. Pearson Education 2004 Keer, Anderson. Customer Relationship Management. TMH The One to One Manager: An Executive’s Guide to Customer Relationship Management. New York: Random House, 1999 Websites www.crmguru.com www.destinationcrm.com www.crmdaily.com www.searchcrm.com www.crm-forum.com www.crmassist.com www.crmsupersite.com www.crmproject.com www.crmxchange.com October 7, 2010 47
- 48. Glossary of Terms • QM: Quality Management • PM: Project Management • PRM: Partner Relationship Management • ROI: Return on Investment • ROR: Return of Relationship • CVP: Customer Value Proposition • TCO: Total Cost of Ownership • CAGR: Compounded Annual Growth Rate • ESP: External Service Provider • NPD: New Product Development October 7, 2010 48
- 49. Thank You October 7, 2010 49
Hinweis der Redaktion
- The highly competitive Internet market has empowered customers to demand both quality products and world class customer service. As products become increasingly less differentiated, customer service will distinguish market leaders from market losers.
- Lets understand what do we mean by each of these keywords. Customer: The word historically derives from "custom," meaning "habit"; a customer was someone who frequented a particular shop, who made it a habit to purchase goods there, and with whom the shopkeeper had to maintain a relationship to keep his or her "custom," meaning expected purchases in the future. Relationship:
- With the changing business scenario, the customer view of the ‘delivered value’ of the product or the service is changing drastically. When buying a product or a service, every customer used to have only a single purpose in mind (its USE) which acted as the key evaluator for that product or service. Today, the value has changed and it has in effect changed the way in which the customer looks at the product or service. Today, usage is not the only criteria but all the additional benefits that the product or service can deliver. The customer looks at a number of factors before buying the product or service e.g. Quality, Availability, Delivery service, Price, After sales service etc.
- Knowing the customers is not enough. The key differentiating factor here is how effectively the customer information is used to your benefit. Its all about knowing your customers better than your competitors.
- Customer Focus is all about putting your Customer ‘FIRST’ –at the employee level, at the process level, at the policies level, at the strategy level: all in all its about aligning your organization to the changing needs of the customer. The challenge here is not only to know your customers but to know your customers ‘Well’.
- Building a Customer Focused Enterprise is the key to an effective CRM strategy. The customer sits at the heart of the system interacting with the enterprise through the 3 key customer centric processes i.e. Marketing, Sales and Service. The interaction happens through the touch points created by various communication channels. The 3 customer centric processes interact with all the other enterprise components making use of the central customer data. The enterprise in turn interacts with the external environment to get the customer information. This gives a 360 degree view of the customer where the enterprise is driven by the customer (data) placed in the centre.
- Let us now look at the concept of the customer-centric process cycle. Marketing, Sales and Service form the 3 major process areas to be looked at from a customer-centric perspective. From identifying your customer base to delivering superior value to your customers, the diagram above gives a flavor as to how our processes can be aligned to focus on our customer-centric business objectives. Each of these processes are discussed in detail in the slides to follow.
- Marketing: It has been defined as a process which “consists of analyzing market opportunities, researching and selecting target markets, developing marketing strategies, planning marketing tactics, and implementing and controlling the marketing effort to satisfy customers and generate profits.”
- From a seller's point of view, a sales process mediates risk by stage-gating deals based on collection of information or execution of procedures that gate movement to the next step. This controls seller resource expenditure on non-performing deals. Ideally this also prevents buyers from purchasing products they don't need though such a benefit requires ethical intentions by the seller. Because of the uncertainty of this assurance, buyers often have a buying or purchasing process. Sales processes are generally more common for companies that either have large revenue risks that require systematic assurance of revenue generation and/or those that choose to use a more consultative sales approach (e.g. Saturn, IBM, Hewlett-Packard). Strictly even an effective ad hoc or retail sales process can be described by steps of an ideal sales process though some of the steps may be executed quickly. Often a bad sales experience can be analyzed and shown to have skipped key steps. This is where a good sales processes mediate risk for both buyer and seller. Many companies develop their own sales process; however, off the shelf versions are available from companies such as Huthwaite International and Miller Heiman. These provide a customisable process and a set of electronic tools that can be freestanding or can be integrated if required with the company's CRM or opportunity management system. Sales Cycle consists of: Planning Process Execution Process Analysis Process Feedback loop: Plans Execution Activities Results Analysis Control Plans
- The highly competitive Internet market has empowered customers to demand both quality products and world class customer service. As products become increasingly less differentiated, customer service will distinguish market leaders from market losers.
- Companies need capabilities in the following eight areas for successful CRM: CRM vision: Building a market position against competitors with defined value propositions based on requirements, personified by the brand and communicated. CRM strategies: Turning the customer base into an asset via delivery of customer value propositions (CVPs). A strategy provides objectives (for example, development) and defines how resources will be used in interaction. Valued customer experience: Ensuring that the propositions have value to customers and the company, achieve the market position and are delivered consistently. Organisational collaboration: Involving the changing of culture, structures and behaviours to ensure that staff, partners and suppliers work together to deliver what is promised. Processes: Managing customer life cycle processes, such as inquiry, welcome, complaints and "winback," and processes in analysis and planning that build customer knowledge. Information: Ensuring that the right data is collected and the right information goes to the right place. Technology: Managing data and information, customer-facing applications, and supporting IT infrastructure and architecture. Metrics: Defining internal and external measures of CRM success and failure.
- CRM vision is the company "personality." Without it, customers will not have a clear image of what the company offers in comparison with the competition, which would leave service expectations unmanaged and at the mercy of market forces. Employees need a vision of what to deliver to customers. The vision should motivate staff and enable them to work together, generate customer loyalty, gain greater market share and turn target customers into advocates. A vision starts with understanding market demand as well as the company's market position, then creating a core proposition to target customers that they will value and that stands out from the competition. This core proposition should be a declaration of intent around which a CVP and culture can be built. Next, the company needs to consider the set of competitively differentiated brand values that the customer values, such as expertise, independence, innovation, involvement and quality. These values should be determined from the customers' rather than the company's view. Too many companies believe that they know what customers want, but find out through costly mistakes that they do not. They overinvest in services that customers do not want or value, and they fail to invest enough in the elements of service delivery that would generate value and, thus, loyalty. Finally, companies need to produce an outline of what the customer experience should be for different situations and segments. Action Item: Companies should examine their core business proposition to customers, if it exists. In addition, companies need to determine whether this proposition is different from those of its competitors, whether it is understood by and motivates employees, and whether customers associate it with the company.
- A CRM strategy is not an implementation plan or road map. A real CRM strategy takes the direction and financial goals of the business strategy and sets out how the enterprise is going to build customer loyalty — that “feel-good factor” of customer connection with an enterprise that means customers stay longer, buy more, recommend the enterprise to others and are more willing to pay a premium price. The objectives of a CRM strategy are to target, acquire, develop and retain valuable customers to achieve corporate goals. For a detailed explanation on CRM Strategy please refer “Developing a CRM Strategy” (TU-14-9475) which discusses the steps involved in the development of the CRM strategy.
- A CRM strategy takes the direction and financial goals that the business strategy provides and revisits the marketing strategy to customise it. This strategy outlines how the company will build valuable customer relationships and customer loyalty. The CRM strategy is viewed as an academic exercise and disregarded unless it has an active connection to the business strategy. The first stage in developing a strategy, which entails an audit of the market and customer position, is to divide customers into segments (for example, by need and value) and to set objectives and metrics by segment. A traditional marketing strategy positions the company in its market relative to its competitors — the strategy audits the market position and defines objectives based on this and the product life cycle. The additional, required customer perspective positions the company with its customer base to create greater customer value and loyalty — it audits the customer base and defines customer objectives based on the customer life cycle. It is difficult to develop customer loyalty, understand customer value and have customer insight without understanding customers in the context of market segments and market forces. However, many companies attempt to determine customer value without knowing their share of a customer's "wallet." Action Item: Start gathering the detailed information needed to set market and customer objectives. Ensure that the objectives set are measurable and have associated key performance metrics.
- Customers’ experiences when interacting with the enterprise play a key role in shaping their perception of the enterprise — the value it provides and the importance it places on the customer relationship. Good customer experiences drive satisfaction, trust and long-term loyalty. Poor customer experiences have the opposite effect and, because bad news travels faster and further than good news, they harm the enterprise’s ability to create new relationships with prospects. Most of the customer experience occurs at the interface between the customer and the company — particularly in service sectors. It is delivered through a front-line experience, such as salespeople, call centre agents, marketing and product brochures, field engineers, deliverers, invoicers, Web sites and mass-media advertising. However, it is filtered through customer expectations. That is, customer satisfaction can be as high for shoppers in a high-end store (such as Harrods and Neiman Marcus) as it is for shoppers of less-high-end stores (such as, Costco and Ikea). In many cases, the shoppers are the same. As a result, these intereactions are not just customer service, but the customers' experience of products and services, mediated by their expectations. In the context of customer experience management (CEM), customers can be customers, employees, partners, students or citizens (in e-government). The management part of CEM comes in the form of: Helping to set expectations. Delivering on the promise during the experience Collecting customer feedback and providing a company's response to the feedback. Feedback can be explicit, as in a survey, or implicit, as when a company follows a customer's mouse clicks while the customer navigates a Web site. Customer experience is not separate from CRM, as some vendors and service providers would like to portray it. Action Item: Companies should consider the before, during and after of every customer experience. Invest more in the before and after of CEM by investing in processes and technology that improve expectation setting and feedback. For more information, please see www.gartner.com, "Customer Experience Management Strategic Analysis Report."
- Poor customer experience can place relationships at risk of reduced share of wallet and defection. The case study shown in slide 9 is from a retail store in which defection accounted for $19.6 million in lost revenue per year. In this example, introducing operational customer feedback should increase the level of complaints and enable more of them to be resolved. In addition, the system should provide feedback for improvements to the customer experience. Resolving additional complaints and improving the customer experience will reduce the level of defection and business risk. Some companies that specialise in customer feedback technology (such as CustomerSat, Respond, ResponseTek Networks and ViewsCast) report that, on average, operational feedback can help to reduce defection by 2 percent to 3 percent per year. Action Items: The customer experience affects revenue potential at every interaction. Enabling staff to add their own touches to a consistent, basic service will improve satisfaction in staff and customers. Use customer and staff feedback to design, develop and personalise the customer experience. Encourage customer feedback by telling customers how their feedback changes the service.
- Many enterprises believe that implementing CRM technologies makes them a customer-centric organization. They forget, ignore or deliberately avoid the necessary changes to the enterprise itself. True CRM means that individuals, teams and the whole enterprise must become more focused on the needs and wants of the customer. The term “organizational collaboration,”, highlights the many facets of the customer-centric internal change needed to deliver the required and desired external customer experience. As a critical part of a CRM program, it will involve changing organizational structures, incentives and compensation, skills and even the enterprise culture. Ongoing change management will be the key. Organisational structure, behaviour and culture are developed over a long period and require deliberate action to change. Employees should understand why they need to change and why they should support the initiative. This requires communication at the corporate level (that is, what the company is trying to achieve, and its value to the company and its customers) and the individual level (that is, how employees will benefit). The five ingredients for successful CRM changes to the company and to individuals are: Leadership: CEOs want to build more-relaxed, non-hierarchical organisations with a strong sense of purpose, and they know that they need to understand how to motivate their staff. Skills and competencies: Companies take great leaps with technology without developing the relevant business skills, particularly in IT, analysis, project management, facilitation and service. Knowledge: Sharing knowledge builds collaboration and innovation, but political barriers are high. The evolving tools and techniques of knowledge management should be employed. Organisation: Decision making needs to move closer to the customer and allow for greater speed of action. Organisational structures should use communities and virtual teams. Incentives: Targets should be aligned with customer goals at first, but recognising and celebrating contributions are more motivating. There are numerous ways to recognise people. For more information, please see www.gartner.com, "CRM Change Management: Creating Organizational Collaboration," R-20-6954.
- There are four main approaches to making changes to customer-facing processes: Much work has been done during the past 15 years to identify, automate and optimise generic processes in individual departments, such as campaign management in marketing, case management in customer care and sales forecasting in sales. Since the late 1990s, the focus has shifted to processes that are generic, but cut across multiple departments and apply to most industries, such as welcoming, change of address, death and quote to cash. In this case, the main challenge lies in building processes that will cross internal departments and functions, because the politics of these internal organisations tend to present a barrier. This approach is likely to require the integration of many applications — for example, more than 200 applications in one government department, and more than 150 applications in one national telecommunications company. Generic processes may dominate the interaction relationship in some industries (such as high technology), but in other sectors (such as telecommunications or insurance) they are of little importance to CRM in comparison with specific processes that are unique to that industry. For example, fault restoration, service reliability and new service introduction are critical processes in telecommunications service provisioning. These approaches to customer-facing processes have merit, but they look from the inside outwards at the customer. As a result, the company and the customer are concerned about widely different key processes. Even within one industry, different companies will find that their customer bases have differing priorities and weights of importance for the processes that affect them. Therefore, more companies are taking an outside-in approach to processes. Action Item: Companies that are focused only on departmental customer-facing processes should work on automating end-to-end processes that cut across departments. Consider welcoming, death and change address as base starting points. For more information, please see www.gartner.com, "Suggested reading: Business Process Automation: The New Buzzword in CRM," T-19-5892.
- Re-engineering requires process mapping or auditing to identify the processes that affect and do not affect the customer. In most cases, organisations will find 150 to 200 processes, depending on the granularity of the definition of a process. It is difficult to query customers without knowing which processes affect them and how to articulate these processes from the customer's perspective. Finding and focusing first on those processes that cause the most dissatisfaction is key. Meaningful, measurable targets can then be set using customer input. Process re-engineering may be significant, cutting across multiple departments and functions, and may take years to complete. For example, one Dutch insurance company took 18 months to re-engineer only one part of its claims-handling, which involved more than 20 processes. No process should be left without ownership. The processes that matter most to customers may be internal and within the control of the company, but many involve partners and suppliers. Communicating with customers about targets for service levels, appropriate compensation levels and feedback on improvements for individual processes are key parts of helping to design the customer experience. After meeting the basic needs of the entire customer base, the re-engineering approach can be repeated for more-targeted segments (for example, highest value or least profitable). Action Item: Companies should catalogue the processes in their organisation to identify which ones touch the customer or which ones the customer touches. Prioritise processes that customers have cited as being a hindrance and redesign those first. Then reiterate as needed. Focus on five or less processes at one time.
- Successful CRM demands the creation of an accurate, timely and complete single view of the customer, for operational and analytical purposes, and a customer information "blood supply" that flows through the organisation, and integrates operational and analytical systems. Customer data and insight needs to reach the touchpoints to support and prioritise customer interactions and drive profitable customer relationships. Organisations need a customer information management strategy that defines how they intend to source, manage and deploy their customer information assets. It should be owned and executed by someone with sufficient authority. Without this strategy and ownership, customer information will be disorganised, which will result in a profusion of unneeded data and a scarcity of vital information. Most organisations' customer information capabilities are poor because of numerous and fragmented departments, initiatives, databases and systems. This has several negative impacts on the company: The costs of storing and managing duplicated data. The inability to manage customer interactions and contacts efficiently, effectively and accurately. The lack of insight into the customers' actual and potential value. The lack of insight into the customers' past and likely future behaviour and requirements. The inability to segment and profile customers for differentiated product offerings and service levels. Action Item: Companies need to determine how to create and maintain a single view of the customer and a customer information and insight "blood supply" for their organisation. For more information, please see www.gartner.com, "Create a Single Customer View With Customer Data Integration," G00123563.
- Companies have many choices when sourcing CRM applications, ranging from the build-it-yourself solution to CRM as part of a business application suite. In between these extremes are the integrated CRM suites (for example, from Siebel), the CRM framework (for example, from Chordiant) and the best-of-breed integrated approach (for example, from Avaya, Selectica and Unica). The fully integrated suite approach guarantees internal integration (of data model and processes), but tends to lag behind leading best-of-breed or CRM suites in horizontal and vertical functionality. However, this approach often appeals to the board of directors, which is comfortable expanding relationships with its strategic partners. To compete, the CRM suite needs to offer better functionality and ensure integration with ERP systems. In most cases, both approaches (that is, CRM suite and integrated ERP CRM suite) impose a data model (an exception is E.piphany's operational CRM modules). In addition, they promote their own process definitions as industry best practices. Companies that aim to approach CRM from a process-centric viewpoint, re-express differentiating processes and continue using established data models will choose a framework approach. Different approaches need different amounts and types of integration work. Action Item: Companies need to review their functional, process, data model and integration requirements, and their skill levels and outlook to technology before evaluating and selecting CRM applications.
- Gartner suggests a hierarchy of linked CRM metrics. There will be different metrics for different areas of the organization but all help to achieve the ultimate customer and corporate goals. The framework has four levels: Corporate (e.g., market share, revenue, profit, margins, cost ratios) Customer Strategic (e.g., acquisition, retention, customer lifetime value) Operational and Process (e.g., complaint levels, response levels) Infrastructure Inputs (e.g., call answering times, data accuracy levels) Corporate metrics and corporate objectives are set by the board-level executives of an enterprise. They are not CRM-specific, but they affect the CRM strategy directly. Some are financial, others are competitive. Corporate goals are big, simple and understandable. For enterprises, they are aimed primarily at shareholders and investment analysts; for nonprofit or government organizations, they are aimed at stakeholders. Customer strategic metrics monitor the success of the CRM strategy. They are vital because they provide a key link between operations and corporate goals through the customer; however, because they are the most difficult to obtain, they are frequently left out. Customer strategic metrics come from both internal and external sources, and users will typically be senior management. Many of these metrics are financially linked, such as current profitability per customer and cost per-interaction. However, the key performance indicators (KPIs) are customer acquisition, development and retention (see "Financial Metrics for Measuring CRM ROI," SPA-13-0854). These tell senior management what sort of customers they are acquiring and rate the satisfaction, loyalty and wallet share of those with the greatest profitability potential. Operational and process metrics are tactical and provide the raw data for the customer strategic metrics. Similarly, customer churn rates and satisfaction levels are often correlated with staff turnover rates, staff knowledge levels, staff empowerment levels and staff satisfaction levels. Enterprises must establish which operational metrics drive their strategic measures. Infrastructure input metrics measure the efficiency of a specific process and provide input to the operational and process metrics. The difference between operational and infrastructure metrics is that infrastructure metrics can be measured real time, whereas operational and process metrics — such as response levels — have to be measured over time, taking trends into account. Infrastructure metrics can often be easily extracted from existing systems such as call center logs, Web site analytic systems, HR systems for employee qualifications or enterprise resource planning systems manufacturing defect rates and delivery dates. Figure 1 gives examples of metrics, purposes and users at each level. These are only a guide; each enterprise needs to have metrics specific to its own unique strategy. The overall aim of the framework should be to link together each level by cause and effect. For more information, please see www.gartner.com, "Getting the Best Out of CRM Performance Metrics," DF-13-1433.
- Few Examples of the CRM Performance Metrics based on the Metrics Hierarchy described earlier. Enterprises must set measurable CRM objectives and monitor all levels of CRM indicators to successfully turn customers into assets. Without performance management, a CRM strategy and associated program is destined to fail. Key challenges lie in establishing the "missing link" of customer strategic metrics that link processes to corporate goals, and in showing the unique cause-and-effect chain of metrics that supports the evolution of a CRM strategy, from infrastructure input to corporate objective.
- The highly competitive Internet market has empowered customers to demand both quality products and world class customer service. As products become increasingly less differentiated, customer service will distinguish market leaders from market losers.
- Benefits of CRM: CRM, if properly institutionalized within all the organizational processes, creates an opportunity to generate more benefits than expected: 1+1=3! The value is not seen as a tangible return in the short term, but is created by increasing the customer experience satisfaction loyalty repeat purchases increased revenues in the long term. The benefit is in terms of creation of customer loyalty and a dedicated customer base with a large buying potential.
- As seen from the previous slide it is quite evident that the benefits of CRM are manifold in the long term. The above slide mentions some of these benefits which are mutual in nature. The benefits to the customers through customer satisfaction lead to an increase in the profit margins of the company. Many of these benefits follow a cause-effect relationship between ‘Customers’ and the ‘Company’ in the long term and so are termed as mutual benefits.
- The highly competitive Internet market has empowered customers to demand both quality products and world class customer service. As products become increasingly less differentiated, customer service will distinguish market leaders from market losers.
- The degree of customer interaction determines the importance of CRM to that industry. It includes two key aspects i.e. Ability to gather & process customer information and the Value generated from the information. If we look at the matrix above, the ability to gather and process information and generate value from the same is equally high in Telecommunication and the BFSI (Banking & Financial Services Industry). But the BFSI sector has a better chance of benefiting from CRM as it gets the most valuable information from the very basic data collection processes in the industry. The potential for up-sell or cross-sell financial products is also higher as are the returns from the same. So everything depends on what information you can gather and then how can your Analytics tool convert that information into meaningful knowledge (Value) for your customers and the business.
- The CRM Market is full of CRM product variants having a host of applications and features. Based on the Deployment Options, the products are classified mainly as On Premise and Hosted. Majority of the CRM products are available as Out-of-the-Box products. These products have a varied set of functional applications dealing with different industry verticals already built into the product. There are also certain products which are built as per the business requirements and are known as the ‘Custom Build’ products. The Hosted solutions are the latest trend on the CRM market block as these are easily deployable over any platform across geographical locations and are easy to maintain.
- CRM Services Market Market Definition : Services for customer facing systems and processes that help organizations in attracting, serving, retaining and expanding relationships with customers. It involves Consulting, Development & Integration and IT Management.
- The highly competitive Internet market has empowered customers to demand both quality products and world class customer service. As products become increasingly less differentiated, customer service will distinguish market leaders from market losers.
- Although a great number of organizations have achieved significant results by implementing CRM solutions, some have not achieved all of the benefits they had hoped for. Instead, they encountered problems ranging from cost overruns and integration challenges to poor user acceptance. The good news is that all of these of problems are avoidable—if the CRM implementation is well designed and executed. Indeed, when properly deployed, CRM solutions produce a significant return on investment by streamlining business processes and providing frontline employees access to richer and more integrated customer information.
- Although a great number of organizations have achieved significant results by implementing CRM solutions, some have not achieved all of the benefits they had hoped for. Instead, they encountered problems ranging from cost overruns and integration challenges to poor user acceptance. The good news is that all of these of problems are avoidable—if the CRM implementation is well designed and executed. Indeed, when properly deployed, CRM solutions produce a significant return on investment by streamlining business processes and providing frontline employees access to richer and more integrated customer information.