E-CRM

Competitive differentiation
• Technology advancements – product features and
functions
– lesser product life cycles
• Price – complex channel networks caused parity pricing
• Promotion strategies – special offers
• Place of distribution – Internet
• Customer Relationship management
– Along with above four provides a meaningful sales and service
– Potential in customer relationships
– Additional opportunities to meet customer needs
– Continuously monitor customer wants-and-needs
 CRM
An enterprise wide initiative and not only a
• technology initiative – do not assign to IT group
• Marketing initiative – do not equate with customer-focused
marketing or data=driven database marketing
• Sales initiative – do not place it in sales department
• Service initiative – service is not the functional aspect of
CRM
• CRM involves – marketing, sales, service, and technology
• Requires transformation with proactive change and not
gradually develop CRM
 You can't build a business on customer service as your
differentiator because anyone can do it…….

You can use customer service as a differentiator, because the

truth is anyone CAN'T do it.

Tom Peters
 E-CRM and its interface

Company facing activity Customer facing activity

Digital
Interface Selection
Communication
plan & delivery
Transaction
Transaction processing
Content Fulfillment
Activity analysis Delivery
Service support
Event reporting
Sales management
Platform integration
Marketing
CRM in Enterprise landscape
 CRM is

CRM is a business strategy to select and manage

customers to optimize long-term value. CRM
requires a customer-centric business philosophy and
culture to support effective marketing, sales, and
service processes.

In one word it can be said as

“Loyal Relationships”
Some facts (www.sybase.com)
 Why CRM…..
• CRM strategy directly proportional to survival of
businesses
• Customer satisfaction and loyalty are turbulent
• Customer expectations are ever-increasing.
• Customers expect companies to know who they are and
what they need.
• First step in CRM strategy is acquire excellent customer
information.
• Use the knowledge gained to customize your business to
strategize and meet customers individual needs
• Action plan to address the organization's current and
potential performance by
– customer acquisition, growth, and retention.
What are the hurdles?
 Clichés about Customer knowledge
• Know your customer !
• Market one-to-one !!
• Fire your worst customers !!!
• Build business relationships with your customer !!!!
• customer knowledge and economic benefits are interlinked
 Hurdles in Customer Knowledge

• Customer knowledge widely dispersed around the company.

• Management of customer knowledge

– Several types
– Each type to manage requires different approach
 Companies on a success track
• MasterCard International Inc does it for member banks that
want to understand the behavior of their credit card customers.

• FedEx uses it to increase market share and profitability among

small shippers.

• Several regional firms have used it to try to become customer-

oriented
 Siebel’s 4 Axioms on CRM

▪ Knowing the one we want to serve.

▪ Identify customer segment
▪ What you value? What are you really selling them? Are
you reliable? Are you the most creative?
▪ Consistent service – fulfils brand
▪ A low-cost structure; an e-business perishes without one
 What is E-CRM
"A comprehensive approach which provides seamless
integration of every area of business that touches the
customer – namely, marketing, sales, customer service and
field support – through the integration of people, process and
technology, taking advantage of the revolutionary impact of
the Internet."
 What is E-CRM..

“E-CRM is a concept, or management discipline concerned

with how organizations can increase retention of their most
profitable customers using Internet technologies and
simultaneously reduce costs and increase value of
interactions, thereby maximizing profits."
 Transitioning business to E-CRM

Transaction
Model
◼ Cost
E-CRM
◼ Service Level
Customer Lifetime Value

◼ Volume
Customer
CRM Model
◼ Customer
Loyalty
Relationship
◼ Employee
Defection
Transaction -
Management
◼ Profitability

Centric
Mass Market One-to-One Model
 What are the goals ..

▪ Use existing relationships to grow revenue

▪ Use integrated information for excellent service
▪ Introduce more repeatable sales processes and procedures
▪ Create new value and instill loyalty
▪ Implement a more proactive solution strategy
 — Ten Tough Questions —
1. Can your customers and staff interact in any combination of e-mail, chat, Web,
phone, and fax?
2. Do they find intelligent self-service at your site?
3. Are your customers frustrated by having to repeatedly contact your staff and re-
explain previous issues to continue a conversation?
4. Can your help-desk staff immediately and intelligently provide full service? With
instant access to a rich knowledge base of answers to common queries?
5. Can previous communication between the customers, help-desk staff, marketing, and
sales agents be easily seen across your organization?
6. Can your help-desk staff immediately and intelligently provide full service? With
instant access to a rich knowledge base of answers to common queries?
7. Do you have tools that improve employee efficiency and morale by reducing the
effort for everyday tasks?
8. Can you use your current system to manage and supervise workforce productivity
issues and easily monitor actionable performance metrics?
9. Can your contact center generate revenues for your company by generating leads and
closing orders?
10. Can you execute a closed-loop marketing campaign?
 4 phases of CRM
▪ Acquire and retain
▪ Analyze customers and prospective customers
▪ Understand and differentiate
▪ Based on customer needs, characteristics, and
behavior
Acquire and
▪ Develop and customize retain

▪ Develop products and service channels to meet

customer needs
▪ Customize by customer segment Understand
Interact and
▪ Interact and deliver deliver
and
differentiate
▪ Deliver increased value to customers
▪ Interact with customers and prospective
customers Develop
and
customize
 Understand & differentiate
• Profiling to understand demographics, purchase patterns,
and channel preferences
• Segmentation to identify logical unique groups – that look
alike and behave similar
• Research to capture needs and attitudes
• Customer valuation to understand profitability – life time
value or long-term potential
• Along with analysis and research – act on what you learn
from customer
• Differentiation based on value customers expect
 Develop & customize
• Products and services to follow customers lead
• Instead of for individual customers – customer segments
– Products, services, and channels to focus on quantitative customer
segments

Interact & deliver

• Not only through marketing and sales
• Many different areas – distribution and shipping, service
and online
• To foster relationship
– All areas of organization to have relevant, actionable customer
information
– All areas trained to use customer information to tailor interactions
based on customer needa nd potential customer value
 Acquire & retain
• Continuously learn about customers
– Helps in knowing what is valuable to each segment, score with
right channel, right media, right product, right offer, right timing,
and relevant message
• Retention based on
– Maintain interaction, never stop listening
– Continue to deliver on customer’s definition of value
– Be alert for changes as customers change as they move thru
different life stages
 Organizing around the customer
1. Prioritizing the changes
• Cost to implement including one-time costs and ongoing expenses
• Overall benefit – larger impact on organization’s ability to increase
customer value & loyalty
• Feasibility based on organization’s readiness, data, and systems; resource
skill-sets
• Time requires; time for training and cultural change management
2. Creating an action plan
• Interdependent activities
• Leadership action plan – significant organization change
• Additional strategies and specific actions
 Organizing around the customer cont.
3. Measuring success
• Means to measure on CRM initiatives
• Enterprise wide measures for success
• Apply metrics on ongoing basis
• Customers core card – cumulative, enterprise-wide impact on customer
relationships
Components of a CRM program

Data mining and Contract

Real-time CRM and
campaign management and
E-Commerce
management building relationship

Incremental Product Customer Profitability, New Business

development and Brand Strength and
profitability, Product Extension
reducing customer
Turn-of
Skills Change Management Strategy
 Supporting requirements
• Integration of customer content

• Customer contact information

• End-to-end business processes

• Extended enterprise

• Integration of Systems
– Legacy system, computer telephony integration
– Data warehousing, Decision Support Technology
 Database integration – effective CRM
Outbound Customer
Marketing Interaction

Operational Call Wireless Banner Direct Outbound Survey Online Point of Web Call Inbound
Database Center Ad Mail e-mail Purchases Sale Logs Center e-mail

100
90

Marketing 80
70
60

Analytical Customer 50
40
30
20

Database Analysis 10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Reporting

Customer
Understanding
The Five Engines of E-CRM
Engine 1: Information Store
 Engine-1: Information Store
Data mining and decision support
▪ Evolution of CRM & Data Mart based systems – real time
marketing data analysis surrounded by campaign management
▪ Enable the search of internal and external data
▪ Internal data from ERP and legacy systems
▪ External data from third party lists
▪ Identify potential customers from databases
▪ Tailor highly targeted campaigns to prospects
 Engine-1: Information Store
Analyzing the data
• Having the right marketing information
– Better understanding of customers and potential customers
– Influence on marketing campaigns and
– Inevitably marketing spend.
• Profitable campaigns –
– the marketing department needs to ensure that customers
receive the information they want
– In a timely fashion
– Target the right people with new information.
 Engine-1: Information Store
Enhancing the data
• Externally available information.
– For ex: geo demographic, lifestyle and psychographics
data can help in developing the full image.
• A single source
– over time a historical perspective can be developed.
Engine-2: Analysis and Segmentation
Engine-2: Analysis and Segmentation
Predicting the future
• Data modeling and mining techniques
– can take customer information one step further,
– Predicting future behavior of your customers by analyzing
their historical behavior.
• Predictions with customer behavior
– Most likely to buy your products or
– Who are most likely to move to a competitor
– Campaign on selected groups more effectively
– Growing the customer base or reducing attrition rates.
Engine-3: Personalization
Engine-4: Broadcast
 Engine-4: Braodcast
Campaign management
• Plan, manage, and monitor the campaign project
• Monitoring the success or failure of leads generated
through the campaign
Engine-5: Transaction
 Successful CRM Strategies
1. Effectively manage customer relationships – critical issue
a biz can tackle
2. Not just post-sales service; throughout the entire customer
lifecycle
▪ Channels; products considering/purchasing; service issues raised
▪ Run the above information thru customer segmentation models –
to better understand needs, behaviors, economic value
▪ Use this knowledge to market more effectively
▪ New customer experience is critical to drive sales – source from
current customers and analyze to generate insights on new product
offerings
▪ Use existing high-value customer information to develop profile of
customers who will desire business services or products – targeted
campaign
Successful CRM strategies cont.
3. Not software – but people, process, and technology
– Customer knowledge management (datamining)
– Optimized customer contacts – optimize customer contacts across
channels and lifecycle
– Integrated technologies
– Collaborative organization
Supplements for CRM strategies
Data controllers
▪ Silo applications by departments in the past
▪ proposal preparation, customer support, call logging,
product development, marketing or brand management.
▪ CRM integrates all the diverse systems
▪ In doing so, add the complexity of incompatible
systems and conflicting data sources.
▪ Data Controllers can work together to unify the
organizations information resources
Supplements for CRM strategies
Control Systems
▪ Outdated customer data is worse than having none.
▪ Removing outdated customer data is the key in a CRM and
also the weakest link in a CRM
▪ Rigorous controls for access and update of corporate and
client knowledge
▪ Sharing information with those who need whilst
preventing and detecting unauthorized access
 Organizational challenges

• Lack of incentive programs to promote CRM

• Difficulty in integrating with legacy systems

• Managing a global CRM operation is difficult with the

traditional methods
 Supplements for CRM strategies
Culture
• Treating customer knowledge as a corporate asset,
• requires investment in the assimilation, analysis and
sharing of customer knowledge,
• The corporate culture reflects and supports this.
• Relinquish personal 'ownership' of information
• Knowledge Management departments and Chief Knowledge
Officer (CKO) role
• Catalyze cultural change in information sharing
• Emphasis on information sharing and not to become
owners or accuracy maintainers
 Is technology sufficient ?

• A technology-driven CRM 'solution' will have the potential

to support the communications and the single customer view.
• Although the technology makes these principles easier to
follow, it will not in itself lead to their full implementation.

• What else is required?

 A roadmap for CRM

• Define a vision of integrated CRM

• Understand the customer
• Evaluate current readiness
• Establish the strategy and specific objectives
• Implement in stages
• Create a closed loop CRM environment
• Create continuous measurement goals
Implementing E-CRM in 3 Phases
(www.cyberdialogue.com)

1. Collect and Integrate Customer Information

• Customer data is created when interact with Web site, call
center, retail outlet, response to a promotion.
• Ensure customer interaction is not delayed
• Integrate this data to DSS
• Bridge the data islands created by multiple operational system.
• Manage data in highly frequented sites
• Collect data both from online and offline sources including
legacy systems and new technology such as WAP
• Integrate this data in a central warehouse
Implementing E-CRM in 3 Phases cont.
(www.cyberdialogue.com)

2. Analyze data to understand your Customer

Analysis helps to answer critical marketing questions, including
– Who are your most valuable customer?
– Which customer are likely to leave or stay?
– Which customer are most likely to respond to an offer?
– What is the best product to offer each customer?
– What is the most relevant message for each customer?
3. Implement targeted campaigns based on customer knowledge
– Campaigns for valuable customers
– Build personalize Web site content to increase long-term
customer loyalty and value.
 The Arc 360 process
Online Data Sources Offline Data Sources

Log Reg. & Survey Call Direct Warranty

Files Trans. Data AdStream Center Mail Circle
Responses

Data CAPTURE CAPTURE

Capture

Data Hygiene
& Integration
Update Database with
Update Database with Results of analysis

Data Storage
Measured Customer
Responses Arc 360

Data Warehouse

Targeted Action Decision Support

E-mail Phone Traffic Customer
Campaign campaign Report Value

Banner Ad Loyalty Customer Cross &

Campaign Program Segmentation Up-sell Model

Targeted Marketing Data Analysis,Viewing & Reporting

 CRM Scorecard

No cross Customer Limited

Applications Functional
channel information functional
integration
system integration
Integrated sales
Service and No access to Access to Access to and service
Support customer Customer relationship information
information information information

Batch processes Customer Close loop

Marketing No marketing for marketing information file integrated
tools marketing

Limited Data warehouse

Decision No customer customer applications Data model
Support analysis analysis analysis
 Top 10 Reasons for CRM Failure
1. No business case
2. Big Bang Release
3. No Executive Support
4. IT Runs the projects
5. No Involvement (Sales Team, Marketing Team, Service
Team).
6. One size fits all business processes
7. Taking the data conversion task for granted
8. No budget for training and communications
9. Customizing the software to make it work the way you
want it to work
10. No consideration for integration with existing systems
 Bottom line

Need to be better than competition

Along with technology… strategy and excellent execution

Technology plays only an enabling role… Therefore,

People make the difference…