Customer Relationship Management Hello, Hello, Is anyone there?

1. Dan Marino, CPIM Sr. Partner Marino Associates, LLC Customer Relationship ManagementHello, Hello, Is anyone there?

2. MOST COMPANIES NEED TO GROW REVENUE Best In Class CRM Companies state that profitable growth, rather than growth through aggressive customer, product or business unit acquisition, is the reason to implement a Customer Relationship Management program.

3. CRM REQUIRES A CULTURAL SHIFT Companies need to align their processes,employees, and systems towards a customer-centric philosophy.

4. CRM IS: A marketing philosophy based on putting the customerfirst. The collection and analysis of information designed for sales and marketing decisions to support and understand existing and potential customer needs. It includes: • Sales and Marketing • Product Line Managers • Demand Managers • Operations • Service • Finance • Systems

5. HOW MANY OF THE COMPANIES IN THE ROOM HAVE? • Implemented CRM and are achieving benefits • Started the process of implementing CRM • Contemplated the implementation of CRM and are not sure how to start • No plan or strategy for CRM

6. KEYS IN ACHIEVING CRM SUCCESS • Open access of all customer information to all employees that are customer facing • Link CRM to corporate goals • Select software that enables the users to apply customer information with speed and accuracy • Build cross functional buy-in and collaboration

7. How is customer intelligence data managed in your company? • Multiple data bases throughout the company to difficult to access • Single data base/accessible and current • Customer information is not kept in a data base no formal system

8. CRM REALITY • CRM is a management discipline • CRM blends customer intimacy with economies of scale • CRM is a data base of needs and preferences and this information is available to anyone in the company • CRM is absolute customer focus • CRM is when the strategic thrust of a business is customer focused

9. BEST IN CLASS CRM PRACTICES REPORTED GREATER THAN 25% YEAR OVER YEAR IMPROVEMENT IN: • Annual revenues • Customer acquisition • Customer retention

10. HOW IS A CRM INITIATIVE VIEWED IN YOUR COMPANY? • A strategic goal • Thought of as tactical only • A Sales department goal only • Not considered an important strategic initiative

11. RECENT ARTICLE IN THE WALL STREET JOURNAL General Motors audit on what the Company would have to change to be able to make cars to order. The answer?  “We’ll have to change everything.”

12. THE IMPLEMENTATION OF CRM REQUIRES THE ENTIRE COMPANY TO CHANGE THE WAY IT THINKS ABOUT THE CUSTOMER: • Who are your customers? • What do they want and expect from your company? • How can they be better served?

13. COMPANIES THAT HAVE SUCCEEDED IN THE IMPLEMENTATION OF CRM HAVE EMBRACED A STRATEGY THAT HAS RE-ENGINEERED THE COMPANY’S: • Focus • Training • Education • Technology • Energy • Product Development • Customer Communications • Personal • E-Mail • Fax • Internet

14. REASONS FOR CRM IMPLEMENTATION • Companies who begin to embrace CRM often have no one single strategy. • They are pushed into CRM by a compelling business problem or a series of customer relationship issues. • They may be losing market share even though cost, quality and solutions are equal

15. CRITICAL ATTAINMENT FACTORS • Top management support is a must when implementing CRM. • Review and value map your business approach before re-engineering. • Build a strong functional CRM team. • Outline the information required to affect the appropriate CRM change. • Integrate CRM tools into your system seamlessly. • Review your technology requirements and only invest in high tech solutions if required.

16. CUSTOMER RELATIONSHIP MANAGEMENT STRATEGY CRM business strategies must clearlydefine where the business benefits willcome from and how these benefits are distributed and, very importantly, in what priority?

17. BEST IN CLASS CRM PRACTICES WILL TYPICALLY: • Centralize management of customer information at the corporate level • Utilize both operational and strategic analytics to respond to high value customers • Take a long term approach to growth by defining customer value according to lifetime value models

18. Companies must understand that customers want and need contact with your company. You must be able to provide this contact: • How they want it • When they want it • What they want it for • .

19. HOW DOES YOUR COMPANY MANAGE ITS CUSTOMER BASE? • Does not individualize customers • Individualizes service by customer • All customers are treated as equal

20. CRM VALUE QUOTIENT • CRM solutions should focus attention on the right customers. The most valuable customer might not be the biggest spender or the most frequent buyer. • Big Spender (high maintenance) • Frequent Buyer (small order quantities, high fulfillment cost)

21. CRM VALUE QUOTIENT cont’d • The perfect customer value quotient is difficult to obtain, but by tracking: • Discount Rates • Product Profitability • Customer Acquisition cost • Cost of Service • Number of Support Calls • Fulfillment Cost It can lead you into knowing and individualizing service based on customer value to your company

22. CURRENT BUSINESS CONDITION ASSESSMENT Checklist • Current Company Process and Business Rules • Has Management communicated throughout the organization a clear CRM STRATEGY ? • Is there a ranking of customers that is used when managing the relationship? • Has Marketing articulated to Management the competitive environment that it is competing in? • Review existing customer databases • Conduct internal interviews with management • Conduct voice of the customer interviews with a cross section of your customer base

23. BUILD THE BUSINESS PLAN • Develop a Detail Project Plan that supports transformation to CRM • Develop a formal CRM Project Team • Define Project Scope and Timelines • Prioritize all Key Elements of the Plan concentrating on competency requirements, education, training and capacity • Establish quick wins (homeruns). Things that can be complete in as little as 3 months’ time and will provide: • Financial Impact • Morale Impact • Validate Process • Early Success

24. CRM STRATEGY NEEDS TO FOCUS ON: • Customer Retention • Rank customer based on ABC • Concentrate on retention campaign • Customer Service • Provide exceptional service in all areas • New Customer Acquisition • Manage the cost of obtaining a new customer

25. DRIVERS FOR CUSTOMER SATISFACTION • Return on Sales • Companies that give good service achieve 12% Return on Sales compared to 1% for companies with poor Customer Service • Market Share • Higher market share • Perceived as a Quality Company • Demand premiumpricing • Internal Customer Satisfaction • Positive Word of Mouth

26. KEY BENEFITS OF CRM • Reduce the cost of customer acquisition • Improve customer retention • Improve the up-selling of additional products and services • Treat your customer with consistency and quality • Improve information flow for Sales and Operations planning • Dynamic information flow for Operations planning

27. ESTABLISH PERFORMANCE MEASUREMENTS • Increases in annual revenues • Improved customer retention • Improved acquisition rates • Improved accuracy in forecasting customer requirements • Improved stability in the S&OP process • Improved utilization of inventory and capacity • Improved supplier management

28. IMPLEMENTATION STRATEGY Modular Approach VS. Big Bang

29. MODULAR APPROACH Function Specific • Marketing • Sales • Logistics / Fulfillment • Call Centers • Benefits • Gradual shift of corporate culture from Product-Centric to Customer-Centric • Drawback • Shift of long-term strategy • Cost Ongoing • Customer data silos continue to exist within company

30. BIG BANG APPROACHCorporation Wide Approach Benefits • All functional areas cut over to the same system • No legacy systems interface • Elimination of redundant systems • All areas sharing the same information • Single source for training and support Drawbacks • Massive Implementation • Massive amounts of: • Support • Education • Training • Legacy Systems are turned off • Culture change required • Cost

31. CRM TEAM PROCESS • Customer Relationship Management Champion • Executive Sponsor • I.T. Management • Management Representative from each department touched : • Sales • Marketing • Customer Service • External CRM Advisor (consultant) • .

32. CUSTOMER RELATIONSHIP MANAGEMENT PITFALLS • Top management direction • Change culture is difficult and change management is not understood • Poor project management • The effects of CRM on current business processes • CRM is not understood • Lack of a solid strategy • Lack of clear goals • Lack of defined objectives • Lack of training and education • Existing technology is inadequate

33. HELLO? HELLO? IS THERE ANYONE THERE ? CRM success requires the total committed resolve of a corporation to commit its resources and to change its culture in a continual campaign that results in the optimization of customer and partner satisfaction, revenue, and business efficiency. Despite the cost and risk, the uncertainty and the noise, CRM is valuable,viable, and real, and it’s not going back in the box.

34. Closing Slide Dan Marino, CPIM Danam333@aol.com Customer Relationship Management Hello, Hello, is anyone there? B-06 Please return your completed session survey to the room monitor or the collection boxes near the exit.