WHAT IS GREY WORLDWIDE?

Grey Global Group Is a full communications enterprise with 16 global partner companies focused on distinct communications disciplines and engaged in a wide range of marketing and communications activities.

Viveca Chan is the CEO of the company.

THE SITUATION

Viveca Chan, CEO of Grey Hong Kong and China, was questioning to what extent the GRM concept should merge technology with traditional marketing philosophy to develop a CRM proposition for its local clients.

CRM

CRM can be defined as a comprehensive set of processes and technologies for managing the relationships with potential and current customers and business partners across marketing, sales and service, regardless of the communications channel

NEED OF THIS CASE STUDY

OBJECTIVE OF THIS CASE

TO KNOW WHAT LED TO THE CHANGED APPROACH BY THE COMPANY TOWARDS THE CUSTOMERS FROM THE TRADITIONAL ONE.

IN THIS CASE WE WILL FOCUS ON THESE ISSUES

A CHANGING MEDIA INDUSTRYTHE CRM INDUSTRY IN ASIAGREY WORLDWIDE HONG KONG-CHINA:

E-MARKETING STRATEGYGREY RELATIONSHIP MANAGEMENT

1.CHANGING MEDIA INDUSTRY

THE MEDIA M,ARKET IN 2000S FACED THE FOLLOWING CHALLENGES INCREASED COMPETITIONNEW TECHNOLOGYRISNG CUSTOMER EXPECTATION

COMPETITION

THE HEIGHTENED GLOBAL COMPETITION THE THIN LINE BETWEEN CORE COMMUNICATION COMPANIES, TRADITIONAL CONSULTING FIRMS,ONLINE MEDIA FIRMS AND DESIGN FIRMS WERE BLURRED.

WITH INTERNET IT BECAME EASY TO STUDY CUSTOMER NEEDS AND EXPECTATION.

TECHNOLOGY

THE GROWTH OF INTERNET PROVIDED EASY COMMUNICATION POSSIBILITIESW SUCH AS: Internet-centric technologies that

integrated with existing business infrastructures (e.g., telecommunications, data communications and other connectivity could provide cross-media business solutions and enhance customer value)

Enhanced Internet telephony and e-marketing communications that leveraged new media technologies, including IP telephony, visual communications, Internet kiosks, interactive responses and messaging portals

RISING CUSTOMER EXPECTATIONA concurrent trend driving industry change was rising customer expectations; this meant that agencies had to refine their ability to identify and serve their “best” customers – and create loyal customers. As a result, previously ad hoc and fragmented techniques for dealing effectively with customers were giving way to a more methodical CRM approach: identifying, attracting and retaining the most valuable customers in order to sustain profitable growth.

CHARLES SCHWAB REPORTED SOME CUSTOMER SERVICES COST IN THE US:face-to-face (F2F) communication – US

$10 per contactcall center agents – US$7.50voice response unit (VRU) – US$2.48 Internet – US$0.18

2.THE CRM INDUSTRY IN ASIA

DURING 2003 THE MARKET SITUATION OF THE CRM INDUSTRY WAS LIKE THIS:

The market size for Asia-Pacific isn’t yet close to growth in the US. We can say the market size for Asia-Pacific is less than eight per cent of the US; although its growth rate is almost 200 per cent – even faster than the growth lines we saw in the US two years ago.10

- James Vogtle, CRM Industry Expert

OF LATE THE ASIAN COMPANIES STARTED TO KNOW THE IMPORTANCE OF CRM TECHNOLOGY IN ASIA AS FINDINMG A NEW CUSTOMER WOULD COST THEM FIVE TIMES MORE THAN RETAINING A CUSTOMER.

Viveca Chan felt that certain Asian specificities needed to be recognised:Asian consumers needed to be educated

in e-business and enabling technologiesThe Asian market was more fragmented

in its CRM needsThe strategy, execution and knowledge

mix in Asia would differ

The global economic slowdown forced companies to cut down on information technology spending, but at the same time, the market needed a quicker return on investment:

The solution lies in CRM, which can help companies manage customers better, and subsequently secure more new clients. Asia-Pacific is the largest growing market for CRM.

3.GREY WORLDWIDE HONGKONG CHINA:E-

MARKETING STRATEGYViveca Chan advised her team to consider several issues when developing strategy ideas:How to tackle a dramatically changing

industry cost structure where there was downward pressure on profit margins

How to attract and retain high-calibre talent, since agencies were pressured to cut costs

To understand the specific market forces that were driving media and communications changes, and to identify how Grey WW-HK/China could manage its business model in the light of these changes

Successful CRM implementation, according to Viveca Chan, hinged on a company’s ability to execute a strategy with the right market knowledge; she felt no such player existed in the market yet . Despite cost pressures, though, Grey WW-HK/China decided not to compete on price; instead, it would differentiate itself through a CRM proposition – the GRM concept. To become that player, Grey WW-HK/China viewed its Asian challenges in two specific ways: by managing knowledge and by executing strategy through managing technology.

MANAGING KNOWLEDGE

Viveca Chan commented that “knowledge management is critical to capture best practices and detailed information about customer usage behaviour, contact history, product enquiries and corporate data that marketing people can use to their advantage.”

Theresa Franklin said:

Knowledge is information gathered on customers through various events and media. Sharing customer knowledge is our biggest future asset. Our main challenge is how to develop a system to build “customer equity”. In addition ,to “brand equity”; customer management has become key in this business. This means managing the multiple customer contact points, managing CRM.

MANAGING TECHNOLOGY

Grey WW-HK/China felt technology was an enabler, a part of its strategy sum, not the sum of its CRM strategy. Viveca Chan elaborated:

We want to enhance our “total customer experience”. Our definition of CRM is focusing on what we do best: enhancing brand equity and enhancing customer loyalty and retention. We want to manage multiple consumer touch points such as the Internet, multimedia, TV and other customer information channels to achieve customer information integration knowledge. Beyond Interactive is expert on educating consumers, but now we are focusing on managing customer feedback and moving prospective customers into loyal prospects

Technology is part of our total communications process, but not necessarily part of our strategic processes. It is part of sharing information about our clients, enhancing our business efficiency and as an alternative for traditional media in building media presence on-line. Our focus is still our brains.

- Candy Wan, Director of Grey Direct

4.GREY RELATIONSHIP MANAGEMENT

The GRM concept was a four-principle philosophy developed with a specific customer management focus:

1. build brands

2. develop and manage customers

3. create a positive brand experience for clients

4. build brand through knowledge about the customer through constant dialogue

Theresa Franklin elaborated on Grey WW-HK/China’s plan to capitalise on changing values:

Database management is the backbone of CRM. We plan to build our credibility in database management through understanding how to use and apply technology.