CRM Framework Terry James © 2006. (c) 2006 Terry James2 Party No. Not a beach party. No beer. No dancing. CIF, or customer information file, lists just

CRM Framework

Terry James© 2006

(c) 2006 Terry James

2

Party No. Not a beach party. No beer. No

dancing. CIF, or customer information file, lists just

customers. When a CIF includes all people with all

relationships and roles to our firm, then it’s called an Involved Party database.

Involved Party: a generic term meaning party (anyone) who is involved with your company; employees, suppliers, clients,…


3

How we got here.

Each LOB (line of business) would keep track of its own clients.

The LOB would usually use an account number to track its clients.

Example: Toronto Hardware

Account number: Client name : Amount spent:etc.

0000150 : Wendy’s : $50000.00


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LOB Account number

The LOB has a lot of shortcomings. It does not know anything about

customers outside the division. It has no role information.

If an employee buys a product, his data looks like simply another customer, no employee discount or number.

If a supplier buys a product, again the CIF likely won’t show it.


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CIF files Common for the CIF file to be copied

different groups for different purposes perhaps to merge with other CIF files

If you have 2 copies, which is the authoritative source The authoritative source is the trusted file

you use if it is not clear which is correct Always update the authoritative source first,

then copy from it, never update the copied file or you will lose track of changes to many copied files.


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Trusted data How long does it take for a copied

CIF to be different than the original? Probably a few nanoseconds if you do

millions of transactions a day As soon as your copy is not current,

you are working with dirty data Dirty data is simply poor quality data,

lacking in accuracy, consistency, or integrity.


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Analysis Patterns

Martin Fowler wrote ‘Analysis Patterns’ which are best-of-breed, proven business analysis solutions.

For CIF, he provided the Party concept.

Person Organization

Address

Phone


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Leading Edge Data Model

INVOLVED PARTY

Person

Organization Products

Relationships and Roles

Demographics, contacts, security, products, accounting, relationships


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Involved party (IP) model You can ask what organization a client

belongs to, what role he has there, and what relationship he and his organization has with your company.

You can reverse questions and ask which customers are in an organization that your have sold products to, and which customers are not in an organization as customers.


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Example What people have I sold computers to at

Honda? What group were they in? Sales,

Service? Are there any groups at Honda I have

not sold computers to? Can I get an introduction from existing clients?

Are any Honda employees members of my Board of Trade team?


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Prospects and Suspects

Prospects are potential clients, but have not bought anything? They may have asked for pricing, asked for a

demo, but not paid any money yet. Suspects are customer lists you bought

from another company Suspects in particular are known for poor data

quality in general. The data could be old, out-of-date, captured

incorrectly, deliberately wrong (client fraud), etc.

Be careful about dumping poor data into your authoritative customer database.


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CRM Basics

Customer reaches for service

E-mail IVR Web Branch

Master Party file

Multi-channel offering- but ONE customer file!


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One customer file

Many functions but one party file

Many divisions – but ONE party file.

Many departments – but ONE party file

Accounting HR Sales Operations

USA division Asia Division

Auto dept. Motorcycles Lawnmowers


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What is a Framework?

Create a framework for future client services without duplicating client code

Rather than build one element at a time, build a framework within which new elements will fit as you add them. Good framework removes duplication, ensures integration.


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What’s in the Framework?

The framework will have infrastructure services to permit a fully integrated CRM solution.

1) Single sign-on

2) Channel independent middleware (e.g. EAI)

3) Dispatcher –route transactions to proper legacy system.

SSO

EAI

Data conversion

Demographics


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SSO What is single sign-on?

It is one logon and password to all your systems Makes it look like you have one company where

everyone helps and works together Why do you want it, what does it provide?

Easier for customers, easier for employees toremember one password and logon

Consistent rules, and less expensive if you use one security system


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SSO Where do you place the security?

In the front end device, in the legacy application?

Rule is put as much security as reasonable as far away from your central operation as possible. Likely have many levels.

What goes in the security directory? Duplicate data with the Party file? Yes, at least the name and contact as a pointer. Smart to keep highly sensitive, encrypted

passwords in a very restricted separate file


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EAI What is EAI software?

Enterprise Application Integration What does it do?

EAI permits all your applications to talk to each other and work as a unit

Translates data into needed formats Provides correct communication methods

and protocols for each application Where do you get it?

Many vendors, IBM, Tibco. How much does it cost?

Fairly expensive.


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CRM – Level 1 Profitability analysis

How much profit from each client? Client comments

Staff comments: (eg. deadbeat, high potential)

Demographics Personal, then business. Fax, email, vacation address, cell phone,…

Segmentation Use profitability to segment clients into tiers,

top, middle, bottom. Personalization

Tailor to client needs, no mass mailings to all regardless of need.


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CRM Level 2 House-holding

Include relationships starting at home, who is the client living with, what are family needs?

Client profile Expand profile with dealings outside your firm Acquire credit and collections history

Channel management Know and use your client favorite

communication channel (email, phone, face-to-face)

Roles and Relationships Add client organization and role (supplier,

competitor, employee, or partner,…?)


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CRM Level 3 Client acquisition

Have client provide referrals Opportunity

Cross-sell, up-sell, add-on, deluxe model Channel optimization – move to least costly

channel Channel integration

Every client touch-point adds to the profile Dynamics

Not locked into fixed, yearly goals Adjust sale goals by minute as client profile

expands Right product, right client, right time, right

place


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CRM Level 4 Micro-segmentation

1 client = 1 segment Every client has own strategy for next sale

Predictive modeling Tracked roles and behavior Use known client patterns to predict client

actions Product development

Tailor products to meet client needs based on behavior and predictive analysis


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Profitability With improved micro-

segmentation, decision making, and dynamics, fine tune the profitability goals, future sales and share of wallet.

What is the balance between good company profit and good client profit?


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Delinquent clients

Treat the client appropriately when delinquent. It could be our poor service – not their

fiscal irresponsibility Prioritize the level of recovery so we

don’t spend more recovering the client than they are worth

Be proactive in reducing or increasing fees.


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Optimization Channel Optimization

Move clients to the least costly channel that meets their needs.

Example: Web $0.07, Phone - $0.35 Face - $1.00 Client may not want costly personal sales

visits. Sales delivery standards

Match the value of service to the client value. Be aggressive at moving low value clients to

low cost communication channels.


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IP database

Segmentation

Client service

Profitability analysis

Cross sellClient channels

Client retentionClient acquisition

Product development

Relationships

Client management


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Metrics Measure before CRM and after

How many enquiries for a 1000 flyers How many sales? What is you add discount?

Indicates cherry-picker clients How many lost clients did you recapture?

Number, total balance involved? How much faster is service per call? How many clients using cheaper channels?


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Client metrics Score the client on:

Next product most likely to buy Client risk Client profitability Propensity to buy Client potential Client vulnerability

Rank by the product most likely to buy and the expected value of that product.

Marketing and campaigns are tailored accordingly


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Metrics Some quantitative metrics on the sales

person Response rate – number of applications divided by

number of offers Approval rate – approved applications divided by

applications Net present value – by campaign and account Delinquent – number of accounts that are delinquent

and the balance involved. Roll rate – number delinquent clients divided by

number of clients Roll back rate – number of clients returning divided

by number of clients Channel usage metrics – by average channel cost.


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Client Decision Profile

Value Proposition Client management

Pricing: Preferred

Service: VIP

Channel: E-mail

Current offer: Movie channel, no connect fee

Response offer: basic

Service guideline: Premium

Account management: Agent

Propensity to buy: Average

Client prosperity: Promising

Credit: Excellent

Documents

CRM Framework Terry James © 2006. (c) 2006 Terry James2 Party No. Not a beach party. No beer. No dancing. CIF, or customer information file, lists just