CRM Report
CRM Report
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PURPOSE OF RESEARCH RESEARCH METHODS DATA ANAYLSIS AND INTERPRETATION THE STUDY ON CUSTOMER RRELATIONSHIP
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In the 1990s companies began to improve on Customer Relationship Management by making it more of a two-way street. Instead of simply gathering data for their own use, they began giving back to their customers not only in terms of the obvious goal of improved customer service, but in incentives, gifts and other perks for customer loyalty. This was the beginning of the now familiar frequent flyer programs, bonus points on credit cards and a host of other resources that are based on CRM tracking of customer activity and spending patterns. CRM was now being used as a way to increase sales passively as well as through active improvement of customer service.
In today's competitive business environment, a successful CRM strategy cannot be implemented by only installing and integrating a software package designed to support CRM processes. A holistic approach to CRM is vital for an effective and efficient CRM policy. This approach includes training of employees, a modification of business processes based on customers' needs and an adoption of relevant IT-systems (including soft- and maybe hardware) and/or usage of ITServices that enable the organization or company to follow its CRM strategy. CRM-Services can even the acquisition of additional hardware or CRM software-licenses.
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The term CRM is used to describe either the software or the whole business strategy oriented on customer needs. The second one is the description which is correct. The main misconception of CRM is that it is only software, instead of whole business strategy.
Major areas of CRM focus on service automated processes, personal information gathering and processing, and self-service. It attempts to integrate and automate the various customer serving processes within a company.
operational - automation to the basic business processes (marketing, sales, service) analytical - support to analyze customer behavior, implements business intelligence alike technology Co-operational - ensures the contact with customers (phone, email, fax, web...)
Operational part of CRM typically involves three general areas of business. They are (according to Gartner Group) a Enterprise marketing automation (EMA), Sales force automation (SFA) and a Customer service and support (CSS). The marketing information part provides information about the business environment, including competitors, industry trends, and macroenviromental variables. The sales force management part automates some of the company's sales and sales force management functions. It keeps track of customer preferences, buying habits, and demographics, and also sales staff performance. The customer service part automates some service requests, complaints, product returns, and information requests.
Integrated CRM software is often also known as "front office solutions." This is because they deal directly with the customer. Many call centers use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost savings, and also encourage new customers.
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CRM solutions can also be used to allow customers to perform their own service via a variety of communication channels. For example, you might be able to check your bank balance via your WAP phone without ever having to talk to a person, saving money for the company, and saving you time.
Provide product information, product use information, and technical assistance on web sites that are
accessible 24 / 7
Help to identify potential problems quickly, before they occur Provide a user-friendly mechanism for registering customer complaints (complaints that are not
registered with the company cannot be resolved, and are a major source of customer dissatisfaction)
Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly
Provide a fast mechanism for correcting service deficiencies (correct the problem before other
Identify how each individual customer defines quality, and then design a service strategy for each
use internet cookies to track customer interests and personalize product offerings accordingly use the internet to engage in collaborative customization or real-time customization Provide a fast mechanism for managing and scheduling followup sales calls to assess post-purchase
Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support
Provide a mechanism to track all points of contact between a customer and the company, and do it in
an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion)
The CRM can be integrated into other cross-functional systems and thereby provide accounting and
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SERVICE SECTOR The service sector of the economy is going through a period of almost revolutionary changes in which established ways of doing business continue to be shunted aside. The current economic globalization is an impact of multidimensional business opportunities available worldwide in goods and more so in the services sector. The emphasis has shifted from the agricultural and the industrial economies to the service economy. Today, every firm has to compete with many domestic as well as multinational companies. The customer is bombarded with a variety of products to choose from. Shifting from one product to another and from one company to another is easy, as every product seems to be good and to be standard. As technologies and customer expectations are changing rapidly, businesses are now realizing the value of having long-term relationship with individual customers and other business partners. Also at this stage of intense competition, the only way companies can differentiate themselves from the competitors is by delivering a customized product or service which probably will help in retaining the customer. The emphasis is on enhancing the lifetime value of customers and developing partnering relationship with profitable customers. The focus of CRM is to make it easier for companies to reach out and touch their customers, and vice versa. This is the very reason for CRMs rise in service industry. Despite the considerable study and the widespread application, it appears that many services marketers have accepted the concept of relationship marketing with little examination of the basis for genuine, quality relationships. This is probably the reason why as much as 80% of CRM implementations has been a failure.
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COMMODITY SECTOR A category of stocks that relate to producing goods used in construction and manufacturing. This sector includes companies involved with aerospace and defence, industrial machinery, tools, lumber production, construction, cement and metal fabrication. A category of stocks related to the manufacture or distribution of goods. The sector is diverse, containing companies that manufacture machinery used to create capital goods, electrical equipment, aerospace and defence, engineering and construction projects.Consumer packaged goods (CPG) are products that are sold quickly and at relatively low cost. Examples include non-durable goods such as soft drinks, toiletries, and grocery items. Though the absolute profit made on FMCG products is relatively small, they are generally sold in large quantities, and so the cumulative profit on such products can be substantial.
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If CRM goals fall into more than two of these categories, you'll likely want to prioritize one over the other and plan a phased deployment. It's also a good idea to know at this point what your likely budget is, how flexible it is, and what your procurement officer or CFO will be looking for in terms of business justification. If you know walking into the project that you'll need to show a six-month payback period, for example, you can plan accordingly.
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CRM software can run your entire business. From prospect and client contact tools to billing history and bulk email management. The CRM system allows you to maintain all customer records in one centralized location that is accessible to your entire organization through password administration. Front office systems are set up to collect data from the customers for processing into the data warehouse. The data warehouse is a back office system used to fulfill and support customer orders. All customer information is stored in the data warehouse. Back office CRM makes it possible for a company to follow sales, orders, and cancellations. Special regressions of this data can be very beneficial for the marketing division of a firm.
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Does the emphasis of the CRM software package match the emphasis of your CRM objectives?
Identify your specific objectives and verify your CRM software can meet those needs.
Is your software user friendly? If you can't effectively use the software why use it? CRM software
training is usually available by contacting the vendor and asking for recommended referrals.
How do other companies feel about the software? Call the provider company and ask for a number of
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History Tracking - get instant perspective into all customer interactions Trend Management- see the status of all pending sales and potential revenue of entire pipeline
Remote Web Synchronization- automatically follow-up with leads generated from your site Automated Process Management - allows consistent communication with customer based on user-
defined criteria
Centralized Information - centralize, manage and simplify access to critical business information Industry Templates and Form s- allows access to a database of industry specific CRM forms
Sales & Quota Analyses - view forecasted sales, closed sales, and comparisons between sales and
quota
Synchronization Wizard - keep calendar and contact information up-to-date on your PDA or laptop
Remote Access Capabilities - access your CRM software through the internet.
Not all CRM software packages are the same. They will greatly range in price and capabilities. CRM Advisor suggests a thorough evaluation is done comparing multiple CRM software packages.
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corporation. Merchandisers and direct marketers lack expertise in the standard analysis applications sold by
business intelligence vendors today. Current retail data analysis systems require heavy IT resources to maintain and utilize.
According to The Marriage of Category Management & Customer Management, written by Gary Robins and published in RIS, July 1999, .Category Management and promotion management need to include analyses of loyal customers. Failure to consider the effects on loyal customers means resources spent on category management and promotion might be and probably is in some or many cases harming your business. Combining category and loyalty data analysis has been done before, but with great difficulty. The biggest hurdle now is getting robust, fast databases to handle the huge amount of integrated data.
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Kellogg Graduate School of Business, a study of a chain drug retailer showed a 30%/70% split, meaning the top 30% of their customers generated 70% of their revenues. It also revealed which categories were more important to top and bottom level customers. In another example, a small regional chain with seven stores targeted 18,000 of their best customers
based on recency and overall dollar amount spent. Of the 18,000 customers mailed, 921 responded, generating a 5.1% response rate. Total revenue brought in from this particular promotion was in excess of $227,000 generating more than $22 for every dollar spent on the promotion. The events average transaction was $24744 an almost $50 increase from their normal average transaction.
best marketing strategy for addressing price-sensitive purchasers is to attempt to change their preference structure by raising their awareness of, and preference for, specific brand/product attributes, whether they are tangible or intangible. Then try to persuade these Price Sensitive Purchasers that your offering has the better value, all things considered. The goal is to increase sales and market baskets of top switchers.
in a category. .It is not just sales, it is how it is affecting loyal customers,.was the mantra from the chain. In a test of the carbonated beverage category, the chain did not lose customers even after eliminating 26% of the category.s SKUs.
Cross-sell the most profitable products and increase the average basket size
A leading beverage company, which has been working with over 40 retailers, says that use of loyalty According to a senior category manager, .we did a
presentation with a small chain in Houston, Texas, and this company had a 6.5% increase in dollars per basket and a 9.8% gain in total dollars among their best shoppers. Page | 14
pieces were mailed bringing the retailer an additional $124,000 of co-op dollars. The piece featured 10 different products, received 16.4% response rate, and the market basket of the responders was 40% greater than the non-responders.
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Financial
CustomerView enables retailers to take existing customer data and use it to drive revenue, increase market basket size, and build market share with no additional capital expenses and labor costs. It enables the CFO to show increased margins on current capital and enables profitable growth.
Merchandisers
CustomerView enables merchandisers to improve the effectiveness of their staff. Using CustomerView, merchandisers can quickly see how certain products can increase market basket size. Using
CustomerView they can see how merchandise mix affects customer loyalty and adjust their assortment accordingly. CustomerView can help merchandisers measure and build retention. It can show market basket value of loyal vs. non-loyal customers. CustomerView can quickly help identify the value of a consumer that shops in critical categories vs. the shopper that does not.
Operators
CustomerView can help Operations Executives make changes in an intelligent way. Using
CustomerView a retailer can keep labor constant while increasing margins. CustomerView can help increase the depth of category purchases by turning cherry pickers into buyers, increasing a loyal customers shopping trips to a category and increasing overall market basket size.
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Consultants
Loyalty and POS databases tend to be stand-alone systems not integrated with category management systems. Most data is uncleansed and hosted in many locations. This leads to many opportunities for consultants to create systems to clean the data, aggregate the data, de-duplicate the data, household the data, etc. before the data enters the CustomerView system. There are also many opportunities for consultants to use CustomerView to help the retailers interpret, translate, and develop strategies based on the information and provide business practice recommendations.
Vendors
CustomerView can help CPG manufacturers build category/brand sales by using real retail data. CustomerView can help them build their share of market by identifying customers buying a particular category of products, but not their brands. CustomerView can show the CPG manufacturer how to increase multi-segment sales by identifying likely purchase behavior across divisions, departments or categories.
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4.4 Manage Your Value Propositions to Better Manage Your Brand and Your Business
A value proposition may be articulated in text on a Web site, catalog, or direct mail piece, or in a telephone conversation. This is where brand differentiation first appears: the proposition is the first impression of the brand and its value to customers. Thus it is critical in initiating conversations, transactions, and relationships. But a value proposition is so much more than a message. The value proposition drives the organizations core logic for creating value. Although its true that value propositions will naturally evolve over time as markets and competitive conditions change, the competitive advantage belongs to companies that can proactively and quickly adapt their value propositions for optimal business results. Professor Ari Ginsberg of New YorkUniversitys Stern School of Business insists that companies can better invent and reinvent value propositions by analytical means that center on customer behavior, in his words, analyzing dimensions of value. It is specifically in this area exploring dimensions of value that customer analytics can make an enormous difference in understanding customers well enough to generate more effective value propositions.
For managing value propositions effectively, companies need to first understand what customers value by using analytical tools integrated with marketing automation systems for creating and acting on customer intelligence. And to take this a step further, the analytics and automation are best supported by an enterprise view of the business and customers, driven in real-time for capturing, managing, and delivering data to marketers and analysts for decisioning.
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functions, including analytics, and they provide workflow engines that facilitate efficient problem and inquiry escalation, tracking and resolution. They provide customizable, dynamic scripting capabilities for the customer service representatives as well as the capability to record customer responses in a shared contact repository. In a call center environment, they also integrate with (or provide) computer telephony integration (CTI) capabilities that allow automatic call routing and automatic screen pop-ups containing customer and product information to agents' workstations as they are answering or initiating calls.
These are tools that automate the collection and distribution of all
types of sales information. They allow for the design of sales teams based on defined criteria. Calendar management, activity management, sales reporting and forecasting, lead distribution, and tracking sales contacts with customers and prospects are some of the myriad of capabilities offered within these solutions. Many also provide access to internal and competitive product information as well as the automated collection and distribution over the Internet of relevant external information such as breaking industry news and customer-specific events. Sophisticated pricing and product configuration engines and third-party channel management capabilities are also available.
campaigns and track the results. Generating lists of customers to receive mailings or telemarketing calls, scheduling automatic or manual follow-up activities and receiving third-party lists for incorporation into the campaigns are all typical functions. Internet personalization tools are offered here to track behavior on a Web site and allow tailoring of the contact experience, or generation of specific cross-selling opportunities, based on this behavior. Inbound and outbound e-mail management capabilities are also becoming popular components of the marketing automation suites.
Let's take a closer look at the marketing automation component because it has been positioned as the solution for all CRM analytics.
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Campaign Management
Segmenting customers, generating targeted marketing campaigns for these segments and tracking results are important parts of CRM analysis. Integrated MA tools provide these capabilities and provide campaign offers and results directly to the customer sales and support processes. Incorporating offers and solicitations into the common contact repository and prompting contact agents to follow-up on campaigns can yield dramatic benefits. Some of the features provided are:
Planning marketing activities and developing campaign hierarchies. Outlining marketing campaign objectives. Defining campaign success measurements. Coordinating multiple channels and event triggers to automate response actions. Building and testing sample campaigns on a subset of customers. Storing and reusing content from previous marketing campaigns. Measuring campaign effectiveness by linking directly to call center, front-line employees and sales
force.
Importing third-party target lists. Tracking fulfillments supplied to the client via each channel to avoid duplication and maximize
effectiveness.
Tracking customer inquiries related directly to campaigns. Tracking sales force closures related directly to campaigns.
Internet Personalization
Personalization is the ability to track and respond to customers in an individualized fashion based upon their past contacts and behavior. The true value of personalization in CRM is when it extends beyond the Internet to encompass all customer contacts across the organization. By integrating personalization into the front-office applications, every contact with your customers can be well planned and personalized. This is a good example of the acceleration of analytics into action. Features of personalization tools include:
Collecting information on Internet site visits. Addressing customers who visit the site by name and remembering their preferences. Page | 21
Allowing visitors to customize content to suit their purposes. Showing customers specific content based on who they are and past behaviors. Offering specific products (on the Internet or over the phone) based on past behaviors. Allowing for the possibility of self-adjusting campaigns and offerings based on customer behavior. Integrating technologies and techniques for optimal customer understanding based on transaction
E-Mail Management
E-mail management capabilities are used in two ways in MA - inbound and outbound. Inbound e-mail management capabilities assist organizations in handling inbound inquiries from customers. While on the surface this would seem to be a purely service-oriented activity, organizations are linking these facilities to their personalization technologies and thus tuning the resulting communications on the basis of CRM analytics. Benefits of this can be quite high as it offers a chance to extend personalization techniques to multiple communication types. Outbound e-mail management capabilities provide the ability to construct and execute permission-based marketing campaigns (where the dialog has been started with a customer via e-mail communications) and are said to be up to 20 percent more successful than traditional direct marketing at a fraction of the cost. Features include:
Automation of the targeting and sending of mass e-mails. Automation of mass e-mail responses. Use of decision engines to parse information from incoming e-mail correspondence. Crafting responses to incoming e-mail without human intervention.
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Business Operations are the core operational systems (billing systems, product or policy systems,
call center and sales force automation systems, etc.) that run the day-to-day business processes in an organization. Information originates in these systems and flows through a data acquisition process into the rest of the CIF where it is consolidated and integrated for strategic and tactical decision making. Frontoffice solutions generally reside here as they facilitate the day-to-day sales and service processes.
Business Intelligence
provides the capabilities required for the strategic decision making in the
organization. Business intelligence consists of the data warehouse, data marts and associated analysis tools, and can provide the technology infrastructure and information necessary to manage the complex relationships and analytics required to understand CRM interactions. Properly architected, the MA components of the front-office applications would reside here.
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Business Management
business intelligence. Business management consists of the operational data store (ODS) and its associated transaction interfaces as well as the associated oper marts. Business management systems are subject-oriented, integrated, current-valued and supply a single point of access for information across the enterprise. An enterprise customer profiling system is a good example of a CRM business management function.
The primary integration point for the MA components is the data warehouse contained in the business intelligence environment. The data warehouse is defined as a subject-oriented, integrated, time-variant, cleansed and non-volatile collection of data for strategic analysis. You can think of it as a big bucket of generic, detailed, enterprise-wide, static and historical data. The data warehouse can serve as the source of data for data marts and for the MA components (which are actually just another set of souped-up data marts). Unlike the data marts or MA components, the data in the data warehouse is not set up for a particular application or department. The data warehouse consists of standardized, consistent pieces of data. By constructing the data warehouse in the most generic and flexible way possible, you can build just about any data mart for CRM analysis. You are only limited by your technology and the data that you can acquire from your operational systems.
The data warehouse reflects the enterprise's view of data in terms of business rules and strategic
requirements. Because the data in the warehouse is to be used for multiple CRM analytical purposes spanning multiple departments, it must accommodate and reinforce the enterprise's vision of its CRM initiative.
It is optimized for flexibility. The data must not display a bias or prejudice toward any one kind of
analytical processing. For example, if the data warehouse is designed using a data model that is prejudiced toward known data relationships or certain business processes, then analytical activities that search for unknown relationships are compromised or, in effect, eliminated.
It provides detailed data for subsequent use by the data marts. Because the data warehouse must be
the source for data marts containing aggregated and summarized data, exploration warehouses containing detailed data, data mining warehouses containing statistical samples of data and MA components which fall somewhere in between in terms of detail and history required, it must contain the proper level of Page | 24
detailed data to satisfy these very diverse requirements. The goal is for the data warehouse to have the "least common denominator" level of data for the data marts and the MA components. It must serve star schemas, cubes and flat files for statistical analyses, and subsets of data for ad hoc querying. The Information Feedback loop, running across the top of Figure 1, is the other key component of the CIF for integrating MA components. This is the set of processes that transmit the intelligence gained through usage of the strategic CIF components to appropriate data stores. This is the mechanism by which we push BI "out to the masses." It is also the mechanism by which we allow the MA components to receive information from the data warehouse and to feed information back into the data warehouse or on to the operational systems or ODS. Examples abound of storing the results of BI analyses in operational systems such as the front-line applications. One such example is to store the results of a customer lifetime value (LTV) analysis - that is, the actual score given to each customer based on their calculated LTV to the enterprise. The numerical values generated from such an analysis can be stored in the front-office system and accessed by the MA components during the generation of campaigns or scripts for call center agents. Behavior toward each customer is altered based on the knowledge of the customer's LTV score. Higher valued customers may receive different campaign solicitations than those with a lower score. Conversely, the solicitations generated by the MA components should also be transported via Information Feedback into the data warehouse. This allows all analytic applications in the organization to take advantage of the valuable information generated by MA components. Beware of vendor sales pitches that contain phrases such as "our MA module can drive your entire marketing process," or "MA provides a direct link between CRM analytics and your customer contact points." While the capabilities embodied in the MA modules do provide significant value, they do not provide sufficient sophisticated analysis capabilities to be your sole vehicle for all CRM analytics. Instead, bypass the hype, implement MA capabilities that make sense for your organization and ensure that MA modules use the information feedback mechanism to feed information to and receive information from the data warehouse or operational systems. Staying true to an architecture such as the CIF will provide you with the guidelines necessary to build the integrated customer information environment required to drive your CRM strategies.
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5.3 New Customer Management Tools For Higher IQ and Peak Business Results
To create a sustainable competitive advantage through CRM or customer management and marketing processes, a business must master leading-edge intelligence tools that raise its organizational IQ (intelligence quality) to peak levels. Fully-informed business decisions, fully-informed tactics, and relevant, right-time value propositions to individual customers require an integrated infrastructure that can capture, analyze, and optimize information from across the extended enterprise including all customer channels with increasing speed and synchronicity. The best value propositions will be created when a business has the CRM tools to do the following: Understand the economics of your customer relationships both today and in terms of individual lifetime value to better anticipate the migration of customer assets over time; Improve your ability to evaluate and use every customer interaction as actionable marketing opportunities with rules driven lead management tools; Cultivate highly relevant and profitable dialogues with customers across all channels, including the e-channel, for better strategic brand and customer equity management; Align business resources and customer communications for effective tactical process execution that balances customer expectations and company objectives; Master sophisticated multistep and event-based marketing and know when your customers are most receptive to offers and messages; Intelligently manage the e-channel to drive revenue growth across all channels; and Leverage the full power of a real-time, enterprise-wide data warehouse.
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depends on each case and can only be calculated with that in mind. There is no universal equation in which to plug numbers or general projection figures that can be applied across the board. Fact is, CRM initiatives are company-wide endeavors and become more elastic and abstract because of this. Consequently, assessing costs is not as simple as checking the price tags on CRM software. Predicting costs must be done through a unique look at every case. In the end, the result of a successful CRM campaign will eventually minimize costs, such as the high price of luring and enticing new customers, and wont break the bank of any company. In fact, businesses will see an extremely healthy increase in profits while their costs will level off to a very manageable point if theyve succeeded in their CRM goal. Page | 27
Customization may not be all at the software end; you may have to do some process reengineering in your firm, as well. Remember to document everything. Make a user's manual for the software, and a process manual with flowcharts for the business processes. 5. Pilot implementation: Roll out a small pilot to marketing first After you have customized the system to your specifications, roll it out in a small, pilot environment. Start with your Marketing users; they will use the software heavily and will be able to provide you with some high-quality feedback. Keep it in a small group until you have the system customized the way you want it. When you have reached that point, roll it out to all users. 6. Full implementation: Communicate with users to explain the change As you roll the system out to all users, this will be a significant change for most of your users. In addition to learning a new software interface, many users will be faced with entire new business processes. The biggest factor here is communication. Make sure your users understand why this change is taking place; don't just mandate the change. Use training sessions and documentation to assist the users with the new system.
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organization is unique and goals and incentives need to be thought through on a case-by-case, department-by-department, and possibly user-by-user basis.
User Groups: Another component of success will be internal and external user group forums. On some set interval (daily, weekly, biweekly), especially in the beginning, internal user groups can be very useful to help team members learn from each other and to help ensure that standards are being developed and followed. External user groups are generally coordinated by the solutions provider. Determine whether or not user groups have been set up and plan to participate in them. These groups provide an excellent way to see how other similar companies are using the system and learn from their successes and mistakes. Advanced and ongoing training opportunities: Investigate what additional training opportunities are available. Most solutions providers have established programs for advanced user training. Many have web-based training, on-demand training and other periodic course offerings that focus on clients specific needs. There is not one right way to train. A well chosen software provider will have the tools in place to guide the team through this process based on the needs, goals and budget of the user organization.
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8.1 Introduction
Seeing CRM initiatives take hold and begin to pay off is often a waiting game. Its not a flip-the- switch product that automatically spits out results or something that will take affect overnight and cause profits to skyrocket while you sleep. The puzzle must be completed and time must play its part before true success will be seen. However, through dedicated and smart planning, businesses should see markedly increased profits, as satisfied customers will continually re-visit them. Gradually, as businesses get to know their customers, their customers get to know them, and a closely aligned partnership is formed. This one-to-one relationship is the catalyst that sparks both lifetime customer loyalty and revenue increase.
In the true spirit of thinking outside of the box, experts at the Gartner Group believe the most successful organizations will be those who, through innovation and focus on business effectiveness rather than merely efficiency, manage to break the mold of traditional business thinking. Being effective is paramount. The end goal of better serving customers and enabling a high percentage of customer retention cannot be met with out creative thinking and effective planning and actions. The task of Page | 34
perfecting the relationship between business and customer is always on going and requires special dedication and innovation as the commerce markets continually change and fluctuate. And over time, customers change, as does their behavior and needs, and business must be able to respond to that. Being on the cusp of the industry and always having a hand on the pulse of the customer is key for success. As the CRM initiative begins to take hold, key players will soon see patterns emerge among customers, will discover what a productive strategy is and what is not. This is the essence of a successful CRM project: being able to really know what will work for your customers, what satisfies them, and what keeps them loyal. The ability to get an accurate gut feeling about the marketing campaigns, new products, and the type of policies customers will respond to is invaluable. This kind of customer knowledge only comes from really digging in and being savvy about how you go about understanding the people that you hope will continually call on the services and products of your business. The ROI in this case would be compelling indeed.
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3. Build and maintain a relationship with quality consultants. Consultants are important not only in an initial deployment, but also as project parameters change - which they will, Liddell says. Monster.com works with CRM consultant Akibia, which lets the company quickly expand its CRM resources when necessary. Each time Monster.com acquires a new company, Liddell's priority is to quickly get those new team members up and running with Siebel sales tools - a process that sometimes requires extra hands. 4. Rely on internal resources. Consultants are helpful, but it's important to maintain ownership of a CRM project. "Nobody's more interested in our success than the team at Monster.com," Liddell says. Plus, somebody has to run the software once the consultants are gone. 5. Make sure everyone is onboard. It's important to have buy-in throughout the organization, Akin says. Financial support is necessary, he says, "but more important is an agreement to use the product universally." It's frustrating for end users if they expect to find a single source of customer service information online and it turns out a key department is missing from the site. 6. Align your project goals and implementation schedule. Berkson and his team at Thomson Financial try to stick to eight- to 12-week projects, rather than rolling out everything to everyone at once. Plus, no department is going to need every function in every application; users would be overwhelmed, Berkson says. Thomson Financial is in the process of upgrading its Vantive applications to PeopleSoft 8 CRM - the new Internet-based suite from PeopleSoft, which acquired Vantive in 1999. "We tend to implement in small, manageable phases," he says. Companies should identify their biggest pain points and greatest opportunities for return on investment, and make those an implementation priority. 7. Start with a low-risk pilot. One project up and running quickly can validate your CRM concepts, Berkson says. Choosing a relatively simple, straightforward project - such as outfitting a department that doesn't require integration with other back-end systems - is important. If you start with a complex trial, it can really drain momentum, he says. 8. Aim for configuration, not customization. Take advantage of today's CRM tool sets, Berkson says. Vendors have built more robust configuration flexibility into CRM applications and recommend that users minimize customizations. So if you can break the habit of writing custom code to accommodate unique business processes, it will be well worth the effort when it comes time to upgrade, Berkson says.
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9. Don't underestimate data requirements. The time and resources needed for data conversion and cleanup will always be more than you think, Berkson says. 10. Provide adequate training. "If you have the time and the resources, train in advance of rollout," Akin says. The university departments that are least enthusiastic about the RightNow products are the ones that weren't ready for it, he says. 11. Set communications standards. In hindsight, Akin wishes his group had set content standards among departments before going live with the project instead of trying to do it later. At USF, e-mail inquiries are routed to as many as 30 different departments. Setting standards for formatting responses can help maintain consistency of service. 12. Watch the details. CRM requires a team that is willing to take ownership of even the most minute details. Monster.com has team members who maintain the software, team members who constantly handle requests for changes and team members who police data quality.
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9.1 What Are Some CRM Products and What Can They Do For You?
CRM products are automated applications that support the accomplishment of corporate goals related to customers, such as increased revenue and/or increased sales efficiency (i.e., better results with lower expenditures from sales, customer service, and marketing.) These technologies capture customer data from across the enterprise, then analyze, consolidate and/or distribute it for use across the multiple customer facing departments (or processes) within the company.
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contacts, track sales prospects, provide sales forecasts, enter and track orders, and provide customized quotes for clients. Examples of these systems include, and on-line sales forecasting and order-tracking.
CallCenter Customer Service Systems:provide support for staff that answer client questions
or respond to requests for dispatch services. Examples of these systems include web-based customer service, customer service call tracking, improved customer service representative (CSR) access to client information, and automated dispatch and tracking.
client needs and/or past business trends. This lead generation could be dynamic (emailing offers or customizing web content) or static (providing targeted databases of clients by type). These systems include customer data mining, automated marketing campaigns, and customer personalization tools.
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users and costs around $500/user. A departmental system (which supports 50 300 users and has a more increased range of
functionality and increased ability and need for customization) usually costs around $1500/user.
An enterprise system (which supports over 500 users and has a higher range of functionality and
introduces dramatic change management issues and requirements for customization) costs around $3500/user. Some vendors quote this functionality for $2000/user.
Implementation and customization costs will add from 25% (limited system) to 100% (departmental)
to 300% (enterprise) for software installation, implementation, and customization. Some vendors estimate as much as 500% for implementation and customization. This does not include vendor maintenance and ongoing customization costs as well as cost of organizational process changes.
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Chapter # 10. E-CRM 10.1 E-CRM: Delivering a Superior Internet Customer Experience
How one Internet retailer delivers the highest quality customer experience, builds customer loyalty, and drives revenue
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An outsourced, hosted site with an EMC Proven application service provider (ASP) that could deliver a 24x7x365 service level commitment and technology on demand The resulting solution consisted of a highly functional e-CRM web site using the Oracle CRM eBusiness Suite, built on a modular EMC Storage Area Network hosted at a third party ASP data center location. The company implemented the solution in three phases: The Implementation Phasedesign and development The Production Phasesolution deployment and stabilization The Growth Phasedelivering more functionality to more users
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Customers like to interact with the same service regarding any transaction with the organization. i.e.: single view of your organization, while on the other hand, organizations that adopt a single view of their customers approach envelops the customers within the organization mesh. So, what really matters? Class A customer support centres characterized by the following: Customers information is up to date and accurately inserted in the data base, and it is accessible to all customer facing points. Staff has been carrying out customer support training and attaining in house standards. Calls and e-mails responses are regularly audited and monitored to maintain level standards. Internal process exceed customers expectations GAP analyses are carried out on regular basis (quarterly, annually) for individuals and also for processes. Statistical data should not be all that matters, well after all what do they actually tell you or indicates? The quantitative approach is rather to satisfy internal demands than customers. How many repeated customers do you have each year? This is really what matters, quality of service leads to a greater customer satisfaction and repeat of business which by its role will be reflected in the balance sheet eventually. Internal slogans are for internal consumption. For customers, perception equals reality.
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CRM analytics provides the key to those vaults and enables insight into customer behavior. Armed with that insight, your organization can now discover the right balance of promotional effort, cost, and support that will result in improved revenue and customer loyalty. CRM Analytics is an area that provides significant and rapid return on investment. Where do you start? At the foundation of CRM analytics are customer-centric data and approaches. Data must be organized and managed at the customer level with historical detail covering purchasing and returns behavior, contacts with customer service, payment behavior, and marketing response behavior. Beyond data, it is important to think in a customercentric manner. While it is important to ask, Who is likely to buy this new product if we offer a 10% discount?, you also need to be asking, Who are our most profitable customers and how has their
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behavior changed over the last three months? The goal is to maximize the value of your customers over the entire relationship with the customer, not for a single marketing campaign. Whenever the need for customer-centric data is established, organizations typically react by calling for an enterprise data warehouse with data collected from every possible data source in the organization. Unfortunately, the single enterprise-wide data warehouse takes too long and costs too much to build before any benefit can be gained. A more effective approach is to develop an information architecture that enables you to build smaller, more agile application-centered data marts. Such a design is possible today using the much improved capabilities of an ETL (extract, transform, and load) tool as the central repository of your data definitions and business rules (metadata). A central repository facilitates a single version of the truth, even as you build department- or application-level data marts one at a time. These targeted data marts must contain both atomic and aggregated data that can support multidimensional analysis. It is the ability to quickly view your data along different dimensions and to intelligently drill down into the data that enables you to proactively identify and address issues and opportunities.
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Your CRM analytics tool must provide you with a complete, customizable reports that include all the views and the queries available to you. Access to various reports, views, and queries should be controlled based on user roles and needs. All reports and informational views must be available for distribution in both electronic and hard copy formats.
Analysis helps devise strategies that maximize profitability, whether at the promotion level or at the customer or product level. Your analytical tool must be able to make your results actionable by integrating with operational CRM systems as well as with any back-office systems that can influence customer interactions. For example, it is important to know actual expenses by product or by customer in order to evaluate how certain products or customers contribute to profit.
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10.7 Asking The Right Questions To Get The Answers That Matter
AS E-BUSINESS IS EVOLVING TO WHERE ANALYTICS IS A REQUIREMENT
Not only does e-business present enterprises with growing volumes of data, it demands increasingly greater analysis. This presents a major challenge: integrating these new and frequently disparate data sources into coherent analytical formats. During the Webs early days (of just a few years ago!) most marketing activities were relatively static, involving publishing data sheets, product manuals, and other generalized marketing materials. This model is quickly evolving to include more dynamic applications. We are moving toward innovative personalization technologies that combine rule-based processing, telephony, intelligent content distribution, and other techniques to give Web companys powerful new abilities to create highly targeted, customized commerce experiences for their customers and partners. For these techniques to succeed, however, businesses will demand greater sophistication in analytical tools. Put another way, these companies will require on-demand detail on who their customers are; what they want; how they want it; and where and when they want it. Such knowledge can only come from business intelligence.
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segmentation. formation and best practices in sales and marketing by analyzing successful marketing
closures and time to close. purchase, deals, revenue generation, and resulting customer profitability. sell analysis. -sell/ upcontrol by measuring performance against key metrics, such as first call
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By packaging analysis, accelerating deployment, and putting information in the hands of the business users, analytic applications have the potential of delivering significant time- to-market value. The time value associated with decision-making may be the most important, although difficult to quantify, factor in figuring the ROI for an analytic application.
Sales
The best way to improve a sales forces effectiveness is to empower them with pertinent information on their target market. On-demand analysis of customer data fuel the ROI for a sales organization by creating a comprehensive view of the customer base, across all customer touch points. The quantifiable benefits of a sales analytic application come from improving the sales reps effectiveness, reducing the risk exposure during the sales cycle, and enabling the rep to sell more product. These key drivers of ROI all lead to increased revenue.
Marketing
The ability to track responses to marketing campaigns and profile target customers yields significantly greater returns on marketing dollars. ROI is traced through improved response rates or click-through for marketing campaigns and advertisements. CRM Analytics fuel improvements in ROI, which can be measured by more and better customers for your marketing dollar.
Customer Service
The customer support functions in an organization have significant influence over a companys recurring revenue stream. By enabling support organizations to track service levels for top customers, products requiring the most service resources, and bottlenecks to problem resolution, a company can optimize service levels, focus support efforts on the most costly problems, and increase customer retention and satisfaction. CRM Analytics allows us to ensure longer customer relationships, reduced customer turnover and lower overall support costs.
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Conclusion
Benefits As companies move from a product-centric to a customer-centric orientation, and as they add new ebusiness channels to traditional customer interactions, they need the tools to analyze and optimize their efforts. Traditionally, performing analysis across the many different systems and information sources about the customer has been a difficult task, involving significant data integration, data mart implementation, and extensive IT support for analysis and reporting.
Packaged analytic applications such as Synergy VisualSmart, with pre-packaged key performance indicators, analytic views, and an easy-to-use interface, deliver the competitive advantage of better business performance information without the expense and time of traditional decision support solutions. As a small- to mid-sized business (SMB), you face even more pressure to maximize every investment dollar. All the steps required to implement world-class CRM analytics may seem daunting. As an SMB, your focus is on maximizing value and minimizing your costs for deployment and maintenance of a CRM analytics system. Hosted application services, where a software provider provides access through a browser, provide the functionality that can accommodate your needs, minimize upfront investments, shorten deployment times and provide the functionality to get you deriving value quickly. With todays business environment putting increased pressure on you to make better decisions faster than ever, VisualSmart provides you with a quick and cost-effective way to make an immediate positive impact on your business.
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These business intelligence capabilities--once only included in the most expensive, high-end systems--are now more widely available, but few CRM vendors offer them for an affordable price. Because of the new, low price point, more businesses, and the users within these businesses, have the opportunity to implement these capabilities at a reasonable cost.
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Today's decisions get made at all levels within the organization. Cohesive decision-making is critical to the success of companies. This means more people stand to benefit from a well-planned CRM strategy as it raises the potential for even greater contribution from each employee to the top line.
For instance, "To provide our sales and marketing team with fast and efficient reporting on our sales activity, we've integrated Crystal Reports with our Maximizer database," said Murray Munro, senior vice president of national sales, marketing, and government relations at Growth Works Capital Ltd. "Having access to this kind of information in a user-friendly presentation enables our sales staff to interact with their contacts at a deeper level and allows our marketing staff to analyze trends and make plans for the future armed with key information."
Taking your customer relationships to the next level requires commitment from everyone within the organization. For companies that are considering a reporting, analytics, and workflow automation strategy, perhaps the best advice is a thorough evaluation of your strategic sales, marketing, and customer service and support processes. Then measure how the implementation of reporting, analytics, and workflow automation can positively impact your company's results. By conducting this analysis customers will be in a better position to leverage their existing CRM investment. When a CRM system is used to its highest potential, organizations will have a much better opportunity to drive more intimate, profitable customer relationships.
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1| Break down those silos. Having an integrated customer service solution is critical to maintaining customer service. Disparate databases of customer information prevent companies from gaining a holistic view of the customer throughout the organization. 2| Make a business case. Prior to selecting the CRM system, monitor employee behavior and performance to identify which business processes can benefit the most. Determine how the CRM system might help share information and resources, cut clutter, administrative duties, and duplicated tasks. 3| Keep customers in mind. While the technology that enables successful CRM is important, at its heart CRM is a business strategy. Finding out how technology can enable all of your company's touch points to facilitate its corporate strategy is key. "The software is only there to enable your implementation of a CRM strategy, not the other way around," says Izzy Franco, CRM leader for North America at Cap Gemini. 4| Ask and ye shall receive. Farm Credit Services of America wanted to become more vital to its customers and the overall rural agricultural credit business, where customer interactions are largely faceto-face. To evaluate possible new retail locations, employees asked their customers and discovered they wanted to carry out banking and financial dealings at their own place of business. So that's what they're doing. Ask customers how they want to interact with your company. 5| Build a team. Before selecting your CRM software, form a CRM team with reps from each department to make sure their colleagues' needs and concerns are addressed. Too often companies neglect to include the correct stakeholders, and the initiative fails to meet the needs of those tied to its results. Pick your CRM team wisely, as it should evangelize the new system when it arrives. 6| Consider people, process, and technology. One of the most common reasons why CRM initiatives fail is that executives tend to think of CRM as an IT project. In fact, it is an organizational and businessprocess change that requires companies to think about people, process, and technology to succeed.
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7| Create a project checklist. Companies need to consider the following six steps when implementing their CRM initiatives: creating a clear strategy, addressing organizational issues, enabling processes, implementing the appropriate technologies, recording and tracking the data that drives the insight, and measuring the appropriate metrics, according to Jeff Schumacher, an associate partner at McKinsey & Company. 8| Experience counts. "I can't emphasize enough the value of an expert consulting organization that understands our business [and] a vendor that has a track record," says Jean Marc Pigeon, president of Inortech. To that end, ask the consultant and vendor for customer references. 9| Take the Goldilocks approach. Some CRM tools are too big; others are too small. Find what's just right for your business. Just because other companies like yours use one approach doesn't mean you have to do the same thing. 10| Benefits come in many flavors. Cost justifications are critical, but look deep enough to see the indirect effect of changes to your CRM policy. Look past the dollar signs of implementation and consider things like employee efficiency, productivity, and customer satisfaction. 11| Calculate short- and long-term costs over time. CRM is not a one-time expense. Total cost of ownership (TCO) and return on investment (ROI) need to be used together when evaluating a CRM project. Expectations should be managed over time. Consider costs over monthly, quarterly, yearly, and three-year periods. Costs don't end with technology, so consider services as well, which can easily cost twice as much as the technology. 12| Emulate best practices. Nothing turns employees off like being forced to do their jobs differently for no obvious reason. Study your top sales and service people, then design or invest in technology that enables your firm's best practices--their best practices--to be emulated company-wide. 13| Get support from the top brass. If management doesn't believe in the new system, why should the employees? Many times the difference between a successful CRM strategy and a huge waste of money is a leader who motivates the rest. Once they're hot on the idea, you need to keep them committed, so communicate with them regularly. 14| Go with a CCO. Yes, another acronym to add to your mile-long scroll of industry terms, but this one's got potential, we promise. If you're lacking accountability across all departments, the chief customer officer is the person to bring it to your organization. Still not sure what a CCO really does? It's her job to keep an eye on everything we put on this list.
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15| Get a champion of change. Don't have a CCO handy? Choose a manager who's behind the implementation, understands the problems, realizes the benefits, and understands the importance of the implementation from the company's side, says Lorie Goudie, director of customer support for Tarantella. After all, there's nothing more motivating than somebody who always has that can-do attitude. Want proof? Just watch a Richard Simmons video. 16| Deputize wisely. A strong second-in-command, the person "who makes all your glossy words actually happen," is critical, says Sadie Baron, marketing project manager at Eversheds. 17| Set goals. Setting predefined and mutually agreed upon goals with your CRM team prior to selecting the CRM vendor will give an organization an idea of how well the CRM solution performs once it is installed. How can a company succeed if success cannot be measured? 18| Set attainable goals. Simply because one salesperson has an 80 percent close rate does not mean all salespeople can come anywhere near that. "Not all customers write business cases. Not all business cases have metrics. Not all metrics are reasonable," says Barton Goldenberg, president of ISM. Determine a department's average performance levels and aim for 5 percent to 10 percent increases in areas like sales, customer retention, or lead generation. 19| Cleanse preemptively. Identify your key client data set before you flip the switch and make sure it's accurate and up-to-date. Do the data audit from day one. 20| Keep it simple. Don't buy what you don't need. The fewer bells and whistles, the less time and money you'll need to devote to training. People don't like change as it is; keeping things simple only makes the switchover that much easier. 21| Success can be contagious. In baseball they say that hitting can be contagious. Implementing CRM is no different. With a full-suite product in particular, starting an implementation with a department you know will find success can make other departments start asking, "Hey, why can't we do that?" If one department finds success with CRM, others will want to as well. 22| Train early, train often. Give your employees as much time as possible to learn the new application. They don't like change any more than other people do, but the sooner you begin, the sooner they realize they're a part of the process and the quicker they will realize the benefits. Repeat and augment training as necessary to keep those skills fresh. 23| Identify quick wins. Tackle the smallest, easiest task straight away and save the hard stuff for later. Success early on gets the ball rolling and motivates employees. Page | 58
24| Take baby steps. Sales teams, like cats, can be finicky. When automating the sales force, roll out the CRM system in small steps. With many sales teams, the number one concern is,what's in it for me? Dump or force a strategy on them and they'll get cranky. 25| Focus on ROI. "CRM should provide salespeople with better pipeline reporting, rather than only make it easier to sell more. The latest CRM solutions are forcing salespeople to enter more administrative numbers than before. As a result, firms find they spend millions in sales automation only to learn that sales reps are still using ACT!" says Scott Nelson, Gartner vice president and distinguished analyst. 26| Slow down, Speedy. Don't get too far ahead of your customers in introducing CRM technologies-changing human behavior is tough, and takes time. Recognize that customers and employees may be struggling to keep up with the pace of technological change. New applications are best served up in small, measured doses, says Jim Johnson, director of information services at Master Lock Company. 27| Find super users. Why fight uphill all the time? Get the most enthusiastic people to use the system first. 28| Keep your eye on the prize. Measure the results and soothe the inevitable hiccups by showing people the benefits of the new CRM system, says Stephanie Ledoux, assistant vice president of customer and provider service at Blue Cross Blue Shield--Rhode Island. 29| Test the waters. Make sure your email and other communications are actually being delivered to the right people at the right time. Troubleshoot with test customers before making your services generally available. 30| See your customer through the same glasses. Various departments in your organization may see your customer as diversely as they would walking past a fun house mirror--attractive and valuable from one angle, unappealing from another. Using one integrated set of analytical data throughout the company can help executives to make key decisions about how much to invest in a particular customer. 31| Keep things uniform. Unify your message across all communication channels, including television, radio, newspaper, email, regular mail, Web site, and the telephone. Try to have the same look and feel throughout the company. Don't send mixed or conflicting messages--you will confuse the customer. 32| Walk a mile in your customers' shoes. Getting complaints from customers about how horrific it is to do business with you? Put yourself in their shoes by role-playing the typical customer experience. Once you suffer through what you dish out, you'll be shocked into a more customer-centric mindset.
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33| Keep your promises. Just like relationships with your friends and loved ones, relationships with your customers should be based on trust. Reminding customers of promises kept--and taking responsibility for promises unfulfilled--simply requires openness. 34| Clean your data regularly. Your CRM system is only as good as your data, so keep it clean and avoid duplication. "According to the U.S. Census, about one in seven people change addresses within a year," says Denis Pombriant, managing principal of Beagle Research Group. That's why, he adds, "Having old data is like having no data." 35| Big names don't mean big money. While big clients may look impressive on a customer list, they may be costing your organization more money than they bring in. These clients may have special needs, such as customized packaging, special distribution needs, more hand-holding, which take extra time and expenses. Look at overall customer profitability, not just sales, and send unprofitable clients to the competition. 36| Consider life stages. According to the U.S. Census Bureau, there are roughly 75 million baby boomers (born between 1946 and 1964), more than 49 million gen Xers (born between 1965 and 1976), more than 72 million gen Yers (born between 1977 and 1994), and 40 million millennial (born between 1995 and now). 37| Know thy customer. Don't assume that an ethnic cohort comprises one monolithic group of consumers. Some consumers are more tied to their culture than others. Within each culture exists subcultures that include a wide range of people who are fully assimilated to those who don't speak English. What's more, country of origin may also play a significant role in buying behavior. 38| Mass marketing or one-to-one? Actually, it should be a mix that mostly meets somewhere in the middle. Your most valuable customers require one-to-one communication. Just below this requires a oneto-some model, in which your marketing messages are somewhat customized and sent to the bulk of your customer base. The bottom level is your lowest 10 percent, which requires little customization. 39| Experiment with marketing. Marketing is just as much of an art as it is a science. Recent technological developments are enabling marketers to challenge their segmented marketing campaigns with just a few keystrokes. Consider different data sets like attitudinal, demographic, and behavioral data when reevaluating your marketing campaigns.
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40| Sell what's priceless. The affluent are no longer as interested in material things as they were leading up to the Internet boom. Instead, they'd rather purchase products and service that enhance their experiences. Take heed from Citibank's "Live Richly" and MasterCards "Priceless" campaigns. 41| Choose your customers. Find some commonality among your best customers in your database and cross reference that with prospects from external databases to pick the most profitable customers. 42| "Don't reinvent your relationships," says Joshua Yuster, CEO of BranchIT Corp. Relationship management software from companies like BranchIT, Spoke Software, and Leverage Software can search digital records of customers and potential customers who have preexisting relationships with other members of your team. 43| Reward team players. In the big picture a happy customer is more important than one salesperson's commission. Provide bonuses or team player rewards for referring customers to the right internal sales agent or business partner who's closer to the customer and can add more value. 44| Think, partners = customers. "Treat [partners] like they're customers," says Catherine Smith, COO of ING U.S. Financial Services. Partners, like customers, want what they want when and how they want it. So just like you do with customers, identify your partners' needs and wants, and implement processes that keep them smiling. 45| Bundle up. To really reward those loyal customers who turn to you for multiple products and services, cut them some slack with a discounted pricing plan to show your appreciation. You may not pull in as much in the short term, but you'll score lifelong customers--and long-term profits. 46|They're not lost, just misplaced. Almost every business goes through rough periods, either individually or when the economy sags, and so lose customers as a result. When business picks up again, be sure to attempt to restart your relationships with lapsed customers--they're easier to sell to than brand-new ones. 47| Automate contract renewals. When focusing on customer acquisition efforts, don't let existing customers slip away. Look to contract renewal applications that will remind sales professionals when clients' contracts are nearing expiration and can also automate contract renewal efforts with customers. 48| Streamline your checkout process. You wouldn't give your family (except maybe your in-laws) a roundabout route to get to your home if there was an easier set of directions. The same idea applies to your online checkout process. Make it less of a maze and more of an express lane. For example, Overstock.com condensed its checkout procedure from seven pages to three, and retooled its product
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pages to make it easier to complete the checkout process, bolstering conversion rates and reducing onlinecheckout customer calls. 49| Get personal. Customers hate to feel like the sales agent is reading to them from a script. Learn your customers' personal needs and profiles and target your service to each individual. It will make them feel important and that you value the relationship. 50| Get cozy. When people come to your retail store, financial institution, or garage, make them feel comfortable. Many kinds of companies provide coffee and cake in the mornings for customers who must come in before work. Others provide free Internet access to people while they wait. Retail stores increasingly are adding in-store cafes to keep hungry shoppers around longer.
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2) Provides sales agents with the ability to configure and quote an order in real-time via a single CRM application, which enables a whole new set of capabilities. Customer-focused product configuration rules can be enforced and dynamic pricing can be applied, shipping charges and taxes can be calculated, and a specific promise date can be confirmed and guaranteed; all this without having to travel back to the office or requiring dual entry ("swivel-chair" integration) to other systems. Sales agents that spend time handling complex orders using multiple systems have less time to spend on new orders and generating new business. A single system gives them more time for these activities, as well as other customer service-related activities like order management and issue resolution. This reduces the amount of time between when an order is placed and when it is delivered, thus improving cash flow.
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3)Improves margins Front-office pricing improves margins by enabling dynamic pricing based on various CRM components, including customer profiles, product attributes, and market segments. Simply knowing who your best and most profitable customers are does not guarantee a successful CRM strategy. Companies should implement programs and policies that target highly desirable customers and provide incentives for them to increase their sales volumes. For example, account profile information like membership in a buying club, being a competitor's top customer, or belonging to a target industry may trigger discounts or promotional benefits that encourage a prospect to become a long-lasting customer. On the other hand, belonging to a low-volume, high-cost customer segment group may trigger price premiums that encourage the customer to either purchase more high-margin products or migrate to a competitor. Establishing pricing rules dependent upon product attributes may also help raise margins. For example, if sales of a product in the color red are outpacing sales of the same product in blue, price premiums may be added for the red product while price discounts could be added for the blue product. This would ensure that the optimal price is charged for each to balance margin targets with inventory goals. Knowing your customer's previous purchasing history or comparing a purchaser's profile to similar customers allows you to use upsell and cross-sell techniques that steer them toward products with higher margins and those that encourage a more long-term buying pattern.
4) Lowers administration costs Using one system to deliver consistent pricing across all channels (Internet, field sales, telesales/call center, and channel sales partners) lowers administration costs. Using multiple pricing and order management systems for each selling channel increases implementation, administrative, maintenance, and upgrade costs. By distributing pricing logic through one repository, these costs can be significantly reduced while ensuring that your prices are applied consistently throughout your organization. However, this approach doesn't just reduce costs and ensure consistency. By deploying a single pricing engine, changes only need to be made once. This allows an organization to adapt quickly to changing market conditions by making them more flexible and nimble. Page | 64
5) Reduces accounts receivables Pricing in the front office reduces accounts receivables problems upfront by enforcing pricing rules during order entry, which reduces invoicing errors and disputes. Customers are demanding more product options to allow them to customize purchases to their exact requirements. This has led to more complex product offerings that require sophisticated product configuration and pricing models. Without the appropriate tools sales agents may promise products with options that cannot be delivered, provide inaccurate quotes, or configure a product that doesn't meet the customer's expectations. This can result in cancelled orders or significant order reconfiguration. Delays due to missed deadlines, reorders caused by incomplete sales forms, or lost sales because of cancellations are costly and can damage a once-solid customer relationship. Resolving product configuration and pricing abnormalities at the time the quote is provided improves order entry compliance and reduces the likelihood of invalid orders reaching the order fulfillment system.
6) Reduces integration costs Moving pricing to the front office reduces integration costs between a firm's CRM and back-office systems. By joining marketing, customer, and product information together with product configuration and pricing rules, a company can reduce the number of its cross-application integration points. Other pricing components that are tied into the back office can be integrated with the CRM pricing engine. These include those systems that calculate delivery charges and taxes, and provide credit card authorization. Moving pricing processes from the back office into a CRM system also decreases the frequency of roundtrips data must take to fulfill an order, since less back-and-forth communication is required among the various systems before the order is approved. However, pricing provides the framework to build and sustain healthy and satisfying customer relationships by enabling smooth, consistent, and effective business transactions that are mutually beneficial. Joining CRM and pricing can positively affect your bottom line by improving cash flow, increasing margins, lowering administrative and integration costs, and reducing aged receivables.
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results that show double-digit percentage growth in revenue, improved productivity, and increased customer satisfaction from new CRM projects. What drives companies to have such different results from the same initiatives? Before we look at reasons, lets define the scope of CRM. CRM has been one of the most confusing terms established in business. In many cases, it has been defined, as what the user of the term is promoting. In the context of this article, we want to look at CRM as the following.
1. CRM initiatives launched without a strategy. Simply stating Were going to do CRM this year is not a strategy. A CRM strategy needs to clearly define how you will be viewed by and manage all touch points with your customers. It should also define how you plan achieve this result. 2. The CRM strategy is not integral to the business strategy. CRM cannot be viewed as a project or solution separate from your overall business plan. How you develop and grow customer relationships is the lifeblood of your company. Customers must be a core part of your overall business strategy. 3. The CRM toolset is based on someone elses success. There are many CRM tool offerings in the market place. Typically, these started around a particular process and product offering that was very effective. This offering has since been expanded to offer broader functions through acquisition or system development. Be sure to evaluate tools against your business requirements to get the best product for your highest priority needs. Not everyone serves customers the same way, has the same business processes, or has the same priorities as your business.
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4. CRM is launched with no regard for enterprise or customer interfaces. Can you afford to invest in making one part of the customer experience excellent only to destroy it at another step in the lifecycle? Make sure every touch point you have with the customer provides consistent, knowledgeable, and high-quality service. 5. CRM is launched without customer input. It is so easy to get caught up in the rush to implement CRM solutions that you forget those people on the outside of your business. Talk with your customers. Find out how they want to be serviced. How can you better meet their needs? How can you collaborate for a true win/win initiative? What are other suppliers doing for them that they like? 6. CRM is considered an IT project not business initiatives leveraging technology. Customers interact with your company through people, processes, electronic media, transactions and indirect relationships. They typically will not know what language your tools are written in or what platform they run on. The capability, quality, function and reliability of the systems are critical. But design them to support the best customer processes you can provide. The greatest success will come from the coordinated efforts of business users and technologists in the company. 7. CRM is launched without defined metrics and objectives. An important part of any rollout of new processes is the expectation of improvement. If you dont expect performance to improve, dont measure it, or manage it. Consequently, you wont see improvement. Even if you achieve it. Set expectations. Measure performance improvement. Provide feedback. Reinforce successes. Look for ways to continue the improving trends. 8. CRM is considered a one-time event. Once your initiative is launched, youre just getting started. Look at it as an evolutionary development of your organization that will require multiple iterations to implement. You will have some employees who resist the change. There will be bumps in the road. Solicit feedback. Learn from the new data at your disposal. Refine your strategy. Set new goals. Develop plans to achieve these new goals.
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9. Assume you have a customer-centric culture because you have customers. The global economy has broken down consumer barriers, reducing geographic constraints and revealing little difference between the products and prices of one competitor to the next. As a result, quality and service have become driving forces behind brand preference, loyalty and bottom line results. Be sure to look at your company as your customers do. Consider how they want to do business with you. Develop your strategy, design processes, and make decisions looking from the outside in. Measure, analyze and track customer service performance. Solicit input and feedback from your customers. Benchmark with other organizations. Drive this customer first culture throughout the organization. Reinforce it with every employee. 10. No top down leadership and employee buy-in for CRM. Every employee will be affected by fundamental changes in CRM. Appoint an executive sponsor. Communicate vertically and horizontally through the organization. Get employees on board. Get them excited about doing a better job for your customers and making your company more successful. Create momentum toward a competitive customer focus. Provide training so employees know their role and the rationale for change. 11. Altering the CRM solution to accommodate current business process and behaviour. Benefits will accrue from the adoption of new processes that leverage the information, speed, integration, lower operating costs and improved service resulting from new CRM tools. Be sure to take advantage of these revenue, service and productivity enhancements. 12. CRM is regarded without urgency. Your customers expectations are increasing. Maybe not from your direct competitors but from other service providers. Will your competitors announce a quantum leap tomorrow? If they do, what will it take to get customers back after you have lost them? How much is it worth to pre-empt your competitors and lock in new customers? 13. Try to implement everything CRM at one time. What about the sense of urgency you ask? It is difficult to change the entire organization overnight and keep it running. Organizations have personalities and need to learn new and adaptive behaviours. Go after your highest leverage, or highest priority areas first. Show successes to bring the rest of the organization along. Move forward in manageable steps. Page | 68
Annexure-I
Bibliography
Websites o o o o o o o o o
www.crm2day.com www.salesforce.com www.bitpipe.com www.customerservicemanager.com www.serachcrm.com www.darwinmag.com www.crmassist.com www.google.co.in www.yahoo.com
Reference Books o o o
CRM: Redefining Customer Relationship Management Why CRM Doesnt Work? CRM: Getting It Right
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