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Customer Relationship Management

MT 115

©2013 LHST sarl

The Key Question

Partners

Stockholders

Clients

Employees

How can customer relationship management enhance

organizational performance?

CRM helps us understand the motivations, experience and objectives of the internal and external clients of the organization

©2013 LHST sarl

The answer(at least in part)

Focus Improve Knowledge Leverage Mesure

Organization Processes Explicit Transactions Efficency

Community Participation Embedded Innovation Engagement

Networks Relationships Emerging Interactions Effectiveness

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Five Questions

•How does Atos Origin define  “customer relationship management”?•Why do the authors argue that customer value is more than just price, product, place and promotion?•How does Atos divide the CRM market into three main solution areas?•What role can a consultancy play in implementing a CRM solution.•Of the different “case studies” mentioned in the paper, which example seems the most significant, and why?

“Customer Relationshp Management“

©2013 LHST sarl

The objectives of an IS

Actifs Demandes en temps

réel ...

Actionnaires

Compétition “made in” “made by” ...

Société

Peu de barrières d’entrée Acquisitions, OPA ...

Partenaires Fidélité ? Vrai coûts ...

Clients

L’organisation

Mobilité Valorisation des tâches ...

Employées

ObjectivesObjectives ISIS InformationInformationProblemProblem InternetInternet

©2013 LHST sarl

The Cost of Retaining a Customer

“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

Sherif Kamel

• Loss current revenues that the business relationship created.• Loss of the jobs that the clients provide.• Loss of reputation.• Loss of of future business.

©2013 LHST sarl

Positioning CRM vs Traditional Marketing

Traditional Marketing CRM

Goal: Expand customer base, increase market share by mass marketing

Goal: Establish a profitable, long-term, one-to-one relationship with customers; understanding their needs, preferences, expectations

Product oriented view Customer oriented view

Mass marketing / mass production

Mass customization, one-to-one marketing

Standardization of customer needs

Customer-supplier relationship

Transactional relationship Relational approach

©2013 LHST sarl

Organizational Stuctures

MT 115

©2013 LHST sarlL. SCHLENKER

ORGANISATIONAL STRUCTURE?

©2013 LHST sarlL. SCHLENKER

TECHNOLOGICAL INFRASTRUCTURES ?

©2013 LHST sarlL. SCHLENKER

BUSINESS PROCESSES ?

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HUMAN COMPETENCIES ?

Technicity

Reflection

Imagination

Cooperation

Method

Action

John Holland

©2013 LHST sarl

Information Systems are a question of perspective

• The financial perspective (entreprise resource planning)

• The logistics perspective (supply chain management)

• The client perspective(client relationship management)

• The community perspective(social media)

ObjectivesObjectives ISIS InformationInformationProblemProblem InternetInternet

©2010 EMLYON

©2013 LHST sarl

DIFFERENT SIDES OF THE COIN

ERP SCM CRMHistory MRP Total Quality

ManagementClient contact systems

Measure QuantitativeStatic

QuantitativeDynamic

Qualitative

Perimeters Inside a firm Between firms Between firms and clients

ROI 5 to 7 years 1 to 3 years 6 months to 1 year

©2013 LHST sarl

Key Tools

MT 115

©2013 LHST sarl

Functional Coverage

Process Identification Differentiation Interaction Customization

Goal · Identify individual customer

·  Evaluate customer value and needs

·Build a continuing relationship

· Fulfill customerneeds· Generate profit

Traditional Mass Marketing

· Not done · Clustering · Call Center · Sales· Services

CRM · Customerprofiling

· Individual level analysis

· Call center management· Auto response system

· Sales automation· Marketing process automation

Information technologies

· Cookies· Web site personalization

· Data mining· Organizationallearning

· Web application· Wireless communication

· ERP· E-Commerce 

©2013 LHST sarl

CRM Activities

•Cross-Selling- Additional products are sold as the result of an initial purchase•Event-Based Marketing- Offering individual promotions tied to specific events to offer the right products & services to customers at the right time.•Mass personalization- understanding customers, their behaviors, and their preferences allows firms to customize communications aimed at specific groups of customers..•Predicting Customer Behaviors- Behaviors can be predicted and firms forecast likelihood of customers’ purchases.•Profiling Customers- Grouping customers in a variety of ways to create more specialized communications about their products.•Relationship marketing or permission marketing- customers select the type and time of communication.

©2013 LHST sarl

CRM Tools

Automated Sales Force Tools- Used for documenting and communicating field activities

– Sales Activity– Sales Territory Management– Lead Management– Knowledge Management

Call CentersCall center systems can now categorize all calls, determine average resolution time, and forecast future and improve the overall productivity of the staff, increasing customer satisfaction levels.

Informational ScriptingScripts to successfully guide service representatives through many types of customer problems. They do not allow for much “out-of-the-box” thinking.

©2013 LHST sarl

“Traditional” Technologies

• Phone calls, E-mails, • SMS, WAP services • Cookies : used for

authenticating, tracking, and maintaining specific information about users

• Loyalty cards• CRM software- “Front office”

solutions

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Market

Sell

Serve

eChannel DistributorCall CenterCSR/TSR

Field Sales

Siebel, Baan (Aurum), Vantive and Clarify

PrimeResponse, Siebel, Vantive, Clarify

Asera,Marketsoft, WebBridge

Blue Martini,Accrue, BroadVision, AndromediaNet Perceptions, eGain,

Vignette, WebTrendsMarketWave, Rubric,

Aptex, PrimeResponse, LikeMinds, RighPoint,

Online Insight,Responsys

Click Interactive,Allegis,

Partnerware, Channelwave,

Webridge

Blue Martini, Interworld, BroadVision, IBM,Open Market, SAP, Oracle, Art

Technology Group (ATG), Microsoft, i2

Calico, SilkNet,Cygent,Trilogy, Netscape,

RighPoint, NetSales, BackWebBroadway & Seymour, Clarify,

Chordiant, Corepoint, IMA, Pegasystems, Quintus, SCT

Utilities, Siebel, SilkNet, Vantive,Advantage KBS (a

division of Carnegie Group), Inference, Molloy Group,

Primus, ServiceSoft, ServiceWare

Click Interactive

ServiceSoft, Inference, Siebel, Vantive, Motive, SilkNet, ServiceWare,Primus, Scala, Invera,

WebTone, Octane,Chordiant, PeopleSupport

Siebel, Baan (Aurum), Vantive and Clarify

Clarify, Metrix, Vantive, Serviceware, Siebel,

Foresight, RTS, Astea

EnablersKana, Brightware, iContact, netDialog,

Acuity, General Interactive, Mustang, LivePerson,Dialog, Genesys, G2X, Webtone, Webline, Nortel,CosmoCom, BroadQuest, Amteva, Tumbleweed

Xcellenet, PowerCerv, Synchrologic

Channel Independent

EnablersBroadbase, Business Objects, Cognos,

E.piphany, Seagate, Quadstone, IBM,

HNC, Tessera,NeuralWare,

RightPoint,SAS

Talus, Concentra, Calico, Trilogy

Inference

Avalon, Broadway & Seymour, Clarify, Chordiant, Oracle,

Corepoint, IMA, Pegasystems, Onyx,Pivotal,Point, Siebel,

Vantive,Firepond, Proscape, SoftAd, Calico

Aspect, Lucent, ATIO, Apropos, Webline, eShare,

Genesys, Geotel, HP , Quintus, Davox (Answersoft)

Market Players

Accenture

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Market Share

• Salesforce.com - is the most popular cloud-based CRM software globally , claiming 14.8% of the entire CRM software market.

• Microsoft Dynamics CRM - Analysts expect the total revenue from Dynamics CRM and ERP to reach $2.5 billion by the end of 2018.

• SAP - has over 30,000 customers and over 2 million users. They also have 12,000 partners to assist them.

• SugarCRM - SugarCRM is the leading provider of open-source CRM software. The company has more than 7,000 customers and over half a million users around the globe.

Marketshare of the French CRM market Copyright PAC 2011

©2013 LHST sarl

Key Metrics

MT 115

©2013 LHST sarl

Organizational Benefits

• Reduction of Marketing Cost

• Timely Data• Increased Revenue• Increased Market Share• Improved Service

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Customer Benefits

• Order Tracking• Availability Checks• Web-based Customer

Self Service• Service and Claims

Management

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Traditional Metrics

• Churn - the number of customers who leave a business in a year’s time divided by the number of new customers in the same period.

• Defection Rate - the percentage of customers who leave a business in one year.

• Customer Lifetime Value - the net present value of the profits a customer generates over the average customer life.

• Touch Points – number of times your company interacts with a customer

©2013 LHST sarl

Size/Share of Wallet

• Size of wallet =

J

jjS

1jS Sales to focal customer by firm j

• Individual share of wallet % =

• Share and size of wallet should be analyzed together...

J

jj

j

S

S

1

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27

Customer Value Metrics:Transition Matrix

• Shows expected share of wallet from multiple brands • Depicts consumer’s willingness to buy over time• Transition probability from B to A, than from A to C:

10%*20% = 2%

Brand A Brand B Brand CBrand A 60%60% 30% 20%Brand B 10% 80%80% 15%Brand C 20% 15% 70%70%

©2013 LHST sarl

Oracle• Interaction Center- integrates with service, sales, contracts, and marketing

applications.• Oracle Sales- processes across all sales and customer interaction

channels.• Oracle Marketing -provides automation and tools for the entire marketing

process. Siebel Systems• Call Center- improve agent productivity by providing critical customer

information.• Siebel Sales- the means to focus on the right deals at the right time.• Siebel Marketing- optimizes targeting and improves response rates with

robust segmentation capabilities.

Some CRMApplication Providers

©2013 LHST sarl

Rules for Successful CRM

RELATIONSHIP- CRM is ultimately about relationship not technology. Focus on improving relationship, which enables organization to develop more prospects

PROACTIVE EXECUTIVE EMPOWERMENT- management involvement is critical

- management set overall strategic direction- Ensure that the culture of customer

service is incorporated in the organization

KNOW YOUR BUSINESS- many people deploy CRM without

understanding the business processes

- define business processes, understanding departmental interactions will help employees better manage customer relationship

“We are not an airline with great customer service. We are a great customer service organization that happens to be an airline”.

Colleen BarrettExecutive Vice PresidentSouthwest Airlines

©2013 LHST sarl

Current Challenges in CRM

New Privacy Regulations- Rules and laws regarding invasion of privacy are springing up. Solution: develop a privacy policy and post it on their Web site.

Application Service Providers (ASPs)- Fifty 50 percent of all CRM programs are now designed and maintained for clients by ASPs.

Adapting CRM for global uses is increasing-New Markets out side of traditional industrialized countries require adaptation to local needs, language, and culture