Download - CR! With CRM Roger Blackwell
CR! With CRM
Roger Blackwell www.rogerblackwell.com
How to Pinpoint, Acquire and Retain the most profitable customers in the long run
The Two Commandments
• Know Thy Customers
• Know Thy Data -- CRM
CRM: Also Known As
• Contact Management (CM)
• Sales Force Automation (SFA)
• Data Mining (DM)
• Automated Marketing Processes (AMP)
• Enterprise Marketing Automation (EMA) SAS
• Electronic Commerce Solution (USA Networks)
Where are business and e-commerce going and where does my firm fit in?
What is happening in the consumer marketplace?
Who is keeping track of these trends and developing tools to help me grow profits?
What is on the minds of your customers?
C.R.M.
C.R.M.
The Foundation is Consumer Behavior
CONSUMPTION CONSUMPTION PROCESS PROCESS ANALYSISANALYSIS
MODEL OF CONSUMER BEHAVIOR - PURCHASE AND OUTCOMES
INPUT INFORMATION PROCESSING
DECISION PROCESS VARIABLES INFLUENCING DECISION PROCESSES
Environmental Influences•Culture•Social Class•Personal Influence•Family•Situation
Individual Differences•Consumer Resources
•Motivation and Involvement
•Knowledge
•Attitudes
•Personality
•Lifestyle
•Demographics
Need Recognition
SearchInternal Search
Stimuli
•Marketer Dominated
•Other
Exposure
Attention
Comprehension
Acceptance
Retention
Memory
Beliefs
Attitude
Intention
Alternative Evaluation
SatisfactionDissatisfaction
Outcomes
Purchase
External Search
Problem Recognition
Search
Alternative Evaluation
Choice/Purchase/Consumption
Satisfaction/ Dissatisfaction
CONSUMER BEHAVIOR MODEL
PURPOSE OF CRMPURPOSE OF CRM
• 1. Identify all customers and the 1. Identify all customers and the nature of contacts with themnature of contacts with them
• 2. Identify which types of 2. Identify which types of customers are most profitablecustomers are most profitable–by salesby sales–by profit contributionby profit contribution
PURPOSE OF CRM PURPOSE OF CRM • 3. Identify and understand the behaviors of 3. Identify and understand the behaviors of
the most profitable customersthe most profitable customers– how to encourage behaviors of most how to encourage behaviors of most
profitable customersprofitable customers– how to encourage those behaviors among how to encourage those behaviors among
other segments of the customer baseother segments of the customer base– how to cross-sell other products to how to cross-sell other products to
customerscustomers
PURPOSE OF CRMPURPOSE OF CRM
• 4. Manage contacts with most 4. Manage contacts with most profitable customersprofitable customers
• 5. Manage activities of the firm that 5. Manage activities of the firm that will please most profitable customerswill please most profitable customers–strategiesstrategies
– tacticstactics
The Century of
How many customers will there be?
Will your markets be growing or slowing?
CRM
MARKETING IN THE CENTURY OF THE CUSTOMER
REQUIREMENTS FOR REQUIREMENTS FOR PROFITABLE PROFITABLE
MARKETSMARKETS
• People with needs and/or People with needs and/or problemsproblems
• People with ability to payPeople with ability to pay
• People willing to spend fundsPeople willing to spend funds
• People with authority to spendPeople with authority to spend
Targeting Segments For Increased Profits
Segmenting Individuals
Is e-tailing a Mass Market or Niche Market application?
Data Mining and CRM
GATHERING CONSUMER INFORMATION
1. Give them feedback as to how information has affected company
2. Don’t waste their time--make process easy and quick
3. People want to be able to access information about their preferences, etc.
IMPLEMENTING CRM
1. Shift from batch process environment to real-time environment
2. Shift from Product Centric Environment to Customer Centric Environment
3. Measures of: recency, frequency, volume of purchases.
The Implementation Triad
1. Functional knowledge of the data being analyzed
2. Programmer to manipulate data
3. Analyst/statistician (to build predictive algorithms
(80% data prep, 20% data analysis)
CHANGING LIFESTYLESCHANGING LIFESTYLES
DemographicsDemographics
PsychographicsPsychographics
Behavioral (Bayesian)Behavioral (Bayesian)
CRITERIA FOR SELECTING CRM SOLUTIONS
1. Improve productivity
2. Add sophisticated functionality
3. Ease of maintenance
4. Flexibility for growth
5. Scalable performance
6. Reliability (of provider, not just software)
ORGANIZATIONAL GOALS
1. Integration of multiple divisions
2. Integration of Multiple Channels
CASE EXAMPLE: USA NETWORKS
USA Entertainment
USA Electronic Retailing
USA Information and Services
USA Network (SciFi Channel)
USA Studios (Law & Order, etc)
Home Shopping Network
Ticket Master
Hotel Reservations
Styleclick.com (B2B Web Design for NASCAR, etc.)
Barry Diller, CEO
USA NETWORKS GOAL: Convert Sales into an IMC
Acxion (Little Rock) cleansing data and updating 45 million addresses (provides ID for every customer that never changes, regardless of address or name changes)
Precision Response Group (operates customer call centers)
PRC handles telephone sales, HSN handles fulfillment
TicketMaster handles NBA tickets, upsells Sports Illustrated
SAS Enterprise Miner (modelling, campaign planning execution--DM, catalogs, e-mail. Calculates lifetime value and cross selling opportunities (1 or 365 emails a year?)
Delano software (e-mail execution, HTML enabled, inbound marketing, Click through tracking --those who delete, read, go to web site, go to web site and buy
NASCAR-- from 100,000 names to a few million prospects
CASE EXAMPLE: U.S. MARINE CORPS
275,000 force, 14,253 leave MC each year without completing contract
Cost $35,000 to train each one; a 1%improvement saves $5 million/year
CRM identified factors causing people to leave: Billet MOS, Age, duty status leave
Don’t recruit the ones that will drop out
2,600 person years lost awaiting training (shipped to schools but not in them)
U.S. MARINE CORPS CRM RESULTS
Retain more, recruit less
Recruit less, train less
Train less, wait less, retain more
Continue upward spiral of career process: Career process better, money saved
Saved $10-12 million on first 3 data mining projects
Implemented by SAS (SAIC), nation’s largest employee owned r and d firm
ASSETS ASSETS VERSUS VERSUS
INFORMATIONINFORMATION
GLOBAL INFORMATION SOCIETY
Information/Mass Ratio
GLOBAL INFORMATION SOCIETY
+ Higher Value to Customer
Information/Mass Ratio
GLOBAL INFORMATION SOCIETY
+ Higher Value to Customer
- Lower Operations Costs
Information/Mass Ratio
GLOBAL INFORMATION SOCIETY
+ Higher Value to Customer
- Lower Operations Costs
MORE MARGINS
Information/Mass Ratio
CR! With CRM
Roger Blackwell www.rogerblackwell.com
How to Pinpoint, Acquire and Retain the most profitable customers in the long run