STRATEGIES AND CRITICAL FACTORS IN CRM

SELECTION IMPLEMENTATION AND MAINTAINANCE –

AN OVERVIEW

ANIL MASALHPGD/OC14/2124SPECIALIZATION: E-BUSINESS

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Contents Customer Relationship Management – CRM Differences in CRM & eCRM Features of eCRM CRM in Type of business Strategies for implementing CRM CRM adoption challenges Difficulties after implementing CRM Successful CRM implementation Market leaders in CRM Examples of CRM Systems Case Studies Conclusion 2

Customer Relationship Management - CRM

• What is Customer Relationship Management?– Customer relationship management (CRM) system is not “just another

information tool.” If applied properly, CRM programs can contribute exceptional economic value to the company as well as competitive advantage to improve customer services.

• Why is it necessary?– Many companies are turning to CRM for better understand customer

wants and needs by using data in combination with data warehousing ecommerce application & call center for achieve customer loyalty.

• Important aspect for customer relationship management1) Customer satisfaction 2) Customer loyalty 3) Customer Retention 4) Customer compile Information

• Types of customer relationship management– Operational - I) Sales force II) Marketing III) Service Automation– Analytical– Collaborative 3

Differences in CRM & eCRM • Major differences between CRM and eCRM

– Customer contacts• CRM – Contact with customer through the retail store, phone, and fax.• eCRM – addition to Internet, email, wireless, and PDA technologies.

– System interface• CRM – Implements the use of ERP systems, emphasis is on the back-end.• eCRM – Geared more toward front end, which interacts with back-end through use of ERP systems.

– System overhead (client computers)• CRM – The client must download various apps to view the web-enabled applications.• eCRM – Does not have these requirements because the client uses the browser.

– Customization and personalization of information• CRM – Personalized views are not available. Individual personalization requires program changes.• eCRM – Personalized individual views based on history & preferences. has ability to customize view.

– System focus• CRM – System designed based on job function & products for a single department or business unit.• eCRM – System designed based on customer needs for enterprise-wide use.

– System maintenance and modification• CRM – More time involved in implementation & maintenance is more expensive for multi locations.• eCRM – Reduction in time and cost. Implementation and maintenance can take place at one

location .4

Features of eCRM

• eCRM can be defined as activities to manage customer relationships by using the Internet, web browsers or other electronic touch points. The challenge hereby is to offer communication and information on the right topic, in the right amount, and at the right time that fits the customer’s specific needs.

• vCRM is one of eCRM is so popular nowadays is that digital channels can create unique and positive experiences – not just transactions – for customers. It’s creation of experiences in order to establish customer service is the use of Virtual Worlds, such as Second Life. Through this so-called vCRM,

• Mobile CRM (mCRM) services that aim at nurturing customer relationships, acquiring or maintaining customers, support marketing, sales or services processes, and use wireless networks as the medium from a mobile phone or PDA with internet access of delivery to the customers.

Features eCRM :

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CRM in Type of business

• CRM in business– CRM system stores all information about its customers in a database. Information such as

customer names, what they bought, and what problems they have had with their purchases, is retained in the CRM database. The system not only uses this data to generate simple reports but can produce critical information to help coordinate sales, marketing, and customer service departments to better and faster serve customers’ needs.

• CRM in e-business– E-business CRM capabilities on their web sites which incorporate technology into consumer

services and also provide cost controlled purchasing. These e-commerce web sites or enterprise portals are for sales ordering systems that control the access of retailers and wholesalers to the companies’ products at the point of loading while also guaranteeing product level availability and high service level.

• CRM in m-business– m-businesses are implementing wireless CRM applications. This idea is based on the fact

that employees carry a mobile device everywhere they go. Mobility implies portability; therefore, employees can initiate a real-time contact with other systems from wherever they happen to be if they can connect to a wireless network.

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Strategies for implementing CRMBefore deciding on investing in new CRM programs, critical strategies that organizations need to be aware of. These strategies include:

A) Customer B) Channel C) Brand D) Differentiation E) Consistency F) Effective communication G) CRM applications choices.

• Strategies for implementing wireless CRMAs opposed to the wired web site, that are rich in graphics, with multiple navigation structures and various selections, mobile CRM must be simple and plain. Regardless of the type of wireless devices that are used to access the web site, the following are some basic rules for mobile business.

A) Basic function B) Basic structure C) Basic content

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CRM adoption challenges• Companies face large challenges when trying to implement CRM systems.

Consumer companies frequently manage their customer relationships unprofitably. Many times, they may not effectively use their connections with their customers, due to misunderstandings or misinterpretations of a CRM system's analysis.

• In 2003, a Gartner report estimated that more than $2 billion had been spent on software that was not being used.

• According to CSO Insights, less than 40 percent of 1,275 participating companies had end-user adoption rates above 90 percent.

• Many corporations only use CRM systems on a partial or fragmented basis. In2007, survey from the UK, four-fifths of senior executives reported that their biggest challenge is getting their staff to use the systems they had installed. 43 percent of respondents said they use less than half the functionality of their existing systems. However, market research regarding consumers' preferences may increase the adoption of CRM among the developing countries' consumers.

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CRM adoption challenges (Contd.)• Barriers to CRM (pre-CRM)

Depending on the types of businesses and how far they want to extend their CRM applications, management has to research possible problems encountered during the process of before, during, and after implementing these applications. Some of these problems are cited by Ramsey (2003) and include the following:

1) Lack of definition 2) Poor leadership

3) Insufficient help from CRM vendors• Barriers to wireless CRM

Getting into the world of wireless is not as easy as many people think. The reason is that compared to e-business, m-business is very different. They are based upon aspects of the business ( Priemer, 2006) such as:

1) Not enough customer demand

2) Large capital investment requirement

3) Meeting customer expectations9

Difficulties after implementing CRMThere are two principal reasons, why CRM does not always meet expectations. They are :

• The disconnection of CRM vision and execution have two factors:– One of them could be that the system does not have enough flexibility.– Second factor is these projects do not have enough commitment and support from top

management.

• The rising standard for CRM excellence– Due to enhancement of technology, the market has been rapidly changing and has become

a very competitive place for businesses. Organizations, in order to survive in the market, must outdo each other to be able to succeed. Also, not all companies who implement CRM have been successful. Often, these companies have overlooked the critical factors that lie behind a CRM project. These factors include:

• Failure to obtain and maintain executive support for the project.• Failure to align key internal functions or business units on goals and mission of the project.• Inability to accurately link the CRM project to higher-level business strategies.• Focusing on capability building instead of ROI creation.• Lack of an integrated plan for project implementation.• Failure to achieve successes early in the project.

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Successful CRM implementationTo have a successful CRM implementation, management must make sure that they have done research in both the industry’s best practices and the adaptation capability of their organization in the new application.The following are the recommended key steps to a successful CRM strategy (Crockett and Reed, 2003):

• Strategic context. The organization should understand how CRM fits into the context of the company’s overall business strategy.

• Capabilities assessment. The assessment is to be done to confirm the company’s current CRM capabilities.

• Business case development. The organization needs a good reason to implement CRM other than new technology fever.

• Implementation plan creation. Create and execute a plan, which clearly defines how to achieve the goal and execute it.

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Successful CRM implementation (contd.)

As per Author Susan Clark wrote her book “10 Steps to a Guaranteed Successful CRM Implementation” there are 10 steps to successfully Implementation of CRM into the company. They are as follow...

1. Start with a picture

2. Define your sales process…Map out how you do things

3. WIIFM

4. Add customizations before roll out

5. Don’t add too many fields

6. Be sure hardware exceeds minimum requirements

7. Have documented procedures

8. Train your staff, but not just keystrokes

9. Follow-up and train your staff again

10. Give Awards12

Market leaders in CRMThe CRM market grew by 12.5 percent in 2012. The following table lists the top vendors in 2006–2008 and 2012-2014 (figures in millions of US dollars) published in Gartner studies.There are different market leaders. Between the different market leaders, each one's services cater to a different professional field, from healthcare to manufacturing.

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Examples of CRM Systems• CRM systems in practice

– Call centres• CRM systems in call centres codify the interactions between company and customers

by using analytics and key performance indicators to give the users information on where to focus their marketing and customer service.

– Contact centre automation• Contact centre automation, the practice of having an integrated system that

coordinates contacts between an organization and the public, is designed to reduce the repetitive and tedious parts of a contact centre agent's job.

– Social media• Social CRM involves the use of social media and technology to engage and learn from

consumers.

– Location-based services• Systems take in information based on a customer’s physical location and sometimes

integrate it with popular location-based GPS applications.

– CRM systems for business-to-business transactions• Technologies and procedures to manage, improve, or facilitate sales, support and

related interactions with customers, prospects, and business partners throughout the enterprise. 14

CASE STUDIES: Mercedes-Benz: Implementing a CRM Programme

– The CompanyMercedes-Benz is one of the world’s most successful premium brands. Its technical perfection, innovative design features and numerous car legends have made the Mercedes star one the world’s best known trademarks today.Other premium brands such as BMW, Lexus and Jaguar were competing fiercely in the luxury car market where Mercedes was traditionally very strong.

– The Challenges 1) Autonomous Dealership 2) Low quality of Service 3) Inadequate Enquiry

System 4) No coordination from dealership 5) Delivery inconsistency 6) Isolated database

7) Sales person’s attitude 8) Inconsistent customer record.

– The Solutions 1) Adopting New Distribution Model 2) Well Establish Project Management Team

3) New Agreement pattern 4) Mercedes-Benz Benchmark 5) New approach of marking structure 6) Good relationship between customer & sales person

– The ResultQuickly the financial benefits to the MA were established as well as steady improvements in key measures of customer satisfaction and customer loyalty. 15

CASE STUDIES (contd.) LEGEND GROUP: CRM Implementation in China

– The Company Legend group was set up in 1984 by 11 computer scientists with US$25,000 in seed money. The group's principal activity is the development, manufacturing and marketing of IT products including desktop and notebook PCs, displays, storage drives, and IT services.

– The Challenges Client–support Frame cannot sustain the customer’s personalised service request.

Separately saved customer’s information is not integrated, and cannot be fully shared.Lack of communication in the process of marketing and service.The client manager lack of proper workflow and measures to follow up. So as to grasp the sales opportunity and keep contact with the clients.

– The Solutions - Critical success factors along with people, process and technology .1) Select technology that supports their processes, versus expecting their processes.2) Redesign its core business processes starting from the customer perspective and involving customer feedback. 3) Eeffective knowledge transfer and knowledge sharing changed the role of the people from

passive acceptance to active involvement.

– The ResultThis case study aims to improve better understanding of CRM implementation and both generic and unique critical factors that affect CRM implementation success in China context.

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CASE STUDIES (contd.) CRM strategy and implementation for large charitable

organization Case Study: Strategic IT Consulting– The Company

A very large charitable organization faced a predicament very familiar to any growing business: inefficient management of tens of thousands of external contacts and the workflow associated with them. The organization spent significant time and money with a global management consulting and technology services company developing a customized tool based on Microsoft technologies

– The Challenges While building a tool that could scale to a wider audience. Ideally, the solution would unify

external customer information with improved workflow while leveraging the Microsoft technologies already in place, enabling simpler implementation of the tool by more organization

teams in the future.

– The Solutions The client proceeded with AIM’s recommendation to migrate information for six of its internal teams to Microsoft Dynamics CRM Online, a strategy that aligned with the organization’s long-term technology vision. A team of three AIM consultants, experts in Microsoft Dynamics CRM Online, implemented the cloud-based, Software-as-a-Service (SaaS) solution for the six teams in projects averaging less than 12 weeks apiece.

– The ResultAs an additional benefit, the charitable organization gained enough exposure with Dynamics CRM Online to be comfortable basing its long-term strategy on this platform. 17

ConclusionCRM system is not “just another information tool.” If applied properly, CRM programs can

contribute exceptional economic value to the company as well as competitive advantage.

Implementing CRM systems can enhance an organization’s ability to improve customer

service, which in turn can generate revenue. However, not all organizations who implement

CRM have been successful. In order to have a successful implementation of CRM,

organizations should evaluate how CRM fits into their overall business strategy, evaluate its

current CRM capabilities, and have a business reason for implementing CRM. They should

then create a plan and execute it. In conjunction, organizations should also look into CRM in

m-commerce or m-business. This is new in both B2B and B2 C so it needs lots of research

and investment. The future of CRM m-commerce provides plenty of opportunities for both

businesses and consumers. The next level of CRM could be “untethered-commerce” u-

commerce “untethered” by the hard wires of traditional computers and telephones,

“unbounded” by traditional definitions of commerce, and “ubiquitous” in that business can

take place anywhere and at anytime

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