Welcome

Competing on products?

Common customer service complaints

“I hate being transferred from one person to another.”“I hate being transferred from one person to another.”

“It is frustrating to sit on hold for minutes on end.”“It is frustrating to sit on hold for minutes on end.”

“Why can’t everybody know my issue? This is the 10th time I have call about the same problem. Don’t they value my business?”

“Why can’t everybody know my issue? This is the 10th time I have call about the same problem. Don’t they value my business?”

“I might not get a timely answer if I email. I’d rather call.”“I might not get a timely answer if I email. I’d rather call.”

“How come when I go to the web site I get a different answer than when I call into your call centre?”

“How come when I go to the web site I get a different answer than when I call into your call centre?”

“I entered my account number and the agent still asks me for it.”“I entered my account number and the agent still asks me for it.”

“I just want to talk to a live person rather than enter 1, 2, or 3 on my touchtone phone.”

“I just want to talk to a live person rather than enter 1, 2, or 3 on my touchtone phone.”

Avoid information silosThere is often a lack of integration between channels. Sales and Customer Service Agents had little visibility into the Web channel, and Web sites sometimes had little

correlation with what was available

Web, Email, WirelessWeb, Email, Wireless • • 24x724x7 • • VisualVisual

Call CentreCall Centre • • ConvenientConvenient • • ImmediateImmediate

Field SalesField Sales • • Hands-onHands-on • • ConsultativeConsultative

ResellersResellers • • LocalLocal • • MultivendorMultivendor

Source: Gartner Group

CustomersCustomers

Understanding your customer in the context of CRM

CustomerCustomerInformationInformation

CUSTOMERS

ProductsProducts/Services/Services

GeographiesGeographies

Legacy / Legacy / Back officeBack office

Best Best PracticesPractices

Web & EmailWeb & Email

Call CentreCall Centre

Field SalesField Sales

Partner/AgentPartner/Agent

…Drives Service Delivery Across All Business Units

Visibility Across All Channels…

CRM Model

Scope of CRM today

Integrated sales, marketing and service across all channels and all products

Customer Database“single viewof customer”

Lead Tracking &Sales Management

ContactManagement

CampaignManagement

MarketingEncyclopaedia

CustomerService

Management

Integration withProduct Engines(Transactions)

TelemarketingWorkflow &Fulfilment

Economics of customer retention

“Winning back a lost customer can cost up to 50-100 times as much as keeping a current one satisfied.”

Rob Yanker, Partner, McKinsey & Company

Understanding your customer is key to retention…..

Know your customer common business processes

Identify CustomerIdentify Customer Identify RequestIdentify Request

Cross-sell /Up-sell Offer

Cross-sell /Up-sell Offer

Capture Customer Details / Update Profile

Capture Customer Details / Update Profile

Obtain Customer Feedback

Obtain Customer Feedback

Complete TaskComplete Task

Call Center Agent

Customer

Initiate RequestInitiate Request

Phone

Email

Web

Technology

Route to Best resource

Route to Best resource

Agent skills

Agent availability

Customer attributes

Screen pop Customer History

Screen pop Customer History

Understanding your customer –

Business strategy & roadmap

Customer segmentation Multi-channel strategy Business processes Skills & culture Technology

• Major Functions

• Student Recruiting

• Admissions

• Financial Aid

• Course Management

• Enrollment

• Student Finance

• Academic Records

• Academic Progression

• Research

• Graduation

• Institutional Research

Student Solution Components

School ofSchool ofEducationEducation

Purdue UniversityPurdue UniversityPurdue UniversityPurdue University

Academic AffairsAcademic AffairsProvostProvost

UniversityUniversityFiscal AffairsFiscal Affairs

UniversityUniversityHuman ResourcesHuman Resources

PurduePurdueNorth CentralNorth Central

Purdue CalumetPurdue Calumet

AdmissionsAdmissionsStudent AffairsStudent Affairs

School of School of TechnologyTechnology

School of School of AgricultureAgriculture

EnrollmentEnrollmentManagementManagement

AdmissionsAdmissions

RegistrarRegistrar

Financial AidFinancial Aid

Academic Academic AdvisingAdvising

UndergraduateUndergraduateStudiesStudies

GraduateGraduateStudiesStudies

BS AgribusinessBS AgribusinessManagementManagement

MS Aquatic MS Aquatic Entomology Entomology

AdmissionsAdmissionsFinancial AidFinancial Aid

RegistrarRegistrarStudent AffairsStudent Affairs

ExternalExternalRecruitment Recruitment

SourcesSources

ExternalExternalBusiness Business AlliancesAlliances

Organization SpecificCalendars

RulesFee Assessment

Reporting

“What do we know aboutCarolyn Lee?”

“How do we contactCarolyn Lee?”

Recruiting/Student Applications

Self Service Applications

Administrative Applications

Carolyn Lee

One Trusted Source of Data

Student Solution Demonstration

Student Recruitment

AdmissionsApplication

John Purdue

Prospective Student

Admission Decision

Postcard

Email Invitation

Financial AidProcessing

John PurdueAdmitted Student

Self ServiceEnrollment

OnlineInvoice

Online Payment

Financial AidDisbursement

Faculty Grading

FacultySpecial Permission

Prospect Inquiry Apply Hold

Student

Alumni & LifeLong Learners

Cultivate the Entire Relationship

StudentServices

StudentAid

Enrollments

Application& Admissions

CultivateInquirers

ProspectGeneration

IdentifyMarkets Recruiting

Admission &Enrollment

Service & Retention

Oracle CRM Recruitment

Events Planning, Execution & Registration List Management Campaign Planning Communications Management (ad hoc,

automated, recurring, event triggered, high volume mass mailing) -- via email, fax, print, web and third party fulfillment houses

360 Degree View of the Person Single Database – One Platform

Implementing CRM

Is it a strategic pain point?Where does it hurt?What specific processes are annoying

customers? Examine the customer relationship cycle;

usually a few small problems that undermine performance.

Do we need perfect real time data?Is it worth spending money on real time

data if we do not need it?

A CRM solution: strategic benefits

Most companies have decided to focus their efforts on multi-product relationships with profitable customer segments. Many are developing relationship strategies to identify, attract, grow and retain profitable customer segments - and hence will be targeting your most profitable customers.

Choose service levels by customer segment and channel. CRM will help enable different parts of the organisation to understand and communicate the “value” of each customer and hence the treatment strategy.

Enable a sales led organisation & culture to be implemented. The CRM solutions include sophisticated sales tools and sales management information to assist sales people

Streamlined administrative processes. CRM is likely to reduce levels of central support, manual administration, error correction and time taken to serve a customer. Save money..

Avoid costly “data clean-up” and re-work programmes. By improving the quality and consistency of information recorded and used there will be far less need to invest in these type of activities.

RM coming of age

Airline deregulation in the U.S. People Express vs. American Airlines

Edelman Award: RM for AA $1.4 billion in 3 years virtually every airline has implemented RM National Car Rental (vs. GM)

Edelman Award: RM for SNCF AA: $1 billion incremental revenues from RM Marriott Int’l RM: 4.7% increase in room revenue

Deregulation Europe: telecom, media, energy … e-distribution supports dynamic pricing & profiling

Dell, Amazon & Coca Cola experiment dynamic pricing

RM spans wide range of industries …

1985:

1978:

1992:

2000-01:

1997:

1999:

2003:

RM Evolution

1980

AirlinesAirlines

1985

RailTransp.

RailTransp.

1990

HotelsHotels

Car rentalCar rental

2000

MediaMedia

EnergyEnergy

Cruise linesCruise lines

Telco/ISPTelco/ISP

1995

Tour Operators

Tour Operators

Freight,Cargo

Freight,Cargo

SportsParksSportsParks

EntertainmentEntertainment

HealthCare/Hospitals

HealthCare/Hospitals

Insurance/banking

Insurance/banking

Manufact.Manufact.

RetailersRetailers

Revenue Management

Strategies & tactics for OPTIMIZING PROFITS

based on

DYNAMIC PRICE INVENTORY SETTING CONTROL

under real-time, disaggregate updating of

DEMAND FORECASTS

The RM Challenge

Arrivals of high paying customers…Closer to departure!

Arrivals of low paying customers…Earlier!

Overbooking metrics

Service level based: P(denial) =0.05 E[#denials]=2 Etc.

Cost based: assign a cost to each and optimiseOverbooking cost (airlines): Direct compensation cost Provision cost of hotel/meal Reaccom cost (another flight/airline) Ill-will cost (~ “lifetime customer value”)

Industries

Overbooking Airlines Hotels Car rentals Education Manufacturing Media

No Overbooking Restaurants Movies, shows Events Resort hotels Cruise lines

...Decisions Are Not Always “Rational”

Tickets; $7.95

$1.00 Discount for Children &

Seniors

Tickets; $7.95

$1.00 Discount for Children &

Seniors

Tickets; $6.95

$1.00 Extrafor Middle Aged

People

Tickets; $6.95

$1.00 Extrafor Middle Aged

People

Price Perception Issues are Complex...

More Acceptable Pricing Product-Based Open Discretionary Discounts and

Promotions Rewards

Less Acceptable Pricing Customer-Based Hidden Imposed Surcharges Penalties

CRM “Attract & retain

customers” maximize profit from

each customer Segment by customer

LTV Price/availability= fct. of

forecasted customer LTV to the organization

Ignores capacity issues and opportunity costs (displacement)

Wealth of data

RM “generate revenue” maximize profit from

available assets Segment by customer

WTP Price/availability = fct.

of forecasted demand & available supply

Ignores customer value issues and long term revenues

Quantifiable value

Maximize long-term profits

CRM & RM

Variables to track

Actual win or loss Number of days played Credit history Length of stay at hotel Individual spending preferences Demographics Psychographic profiles

Theoretical Revenue

Theoretical = (total amount wagered) X(house advantage)

100$ hand x 10 hours x 100 Hands/hour x .01 (house adv. 49/51) = $1,000

Can you track every single person???

Not always Difficult in table games Theoretical =

(total amount wagered) X(house advantage)

Where..Total amount wagered = estimated

average bet x estimated time played

Future estimates…

ADT = Average Daily Theoretical Revenue

Assumes that this level is constant Multiply by estimated # of days of

future trip to gain value Combined with CRM data on

consumption of food and beverage, entertainment, pshychographics, etc

Rooms, a scarce resource

Heads in beds: make money on gaming

Comp. Rooms: traditionally a fixed number of rooms given to big gamblers

Used averages to cost out, did not dynamically look at “opportunity cost”

ReInvestment amount

% of the ADT ADT $1,000 Reinvestment amount = 30% = $300 Total value of the room, F&B,

Entertainment, etc. must be less than the Room 200, F&B 100, Ent. 80..more than

ADT x reinvest. Ergo…try and sell room.. Sophisticated applications use dynamic

pricing to asses opportunity costs..

Requirements

RM – Yield management like the airlines..

Player tracking systems..Use cards like Harras, to register all activity and psychographic profiles

POS resturants, theaters, spas, retail stores, entertainment, etc…

CRM integrates all of the above!! Statistical analysis and optimization

applications.