the value of customer knowledge,.ppt

Customer Customer RelationshipRelationshipMaManagementnagement

(CRM)(CRM)ATTF LuxemburgATTF Luxemburg

Helping you through the learning curve

R.J.ClaessensR.J.Claessens&&PartnersPartners

Key Sources of the Key Sources of the course:course:

Harvard Business Harvard Business ReviewReview

CRM by Ed Peelen CRM by Ed Peelen Snezana DraSnezana Draggicevic icevic

Geraldine Geraldine ClaessensClaessens E mail: [email protected] - Internet:

www.rogerclaessens.be

R.J.ClaessensR.J.Claessens&&PartnersPartners

The key message of the The key message of the coursecourse


We are in it, together!


• In 2003, according to Harvard Business Review, 82% of interviewed companies in the USA, stated they would introduce CRM, a large jump from the 35% who employed CRM in 2000.

• What changed?


• The approach changed!

Rather than use CRM to transform entire businesses, companies using CRM successfully have directed their investments toward solving clearly defined problems within their customer relationship base


• The approach changed!

CRM today result in highly focused projects that are relatively narrow in their scope and modest in their goals.

There is also an understanding that highly accurate and timely data are not required everywhere


« Achieving success with CRM is more difficult than expected and it is not just a matter of marketing and IT. »

IntroductionIntroductionThe philosophy of Customer Relationship Management is this :

•CRM is about « Keeping the old-time spirit of customer connection even when you can not shake every hand ».

IntroductionIntroductionThe philosophy of CRM is:

•It is a comprehensive approach for creating, maintaining and expanding customer relationships. •CRM is a way of thinking about and dealing with customer relationships

IntroductionIntroductionThe focus is on: •What will the customers buy, when, why and for how much? •What creates value for them?•What does create a structural bond? •What service can we provide that does create a premium?•What about market segmentation?

IntroductionIntroductionWhat CRM systems do!

•The primary task of a CRM system consists in supporting or performing the activities involved in customer contact processes•The secondary task is related to providing customer and management information

IntroductionIntroductionThe concept of CRM is:

• Customer relationship management (CRM) is a business strategy to select and manage the most valuable customer relationships.• CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes.

IntroductionIntroductionThe concept of CRM is:

• CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy, and culture

CRM should the end of CRM should the end of the roadthe road

•CRM is a great concept BUT you might wonder if it is worth the effort relative to your customer base and expenses involved?

•It is the ultimate phase AFTER a solid market research and a strategic planning process!

IntroductionIntroduction

• Is the issue we analyse strategic?

• Where could we make more money? • Do we need perfect data?• What is the next step?

IntroductionIntroductionIs it strategic?• A large and comprehensive CRM

program involves complicated business and technology issues and requires investments of time and money.

• Before spending money, key marketing questions need to be addressed

• What are your key marketing questions?

IntroductionIntroductionIs it strategic?• An example: A well trained and

« proactive » sales force is a strategic necessity; this requires the right information!

IntroductionIntroductionWhere could we make more money?• It is possible to use CRM to

manage the entire relationship cycle: that is usually a bad idea!

• Large systems usually do not pay back.

• The focus of CRM should be the weak points that undermine performance

IntroductionIntroductionWhere can we make more money?• Focusing on weak points can not

only be an effective way to build a successful CRM program but can also put it back on track in case you started one.

IntroductionIntroductionDo we need perfect data?• Perfect real time information

comes at a very high cost• The requirements for real time

and good data are quite different

• Example: Outstandings on a current account (real time) versus portfolio management data (good data)

IntroductionIntroductionWhat is the next step?• Narrowly focused CRM system often

reveal additional opportunities for business improvements.

• All the small improvements taken together, can amount to a broad CRM application that extends across the bank.

• The key is to make sure the step by step approach fits into a defined strategic plan

IntroductionIntroductionWhat is the next step?• In most cases, the opportunities

for development lie in the activities adjacent to the customer relationship cycle.

• Ultimately, CRM can be the glue that binds together all activities related to a customer.

IntroductionIntroductionCustomer relationship cycle.

Development

Sales

Experience

Retention

Targeting

IntroductionIntroductionBusiness before technology• We should look at what CRM should

do, not so much on what it can do• CRM depends more on strategy than

on the amount spent on technology• Strategy is about the way you

allocate your resources to create a competitive advantage and superior performance

IntroductionIntroductionImplementing CRM before creating a

customer strategy = like building a house without an architectural plan

• Effective CRM is based on segmentation analysis

• Customer strategy is designed to achieve some specific marketing goals

• Technology is not a marketing strategy

IntroductionIntroductionIntroducing CRM before changing

your organisation into a customer focused organisation = like painting without sanding

• CRM will succeed only AFTER the organisation and its processes – job descriptions, performance measures, compensation systems, training programs, and so on- have been structure to provide superior customer value

IntroductionIntroductionAssume that more technology is

better = is like building without foundation

• To start, see what lower-tech alternatives offer; there may be no need for more in the very near future

• In the future as sequence of individual software solutions may lead to each step reinforcing the next step

IntroductionIntroductionDefine the right customers you want

to establish a relationship with = a two way street

• Just because managers can contact customers, does not mean they should by all means and for whatever reason.

IntroductionIntroductionHow do consumers define us in terms

of competition?

IntroductionIntroductionHow do consumers define us in terms

of competition?• Cost• Time• Quality• Opportunity• Information• Knowledge• Choice• Culture


Why might you consider CRM?

IntroductionIntroductionWhy might you consider CRM?1. Gather customer information quickly2. Identify the most valuable customers3. Obtain loyalty by providing customized

products4. Possibly reduce cost of serving these

customers5. Making it easier to acquire similar

customers6. Retention of existing profitable customers 7. Getting the maximum out of existing

customers8. It can function as an early warning system

IntroductionIntroductionWhy might you consider CRM?

Current situation

Medium term

Long term

Financial perspective

Turnover Increased turnover

Value

Customer perspective

Satisfaction

Individual satisfaction

Commitment

Communication

One way Attuned Multi-channels

Organisation

Data Knowledge

Integrated image

IntroductionIntroductionThe ultimate goal of CRM : The goal is to encourage the customer to make its future purchases from you and reduce the share of purchases being made from the competition DUE TO THE FACT customer knowledge has been accumulated and therefore it will be more difficult for the competition to offer a similar package

IntroductionIntroductionCRM is only a part of the sales’ performance!

How would you assess your overall sales’ performance?

Please rate the questions hereafter as followsNot effective Extremely effective1 2 3 4 5 6 7 8 9 10

(Source HBR 08/06)

IntroductionIntroductionSalespeople’s capabilities•Finding customers – identifying sales opportunities•Winning customers – converting opportunities into business•Keeping customers – cementing customer relationships - CRM

Not effective Extremely effective

1 2 3 4 5 6 7 8 9 10

IntroductionIntroductionSales Managers' skills •Planning for growing business•Coaching – giving clear direction, expectations and feedback•Motivating – recognition and rewards


1 2 3 4 5 6 7 8 9 10

IntroductionIntroductionSupport systems •Recruiting and hiring capabilities•Performance management systems•Opportunities management systems•Strategic account management systems •CRM systems•Training and development systemsNot effective Extremely effective

1 2 3 4 5 6 7 8 9 10

IntroductionIntroductionSales organisation climate •Clarity of goals and expectations•Staff dedication to achieve challenging goals•Staff initiative •Acknowledgment of good work


1 2 3 4 5 6 7 8 9 10


• The total score for your sales organisation is:……..


Average for high-performing organisations° 123Average for low-performing organisations° 109

We shall put the spot on CRM, but it is only a part of a bigger picture(° US based companies)

The structure of the The structure of the coursecourse

CRMCRMIntroductionIntroduction

ORGANISATIONORGANISATION MARKETINGMARKETING ANALYSISANALYSIS

1_Elements of CRM1_Elements of CRM

2_Customer-supplier2_Customer-supplier

3_Strategy3_Strategy

4_Relationship oriented4_Relationship oriented

1_Customer knowledge1_Customer knowledge

2_Customisation2_Customisation

3_Communication3_Communication

4_Relationship policy4_Relationship policy

1_1_Relationship Relationship DataData

2_Data mining2_Data mining

3_Data selection3_Data selection

4_Data reporting4_Data reporting

SYSTEMSSYSTEMS

1_CRM systems

2_Implementation

3_The future

4_Conclusion

1_Elements of CRM1_Elements of CRMThe four cornerstones of the «elements of CRM » are:1.Customer knowledge2.Relationship strategy3.Communication4.The individual value

proposition


1.Customer knowledge• Segmentation• Awareness, Attitude

• Usage• Concept• Customer satisfaction

• Customer loyalty

• Brand Image• Brand equity• Pricing• Advertising


2.Relationship strategy

•A long lasting customer – supplier relationship

•The key is not only the stimulation of a transaction

•Success is not measured by market share


3.Communication

•The issue is to carry on a dialogue with individual customers

•Shifts should be possible between distribution channels


4.The individual value proposition

•The product, service and price are adapted to the individual circumstances

•The organisation has to build up the capacity to supply customisation in one form or another


Systems•If a relationship must be maintained with a large group of customers, a portion of which represents a low value to the supplier, the use of IT becomes inevitable.

•Integration is therefore a must between front-mid-back office

the value of customer knowledge,.ppt

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