Customer Relationship Management Raghu Seelamonthula

Customer
Relationship
Management

Customer Relationship Management – Jill Dyche 1

Sales Force Automation


Strategic Framework for CRM


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.


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


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


Sales Force Automation – Key Components
•Locate & store information and
provide users a means of Knowledge
Management
communicating about and
adding to its contents from a
single application.

• Based on product Configuration
Support
configuration and price quote,
configuration tool provides
forms for electronic

Lead
communication of info.

•Provide foolproof strategies so Management
no sales task, document or
communication falls through the • Organizing and managing data
cracks. 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.


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.


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.


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


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


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.


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.


Sales Force Automation Dashboards


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.


Field Force Automation

Customer Sales Force
Service 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

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.


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.


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.


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.


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 company's 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


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)


End Note

• Q&A
• Adidas Sales Force Automation Case
Study


CRM in e-Business


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


Sales Force Automation – Key Components
•Locate & store information and
provide users a means of Knowledge
Management
communicating about and
adding to its contents from a
single application.

• Based on product Configuration
Support
configuration and price quote,
configuration tool provides
forms for electronic

Lead
communication of info.

•Provide foolproof strategies so Management
no sales task, document or
communication falls through the • Organizing and managing data
cracks. 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.


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.


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.


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.


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.


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


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


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


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


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


Supplier Relationship Management
• Supplier relationship management is a comprehensive approach to
managing an enterprise's 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.



Strategic 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



• 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


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


CRM in e-Business
Major 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.


End Note

• Q&A
• Case Study – E-Business in Small Danish
Furniture Manufacturers


Analytical CRM or aCRM


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 Contact
Database Database Centre
Database


Case for Integrated Customer Data

Demographics
Survey
Purchase Data
responses

Call Center Campaign
Contacts Data Warehouse Responses

Billing &
Returns
Payments

Web Activity


Data Analytics Architecture


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.


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


DW Characteristics & Fit with CRM

Data Warehouse Characteristics
•Subject oriented -- data are organized around sales,
products, etc.
•Integrated -- data are integrated to provide a
comprehensive view
•Time variant -- historical data are maintained
•Nonvolatile -- data are not updated by users

How 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


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.


Emergence of Active Data Warehouses


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.


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.


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


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 company's 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.


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.


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.

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.


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.


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.


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


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.


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.


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.


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.


Segmenting Customer Base


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.


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


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.


Credit-Risk Scoring - How does it Work

Offline Credit-Risk Modeling

Mining
Data
Customer, Analysis
Data Preprocessing
Customer history, Data
Background data

Current Enriched Scored
Transaction Transaction Transaction

Online Credit-Risk Prediction


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 Lifetime Value

Three 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


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


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 area's 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.


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.


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.


End Note

• Q&A


Delivering CRM – Planning your CRM Program


Strategic Framework for CRM


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


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.


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)


Defining CRM Success


The Big Picture


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


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 of
QUALITY 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.


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


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.


Mapping CRM Features to Business Requirements


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.


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


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.


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?


Constituents of CRM Business Plan


CRM Business Plan


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.


End Note

• Q&A


Delivering CRM – Choosing your CRM Tool


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).


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.


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.


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.

Steps in Product Selection

• Defining CRM functionality
• Narrowing down the technology choices
• Defining Technical requirements
• Talking to CRM vendors
• Negotiating Price
• Checking References


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

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


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


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?


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.

Other Development Approaches

• Alternative methods of developing and
deploying CRM for a variety of reasons:
– Home grown CRM
– Using ASP or Application Service Provider


Home Grown CRM

• “Doing CRM before CRM was even invented”
– Many companies have mature data warehouse and BI environments
which have evolved existing customer-focused applications (customer
profiling, campaign planning, product affinity analysis, product
recommendation engine etc) into tailored CRM platforms.
– As all data is centralized on a data warehouse, companies formalized
processes for integrating and deploying customer data to provide the
business with a 360-degree view of its customers.
• Given CRM’s strategic importance, companies had no
choice but to build their own CRM environments to
maintain their differentiation and confidentiality.
• Companies develop their own CRM Systems for
following reasons:
– Non-existence of core CRM capabilities at the time when needed.
– Perceive retail packages as to be expensive.
– Need combination of core function which are too specialized for single
CRM product.
– Assurance of a unique solution – one competitors cannot use and
vendors cannot reference.


Using ASPs or Application Service Providers

• Application Service Providers or ASPs develop, deliver,
and maintain packaged software applications on behalf
of their client companies, using web as the primary
development mechanism.
• Two types of ASPs:
– Web-hosting firms providing customer internet access plus a
range of services along with a robust technology infrastructure.
– Application providers offering customers access to specific
products and product packages.
• Why the rush to become an ASP? Web delivery
capabilities
– Making outsourcing a more realistic choice
– End users accessing CRM from browser interface need not
know where the customer knowledge is originating.


Customer Relationship Management Raghu Seelamonthula

Customer Relationship Management Raghu Seelamonthula

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