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  1. 1. PRESENTED BY VARSHA RANA PG-06-095 VISHAL WADEKAR PG-06-119 Successful Customer Relationship Marketing IBM
  2. 2. It is a Comprehensive Strategy and Process of Acquiring , Retaining, and Partnering with “Selective Customers” to create Superior Value for the Company and Customer . Defining CRM
  3. 3. C-MAT Model <ul><li>( Customer Management Assessment Tool ) </li></ul><ul><li>The model encompasses all the essential elements of practical management. </li></ul><ul><li>It assumes you know what market you are in and where do you want to be. </li></ul><ul><li>This Model defines the scope of customer management. </li></ul>
  4. 4. Analysis and Planning <ul><li>Customer management starts with understanding the: </li></ul><ul><li>Value </li></ul><ul><li>Behaviour </li></ul><ul><li>Attitudes </li></ul>
  5. 5. process People and Organization Technology Measuring the effect CM Activity Targeting Enquire management Welcoming Know customers Customer development Managing problems Win back The customer Experience competitors The Proposition Analysis and planning
  6. 6. C-Mat Model <ul><li>Analysis and planning- understanding the value, behaviour and attitude of different customers </li></ul><ul><li>The preposition- the understanding derived in the above step will help identify groups of segments of customers who should be managed </li></ul><ul><li>Customer management activity- Delivery of customer management </li></ul>
  7. 7. C-Mat Model <ul><li>People and organization-People deliver the activity </li></ul><ul><li>Measuring the effect-Measurement of people, profitability, proposition delivery, channel performance </li></ul><ul><li>Understanding customer experience- ratings, room of improvement, ratings given to the competitors </li></ul><ul><li>Information Technology-Integrated CRM strategies require integrated systems </li></ul>
  8. 8. Integrating customer data into CRM Strategy <ul><li>This section describes the results of a recent empirical study designed to reveal the level of deployment of customer data in CRM strategies. </li></ul><ul><li>Today technologies such as data warehousing and data mining allow companies to collect, store, analyze and manipulate enormous volumes of data. </li></ul>
  9. 9. The Quantitative Study <ul><li>Research Question </li></ul><ul><li>Data Collection </li></ul><ul><li>Respondent Demographics </li></ul>
  10. 10. Results <ul><li>Marketing Department Information </li></ul><ul><li>Customer Interaction </li></ul><ul><li>Brand or Customer Management </li></ul><ul><li>Budgets and Targets </li></ul><ul><li>Measurement </li></ul><ul><li>Databases </li></ul><ul><li>Marketing Tools used </li></ul>
  11. 11. Strategic data analysis for CRM <ul><li>Many Companies have not determined how to deal with the rapidly increasing volumes of data about customers now being recorded in and about their business, through research, operations or external data suppliers. </li></ul><ul><li>Two examples: </li></ul><ul><li>Consumer goods retailers, </li></ul><ul><li>Utilities, financial services and industrial marketing companies. </li></ul>
  12. 12. The product Dimension <ul><li>Those retailers do not know the identity of their final customers., while applying customer management disciplines to their immediate direct customers, must use product management to get best results. </li></ul><ul><li>This is called “Product Optimizer”. </li></ul><ul><li>The data is organized along the product dimension, and the key analysis task is to make sense of the possibly daily millions of transactions in which their products are involved. </li></ul>
  13. 13. The Customer Dimension <ul><li>Which customer do I want to market to, and which not? </li></ul><ul><li>How do I want to manage my customers? </li></ul><ul><li>Which products and services would I like to sell to particular kinds of customers? </li></ul><ul><li>At what price would I like to sell, through which channels of distributions, and when? </li></ul>
  14. 14. The Customer Optimizer <ul><li>Contact Management </li></ul><ul><li>Analytical Segmentation </li></ul><ul><li>Response Segmentation </li></ul><ul><li>Strategic Segmentation </li></ul><ul><li>Delivered Loyalty Segmentation </li></ul>
  15. 15. Data mining and warehousing <ul><li>Definition - Data mining is extraction of previous unknown, comprehensive and actionable information from large positories of data, and using it to make a crutial business decisions and their support implementation, including formulating tactical and strategic marketing initiatives and measuring their successes </li></ul>
  16. 16. Aspects of Data Mining <ul><li>Extraction of Information </li></ul><ul><li>Large Data Repositories </li></ul><ul><li>Formulating Initiatives </li></ul>
  17. 17. Why use data mining in marketing <ul><li>The companies seek answers for the following questions: </li></ul><ul><li>Customer based questions </li></ul><ul><li>Product or price </li></ul><ul><li>Distribution and communication </li></ul><ul><li>Customer gain and loss analysis </li></ul><ul><li>Customer Migration </li></ul><ul><li>Customer Solicitation </li></ul><ul><li>Promotion analysis </li></ul><ul><li>Cross selling </li></ul><ul><li>Seasonality analysis </li></ul>
  18. 19. Discovery lead- <ul><li>Usual situation </li></ul><ul><li>For new data mining users </li></ul><ul><li>First question “how can I get the data to solve my business problem”. </li></ul><ul><li>Three types of customers- Average customers, High value customers and defaulters </li></ul>
  19. 20. Discovery Led Work <ul><li>Correlation </li></ul><ul><li>It says, how does a group of factor relate to </li></ul><ul><li>some other group of factors </li></ul><ul><li>Segmentation </li></ul><ul><li>This involves defining classes and assigning </li></ul><ul><li>individuals to a particular class based on one or </li></ul><ul><li>more criteria </li></ul><ul><li>Propensity </li></ul><ul><li>This is a extension of either correlation or segmentation. Given </li></ul><ul><li>certain types of things what can be expected for the remainder </li></ul>
  20. 21. When to use a particular technique
  21. 22. Does the problem involve sequencing or time dependencies Does the problem involve summarizing variation in the data USE CORRELATION USE SEGMENTATION Is the main interest in broad class or usual class Look for deviation . USE DEVIATION ANALYSIS USE PROPENSITY ANALYSIS Does the problem involve predicting Behaviour Look for classes Yes Yes Yes Yes No No
  22. 23. Data mining interactive analysis Marketing and sales application Data mining application Data mining analysis function Data warehouse External databases Other databases Operational database RELATIONSHIP BETWEEN DATA MINING AND DATA WAREHOUSING
  23. 24. Analysis Requirement <ul><li>Provides a basis for discussion of: </li></ul><ul><li>What the value of the analysis or reporting is. </li></ul><ul><li>What actions might be taken as a result of what might be found. </li></ul><ul><li>What business benefits would arise from those actions. </li></ul><ul><li>A conclusion as to whether the analysis or reporting is therefore worth undertaking. </li></ul>
  24. 25. Pre-Relationship Planning <ul><li>Objectives: To determine what are the main variables by which relationship types are to be defined. </li></ul><ul><li>Example: </li></ul><ul><li>Contact Media </li></ul><ul><li>Contact Frequency </li></ul><ul><li>Positioning of Relationship </li></ul><ul><li>Buying Behaviour, as measured by FRAC </li></ul><ul><li>Loyalty </li></ul><ul><li>Estimated Lifetime Value </li></ul>
  25. 26. Continuing Relationship Management <ul><li>Objectives: </li></ul><ul><li>To determine whether the quantitative and qualitative boundaries between customer types remain the optimum. </li></ul><ul><li>To determine whether the relationship offered remains the optimum. </li></ul><ul><li>To identify which types of sales initiative and promotion work best for different customer types. </li></ul><ul><li>To identify opportunity area for achieving customer migration to higher-spend types </li></ul>
  26. 27. Customer Recruitment, Retention and Competitive Defence <ul><li>Objective: </li></ul><ul><li>To provide clear definition of which customers who are not currently in a relationship with the supplier should be targeted for recruitment taking into account their quality, creditworthiness, likely persistence etc. </li></ul><ul><li>To identify which customers are most at risk of or actually experiencing declining spend or completely inactive relationship with the supplier and the reason for this. </li></ul><ul><li>To identify which actions are most likely to prevent these customers from reducing or canceling their commitment to the supplier and which actions are most likely to regenerate their commitment. </li></ul><ul><li>To identify number and type of non-spending customers and evaluate the results of campaigns designed to stimulate them into use. </li></ul><ul><li>To evaluate the requirement for actions to stimulate cusomers who only buy rarely or customers gained from competition into continued purchasing activity </li></ul>
  27. 28. <ul><li>Part 2 </li></ul>
  28. 29. Sharing customer data in the Value Chain <ul><li>The ways company can share Customer knowledge are influenced by: </li></ul><ul><li>The type of data, </li></ul><ul><li>Sharing Process, </li></ul><ul><li>Data protection legislation and industry conduct guidelines. </li></ul>
  29. 30. Arguments for sharing customer knowledge <ul><li>Improved targeting of marketing strategy. </li></ul><ul><li>Improved targeting of marketing communications. </li></ul><ul><li>Improved/more relevant content of marketing communications. </li></ul><ul><li>Improved product planning. </li></ul><ul><li>Improved pricing. </li></ul><ul><li>Reduced costs of data acquisition. </li></ul><ul><li>Reduced costs of data processing. </li></ul><ul><li>Reduced media advertising. </li></ul><ul><li>Reduced direct mail expenditure. </li></ul>
  30. 31. Arguments Against sharing customer knowledge <ul><li>Increased complexity of the marketing process. </li></ul><ul><li>Increased marketing costs. </li></ul><ul><li>Increased problems with data management. </li></ul><ul><li>General conflicts of interest. </li></ul><ul><li>Conflict of interest over customer ownership. </li></ul><ul><li>Conflict of interest over data ownership. </li></ul><ul><li>System incompatibilities. </li></ul><ul><li>Legal Complexities. </li></ul><ul><li>Data Security. </li></ul>
  31. 32. Reasons for sharing of customer knowledge <ul><li>Sector specific issues. </li></ul><ul><li>Competitive situation. </li></ul><ul><li>Relative strengths and weakness of different partners. </li></ul><ul><li>Perceived costs and benefits of sharing. </li></ul><ul><li>Availability of trusted independent intermediaries to help. </li></ul><ul><li>Relationship between prospective Partners </li></ul>
  32. 33. Integrating customer management system <ul><li>Three types of CRM: </li></ul><ul><li>Collaborative </li></ul><ul><li>Operational </li></ul><ul><li>Analytical </li></ul>
  33. 34. Data Cycle Campaign Optimization Campaign Execution Results Measurements Learning & Feedback Data Provision Data analysis or mining Common Data
  34. 35. The intelligent supply Chain <ul><li>Redescribing Models of customer Management: </li></ul><ul><li>One to One </li></ul><ul><li>Transparent Marketing </li></ul><ul><li>Classic CRM </li></ul><ul><li>Personalized Communication and Targeting </li></ul><ul><li>Top Vanilla </li></ul><ul><li>Pure spot Selling/buying </li></ul><ul><li>Spot selling/buying within a managed roster </li></ul>
  35. 36. “e Value Chain Processes” ERP SCM eCom CRM PDM Integrated Transaction Store Optimize Business Process Engage Business Partners Nurture & Sustain Relationship Products to Market Faster
  36. 37. e-hub Buy-side tools Sell-side tools e-hub Buyer Buyer Buyer Buyer Buyer Seller Seller Seller Seller Seller
  37. 38. Buyer value proposition <ul><li>Streamline procurement processes. </li></ul><ul><li>Reduce transaction costs. </li></ul><ul><li>Access new market opportunities. </li></ul><ul><li>Transcend time and geography boundaries. </li></ul>
  38. 39. Seller Value Proposition <ul><li>Provide a new sales Channel. </li></ul><ul><li>Improve yield of Production processes. </li></ul><ul><li>Offload excess or obsolete inventory and excess capacity. </li></ul><ul><li>Anonymity </li></ul>
  39. 40. Market maker value proposition <ul><li>Time to liquidity. </li></ul><ul><li>Multiple revenue streams </li></ul><ul><li>Operating efficiency </li></ul>
  40. 41. Customer Value Management (CVM) <ul><li>Define: </li></ul><ul><li>A methodical approach for achieving the Strategic, profitable and Competitive positioning and alignment of a Company’s essential capabilities – its processes, organization and infrastructure. </li></ul>
  41. 42. CVM-Driven process <ul><li>Analyzing the company’s current capabilities, </li></ul><ul><li>Comparing it with the capabilities required to meet target customer's high-value needs, </li></ul><ul><li>Identifying any gap between desired and current capabilities, </li></ul><ul><li>Identifying the enablers required to close the gap, </li></ul><ul><li>Closing the gap. </li></ul>
  42. 43. Wireless customer management <ul><li>“ The way in which technologies and service are developing, and from emerging applications, that the mobile phone and other wireless devices will revolutionize our thinking about customer management.” </li></ul><ul><li>It will also open many new opportunities for companies to use mobile technology to differentiate their services and gain a competitive advantage. </li></ul>
  43. 44. Pervasive Wireless Devices <ul><li>Mobile phone are just one kind of wireless devices that can be used in customer management. </li></ul><ul><li>Combined with an appropriate smart card, the mobile phone adds remote functionality to the smart card, enabling the customer to execute all kinds of transactions that would have required insertion of the card into a reader. </li></ul><ul><li>Coming from another direction is the personal digital assistant (PDA). With opertaing system desgined to optimize use of limited display and battery life. </li></ul>
  44. 45. Principles of Mobile Customer Management <ul><li>In many sectors, companies need to: </li></ul><ul><li>Get to know their customers, and keep renewing their knowledge of customers. </li></ul><ul><li>Stay in touch with the customers, with timely and relevant communications, ranging from promotions to useful information. </li></ul><ul><li>Identify quickly when customers are not being served well and react. </li></ul><ul><li>Identify the customers needs - often before customers realize them – and fulfill them quickly. </li></ul>
  45. 46. Create Smart wireless devices <ul><li>It will allow customers to: </li></ul><ul><li>Check the e-mail. </li></ul><ul><li>Feed data in remotely. </li></ul><ul><li>Use the internet. </li></ul><ul><li>Express preferences to suppliers. </li></ul><ul><li>Have electronic purse loading and use. </li></ul><ul><li>Use ticketing. </li></ul><ul><li>Use micorpayments </li></ul><ul><li>Receive customized sales and service information and alerts from suppliers and content providers. </li></ul><ul><li>Control their households automations. </li></ul>
  46. 47. Major financial beneficiaries <ul><li>Telecommunications companies, who have seen use of their fixed telephony systems grow very rapidly due to online time. </li></ul><ul><li>User companies who are able to give much better levels of services before and after the sale. </li></ul><ul><li>User companies who have re-engineered their entire business to make it a web business. </li></ul><ul><li>User companies who used the web to extend their reach nationally and globally, or to enter new markets, possibly at much lower costs – some of these companies were totally new. </li></ul><ul><li>Intermediaries who are bale to present product and service options more effectively to customers and manage relationships more effectively with suppliers. </li></ul><ul><li>Content providers, who have found new markets for their content. </li></ul>
  47. 48. The sectors affected <ul><li>Financial services, where wireless technology is already being used for trading checking balances and the like, and where we expect it to be used in areas such as claims management and general customer service. </li></ul><ul><li>Travel and transport, where the prime use will be checking schedules, booking, delay alerts, tracking, locating facilities and the like. </li></ul><ul><li>Automotive, where use will be in marketing and sales, in locating new and used cars, managing the services cycle, and as an in-car device for all other purposes. </li></ul><ul><li>Utilities and telecommunications, where billing, switching and servicing will be the prime uses. </li></ul><ul><li>General business to business, where general use for communications within the supply chain will be supplemented by all other uses in this section for managing customers, suppliers and business partners. </li></ul>
  48. 49. Stages of Relationship <ul><li>Targeting </li></ul><ul><li>Enquiry Management. </li></ul><ul><li>Welcoming </li></ul><ul><li>Getting to know </li></ul><ul><li>Customer development/retention. </li></ul><ul><li>Customer development. </li></ul><ul><li>Problem Management: Intensive care through service failure. </li></ul><ul><li>Problem Management: Intensive care through customer change. </li></ul><ul><li>Problem Management: Pre-divorce </li></ul><ul><li>Problem Management: Divorce </li></ul><ul><li>Problem Management: Win-back </li></ul>
  49. 50. Smart Cards <ul><li>A technology that allows a single card to be ued for a variety of applications. These includes: </li></ul><ul><li>Customer Loyalty. </li></ul><ul><li>More accurate customer identification for marketing purpose. </li></ul><ul><li>More accurate customer identification for Validation purpose. </li></ul><ul><li>Local storage of customer data. </li></ul>
  50. 51. <ul><li>Part 3 </li></ul>
  51. 52. Global Customer Management <ul><li>Pervasive computing </li></ul>Amount & complexity of information that can be transferred cost-effectively Digital TV World Wide Web Mobile Fixed Telephony Diffusion level in the population
  52. 53. Changing Customer Management <ul><li>The supply chain </li></ul><ul><li>The customer management model </li></ul><ul><li>Content Management </li></ul>
  53. 54. Customer Management Through people <ul><li>Critical factors, why customer management programmes succeed or fail: </li></ul><ul><li>Restructuring current teams to create the right environment can be extremely difficult. </li></ul><ul><li>Strong programme management is absolutely critical. </li></ul><ul><li>The management role needs to change. </li></ul><ul><li>Customer management cannot be owned by the IT or marketing department alone. </li></ul><ul><li>Knowledge management is at the heart of customer management. </li></ul>
  54. 55. New competencies developed by Organizations <ul><li>Understanding Customers </li></ul><ul><li>Customer Strategy design </li></ul><ul><li>Contact strategy design and management. </li></ul><ul><li>Understanding business impact. </li></ul><ul><li>Managing customers/relationship </li></ul><ul><li>Managing, coaching and developing people. </li></ul><ul><li>Managing and interpreting customer information. </li></ul><ul><li>Innovating for the and with customer </li></ul><ul><li>Researching the market </li></ul>
  55. 56. Sector studies
  56. 57. Managing CRM in travel Industry include <ul><li>Managing high value individuals </li></ul><ul><li>Managing corporate individuals </li></ul><ul><li>Managing customers for a limited duration </li></ul><ul><li>Locational Variety </li></ul><ul><li>International variety </li></ul><ul><li>Loyalty management </li></ul><ul><li>Data support requirements </li></ul>
  57. 58. DEFINITION OF SERVICES SERVICE TYPE NATIONAL Multinational International To whom Customers experience service in one country only Customers experience service in one country only from company supplying in several countries Customers experience service in more than one country Examples Many customers of small firms Customers of multinational consumer goods companies User of international travel and communication Main competitive issue Identify service needs of local customers monitor competitor’s service standards As for nationals, plus development competitive advantage by transferring best practice from other countries A for Multinationals, plus identify international service needs of customers monitor international service needs of customers and monitor international competitor’s service standards Focus of service delivery Full range of technique –systems standards, recruitments and training etc used to attune delivery to customer needs As for national, plus….. Head office may focus on whether methodology being followed and right infrastructure exist Very strong focus on how people from different cultures handle people from different culture
  58. 59. Managing CRM in Airlines <ul><li>Reputation and recommendations </li></ul><ul><li>Safety Record </li></ul><ul><li>Lounge access </li></ul><ul><li>Direct flight </li></ul><ul><li>Ease in check in </li></ul><ul><li>Advance Check in </li></ul><ul><li>Guaranteed booking </li></ul><ul><li>Safe, fast baggage handling </li></ul><ul><li>frequent flyer benefit </li></ul><ul><li>Special offers </li></ul>THE NEED OF FREQUENT FLYER
  59. 60. The frequent flyer behavior airlines want to manage <ul><li>The small businessmen. </li></ul><ul><li>Managing the corporate business </li></ul><ul><li>Managing changes in traveling pattern </li></ul>
  60. 61. How airlines manage customers <ul><li>General sales team </li></ul><ul><li>Corporate sales team </li></ul><ul><li>Yield management </li></ul><ul><li>Trade sales team </li></ul><ul><li>Frequent flyer programmers </li></ul><ul><li>Product/Brand managers </li></ul><ul><li>Marketing Communications </li></ul><ul><li>Partnership Marketing </li></ul>
  61. 62. CRM in RETAILING <ul><li>IF THE RETAILERS WANT THE CUSTOMERS TO STAY WITH THEM THEY SHOULD DO THE FOLLOWING: </li></ul><ul><li>Recognize which customers offer them the best potential. </li></ul><ul><li>Keep the customers informed of what they are doing for the customers to persuade them to continue to keep in touch with them and buy from them. </li></ul><ul><li>Give them the type and level of customer service which is appropriate for them. </li></ul><ul><li>Reward them for staying loyal </li></ul>
  62. 63. Strategies for managing loyal retail customers <ul><li>Use data effectively </li></ul><ul><li>Specific product promotions </li></ul><ul><li>Specialist catalogues </li></ul><ul><li>Market research </li></ul><ul><li>Mystery shopping </li></ul><ul><li>Qualitative research </li></ul><ul><li>Having right product on shelf at right time </li></ul><ul><li>Maintain stock level </li></ul>
  63. 64. Communication <ul><li>For small customers store magazines would be effective. </li></ul><ul><li>Short term schemes (even as little as three to six months) should would be advisable to preserve the shopping habits. </li></ul><ul><li>Very difficult to send direct mails for the high traffic mass market retailers </li></ul>
  64. 65. CRM in Automotive Example-students, employed person, housewife, retired person National fleets, car rentals, leasing companies, local and central government, other public organizations
  65. 66. Beyond the basic vehical <ul><li>The product is not just the basic vehical, but may also include: </li></ul><ul><li>Product options </li></ul><ul><li>Finance- loans, payment schedule, guaranteed buy-back prices, insurance </li></ul><ul><li>After sales services </li></ul><ul><li>Servicing and damage repair </li></ul>
  66. 67. Distribution Channel Evolution <ul><li>The major changes are: </li></ul><ul><li>1.Emergence of car supermarket </li></ul><ul><li>2.Direct distribution. </li></ul>
  67. 68. 1.Car supermarkets <ul><li>Popular concept in UK </li></ul><ul><li>Wide range of choice at a fixed price </li></ul><ul><li>Value for money </li></ul><ul><li>Aims to create a classic retail environment </li></ul><ul><li>Displays 1000 to 2000 cars per sites </li></ul><ul><li>Selling about 250 to 300 vehicles per week </li></ul><ul><li>2000 to 3000 visitors per week </li></ul>
  68. 69. 2.Direct selling by automotive manufacturers <ul><li>Car makers are increasingly bypassing dealers in the UK, especially in their relationship with fleet buyers. </li></ul><ul><li>Major trend- to buy smaller fleets to buy direct. </li></ul><ul><li>Buying are negotiable. </li></ul><ul><li>Direct selling experiments are widespread , and the web is used extensively to support selected dealers. </li></ul>
  69. 70. CRM applications of call centers Targeting Outbound telemarketing to prospect list generated from internet and coupon campaign Acquisition Booking test drive, perhaps ordering too Welcoming Welcome and introduce call for every purchase Account management-Retention Replacement cycle calling at timed intervals before expected replacements Account management-Development Campaigns to cross sell and up sell (eg. warranties, accessories, financial services) to the buyers and to family members Intensive care-Service Problem Ensure availability to handle complaints, allow easier complaint tracking Intensive care- customer change Regular calling cycle to collect data on an y changes in need Pre-divorce Extra careful ‘listening’ in call center; triggering urgent action; active calling to identify what else can be done to help customers Divorce Outbound call to protect brand and offer route back Win back Out bound telemarketing
  70. 71. <ul><li>Traditional automotive CRM </li></ul><ul><li>Today’s CRM </li></ul><ul><li>Timings determined by the suppliers. </li></ul><ul><li>It was one way. </li></ul><ul><li>It was transaction focused. </li></ul><ul><li>It involved target volumes from lists. </li></ul><ul><li>It results in little learning by the supplier </li></ul><ul><li>Customer timing is known. </li></ul><ul><li>It could involve a dialogue overtime. </li></ul><ul><li>It could be continuous. </li></ul><ul><li>It could be focused on prospects and customers. </li></ul><ul><li>It could use predictive algorithms to decide who to talk. </li></ul>Strategic challenges in customer management
  71. 72. Consumer Durables <ul><li>Modelling Approach </li></ul><ul><li>The ultimate aim is to deliver an approach score, predicting: </li></ul><ul><li>Whether customers are likely to buy. </li></ul><ul><li>When they are likely to buy. </li></ul><ul><li>What they are likely to buy. </li></ul><ul><li>How will they behave after buying </li></ul>
  72. 73. The modelling process <ul><li>Hold group discussions to confirm key state of change </li></ul><ul><li>Built the sample database </li></ul><ul><li>Develop and implement questionnaire to gather missing present and past explanatory data </li></ul><ul><li>Profile brand, category and class acquirers non-acquirers of each, using hypothesis-based and discovery mining techniques </li></ul><ul><li>Identify key triggers for purchasing </li></ul><ul><li>Develop profiles of near acquires </li></ul><ul><li>Evaluate whether and how data triggers can be collected </li></ul><ul><li>Built the main database. </li></ul><ul><li>Identify current status </li></ul><ul><li>Market to them </li></ul><ul><li>Analyze success </li></ul><ul><li>Recalibrate the model </li></ul><ul><li>Extend to include the following two years </li></ul>
  73. 74. Utilities and telecommunication <ul><li>Good customers have the following attributes: </li></ul><ul><li>They buy for value and not just for price. </li></ul><ul><li>They don’t switch suppliers for small price gains. </li></ul><ul><li>They complain reasonably. </li></ul><ul><li>They are responsive. </li></ul><ul><li>They are “not bad” ,i.e., not risky or fraudulent </li></ul>
  74. 75. The changing focus on customer service <ul><li>Work done by one of the utilities has indicated that there are three contributors to reducing the propensity to switch, namely : </li></ul><ul><li>Satisfaction with the brand. </li></ul><ul><li>Satisfaction with the customer service- in all its forms. </li></ul><ul><li>Satisfaction with the category </li></ul>
  75. 76. Customer retention <ul><li>Period to be measured- the average length of time between the real decision about which suppliers to use , eg three years for cars, five to six years for mortgages. But for a product like LPG , monthly retention Measurement is necessary. </li></ul><ul><li>Retention of all customers is not equally desirable. </li></ul><ul><li>Most utilities have very high fixed cost, so unlike other companies, they cannot afford to be too indifferent to loosing large number of lower value customers. </li></ul>
  76. 77. Systems for utility customer management <ul><li>Managing millions of customers. </li></ul><ul><li>Managing customers over network. </li></ul><ul><li>Managing customers competitively. </li></ul><ul><li>Customer contact and customer service. </li></ul><ul><li>Regulatory and political factors. </li></ul><ul><li>The human factor and the “Utility Mindset” </li></ul>
  77. 78. Required business functionalities <ul><li>Customer and agent data management </li></ul><ul><li>Consumption monitoring and billing </li></ul><ul><li>maintenance/service management </li></ul><ul><li>Inventory management </li></ul><ul><li>Supplier management </li></ul><ul><li>Products/service/price </li></ul><ul><li>Sales and marketing </li></ul><ul><li>Customer dialogue management </li></ul><ul><li>Combining hardware and software to best technical effect </li></ul><ul><li>Scalability and flexibility </li></ul>