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Customer Relationship Management

Customer Relationship Management. Managing the Change in HEPCO. Background of CRM initiative in HEPCO Projects defined Managing the change in HEPCO How YOU should manage the change in HEPCO The future. Agenda. Department 1. Department 5. Department 2. 360 degrees view. Customer.

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Customer Relationship Management

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  1. Customer Relationship Management Managing the Change in HEPCO Dr. A. Albadvi

  2. Background of CRM initiative in HEPCO Projects defined Managing the change in HEPCO How YOU should manage the change in HEPCO The future Agenda Dr. A. Albadvi

  3. Department 1 Department 5 Department 2 360 degrees view Customer 360 degrees view Department 3 Department 4 360ºView of the Customer Dr. A. Albadvi

  4. The Importance of CRM • 80/20 rule • CRM value formula: 20% of the customers contribute 80% of the revenue Retention => Reputation => Attraction Dr. A. Albadvi

  5. 3 Types of CRM Technology Operational CRM Roles and workplaces implementing best-business-practices Analytical CRM Underlying business warehouse and knowledge management Collaborative CRM Collaboration across all channels (mobile, phone, Internet) Dr. A. Albadvi

  6. 3 Types of CRM Technologies • Operational CRM • Customer-facing applications that integrate the front, back and mobile offices, including sales-force automation, enterprise marketing automation, and customer service and support • Analytical CRM • Applications that analyze customer data generated by operational tools for the purpose of business performance management • Collaborative/Communicational/Interactive CRM • Collaborative services that facilitate interactions between customers and businesses • Help to establish the lifetime value of customers beyond the transaction by creating a partnering relationship Dr. A. Albadvi

  7. Operational CRM: Touching the customer Customers Customers Customer Touch-points Web access Usage Fax Call Center E-mail Direct Sales Refined Business Actions Dr. A. Albadvi

  8. Business intelligence Process improvement Analytical CRM: Understanding the Customer Refined Business Actions Analysis Information Integrated Database Businesssystems Provisioning Sales Accountspayable/rec’bles Dr. A. Albadvi CallCenter Billing

  9. 3 Types of CRM Technology Operational CRM Roles and workplaces implementing best-business-practices Analytical CRM Underlying business warehouse and knowledge management Collaborative CRM Collaboration across all channels (mobile, phone, Internet) Dr. A. Albadvi

  10. 2. Analytical CRM • Data gathered within operational CRM are analyzed to segment customers or to identify cross- and up-selling potential • Data collection and analysis is viewed as a continuing and iterative process • Ideally, business decisions are refined over time, based on feedback from earlier analysis and decisions Dr. A. Albadvi

  11. Analytical CRM Example Dr. A. Albadvi

  12. 3 Types of CRM Technology Operational CRM Roles and workplaces implementing best-business-practices Analytical CRM Underlying business warehouse and knowledge management Collaborative CRM Collaboration across all channels (mobile, phone, Internet) Dr. A. Albadvi

  13. Re-configure organization & Re-engineer the work processes What’s the problem? Where’s the problem? What’s the Solution? How to Implement the Solution. CRM Implementation: How Manage the Change Dr. A. Albadvi

  14. Problems with work Organizations “Many of our current processes result from a series of ad-hoc decisions made by functional units, with little attention to effectiveness across the entire process. Many processes have never even been measured.” T. Davenport and J. Short Sloan Management Review Summer 1990 Dr. A. Albadvi

  15. Functional Organizations • Provides comfort zone • Creates checks & balances • Streamlines authority • Prevents flexibility & creativity • Lack of balance, source of bottlenecks • Highly overhead • Long lead-time Dr. A. Albadvi

  16. New Product Development Order Fulfillment Function Vs. Process-based Organization Customer R&D Manufacturing Sales Dr. A. Albadvi

  17. Re-configure organization & Re-engineer the work processes What’s the problem? Where’s the problem? What’s the Solution? How to Implement the Solution. CRM Implementation: How Manage the Change Dr. A. Albadvi

  18. Dr. A. Albadvi

  19. Re-configure organization & Re-engineer the work processes What’s the problem? Where’s the problem? What’s the Solution? How to Implement the Solution. CRM Implementation: How Manage the Change Dr. A. Albadvi

  20. The answer is: BPR • Increase Profitability • Increase Quality • Increase Customer Satisfaction • Improve Productivity • Increase Flexibility • Decrease Expenses • Increase Market Share • Increase speed to market Dr. A. Albadvi

  21. BPR for CRM BPR is the fundamental rethinking and radical redesign of business processes to achieve drastic improvements in critical measurements of performance (such as time, cost, and quality). A business process is a collection of tasks that together create value for a customer. Hammer and Champy, 1993 Dr. A. Albadvi

  22. Re-configure organization & Re-engineer the work processes What’s the problem? Where’s the problem? What’s the Solution? How to Implement the Solution. CRM Implementation: How Manage the Change Dr. A. Albadvi

  23. BPR Starts from Strategy, and then People Processes Technology BPR for CRM involves rethinking and redesigning business processes to create value to Customers. Dr. A. Albadvi

  24. Re-configure organization & Re-engineer the work processes What’s the problem? Where’s the problem? What’s the Solution? Howto Implement the Solution. CRM Implementation: How Manage the Change Dr. A. Albadvi

  25. Managing the Change in CRM • “ Organizational design and transformation can make the difference between success and failure in CRM.” Dr. A. Albadvi

  26. “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things.” Jean-Jacques Rousseau Dr. A. Albadvi

  27. Dr. A. Albadvi

  28. Dr. A. Albadvi

  29. HEPCO CRM PROJECTS Dr. A. Albadvi

  30. Projects Defined • Product-Service Knowledge Management • Key Customer Management • An integrated Customer Database 1. What am I offering that my competitors are not? (the value element) 2. How can I build better relationships with my most profitable customers? (the service element) 3. How can I use IT to help? (the technology element) Dr. A. Albadvi

  31. And before we start, a questionnaire! (my homework!) The Customers Who are they? What do they want? Why do they want it? Why should they buy from us? Why should we supply them? Dr. A. Albadvi

  32. The Three Aspects of Marketing Company Staff 2 3 1 Customer Competitor 1 External Marketing 2 Internal Marketing 3 The Moments of Truth Product Dr. A. Albadvi

  33. Are there different kinds of Customers? Dr. A. Albadvi

  34. A Portfolio of Customers Many One Off Exchanges for continuing relationship No Opportunity or no desire Little scope for mutual Added Value Low switching costs ‘Always-a-Share’ if offer is good enough Number of Customers Relationships Commitment and trust from both partners Real opportunities for win-win High switching costs ‘Lost for good ‘ if relationship fails Loyalist trading Few Low High Customer Importance Dr. A. Albadvi

  35. A Portfolio of Customers Transactional Collaboration · · Profit today Profit tomorrow · Short term horizon · Long term horizon · Low investment · High investment · ‘Contractual trust’ · ‘Goodwill trust’ Dr. A. Albadvi

  36. TRANSACTION vs. RELATIONSHIP TRANSACTIONRELATIONSHIP OBJECTIVE Profitability of individual Profitability stream over the transaction life of the relationship STRATEGY Volume of new business Penetration of existing customers Credit emphasis Cross selling (credit, non-credit, deposit) MARKETING Product driven Market driven Credit emphasis Product knowledge FUNCTION Sales Management of internal and Go it Alone external relations Dr. A. Albadvi

  37. Rule 1: “The Customer is always right” Rule 2: “If the customer is ever wrong, re-read Rule 1” Provision must equal expectation Dr. A. Albadvi

  38. THE POSITION OF THE HEPCO In the market Prob (Sale) = (Uncontrollable Factors, Controllable Factors) The Competition The Customers Product/Service Who? What Segments? What Changes? Price Promotion Place Personal Selling People Organisation Who? What Strategies? What Changes? Dr. A. Albadvi

  39. Product Attributes Core Tangible Augmented Dr. A. Albadvi

  40. THE POSITION OF YOUR CUSTOMER Prob (P ) = A * P i j ij For each segment, identify Importance of the attributes (A ) All the suppliers’ scores (P ) j ij Dr. A. Albadvi

  41. Understanding how the Product is Bought (From the buyers’ perspective, not yours!) 1 What are the attributes? 2 How important are they? 3 How do I score? 4 How do my competitors score? Dr. A. Albadvi

  42. The Value Exchange Process DELIVERY OF VALUES COMMUNICATING VALUES EXCHANGE PROCESS ORGANISATION CUSTOMER CREATING VALUES UNDERSTANDING CUSTOMER VALUES Dr. A. Albadvi

  43. THE MARKETING CYCLE Distribution of product/service Provision of exchange opportunity DELIVER Communication of values and product/service benefits COMMUNICATE EXCHANGE PROCESS BUSINESS CUSTOMER UNDERSTAND VALUES CREATE Knowledge of customer and market characteristics Development and maintenance of product/service given customer perceived values Dr. A. Albadvi

  44. Product Attributes: Importance and Performance Hi import Work harder Keep it up Lo perf Hi perf Low priority Overkill Lo import Dr. A. Albadvi

  45. Different Marketing Models The Mass Marketing (Coke) The Continuous Innovator (Sony) Trust-based Marketing (Scottish Widows) Customer Loyalty Marketing (Harley Davidson) Low Cost Marketing (Go, Easyjet) The Over-serviced Market (Singapore Airlines, Daewoo) The Total Solution (3M, Eli Lilly) Good Citizen Marketing (Body Shop, Ben & Jerry) _______________________ (HEPCO) Dr. A. Albadvi

  46. DEFINITION OF QUALITY * THE CUSTOMER’S JUDGEMENT NOT YOURS * BOTH THE PRODUCT AND THE ASSOCIATED SERVICES * NOT ABSOLUTE, BUT RELATIVE TO COMPETITORS * DOES NOT INCLUDE PRICE RELATIVE QUALITY TENDS TO BOOST RATES OF RETURN Dr. A. Albadvi

  47. High Lesser Premium Product Positions Along the Price Performance Curve Value Good Average value on Relative price performance Average Price curve Commodity Greater Economy Low Value Low High Relative Product Quality pn208 Dr. A. Albadvi

  48. Projects Defined • Product-Service Knowledge Management • Key Customer Management • An integrated Customer Database 1. What am I offering that my competitors are not? (the value element) 2. How can I build better relationships with my most profitable customers? (the service element) 3. How can I use IT to help? (the technology element) Dr. A. Albadvi

  49. Managing the Change Dr. A. Albadvi

  50. Time The Life Cycle of Change Initiatives Potential (unrealized) Dr. A. Albadvi

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