Customer Relationship Management

Customer Relationship Management John Tullis DePaul Instructor john.d.tullis@us.arthurandersen.com

Agenda • Introduction • Current Situation • Grounding CRM • Approaching CRM • Next Steps

Business vision • Customer relationship strategies supporting the vision • Who are the company's customers • What are the top three: • business issues • customer relationship issues • information systems • How does your customer relationship add value for the customer and to the company bottom line • What is the greatest obstacle facing customer relationship today • What is the company's expectation from customer relationship management e.g. customer sat, ROI etc. Current Situation

Recent cross industry CRM engagements have revealed several priorities among executives concerning customer relationships • Knowing about customers • Understanding their current and future needs • Maximizing the yield from that relationship • Cost containment / value • Service consistency; enterprise - wide Grounding CRM

These engagements have further shown multiple business purposes among companies for pursuing CRM • Increasingly competitive markets • Fragmentation and disintermediation • Globalization and deregulation • New and nontraditional competitors • Customer sophistication • Easy access to information • Convenience and personalization expectations • Extended value in products and services • e-Business revolution • Anytime, anywhere, anyhow access • Collaborative dialog v. one-way marketing communication Grounding CRM

... the same can be said for goals and impact to the organization... • Unique goals at the tactical level however strategically... • Provide consistent customer value add experiences • over multiple access points • across key company capabilities • within each line of business • Organization Impact • Vision / Cultural - customer view v. our view • Customer ownership/responsibility • information, intelligence, access • Communication • customer, company, employee Grounding CRM

... and impact to the value of the customer interaction • "Pre CRM" • Industrial economic model • add value to an input and pass it along • maybe insufficient to maintain leadership • CRM • Information age model • Recognizes customers consume AND create value • customer to customer • customer to company • environments that create knowledge advantage Grounding CRM

Grounding CRM CRM: Alignment and linkage between what customers value ...and your own capabilities to deliver I. Customer "Vision" Ideal -Optimum possible "Value" Customer Value -Attributes of "Ideal" delivery ( Customer Requirements ) MOTs II. Company "Vision" Essential delivery of the -Premier Process Capabilities customer-defined "Value" ENABLING INFRASTRUCTURE

Customer Relationship Management Value Chain Customer Acquisition Customer Development Customer Retention • Who are the profitable customers ? • How do we attract them ? • How do we deliver what the customer wants, how they want it, when they want it ? • How do we build and sustain customer loyalty ? Experience indicates that CRM requires support by an enterprise-wide value chain that encompasses the life cycle of the customer . Grounding CRM

Create long-term, high value relationships with customer chain People Process Simplify and align processes that deliver sustained dialogue and personalized value Technology Enable customer choice among multiple enterprise access points Collect customerinformation at every point of contact Use business intelligence to customize marketing/sales/service at every point of contact Moving customer relationship towards a enterprise-wide view requires more than concentrating on a single function or activity... Grounding CRM ... rather it requires an approach that views multiple activities... crafted into a "framework"... that provides a "blueprint" enabling an excellent customer relationship providing maximum yield.

This "enterprise-wide view" begins with each opportunity to dialog with a customer... no matter how or where in the enterprise. Grounding CRM Customer actions during lifecycle & business responses CRM interactions/activities are executed across organizational boundaries throughout the lifetime relationship with the customer.

Experience shows an enterprise-wide view to customer relationship requires a comprehensive STRATEGY... • Focusedon customer wants and needs, with processes designed to ensure timely, accurate, flexible and complete responses creating VALUE that iscustomer centric. • "HOLISTIC"in approach to the development and management of customer relationship which effectively imbeds customer service as a enterprise asset. • Effectively establishes ACCOUNTABILITY within the company for results, ensuring delivery of value. • COMMUNICATED, understood and fully supported by leadership and staff at all levels. • Focused onCONTINUOUS IMPROVEMENTthrough systemic learningfrom past experience, supported by capturing and sharing lessons learned • Compared with other companies to establish an external BENCHMARK as a measure for improvement. Grounding CRM ...which forms the foundation for development of a Customer Relationship Management (CRM) framework.

... and must consider more than the traditional customer service environment... Grounding CRM

Customer Expectationof Promised Product or Service Provider's Perception of Customer Expectations G A P Product or Service Standards or Measurements Actual Product or Service ... development of a CRM framework begins with understanding customer expectations/perceptions and the capability to deliver on wants and needs... Grounding CRM Customer Perceptions of Delivered Product or Service

Attractors/Differentiators Advantage Attractors/ Differentiators Satisfiers Satisfiers Basic Expectations Basic Expectations Customers’ Vision Capabilities Satisfaction Parity Enablers Time Satisfiers Attractors (things that would delight the customer) ...identifying the hierarchy of customer needs and wants, provides specific direction for CRM framework formation... Grounding CRM The "hierarchy" of customer needs identifies behavior drivers: (the "must-haves")

Customer-defined Relationship Vision • "I want...." • "I need...." • "I would be delighted by..." Customer "Vision" Of Ideal Relationship Transaction Stress Points & Service Standards or "Moments of Truth" Best of Breed/World class: • Service Standards • Performance Capabilities Essential Service Process Capabilities Best of Breed/World class • Actionable "Design Points" Enabling Infrastructure ... thus ensuring a successful CRM framework grounded in customer need and want that drives appropriate enterprise capability and enablement... Grounding CRM

...which forms the foundation for design and development of a CRM blueprint. Grounding CRM

"Grounding" CRM within the enterprise presents solid value propositions and can be measured. • Key Value Propositions: • Enhanced ability to offer personalized incentives and "lock-in" satisfaction • Real time insight for adapting current products/services • Cost proficient regular customer contact • Early warning of customer dissatisfaction and defection • Venue from which to "continuously" earn trust with the customer • Ability to continuously update individual and group needs and wants • Reduced marketing and access costs • Venue from which to gain and provide knowledge • Key Metrics: • Operational expenses • Transaction cycle time • Customer satisfaction Overall End of Transaction Grounding CRM

Successful CRM projects provide insight for vision development... • Critical Success Factors • Addresses clearly defined business objectives • Executive sponsorship / champion. • Customersare consulted • Recognize the CRM transformation is evolutionary and not a 'One Time Effort • Realistic budget and implementation timetable • Execute an iterative phased rollout that balances dependencies, benefits, and assimilates the new approach • Change management (human behavior) issues are addressed and ongoing Approaching CRM

Recent Experience - Retail • Challenge: • Preempt margin erosion in a "soon to be" commodity driven market through improved customer relationship • Key Issues: • Current "CRM" strategy - ad-hoc • Org. focus - "burn & turn" • Market strategy - something for everybody • Backoffice - weak Frontoffice - missing • Approach: • Rebrand & focus on "premium" market segment • Wallet share and market share • Minimize "cut-rate" product suite • Key transformation activities - multiple IBM practices • Strategy development • BO/FO process reengineering • Access point development / redesign Approaching CRM

Recent Experience - Utilities • Challenge: • Maintain/increase marketshare while managing deregulation pressures and int'l competition • Key Issues: • Reduce customer service ops costs - the more the merrier • Culture transformation - what customer • Technology - bits & bytes will do it right • Skills requirements - who to keep • Approach: • Consolidate customer service operations • Reengineer/develop CRM processes • Key transformation activities • CRM transition strategy development • Technology / process design & implementation • Facilities transition planning • Education & training planning and implementation Approaching CRM

Customer Relationship Management Value Chain Customer Acquisition Customer Development Customer Retention • Manage Markets • Manage Sales • Manage Customers The CRM Value Chain is leveraged through three key customer relationship capabilities. Approaching CRM

Managing Markets. Defined business mission, objectives and current position within the marketplace understands the enterprise understands marketplace dynamics, economic trends, and technology understands the key demographic forces understands customers' wants and needs Identified and evaluated attractiveness of relevant segments in the marketplace. developed customer profile "triggers" for key, attractive market segments assessed current and future product/service offerings in relevant markets assessed strengths and weaknesses in relevant market segments. Determined the "face-to-market" approach for relevant market segments. understands profitability and lifetime value of target customers. knows market segments that align with its core capabilities, strengths, weaknesses knows value propositions for all market segments Approaching CRM

Managing Sales. Defined channel management plan developed criteria for selecting channel participants. optimized channel offerings mix. identified resources for channel plan. Developed opportunity management processes. able to capture, qualify, disseminate and track opportunities. procedure for assigning resources to opportunities. aligned opportunity process with the channel management plan and market segment strategies. capability to create and manage customer profiles. leverages usage of technology for sales opportunity management. Developed the appropriate enablers to execute and manage the process. able to provide appropriate training, motivation, compensation and incentive programs. knows which customers are buying its products/services and why. Approaching CRM

Managing the customer. Understands the level of service its customers expect by market segment. customer service strategy is tailored for market segments can predict the inquiries that target customers will make customer service plan is aligned with other CRM capability planning customer service plan leverages technology, alliances and partnerships. process for effective complaint capturing and problem resolution in place. Knows customers’ ease-of-use requirements knows its target customers' needs for “special handling”. “special handling” procedures are aligned with CRM capability planning. uses customer history to further pinpoint its target customers. Develops the skills, resources, facilities, and data to efficiently deliver service. processes in place for any employee to capture and access customer input. methods in place to organize customer input, identify patterns & prioritize options, leverage other customer facing processes (AR, AP etc.) understands satisfaction performance and competitive benchmarks customer satisfaction process is closed-loop Approaching CRM

MANAGE MARKETS MANAGE SALES MANAGE CUSTOMER ORGANIZATION PROCESS INFO ACCESS TECHNOLOGY FACILITIES The development method in the buildout of a CRM blueprint focuses on key capability points (KCP) which must be in place and aligned for successful CRM transformation. Approaching CRM

CRM "enablers" represent the infrastructure that must be in place to support the essential customer relationship capabilities Approaching CRM

Experience indicates that typically a CRM project of this nature is accomplished in iterative project cycles over four phases... Approaching CRM

Manage Sales Manage Market Manage Service Organization Process Info Access Technology Facilities This method of analysis gives a consistent "view" within each phase of our work methods from assessment of the "as-is" environment to deployment of the "to-be" state. Approaching CRM

Week One Week Two Week Three Week Four Week Five Week Six Week Seven Week Eight PHASE 0 - CRM ASSESSMENT Initiate Project Assess Current Environment Conduct / Workshops Define "To Be" Environment Develop Roadmap Recommendations Prepare and Present Final Report The Assess & Plan phase can vary depending upon scope but generally executes over a 8-12 week period... Approaching CRM ... resulting in a CRM Roadmap showing iterative phase initiatives and project requirements

Strategy and Vision CRM Roadmap CRM Strategy CVM Assessment CRM Briefing Customer Contact Management Customer Campaign & Market Management Customer Intelligence Management Call Center Start up & Consolidation Channel Optimization Customer Market Research Segmentation Strategy Contact Center: - Telephony Enablement - Call Center Sales & Service Application - Web Enabled Contact Center Channel Integration Management Data Harvesting Segmentation & Selection Personalized Interaction Enrichment Data Mining Internet Sales/ Service Other Access Channel Enrichment Campaign Development, Management • Analyze • Profile • Score • Discover • Trends • Affinities • Patterns • Associations Mobile Sales & Service Automation Channel Integration Management • Customer Feedback • Campaign Tracking • Product & Service Strategies Field Service & Dispatch Enterprise Connectivity Next Steps

Customer Relationship Management