Customer Relationship Management the mobile telco case

AAM Management Information Consulting Ltd.Csaba Lengyel

International Business development Director

11 May 2005, Sofia

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AAM Consulting

Founded in 1994

AAM Technologies – our technology arm, 2001

2nd largest Consulting firm in Hungary, 2003

International BU, 2004

Headcount 120+30

Net revenue 5,5 million euro

Clients: Telco, Financial services,

Utilities, Public Administration

Services: Management and IT Consulting

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What is CRM? – in the real life…

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What is CRM? – and in the future…

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Agenda for today

– CRM definition– How does it all work?– What Capabilities are required?– IT support– CRM Business Case– A mobile telco case

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„The true business of every company is to make and keep customers.”

Peter Drucker

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What is CRM? – the „dark side”

All started with „all promising” technology investments:– Call Center– Sales Automation Software– Internet based customer service– Campaign management solutions– Integrated CRM solutions

Than the disillusionment came– 70% of Big CRM investments were not justified by either cost-cutting or revenue increase (late ’90-ies data)

In 2002 $13 billion has been spent on CRM related technology„The CRM „spirit” is willing, but the cash backing is still weak”

„Customer privacy concerns require improvement in marketing capabilities.”

„As the channel mix grows, enterprises will become more accountable for the ways in which they reach out for the customers”

Gartner predictions

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What is CRM? – the „challenge” still ahead

Key questions still persist:

– Do you know which customers are the most profitable?

– Which customers are satisfied, …and which not so much?

– Do you know, what they would need (Who? What? How?)

– How your customer service processes compare in speed, cost and value to your competitor?

– How the executive leadership is supportive and your culture is customer oriented?

– Does your technology support your aspirations?

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Why? – The „real CRM levers”

Increasing competition– Deregulation– Common market– Low cost competitors– Need for „real-time” response

Decreased customer loyalty– or a threat of that

Revenue uncertainties– More customers– Lower prices, dropping revenue per user

Increasing marketing and sales costs– More products and services– Shortening cycle times– Multiple channels (e-Commerce, Internet, Contact

Center, etc.)

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CRM – is a Paradigm shift

Our objective is to sell our product to as many Buyers as possible.

We want to sell these products on the highest possible price and produce, service them on the lowest possible cost.

Our objective is to sell as many products to our Buyer as as possible.

We want to obtain the highest possible profit margin on each Buyer through maximizing his satisfaction by providing him with the most appropriate products and services given his needs and buyer capacity.

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CRM Objective

Increase profitability over the Customer Lifecycle!

Knowing who are your most profitable customers Increasing revenue & profitability through cross-selling,

up-selling Prolonging the lifecycle of the customers by reducing

churn Increase efficiency of customer interactions through

differentiated (segment based) servicing targeted sales offers Integrated channel management

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Acquisition What criteria determine who will be our most profitable customers? How can we acquire this customer in the most efficient way?”

RetentionHow can we keep thiscustomer for as long as possible?”

$

Time

$ $ $ $How can we increase the profitability of this customer?”

$

Time$ $ $

Cross/Upsell

Customer Lifecycle

What we need to know?

Servicing

$ $

$$

$

How can we increase the satisfaction and optimise the cost of servicing this customer through efficient and „personalized” care?”

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CustomerRelationshipprofitability

Actions which build relationship warmth

No fault service “Have a nice day” Targeted sales

Time

Event based sales opportunities

How we can increase profitability?

Customer Lifecycle

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Evolution of Mobile market

A „general” view:

Stage 1:

„Starting up”

Stage 1:

„Starting up”Stage 2:

„Growing”

Stage 2:

„Growing”Stage 3:

„Maturing”

Stage 3:

„Maturing”

„Customers” agenda: Network quality Coverage Phone sets / appliances

Business issues: Network development

investments Phone subsidies Rapid growth Revenue stream risks

Products & Services Pricing Brand Customer Service

Accent on customer service

New services / tariffs Continuous growth Competition

(copying services/tariffs)

Customer insights Tailored offers Smooth servicing Globalisation

How to get a sustainable advantage?

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Example 1: Identifying Churn probability and make a relevant offer!

1. A Regular customer calls Call Center and asks for the detailed invoice to be resent again.

3. Based on the “Retention offerings”, the most suitable proposal is made to the customer.

2. On the CRM interaction screen the high churn probabiliy of this customer is visible.

What is CRM? – in the real life…

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1. A Customer comes to a shop to buy a new headset. After the sales the agent registers the interaction in the CRM solution.

2. Since the sales resulted a positive mood, the agent proposes a new MMS tariff plan to the customer based on the three targeted offers available in the CRM solution.

Example 2: Support Cross selling with targeted relevant offer!

What is CRM? – in the real life…

3. The agent registers the reaction of the customer in the CRM solution.

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Example 3: Support prepaid-postpaid migration, retention with workflows

1. A prepaid customer calls Call Center and asks why an ordered service is not available for free, although he recharges regularly with a high amount.

2. Since the churn lamp shows high churn and the customer has a high value, the CSR offers the migration to post-paid (because the requested service is free for post-paid)

3. Since further processing required (in back office) the CSR registers the request and assigns it to the relevant user group.

What is CRM? – in the real life…

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What is CRM? – in the real life…

Example 4: Unified channels

1. A Customer calls Call Center, who has been targeted with the recent SMS campaign.

3. The CSR can use this information to find out the response of the customer. The preferred way of contact of the customer can be registered.

2. A Flash window appears for the CSR, notifying her/him about the campaign.

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IT Components of the CRM architecture :

Customer Contact applications

Direct decision support through ALL channels

Data mining and analysing tools

(OLAP)

Data and tools of strategic analysis

How technology may help?

Background support systems

(Billing, etc)

DWH Access to reliable and coherent data

Value added components

Supporting elements

Action delivery applicationsDirect actions to

build customers

Ensure data to ALL CRM applicationsMiddleware

(EAI)

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For the Company: Increase profitability Retain most valuable customers Entering new markets, get new

customers Stop market losses Leave unprofitable markets Effective marketing through market

segmentation Product and service development based

on customer needs High level customer service Shortening sales cycles Get more knowledge about customers

For the Customers: Products, services and processes

tailor made to their (individual) needs

Multi-channel sales and Customer Service

Segment dependent communication, sales and service

CRM Benefits

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ChurnARPUAcquisition costs

ServicingCosts

Process & Organisational development: • Modify existing customer facing processes• Develop new processes• Update / develop new organizational forms• Develop KPI’s and performance

measurement procedures

Process & Organisational development: • Modify existing customer facing processes• Develop new processes• Update / develop new organizational forms• Develop KPI’s and performance

measurement procedures

IT developments: • Building a unified customer database

(data model, data cleansing, migration, populating)

• Implementing new CRM application(s)• Implementing EAI• Updating / changing existing systems

IT developments: • Building a unified customer database

(data model, data cleansing, migration, populating)

• Implementing new CRM application(s)• Implementing EAI• Updating / changing existing systems

Building a Business Case for CRM

Tasks…

Acquisition Cross/ Upsell Servicing Retention

Benefits…

Concrete CRM Targets (Levers)

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CRM Programme - Timeline Overview

Phase 0

Phase 1 Phase 2

Con

cep

tion

ing

Central CustomerCentral CustomerDatabase realisationDatabase realisation

- Operational CRM- Operational CRMCore System implementationCore System implementation

CRM IT architectureCRM IT architecturerealisationrealisation

Middleware softwareMiddleware softwareimplementationimplementation

New Loyalty Prog.New Loyalty Prog. realisation realisation

Contact CentreContact Centre implementation implementation

Contact Centre & CRMContact Centre & CRMCore System IntegrationCore System Integration

Implementation ofImplementation ofCampaign ManagementCampaign Management

& Analytical Tool& Analytical Tool

Sales Force Automation Sales Force Automation Approval Approval

Process of Process of Corporate Corporate

Sales Sales OpportuniOpportuni

ties ties AutomatioAutomatio

nn

AutomatAutomation of ion of 85%85%

of the of the CorporatCorporate Sales e Sales ProcessProcess

AutomatioAutomation of 100% n of 100%

of the of the Sales Sales

ProcessProcess

Mobility - Mobility - Use of Use of Mobile Mobile

Devices Devices

Use of Use of Analytic Analytic ResultsResults

2003 2004 2005

CRM business actionsCRM business actions

CustomerCustomersegmentationsegmentation& cust. value& cust. valuecalculationcalculation

Customer segment strategiesCustomer segment strategies & Account planning& Account planning

LegendLegend CompletedCompleted In progressIn progress PlannedPlanned

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CRM Programme achievements

Legend - completed- still in progress- out of project scope

Operational Operational CRMCRM

Interactive Interactive CRMCRM

Analytical CRMAnalytical CRM

Central customer database

Sales Proposalprocess support

Campaign execution

Customer value

Churn (pre- and postpaid)

Customer need (corporate and

consumer)

Contact Center core

Data Warehouse

Customer self-care solutions (web, wap)

Terminal serviceSupport system

Billing Systems (pre-and postpaid)

New LoyaltyProgramme support

Call CenterIVR

Document Management

& registry

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CRM Programme Results

Increasing revenue by effective retention and cross-selling activities

Churn rate by starting CRM activities has decreased by more than 50% in the targeted segments

Despite the aggressive price competition the market share is unchanged due to the CRM Strategy, even the number of customers is still increasing

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Lessons Learnt – To Focus On

Business Journey - a clear business direction that shows how the business will become customer centric

Customer Strategies - that plans the customer journey from initial prospect to high value customer and enables all customer facing functions to know what is required of them to achieve this goal

Organisation Design – purpose built to deliver the customer strategies and provides the cultural framework for transitioning the business

Information Architecture - that underpins the execution of the customer strategy, providing the right data, processes and treatments at each customer touch point

Performance Measures - that recognise and reward the new behaviours required for the company to become customer centric

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Lessons Learnt –To Avoid

Low company leadership commitment Misaimed scope of the project Internal focus of the business, often product centric Functional organisation design Unchanging command and control culture Inadequate customer data (also inconsistency of

customer data between applications) Emphasis on IT as a solution for CRM

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Questions?