customer relationship management barr, fink and pape october 2001
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Customer Relationship Management Barr, Fink and Pape October 2001. Presentation Goals. Define CRM CRM real life experiences Review of critical success factors CRM future directions. CRM Defined. A Strategy A Process An Integrated Architecture The Outcome. CRM Defined. A Strategy - PowerPoint PPT PresentationTRANSCRIPT
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Customer Relationship Management
Barr, Fink and Pape
October 2001
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Presentation Goals
Define CRM
CRM real life experiences
Review of critical success factors
CRM future directions
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
CRM Defined
A Strategy
A Process
An Integrated Architecture
The Outcome
1www.american-crm-directory.com
CRM Defined A Strategy
“Needed to completely integrate a business in order to get a holistic view of the customer and their relationship to the entire enterprise.”1
2 "CRM is a strategy, not a tactic" Ivey Business Journal; London; Sep/Oct 2001; Ian Gordan
CRM Defined A Process
“CRM is the ongoing process of identifying and creating new value with individual customers, and sharing the benefits over a lifetime association. It involves the understanding and managing of ongoing collaboration between suppliers and selected customers for mutual value creation and sharing.”2
3 www.american-crm-directory.com
CRM Defined An Integrated Architecture
“It is a blend of internal business processes: sales, marketing, and customer support with technology and data capturing techniques.”3
4 www.cio.com/research/crm/edit/crmabc.html
CRM Defined The Outcome
“When effective, CRM will be used to learn more about customer needs and behaviors in order to develop stronger relationships.”4
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; M. A. Hamlin
Critical Considerations
20% of your customers provide 80% of your
business.5
Not all customers are created equal.
Therefore, Customer Relationship Management
is vital to the survival of your company.
6 "The Truth about CRM" CIO Magazine; May 1, 2001; Susannah Patton
Critical Considerations
Typical Cost Allocations
23%
38%
28%11%
SoftwareServicesHardwareTelecommunications
7 "CRM Market will double" Credit Union Magazine; Madison: Sep 2001; Schmidt and Sweeney
Financial Impact In 2000
$3.9B on CRM software and by 2005, $11.9B (Datamonitor).7
In 2001 $5.4B to between $11B and $16.9B by 2003
(www.American CRM Directory.com) In 2001
$20.4B CRM market will grow to $46B next year (Meta Group)6
Industry Leaders in CRM Software Siebel (www.siebel.com)
Founded 1993 2000 Revenue - $1.79B Database systems and Sales and Managerial Software
Oracle (www.oracle.com/corporate/story.html) Founded 1977 2000 Revenue - $10.1B Database systems and Sales and Managerial Software
8 "http://www.crm-forum.com/cgi-bin/item.cgi?id=41548&d=564&h=570&f=569
Industry Leaders in CRM Software Convergys (www.convergys.com)
Founded 1998 2000 Revenue - $2.16B Sales and Managerial Software applications
“500 or more companies claiming to make CRM software, only about 200 of them can legitimately make
that claim.” - Gartner Group8
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Reasons for Failure
0%
5%
10%
15%
20%
25%
30%
%of Failures from 900respondants
Could not adapt totechnology
Company politicsand inertia
LimitedUnderstanding
Poor planning, lackof CRM skills,budget limitationsSoftware problems
9 http://www2.cio.com/archive/050101/truth_content.html
Why Bother? “It’s expensive, hard to implement, time
consuming and it may not work.”9
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
10 http://www.more business.com/running_your_business/management/d935705915.brc
Why Bother? Because... “Businesses typically lose 15-20% of their
customers each year.” - Grace Butland10
“Companies can boost profits by almost 100% by retaining just 5% more of their customers.” - Reichheld and Sasser10
11 "CRM Made Simple" CIO Magazine; Sept 15, 2001; Stewart Deck
Tipper Tie $94M a year division of Dover Corp. Market leader in aluminum clips for the
food industries. “CRM, or any software, won’t increase
sales. But the applications could help them understand our customers better.” - Kendra Bender, IT Manager11
12 Kendra Bender, IT Manager Tipper Tie, Interview November 2001.
Tipper Tie The Pressures
Alternative packaging methods began making inroads with Tipper Tie’s customer base
Lead Kendra Bender IT Manager
Budget Annual IT Budget $1M CRM Estimated $250K
IT Staff of four
Tipper Tie Strategy Process Integrated Architecture Outcome
Tipper Tie Strategy
The company needed to change the way its customer-facing staff worked, including the eight call center operators, 16 member field sales force and 8 repair technicians.
Tipper Tie Process
TT needed a system to trim the cost of generating sales leads and produce more sales from its best customers by providing better service and better communications between its service channels.
13 http://www.cio.com/archive/091501/simple_content.html
Tipper Tie Integrated Architecture
Utilized Siebel Systems’ stand-alone call centers and sales force CRM modules to link the sales reps in the field and the call center into the same continually updated customer data view.
“Cross functional and pilot teams are keys to success…it saves a tremendous amount of time and effort later on by including their insight expertise and gaining their support.” - Elizabeth Herrell, Giga Information Group13
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Tipper Tie
Outcome Bender estimates that Siebel system will pay for
itself in a little over two years. Each sales rep has approximately 18 more days per
year in face-time selling that they would have spent generating reports or dealing with the peripherals.
TT is much more responsive to customers by providing better communication between the customer and the company
14 "The Truth about CRM" CIO Magazine; May 1,2001; Susannah Patton
Monster.com $485.9M division of TMPW Global leader in on-line information and opportunities
for job seekers and employers 8 million job seekers and over 400,000 job opportunities
throughout North America, Europe and Asia. “CRM is not for the weak spirited. It requires a lot of
management and money.” - Ned Liddell, VP Business App. Dev.14
15 Ned Liddell, Director Business Systems Monster.com, Interview November 2001.
Monster.com Pressures
Monster was facing phenomenal global expansion and needed accurate and fast data for all involved.
Lead Jocelyn Talbot, SVP of Telesales
Budget Annual IT ~$20M Estimated CRM $1-1.5M Actual CRM costs ~$4M
IT Staff 50 people worldwide, not including the development group for
the web-sites
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Monster.com Strategy
Merge data from legacy system and failed Siebel rollout in order to facilitate its global market expansion.
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Monster.com Process
Hire Akibia to create a single database from legacy systems and customized applications to use this new database more efficiently
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Monster.com Integrated Architecture
Akibia continued to work with Monster.com employees to
– help with database-specific issues– analyze country-specific business processes– computer telephony integration
16 "Online recruiter faces 'monster' headaches with CRM" INFOWORLD; Feb. 26, 2001; Heather Herreld
Monster.com Outcome
“In addition to providing hundreds of global employees with synchronized customer data, the system has proved flexible as Monster.com evolves its business model.”16
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Critical Success Factors Evaluate current customers’ impact on
business. CRM must start with determining what kind of customer information the company is looking for and what it intends to do with the information.
Evaluate business environment to understand how current customer relationships impact business retention and growth.
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Critical Success Factors Develop a strategy that is well articulated to
give unequivocal direction and value to all employees Strategy must not only parallel current mission
but be able to adjust with changing business requirements
Strategy must be embraced by the CEO, COO, CMO and supported by IT
14 "The Truth about CRM" CIO Magazine; May 1, 2001; Susannah Patton
Critical Success Factors Find the CRM vendor that can meet your
requirements not define them Gartner Group reports even the highest rated
CRM application suite only delivered 51% of the necessary components to get a complete view of the customer.14
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Critical Success Factors Methodical approach to rollout
Handpick dynamic employees to “sell” new systems to their co-workers
Make information from all parts of the enterprise available to employees who deal with customers
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Critical Success Factors Work hand-in-hand with vendor(s), consultants
and users to ensure progress being made is reflective of the planned CRM solution. Watch for implementation atrophy Good project management = 50% you + 50% client Open your enterprise to make it easier for
customers to use your systems
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
Critical Success Factors Evaluate and update the strategy
The goal is to lock customers into a mutually beneficial long-term relationship. The CRM strategy aligns an entire organization toward customers in a way that benefits partners, suppliers and improves the financial bottom line.
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
17 "Analytical CRM is the next step" Insurance and Technology; New York; Oct 2001; Gregory MacSweeney
The Future of CRM Impacted by the downturn in the economy,
however not necessarily negative. “You have to grow and retain the existing
customers.” - Nelle Schantz17
17 "Analytical CRM is the next step" Insurance and Technology; New York; Oct 2001; Gregory MacSweeney
The Future of CRM Analytical CRM
“Many companies have already invested in operational CRM products…now that the hardware is in place, companies want the ability to build one view of the customer. Get the customer data, clean it, do some pretty serious data mining and then deploy the knowledge to the front offices.”17
5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin
“The days of mass marketing are over. If you don’t know your customers
intimately, you don’t know where your next profit is coming from.”
-Timothy Goh Director of CRM,
Sing Tel Mobile