21031949 CRM Project Report

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Chapter # 1. Introduction to CRM

1.1 Evolution of CRM

Customer Relationship Management (CRM) is one of those magnificent concepts that

swept the business world in the 1990s with the promise of forever changing the way

businesses small and large interacted with their customer bases. In the short term,

however, it proved to be an unwieldy process that was better in theory than in practice

for a variety of reasons. First among these was that it was simply so difficult and

expensive to track and keep the high volume of records needed accurately and

constantly update them.

In the last several years, however, newer software systems and advanced tracking

features have vastly improved CRM capabilities and the real promise of CRM is

becoming a reality. As the price of newer, more customizable Internet solutions have

hit the marketplace; competition has driven the prices down so that even relatively

small businesses are reaping the benefits of some custom CRM programs.

1.2 In the beginning

The 1980s saw the emergence of database marketing, which was simply a catch

phrase to define the practice of setting up customer service groups to speak

individually to all of a companys customers.

In the case of larger, key clients it was a valuable tool for keeping the lines of

communication open and tailoring service to the clients needs. In the case of smaller

clients, however, it tended to provide repetitive, survey-like information that cluttereddatabases and didnt provide much insight. As companies began tracking database

information, they realized that the bare bones were all that was needed in most cases:

what they buy regularly, what they spend, what they do.

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1.3 Advances in the 1990s

In the 1990s companies began to improve on Customer Relationship Management by

making it more of a two-way street. Instead of simply gathering data for their ownuse, they began giving back to their customers not only in terms of the obvious goal

of improved customer service, but in incentives, gifts and other perks for customer

loyalty.

This was the beginning of the now familiar frequent flyer programs, bonus points on

credit cards and a host of other resources that are based on CRM tracking of customer

activity and spending patterns. CRM was now being used as a way to increase sales

passively as well as through active improvement of customer service.

1.4 Introduction

Customer Relationship Management - CRM

The generally accepted purpose ofCustomer Relationship Management (CRM) is

to enable organizations to better serve its customers through the introduction of

reliable processes and procedures for interacting with those customers.

In today's competitive business environment, a successful CRM strategy cannot be

implemented by only installing and integrating a software package designed to

support CRM processes. A holistic approach to CRM is vital for an effective and

efficient CRM policy. This approach includes training of employees, a modification

of business processes based on customers' needs and an adoption of relevant IT-

systems (including soft- and maybe hardware) and/or usage of IT-Services that enable

the organization or company to follow its CRM strategy. CRM-Services can even

redundantize the acquisition of additional hardware or CRM software-licences.

The term CRM is used to describe either the software or the whole business strategy

oriented on customer needs. The second one is the description which is correct. The

main misconception of CRM is that it is only software, instead of whole business

strategy.

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Major areas of CRM focus on service automated processes, personal information

gathering and processing, and self-service. It attempts to integrate and automate the

various customer servingprocesses within a company.

There are three parts of application architecture of CRM:

operational - automation to the basic business processes (marketing, sales, service)

analytical - support to analyse customer behaviour, implements business

intelligence alike technology

cooperational - ensures the contact with customers (phone, email, fax, web...)

Operational part of CRM typically involves three general areas of business. They are

(according to Gartner Group) a Enterprise marketing automation (EMA), Sales force

automation (SFA) and a Customer service and support (CSS). The marketing

information part provides information about the business environment, including

competitors, industry trends, and macroenviromental variables. The sales force

management part automates some of the company's sales and sales force management

functions. It keeps track of customer preferences, buying habits, and demographics,

and also sales staff performance. The customer service part automates some service

requests, complaints, product returns, and information requests.

Integrated CRM software is often also known as "front office solutions." This is

because they deal directly with the customer.

Many call centers use CRM software to store all of their customer's details. When a

customer calls, the system can be used to retrieve and store information relevant to the

customer. By serving the customer quickly and efficiently, and also keeping all

information on a customer in one place, a company aims to make cost savings, and

also encourage new customers.

CRM solutions can also be used to allow customers to perform their own service via a

variety of communication channels. For example, you might be able to check your

bank balance via your WAP phone without ever having to talk to a person, saving

money for the company, and saving you time.

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Improving customer service

CRMs are claimed to improve customer service. Proponents say they can improve

customer service by facilitating communication in several ways:

Provide product information, product use information, and technical assistance

on web sites that are accessible 24 / 7

Help to identify potential problems quickly, before they occur

Provide a user-friendly mechanism for registering customer complaints

(complaints that are not registered with the company cannot be resolved, and

are a major source of customer dissatisfaction)

Provide a fast mechanism for handling problems and complaints (complaints

that are resolved quickly can increase customer satisfaction)

Provide a fast mechanism for correcting service deficiencies (correct the

problem before other customers experience the same dissatisfaction)

Identify how each individual customer defines quality, and then design a

service strategy for each customer based on these individual requirements and

expectations

use internet cookies to track customer interests and personalize product

offerings accordingly

use the internet to engage in collaborative customization or real-time

customization

Provide a fast mechanism for managing and scheduling followup sales calls to

assess post-purchase cognitive dissonance, repurchase probabilities,

repurchase times, and repurchase frequencies

Provide a fast mechanism for managing and scheduling maintenance, repair,

and on-going support (improve efficiency and effectiveness)

Provide a mechanism to track all points of contact between a customer and the

company, and do it in an integrated way so that all sources and types of

contact are included, and all users of the system see the same view of the

customer (reduces confusion)

The CRM can be integrated into other cross-functional systems and thereby

provide accounting and production information to customers when they want

it

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Improving customer relationships

CRMs are also claimed to be able to improve customer relationships . Proponents saythis can be done by:

CRM technology can track customer interests, needs, and buying habits as

they progress through their life cycles, and tailor the marketing effort

accordingly. This way customers get exactly what they want as they change.

The technology can track customer product use as the product progresses

through its life cycle, and tailor the service strategy accordingly. This way

customers get what they need as the product ages.

In industrial markets, the technology can be used to micro-segment the buying

centre and help coordinate the conflicting and changing purchase criteria of its

members

When any of the technology driven improvements in customer service

(mentioned above) contribute to long-term customer satisfaction, they can

ensure repeat purchases, improve customer relationships, increase customer

loyalty, decrease customer turnover, decrease marketing costs (associated with

customer acquisition and customer ?training?), increase sales revenue, and

thereby increase profit margins.

Technical functionality

A CRM solution is characterised by the following functionality:

scalability - the ability to be used on a large scale, and to be reliably expanded

to what ever scale is necessary.

multiple communication channels - the ability to interface with users via many

different devices (phone, WAP, internet, etc)

workflow - the ability to automatically route work through the system to

different people based on a set of rules.

database - the centralised storage (in a data warehouse) of all information

relevant to customer interaction

customer privacy considerations, e.g. data encryption and the destruction of

records to ensure that they are not stolen or abused

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Privacy and ethical concerns

CRMs are not however considered universally good - some feel it invades customer

privacy and enable coercive sales techniques due to the information companies now

have on customers - see persuasion technology. However, CRM does not necessarily

imply gathering new data, it can be used merely to make "better use" of data the

corporation already has. But in most cases they are used to collect new data.

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Chapter # 2. CRM Planning

2.1 CRM Planning: Keys for Project Success

Whether you're updating, upgrading, jump-starting, or restarting your CRM efforts,

some basic steps will help keep you on the path to a positive ROI.

Thinking about the potential ROI of your customer relationship management (CRM)

project should start during the selection process. Before you write an RFP or start

talking to vendors, you need to do some homework to ensure that you're on the right

track to maximize ROI.

2.2 Identify the Problem and the Solution

Before you start thinking about vendors, you should define your problem in clear

business terms. Do you need to improve management visibility into the sales

pipeline? Reduce customer support costs or improve customer support? Reduce

customer-related administrative overhead? Making your CRM challenges specific will

help you determine which technologies or components are most likely to deliver ROI

and how you can prioritize your development and deployment plans. Most companies'

CRM goals fall into a couple of main categories:

Improved sales performance

Improved management visibility

Improved customer support

Improved marketing

Reduced costs

If your CRM goals fall into more than two of these categories, you'll likely want to

prioritize one over the other and plan a phased deployment. It's also a good idea to

know at this point what your likely budget is, how flexible it is, and what your

procurement officer or CFO will be looking for in terms of business justification. If

you know walking into the project that you'll need to show a six-month payback

period, for example, you can plan accordingly.

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Once you've identified the likely vendors to deliver the best solution for you, you'll

want to check their references - and this doesn't mean just reading case studies on

their Web sites. Look to independently developed case studies and your own

interviews with references to learn about their decision process, project successes and

challenges, and whether or not their spending - and benefits - met expectations.

Find a Partner (Check Resumes, 2)

In the CRM world, few companies will deploy a solution without some help from

external consultants or systems integrators. Selecting and planning how you work

with consultants is just as important to your project's success as the technology you

choose.

Justify Your Investment

Once you've identified your goals and selected a short list of vendors, you can use a

structured evaluation of costs and benefits to determine the best solution in terms of

ROI and build the business case for moving forward. On the costs side, you'll want to

consider the initial and ongoing software, hardware, consulting, internal personnel,

and training costs associated with the project.

Here are a few guidelines to keep the ROI from your CRM project on track:

You should spend less on software and consulting than 70 percent of expected

annual direct benefits.

You should be able to deploy and achieve some returns in fewer than six

months (even if it's only a pilot).

For a hosted solution, you should see benefits in fewer than 60 days.

Consulting costs should not be more than twice your initial software

investment.

Training users should take fewer than four hours.

On the benefits side, you'll want to consider both direct and indirect benefits.

Prioritize your expected benefits from most direct to most indirect, and then work on

your estimates, using internal surveys, case study data, and reliable benchmarking

information as a starting point for quantifying expected benefits for your company.

Key Decision Factors

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By and large, there's no such thing as a bad CRM solution. Most solutions deliver

value when they're chosen based on clear business needs and deployed correctly.

Once you've identified your CRM needs and your short list, there are a number of

factors to consider to help you make the right solution decision.

User Adoption

In evaluating the type of CRM solution that will be best for your organization in terms

of user adoption, you'll want to consider two key factors:

The willingness of users to adopt the application. Adoption can often be as

much about politics and culture as it is about technology. Successful adoption will

also depend on how much users will have to change their normal way of doing work

to use the solution.

The technology ability of potential users. Many CRM solutions are complex

and difficult to use; others have a more intuitive look and feel. Choose a solution that

fits the abilities of your users.

Once you've determined where your organization fits, you'll want to consider both the

complexity of the solution and ease (or difficulty) involved in adding and evolving

functionality over time as your needs change and your users become more

comfortable with the solution. Here are some red flags you should look out for in

evaluating solutions in terms of user adoption:

Plans for extensive customization

Multiple components that will be integrated to meet your needs

Lack of a track record supporting "your kind" of sales reps

Functionality planned "for the next release"

An extensive training program

Ongoing consulting requirements for any changes or updates

Cost

In CRM, "you get what you pay for" isn't always true. In fact, many companies in the

past have overspent on CRM components and features that never delivered value to

their users - if they even made it out of the box. You'll have the most success with a

measured approach that doesn't have to include a hefty initial license fee.

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Existing Environment

What other solutions and data sources do your sales or customer supportrepresentatives use today, what solutions are they most comfortable using, and what

will need to be integrated in some way into the CRM solution you choose to deliver

value? How you integrate existing resources and applications into a CRM project

should not be an afterthought. In selecting a vendor, you'll want to explore how it can

integrate with your existing environment. Demand to see a track record with reference

customers in a similar situation.

Best Practice: Make a Match

One company chose Microsoft CRM because it would easily integrate with back-end

office applications, because the sales force was already familiar with the Microsoft

interface look and feel, and because the design of the application closely matched its

existing business processes. It achieved a payback of five months.

FlexibilityIn addition to the initial development, integration, and deployment, when selecting a

solution, you should consider how easy it will be to make changes over time as your

needs change. In all likelihood, the way you use CRM will change over time - and the

flexibility of the application to enable you to support those changes can have a

significant impact on the ongoing cost of the solution.

Best PracticesOnce you've determined which solution is right for you and built the business case,

you'll want to make sure you have the key checkpoints in place so that the project

delivers on your ROI expectations.

Pricing and Purchasing

Before you sign on the dotted line, make sure you've done due diligence on your

contract with the vendor. Double-check the following:

Is the initial license price per user in line with industry benchmarks?

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Fine-Tuning Your ROI

If you've picked the right vendor, planned a deployment with clear milestones, and

gotten users on board, you've probably received 70 percent of the ROI you can

expect. The trick to really successful CRM is continuing to evaluate and evolve your

solution to deliver greater value. You'll also want to keep track of potential upgrade

opportunities and take a close look at the business case - both the benefits of

upgrading and the time and pain associated with the upgrade - before you make a

change.

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Chapter # 3. CRM in Business

3.1 IntroductionIn this day and age the use of internet sites and specifically e-mail, in particular, are

touted as less expensive communication methods, compared to traditional methods

like telephone calls. This revolutionary type of service can be very helpful, but it is

completely useless if you are having trouble reaching your customers. It has been

determined by some major companies that the majority of clients trust other means of

communication, like telephone, more than they trust e-mail. Clients, however, are not

the ones to blame because it is often the manner of connecting with consumers on a

personal level making them feel as though they are cherished as customers. It is up to

the companies to focus on reaching every customer and developing a relationship.

CRM software can run your entire business. From prospect and client contact tools to

billing history and bulk email management. The CRM system allows you to maintain

all customer records in one centralized location that is accessible to your entire

organization through password administration. Front office systems are set up to

collect data from the customers for processing into the data warehouse. The data

warehouse is a back office system used to fulfill and support customer orders. All

customer information is stored in the data warehouse. Back office CRM makes it

possible for a company to follow sales, orders, and cancellations. Special regressions

of this data can be very beneficial for the marketing division of a firm.

3.2 CRM Software: A key to scalability and efficiency

CRM Software provides added strength to your existing plan. CRM software is

not a "cure-all" for the CRM program in your business. Successful launch of a CRM

software campaign requires a strong CRM plan for your business, with complete

objectives and clear priorities. CRM software can offer incredible accuracy, track-

ability and detailed follow-up capabilities.

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3.3 How do you choose CRM Software?

Does the emphasis of the CRM software package match the emphasis of your

CRM objectives? Identify your specific objectives and verify your CRMsoftware can meet those needs.

Is your software user friendly? If you can't effectively use the software why

use it? CRM software training is usually available by contacting the vendor

and asking for recommended referrals.

How do other companies feel about the software? Call the provider company

and ask for a number of preferrals, (preferably three or four companies in

similar size and scope).

3.4 What are some key components of CRM software?

History and Trend Management

History Tracking - get instant perspective into all customer interactions

Trend Management- see the status of all pending sales and potential revenue

of entire pipeline

CRM Software Automated Processes

Remote Web Synchronization- automatically follow-up with leads generated

from your site

Automated Process Management - allows consistent communication with

customer based on user-defined criteria

CRM software Data-base Information

Centralized Information - centralize, manage and simplify access to critical

business information

Industry Templates and Form s- allows access to a database of industry

specific CRM forms

CRM Software Sales and Marketing Analysis

Sales & Quota Analyses - view forecasted sales, closed sales, and comparisons

between sales and quota

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Leads Analysis - track responses to identify effective campaigns

CRM Software Mobil Technology Capabilities

Synchronization Wizard - keep calendar and contact information up-to-date on

your PDA or laptop while you travel

Remote Access Capabilities - access your CRM software through the internet.

Not all CRM software packages are the same. They will greatly range in price and

capabilities. CRM Advisor suggests a thorough evaluation is done comparing multiple

CRM software packages.

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Chapter # 4. Analytic CRM

4.1 Analytic CRM for Retailers:An ROI Perspective

The Retailers Data Challenge

Todays retail environment includes increased competition among stores, a general

economic downturn, rising interest rates and higher gas and heating oil prices. All of

these factors have reduced the disposable income available to many retailers, core

customers. In this economic environment, retailers must learn to generate more

business from their existing customers. To do this they must first mine the data they

have collected on customer purchases and loyalty programs. Still, retailers are

drowning in customer data.

Critical customer information is inaccessible and underutilized.

More decision-makers need more access to consistent corporate data about

their customers.

Loyalty program, POS, and demographic databases exist, yet are not

integrated within a retail corporation.

Merchandisers and direct marketers lack expertise in the standard analysis

applications sold by business intelligence vendors today.

Current retail data analysis systems require heavy IT resources to maintain and

utilize.

According to The Marriage of Category Management & Customer Management,

written by Gary Robins and published in RIS, July 1999, .Category Management and

promotion management need to include analyses of loyal customers. Failure to

consider the effects on loyal customers means resources spent on category

management and promotion might be and probably is in some or many cases harming

your business. Combining category and loyalty data analysis has been done before,

but with great difficulty. The biggest hurdle now is getting robust, fast databases to

handle the huge amount of integrated data.

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CustomerView was designed to address these retail data challenges. CustomerView

supports the retailers. Top marketing objectives to solve these problems:

Reward loyal shoppers and get them to buy more

According to Robert Blattberg, director of the Center for Retail Management at

Northeastern.s Kellogg Graduate School of Business, a study of a chain drug

retailer showed a 30%/70% split, meaning the top 30% of their customers

generated 70% of their revenues. It also revealed which categories were more

important to top and bottom level customers.

In another example, a small regional chain with seven stores targeted 18,000 of

their best customers based on recency and overall dollar amount spent. Of the18,000 customers mailed, 921 responded, generating a 5.1% response rate. Total

revenue brought in from this particular promotion was in excess of $227,000

generating more than $22 for every dollar spent on the promotion. The events

average transaction was $24744 an almost $50 increase from their normal average

transaction.

Target top switchers

If your firm is not the lowest cost producer in the category and your switchers are

price sensitive, the best marketing strategy for addressing price-sensitive

purchasers is to attempt to change their preference structure by raising their

awareness of, and preference for, specific brand/product attributes, whether they

are tangible or intangible. Then try to persuade these Price Sensitive Purchasers

that your offering has the better value, all things considered. The goal is to

increase sales and market baskets of top switchers.

Optimize trade areas and improve assortments store-by-store

A leading supermarket chain recently used data from loyalty programs to edit

which products to delist in a category. .It is not just sales, it is how it is affecting

loyal customers,. was the mantra from the chain. In a test of the carbonated

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beverage category, the chain did not lose customers even after eliminating 26% of

the category.s SKUs.

Cross-sell the most profitable products and increase the average basket

size

A leading beverage company, which has been working with over 40 retailers, says

that use of loyalty data does help retailers increase basket size. According to a

senior category manager, .we did a presentation with a small chain in Houston,

Texas, and this company had a 6.5% increase in dollars per basket and a 9.8%

gain in total dollars among their best shoppers.

Maximize ROI for programs funded with manufacturer co-op funds

A national retailer recently completed a targeted promotion with a leading CPG

company. 350,000 pieces were mailed bringing the retailer an additional

$124,000 of co-op dollars. The piece featured 10 different products, received

16.4% response rate, and the market basket of the responders was 40% greater

than the non-responders.

4.2 Who can benefit by using CustomerView?

CustomerView is targeted at five key audiences within the retailers organization:

Financial

CustomerView enables retailers to take existing customer data and use it to drive

revenue, increase market basket size, and build market share with no additional

capital expenses and labor costs. It enables the CFO to show increased margins on

current capital and enables profitable growth.

Merchandisers

CustomerView enables merchandisers to improve the effectiveness of their staff.

Using CustomerView, merchandisers can quickly see how certain products can

increase market basket size. Using CustomerView they can see how merchandise mix

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affects customer loyalty and adjust their assortment accordingly. CustomerView can

help merchandisers measure and build retention. It can show market basket value of

loyal vs. non-loyal customers. CustomerView can quickly help identify the value of a

consumer that shops in critical categories vs. the shopper that does not.

Operators

CustomerView can help Operations Executives make changes in an intelligent way.

Using CustomerView a retailer can keep labor constant while increasing margins.

CustomerView can help increase the depth of category purchases by turning cherry

pickers into buyers, increasing a loyal customers shopping trips to a category and

increasing overall market basket size.

Consultants

Loyalty and POS databases tend to be stand-alone systems not integrated with

category management systems. Most data is uncleansed and hosted in many

locations. This leads to many opportunities for consultants to create systems to clean

the data, aggregate the data, de-duplicate the data, household the data, etc. before the

data enters the CustomerView system. There are also many opportunities for

consultants to use CustomerView to help the retailers interpret, translate, and develop

strategies based on the information and provide business practice recommendations.

Vendors

CustomerView can help CPG manufacturers build category/brand sales by using real

retail data. CustomerView can help them build their share of market by identifying

customers buying a particular category of products, but not their brands.

CustomerView can show the CPG manufacturer how to increase multi-segment sales

by identifying likely purchase behavior across divisions, departments or categories.

4.3 Optimizing Customer Interactions and Marketing Analytics

Customer conversations and new analytical marketing techniques make dynamic

customer relationship optimization a new top priority. Business competence

comes down to a companys ability to generate value by using meaningful

propositions, relevant interactions, messaging, information, and conversations that

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customers find compelling. The most important thing that CRM can do for you today

and tomorrow is help you create effective conversations that are crafted with credible,

holistic intelligence and delivered to the right customer on the right channel at the

right time. Businesses need to create economic value, which requires understanding

customers and then engaging them with value propositions. The single most

important event that happens in business is a customer conversation. The conversation

is where economic value begins revenues, activity, paychecks, and shareholder

value. Every company should make the composition of those value props its highest

priority. But are they doing so? How well do businesses create conversations? How

much do firms optimize opportunities? What are some of the best firms driving new

customer value? This latest management challenge is being addressed by the best of-

breed CRM analytical tools that provide marketers with the intelligence to understand

customers so that value propositions are relevant and arrive at the most opportune

time for the customer. The new analytics provide capabilities for companies that wish

to make it a business priority to create uniquely effective value propositions. The

interesting thing is that customers expect it. Yes, customers expect you to know them

and to treat them as persons and remember every contact and transaction theyve

ever made. This idea has been in existence for a decade, since database marketing

began to grow in popularity and use. B2B or B2C or B2B2C buyers now instinctively

believe that their providers should know them.

Initially flattered by being treated less as a number and more as an individual with

distinct requirements, consumers are now communicating their demands back to their

suppliers. Where once they would not consider the idea of bargaining, they now tell

the managers of brand retail chains what they are prepared to pay and specify how

they want products sourced, designed, styled, combined, assembled, delivered, and

maintained.

Accelerating Customer Relationships, Swift As Internet communities of practice have

grown, people have become more vocal about what they expect from providers in

many consumer serving industries. More than two years ago, the bookThe Cluetrain

Manifesto: The End of Business as Usual discussed the new realities of value

propositioning and marketing techniques for the new millennium.

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Here are the pertinent highlights:

Marketing is really various types of interaction or conversations.

Technology is enabling conversations among human beings that were not possible

in the era of mass media.

These networked conversations are enabling powerful new forms of social

organization and knowledge exchange.

As a result, markets are getting smarter, more informed, and more organized.

Already, companies that speak in the language of the pitch are no longer speaking

to anyone.

Companies can now communicate with their markets directly.

If they blow it, it could be their last chance. The opportunities for companies that

leverage CRM to interactively communicate with relevance and timeliness are

enormous. Yet intelligence from across the enterprise is required to understand and

predict what customers will want to know about and demand. The potential to

generate dramatic ROI on such an investment is worth five to 10 to 100 times the

investment.

Focusing on and predicting customer demand and making decisions both

proactively and scientifically is an opportunity worth hundreds of millions, if not

billions, of dollars of incremental revenue starting with segmentation and improved

forecasting, then shifting to integration and alignment of functions based on demand,

and finally reaching optimization, which is the application of advanced mathematics

to dramatically improve decisions.

4.4 Manage Your Value Propositions to Better Manage Your Brand

and Your Business

A value proposition may be articulated in text on a Web site, catalog, or direct mail

piece, or in a telephone conversation. This is where brand differentiation first appears:

the proposition is the first impression of the brand and its value to customers. Thus it

is critical in initiating conversations, transactions, and relationships. But a value

proposition is so much more than a message. The value proposition drives the

organizations core logic for creating value.

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Although its true that value propositions will naturally evolve over time as markets

and competitive conditions change, the competitive advantage belongs to companies

that can proactively and quickly adapt their value propositions for optimal business

results. Professor Ari Ginsberg of New York Universitys Stern School of Business

insists that companies can better invent and reinvent value propositions by analytical

means that center on customer behavior, in his words, analyzing dimensions of

value. It is specifically in this area exploring dimensions of value that customer

analytics can make an enormous difference in understanding customers well enough

to generate more effective value propositions.

For managing value propositions effectively, companies need to first understand what

customers value by using analytical tools integrated with marketing automation

systems for creating and acting on customer intelligence. And to take this a step

further, the analytics and automation are best supported by an enterprise view of the

business and customers, driven in real-time for capturing, managing, and delivering

data to marketers and analysts for decisioning.

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Chapter # 5. Market Automation

5.1 Marketing Automation - The CRM Vendor Solutions

The components offered in a front- office application suite fall into three general

categories:

Customer Service and Support: These applications automate the service

and support functions, including analytics, and they provide workflow engines

that facilitate efficient problem and inquiry escalation, tracking and resolution.

They provide customizable, dynamic scripting capabilities for the customer

service representatives as well as the capability to record customer responses in a

shared contact repository. In a call center environment, they also integrate with (or

provide) computer telephony integration (CTI) capabilities that allow automatic

call routing and automatic screen pop-ups containing customer and product

information to agents' workstations as they are answering or initiating calls. Sales Force Automation: These are tools that automate the collection and

distribution of all types of sales information. They allow for the design of sales

teams based on defined criteria. Calendar management, activity management,

sales reporting and forecasting, lead distribution, and tracking sales contacts with

customers and prospects are some of the myriad of capabilities offered within

these solutions. Many also provide access to internal and competitive product

information as well as the automated collection and distribution over the Internet

of relevant external information such as breaking industry news and customer-

specific events. Sophisticated pricing and product configuration engines and third-

party channel management capabilities are also available.

Marketing Automation: These applications provide the ability to create

automated marketing campaigns and track the results. Generating lists of

customers to receive mailings or telemarketing calls, scheduling automatic or

manual follow-up activities and receiving third-party lists for incorporation into

the campaigns are all typical functions. Internet personalization tools are offered

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Crafting responses to incoming e-mail without human intervention.

5.2 Closing the Loop - Adopting an Architected Solution

Now that we understand the CRM analytic capabilities offered with MA solutions,

what's the catch? When MA modules are implemented as an integrated, open part of

an enterprise business intelligence environment, there may be no catch. The catch is

the temptation to implement these front-office product suites and bypass the

enterprise as a whole and the data warehouse specifically. While this automates

certain types of marketing activities and integrates these activities to the front line, it

lacks the depth, breadth and share ability of an architected data warehouse solution.

The organization is deprived of the more sophisticated forms of CRM analytics,

forming yet another departmental silo of analysis, furthering the very data mart chaos

and inconsistency that the data warehouse is designed to prevent.

Let's examine the Corporate Information Factory (CIF) architecture to determine

where the MA integration points should be. Figure 1 illustrates the CIF. As stated

earlier, the CIF provides a high-level technology road map for organizations wishing

to develop CRM initiatives. The CIF is a logical architecture whose purpose is to

provide a framework for implementing integrated technology across all areas, all

departments and all functions of an organization. Building a framework such as the

CIF enables organizations to share customer information freely and distribute

analytical results to all individuals in the organization that need them. The CIF

consists of three primary types of CRM systems

Business Operations are the core operational systems (billing systems, product or

policy systems, call center and sales force automation systems, etc.) that run the day-

to-day business processes in an organization. Information originates in these systems

and flows through a data acquisition process into the rest of the CIF where it is

consolidated and integrated for strategic and tactical decision making. Front-office

solutions generally reside here as they facilitate the day-to-day sales and service

processes.

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Business Intelligence provides the capabilities required for the strategic decision

making in the organization. Business intelligence consists of the data warehouse, data

marts and associated analysis tools, and can provide the technology infrastructure and

information necessary to manage the complex relationships and analytics required tounderstand CRM interactions. Properly architected, the MA components of the front-

office applications would reside here.

Business Management enables organizations to act on the analytical results

generated within business intelligence. Business management consists of the

operational data store (ODS) and its associated transaction interfaces as well as the

associated oper marts. Business management systems are subject-oriented, integrated,current-valued and supply a single point of access for information across the

enterprise. An enterprise customer profiling system is a good example of a CRM

business management function.

The primary integration point for the MA components is the data warehouse

contained in the business intelligence environment. The data warehouse is defined as

a subject-oriented, integrated, time-variant, cleansed and non-volatile collection of

data for strategic analysis. You can think of it as a big bucket of generic, detailed,

enterprise-wide, static and historical data. The data warehouse can serve as the source

of data for data marts and for the MA components (which are actually just another set

of souped-up data marts). Unlike the data marts or MA components, the data in the

data warehouse is not set up for a particular application or department.

The data warehouse consists of standardized, consistent pieces of data. By

constructing the data warehouse in the most generic and flexible way possible, you

can build just about any data mart for CRM analysis. You are only limited by your

technology and the data that you can acquire from your operational systems.

The data warehouse reflects the enterprise's view of data in terms of business

rules and strategic requirements. Because the data in the warehouse is to be

used for multiple CRM analytical purposes spanning multiple departments, it

must accommodate and reinforce the enterprise's vision of its CRM initiative.

It is optimized for flexibility. The data must not display a bias or prejudice

toward any one kind of analytical processing. For example, if the data

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warehouse is designed using a data model that is prejudiced toward known

data relationships or certain business processes, then analytical activities that

search for unknown relationships are compromised or, in effect, eliminated.

It provides detailed data for subsequent use by the data marts. Because the

data warehouse must be the source for data marts containing aggregated and

summarized data, exploration warehouses containing detailed data, data

mining warehouses containing statistical samples of data and MA components

which fall somewhere in between in terms of detail and history required, it

must contain the proper level of detailed data to satisfy these very diverse

requirements. The goal is for the data warehouse to have the "least common

denominator" level of data for the data marts and the MA components. It must

serve star schemas, cubes and flat files for statistical analyses, and subsets of

data for ad hoc querying.

The Information Feedback loop, running across the top of Figure 1, is the other key

component of the CIF for integrating MA components. This is the set of processes

that transmit the intelligence gained through usage of the strategic CIF components to

appropriate data stores. This is the mechanism by which we push BI "out to the

masses." It is also the mechanism by which we allow the MA components to receive

information from the data warehouse and to feed information back into the data

warehouse or on to the operational systems or ODS.

Examples abound of storing the results of BI analyses in operational systems such as

the front-line applications. One such example is to store the results of a customer

lifetime value (LTV) analysis - that is, the actual score given to each customer based

on their calculated LTV to the enterprise. The numerical values generated from such

an analysis can be stored in the front-office system and accessed by the MA

components during the generation of campaigns or scripts for call center agents.

Behavior toward each customer is altered based on the knowledge of the customer's

LTV score. Higher valued customers may receive different campaign solicitations

than those with a lower score.

Conversely, the solicitations generated by the MA components should also be

transported via Information Feedback into the data warehouse. This allows all analytic

applications in the organization to take advantage of the valuable information

generated by MA components.

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Beware of vendor sales pitches that contain phrases such as "our MA module can

drive your entire marketing process," or "MA provides a direct link between CRM

analytics and your customer contact points." While the capabilities embodied in the

MA modules do provide significant value, they do not provide sufficient sophisticated

analysis capabilities to be your sole vehicle for all CRM analytics. Instead, bypass the

hype, implement MA capabilities that make sense for your organization and ensure

that MA modules use the information feedback mechanism to feed information to and

receive information from the data warehouse or operational systems. Staying true to

an architecture such as the CIF will provide you with the guidelines necessary to build

the integrated customer information environment required to drive your CRM

strategies.

5.3 New Customer Management Tools For Higher IQ and Peak

Business Results

To create a sustainable competitive advantage through CRM or customer management

and marketing processes, a business must master leading-edge intelligence tools that

raise its organizational IQ (intelligence quality) to peak levels. Fully-informed

business decisions, fully-informed tactics, and relevant, right-time value propositions

to individual customers require an integrated infrastructure that can capture,

analyze, and optimize information from across the extended enterprise including all

customer channels with increasing speed and synchronicity. The best value

propositions will be created when a business has the CRM tools to do the following:

Understand the economics of your customer relationships both today and in

terms of individual lifetime value to better anticipate the migration of customer

assets over time;

Improve your ability to evaluate and use every customer interaction as

actionable marketing opportunities with rules driven lead management tools;

Cultivate highly relevant and profitable dialogues with customers across all

channels, including the e-channel, for better strategic brand and customer equity

management;

Align business resources and customer communications for effective tactical

process execution that balances customer expectations and company objectives;

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Master sophisticated multistep and event-based marketing and know when your

customers are most receptive to offers and messages;

Intelligently manage the e-channel to drive revenue growth across all channels;

and

Leverage the full power of a real-time, enterprise-wide data warehouse.

Chapter # 6. CRM Initiative

6.1 Implementing a CRM Initiative

According to the surveys, through the year 2004 only 35% of businesses will

accurately forecast the implementation cost and ROI projections before initializing aCRM strategy, and less than 20% will stick to the guidelines and initiative plans

theyve established without veering off the designated course to an unsuccessful

destination. This is an avoidable situation that mainly illustrates the infant growing

pains many companies have when trying to wrap their arms around any new business

strategy. Inexperience with such an important, yet often difficult, strategy comes from

it being a young and untested initiative. If a business has done their homework and

intelligently forecasted the resources needed to fulfill a CRM initiative, the pains and

pitfalls currently being experienced will lessen and the benefits will increase.

Initializing a CRM campaign and carrying it out for the long haul is a project that

involves hands from throughout a business, from customer support personnel, to IT

professionals, to obvious key individuals like CRM project managers. From the

person taking incoming phone calls and providing accurate service to the caller, to the

database-analyzing software that efficiently and smoothly manages and processes

customer data, to the front-end Web site that is tailored to individual customers

through such things as preferred language and topics of interest, every facet needs to

work in conjunction. Being able to touch all points of customer interaction requires a

comprehensive set of software that is effective and comprehensive. An intelligent

database system that can support and store many users and their information is

critical. This makes customer management very streamlined and easier. Additionally,

the ability to instigate highly specific queries that result in rich, pinpoint demographic

information is also an invaluable part of any CRM implementation. The cost of re-

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gearing a business to be customer-centric depends on each case and can only be

calculated with that in mind. There is no universal equation in which to plug numbers

or general projection figures that can be applied across the board. Fact is, CRM

initiatives are company-wide endeavors and become more elastic and abstract because

of this. Consequently, assessing costs is not as simple as checking the price tags on

CRM software. Predicting costs must be done through a unique look at every case.

In the end, the result of a successful CRM campaign will eventually minimize costs,

such as the high price of luring and enticing new customers, and wont break the bank

of any company. In fact, businesses will see an extremely healthy increase in profits

while their costs will level off to a very manageable point if theyve succeeded in

their CRM goal.

6.2 Seven Steps to Managing Your CRM Initiative

1. Business analysis: Focus on your customer data-collection process

The first step in your CRM project should be business analysis. Take a step back and

look at the areas of your firm that deal with customer data (most of your firm,

probably). How well are you handling data right now? Are you collecting all the data

you want from your clients or would you like to collect more? Is this information

accessible by all those who need it? Do you ever have to reenter information as the

client moves from Marketing & Sales through to Time & Billing?

2. Needs analysis: Make a list of your customers' needs

As you ask yourself these and other questions, make a list of your customers' needs.

Start with the absolute essentials at the top. Examples of these needs may include

collecting certain types of information, a centralized database, scalability, and

capability to access the system remotely. An important note to rememberthis list

should include all your essential needs, even the needs met by your current system. As

you work through your list of essentials, begin to add nice to haves. These are needs

that you would like to meet but are not critical to the success of your CRM system.

Make sure your whole project team contributes to this listyou won't think of

everything on your own.

3. Product evaluation: Compare vendors and products

After you have your list of needs compiled, you can start comparing vendors and

products. As you are looking at features offered by the different products, try to cross

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the critical needs off your list first before you look at nice to haves. There will

undoubtedly be products that meet a lot of your nice to haves, but are lacking in one

or more critical needs. Critical needs must be met so that the time, money, and ideas

given to the CRM project do not change systems for the sake of change. When you

are making your project plan, allow plenty time for this phase. It is very important not

to rush through your evaluation. Take your time, view lots of demos, and ask lots of

questions.

4. Product configuration: Make the system fit your firm

No matter what product you choose, there will most likely be some configuration that

needs to be done to make the system fit your firm. Treat this as a subproject with its

own project plan that includes timelines and milestones. Many products are highly

customizable at the front end, but far less so when they are implemented. Don't get

poor results because you sped through this step. Customization may not be all at the

software end; you may have to do some process reengineering in your firm, as well.

Remember to document everything. Make a user's manual for the software, and a

process manual with flowcharts for the business processes.

5. Pilot implementation: Roll out a small pilot to marketing first

After you have customized the system to your specifications, roll it out in a small,

pilot environment. Start with your Marketing users; they will use the software heavily

and will be able to provide you with some high-quality feedback. Keep it in a small

group until you have the system customized the way you want it. When you have

reached that point, roll it out to all users.

6. Full implementation: Communicate with users to explain the change

As you roll the system out to all users, this will be a significant change for most of

your users. In addition to learning a new software interface, many users will be faced

with entire new business processes. The biggest factor here is communication. Make

sure your users understand why this change is taking place; don't just mandate the

change. Use training sessions and documentation to assist the users with the new

system.

7. Evaluation: Follow-through for a successful implementation

As more and more firms are implementing CRM systems, plenty of success stories are

emerging. The firms that experience successful implementations have a plan from the

beginning and follow it through to the end. Failed implementations often are the result

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of choosing a product that does not meet the firms needs or poor communications

between project teams and end-users. Follow these 7 steps to managing your CRM

initiative for a successful CRM implementation experience.

Chapter # 7. CRM Implementation

7.1 The Implementation Process

Know the required commitment for CRM implementation success

Many companies think that choosing a solution is the hard part. In reality, choosing a

system is relatively easy. Implementing a system is the hard part of the process. In

choosing a solution it is common for a team to be brought together to develop a needs

analysis document. It is not uncommon for teams to spend months developing

selection criteria and subsequently choosing a vendor. Typically, however, less

thought is put into how the solution is going to be implemented which is one of the

reasons for the well documented, high failure rate. Unlike back end systems (ERP,

SCM, etc) the use of which is required for day-to-day operation of a organization,

companies and employees have lived without CRM and may be able to continue

doing so. Each person has their own way of doing things and those habits are difficult

to change. To overcome all of the possible obstacles, CRM must become part of the

culture of an organization and people must recognize that by using the system they are

helping the team become more effective as a whole.

7.2 Implement And Learn The Basics First

It is no surprise that once companies select a solution they race to implement that

solution. Customers have been sold on the return on investment (ROI) of the solution,

and know that ROI will not come until the team is effectively using the solution. The

common mistake here is trying to do too much at one time. The reality is that users

who are overwhelmed by a tool end up not using it. It is important that you establish

and focus on short, medium and long-term goals.

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Although often overlooked or assumed, the first goal is to make sure that the user

group is proficient on the base functionality of the system. Users need to be able to

comfortably duplicate what they have routinely been doing in the new system. For

instance, if inside sales receive incoming phone calls; do they know how will they log

those in the new system? If outside sales make sales visits, how can they eliminate

filling out call reports? How are people going to send email and create letter and

manage their task list? Users who quickly become proficient on this base functionality

will be more apt to want to learn more and reap the potential added benefits of more

proficient use of the new system.

7.3 Outline An Implementation Strategy

The first step of implementing a new CRM system is to determine a strategy. The

implementation strategy should be developed with the software provider to determine

and document the process to roll the solution out to the user group. Questions like

What is the timeline? Should everyone be brought on at once or do a pilot?

Where are the strengths and weaknesses in of the company and the individual

users? all need to be answered.

User champions and administrative champions need to be selected. Look within the

organization to determine whom the power users will be and solicit their support on

the project. Identify those users who will be the most reluctant to change and help

them understand how this will benefit them (One of the most effective ways to

overcome reluctance is to help each reluctant user to find one or two things that will

make their job easier so that they begin to see the power of the system for

themselves).

Short, medium and long-term goals need to be established and monitored for each

department and for the organization as a whole. Companies may find that they want to

track one metric for inside sales, another for outside sales, and a third for marketing.

Some companies have chosen to motivate users by offering incentive compensation

related directly to system utilization. Each organization is unique and goals and

incentives need to be thought through on a case-by-case, department-by-department,

and possibly user-by-user basis.

7.4 Invest Time In Training

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Training is a major component of long-term success and should be budgeted for

sufficiently. Having the software provider spend one day training users is not enough

to be successful. Training should be divided into multiple stages designed to fit the

particular user group needs. Those stages may include beginner user training,

advanced training, trainer training, goal-specific training, utilization reviews, and

users groups to name a few.

Beginner User Training: Most users first experience with their new CRM tool will

be during beginner user training which is intended to get users comfortable with all of

the basic functionality of a system and should be mandatory for all users. Users will

not become an expert in one day. Use this time to ensure that everyone is comfortable

enough with the system that, once the trainer has gone, they can do all of their routine

tasks in the new system. Breaking up beginner user training into multiple groups over

multiple days will allow users to use the system while the trainer is still available, and

to work through real life situations.

Trainer Training: Some organizations opt for training a core group of user

champions who will then be responsible for training the entire team. This allows

companies to rely more heavily on internal resources. This may require an additional

upfront expense but should allow minimization of future training costs, especially for

larger user groups.

Utilization Reviews: After beginner user training plan to set up utilization reviews,

both internally and with the solutions provider, to track usage and to uncover issues

before they become real problems. Most systems have built in tools to monitor

successful usage of the system. Typical questions that need to be answered are Who

is using the system? Who is not using the system? What are they using it to do

and are they following the established standards? Are we achieving the goals we set

for ourselves and if not why? What additional assistance (training or consulting) do

we need from our solutions provider? What else should we be doing in the system?

Who else should be on the system that is not currently on the system? By working

internally and with the software provider to track usage and monitor success and

failure throughout the user group, the Company will be able to maximize the benefits

of improved sales process management.

User Groups: Another component of success will be internal and external user group

forums. On some set interval (daily, weekly, biweekly), especially in the beginning,

internal user groups can be very useful to help team members learn from each other

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and to help ensure that standards are being developed and followed. External user

groups are generally coordinated by the solutions provider. Determine whether or not

user groups have been set up and plan to participate in them. These groups provide an

excellent way to see how other similar companies are using the system and learn from

their successes and mistakes.

Advanced and ongoing training opportunities: Investigate what additional training

opportunities are available. Most solutions providers have established programs for

advanced user training. Many have web-based training, on-demand training and other

periodic course offerings that focus on clients specific needs.

There is not one right way to train. A well chosen software provider will have the

tools in place to guide the team through this process based on the needs, goals and

budget of the user organization.

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Chapter # 8. CRM Success

8.1 Introduction

Seeing CRM initiatives take hold and begin to pay off is often a waiting game. Its not

a flip-the- switch product that automatically spits out results or something that will

take affect overnight and cause profits to skyrocket while you sleep. The puzzle mustbe completed and time must play its part before true success will be seen. However,

through dedicated and smart planning, businesses should see markedly increased

profits, as satisfied customers will continually re-visit them. Gradually, as businesses

get to know their customers, their customers get to know them, and a closely aligned

partnership is formed. This one-to-one relationship is the catalyst that sparks both

lifetime customer loyalty and revenue increase.

In the true spirit of thinking outside of the box, experts at the Gartner Group believe

the most successful organizations will be those who, through innovation and focuson business effectiveness rather than merely efficiency, manage to break the mold of

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traditional business thinking. Being effective is paramount. The end goal of better

serving customers and enabling a high percentage of customer retention cannot be met

with out creative thinking and effective planning and actions. The task of perfecting

the relationship between business and customer is always on going and requires

special dedication and innovation as the commerce markets continually change and

fluctuate. And over time, customers change, as does their behavior and needs, and

business must be able to respond to that.

Being on the cusp of the industry and always having a hand on the pulse of the

customer is key for success. As the CRM initiative begins to take hold, key players

will soon see patterns emerge among customers, will discover what a productive

strategy is and what is not. This is the essence of a successful CRM project: being

able to really know what will work for your customers, what satisfies them, and what

keeps them loyal. The ability to get an accurate gut feeling about the marketing

campaigns, new products, and the type of policies customers will respond to is

invaluable. This kind of customer knowledge only comes from really digging in and

being savvy about how you go about understanding the people that you hope will

continually call on the services and products of your business. The ROI in this case

would be compelling indeed.

8.2 Advice for Breeding CRM Success:

1. Buy the best package you can afford. Choosing a high-end system that allows for

growth is key, Monster.com's Liddell says. Monster.com has rolled out Siebel

Systems' sales force automation software to 800 users since implementing the

software in November 1998.

Where low-end packages break down is in their ability to handle complex definitions

of customers, he says. Monster.com established formal guidelines for defining

customers across divisions and applications so salespeople can access clean,

consistent data.

2. Choose wisely. Figure out who you need to reach and then find the software that

will help you accomplish that. Before settling on RightNow, USF scrapped a previous

CRM project a month into the implementation after concluding the software didn't

work the way the university wanted. Too often companies choose software before

they have defined the problem, Akin says.

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"I've seen it lots of times - 'Hey, this is a neat application. Let's buy it and then figure

out how we can use it here.'"

USF tapped Right Now Technologies' e-mail management software to help the IT

department, financial aid office and other administrative groups that were bogged

down with customer service inquiries from 40,000 students and staff.

3. Build and maintain a relationship with quality consultants. Consultants are

important not only in an initial deployment, but also as project parameters change -

which they will, Liddell says. Monster.com works with CRM consultant Akibia,

which lets the company quickly expand its CRM resources when necessary. Each

time Monster.com acquires a new company, Liddell's priority is to quickly get those

new team members up and running with Siebel sales tools - a process that sometimes

requires extra hands.

4. Rely on internal resources. Consultants are helpful, but it's important to maintain

ownership of a CRM project. "Nobody's more interested in our success than the team

at Monster.com," Liddell says. Plus, somebody has to run the software once the

consultants are gone.

5. Make sure everyone is onboard. It's important to have buy-in throughout the

organization, Akin says. Financial support is necessary, he says, "but more important

is an agreement to use the product universally." It's frustrating for end users if they

expect to find a single source of customer service information online and it turns out a

key department is missing from the site.

6. Align your project goals and implementation schedule. Berkson and his team at

Thomson Financial try to stick to eight- to 12-week projects, rather than rolling out

everything to everyone at once. Plus, no department is going to need every function in

every application; users would be overwhelmed, Berkson says.

Thomson Financial is in the process of upgrading its Vantive applications to

PeopleSoft 8 CRM - the new Internet-based suite from PeopleSoft, which acquired

Vantive in 1999.

"We tend to implement in small, manageable phases," he says. Companies should

identify their biggest pain points and greatest opportunities for return on investment,

and make those an implementation priority.

7. Start with a low-risk pilot. One project up and running quickly can validate your

CRM concepts, Berkson says. Choosing a relatively simple, straightforward project -

such as outfitting a department that doesn't require integration with other back-end

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systems - is important. If you start with a complex trial, it can really drain momentum,

he says.

8. Aim for configuration, not customization. Take advantage of today's CRM tool

sets, Berkson says. Vendors have built more robust configuration flexibility into CRM

applications and recommend that users minimize customizations. So if you can break

the habit of writing custom code to accommodate unique business processes, it will be

well worth the effort when it comes time to upgrade, Berkson says.

9. Don't underestimate data requirements. The time and resources needed for data

conversion and cleanup will always be more than you think, Berkson says.

10. Provide adequate training. "If you have the time and the resources, train in

advance of rollout," Akin says. The university departments that are least enthusiastic

about the RightNow products are the ones that weren't ready for it, he says.

11. Set communications standards. In hindsight, Akin wishes his group had set

content standards among departments before going live with the project instead of

trying to do it later. At USF, e-mail inquiries are routed to as many as 30 different

departments. Setting standards for formatting responses can help maintain consistency

of service.

12. Watch the details. CRM requires a team that is willing to take ownership of even

the most minute details. Monster.com has team members who maintain the software,

team members who constantly handle requests for changes and team members who

police data quality.

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response management systems, web personalization systems, web-based order-entry,

and web self-help.

Sales Force Automation Systems: provide tools for your sales people tomaintain their contacts, track sales prospects, provide sales forecasts, enter and track

orders, and provide customized quotes for clients. Examples of these systems include,

and on-line sales forecasting and order-tracking.

Call Center Customer Service Systems:provide support for staff that answer

client questions or respond to requests for dispatch services. Examples of these

systems include web-based customer service, customer service call tracking,

improved customer service representative (CSR) access to client information, andautomated dispatch and tracking.

Operational Billing/Order System Integration Systems: provide

integration (as well as migration) between customer-facing (front-end) applications

and the production (back-end) order-status and financial systems that contain the data

that clients and partners may seek. These systems are not only CRM systems, but

rather the components of larger software suites that may include CRM. Examples of

these systems are packaged accounting and manufacturing systems that have CRM

front-ends.

Technology-Enabled Lead Generation Systems:enable targeted marketing

based on client needs and/or past business trends. This lead generation could be

dynamic (emailing offers or customizing web content) or static (providing targeted

databases of clients by type). These systems include customer data mining, automated

marketing campaigns, and customer personalization tools.

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9.2 What Kinds of CRM Products Do What?

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9.3 How Much Do CRM Products Cost?

According to Erin Kinikin at GigaGroup, CRM (software only) costs vary as follows:

A limited system (in terms of range of functions or customizability) usually

supports less than 50 users and costs around $500/user.

A departmental system (which supports 50 300 users and has a more increased

range of functionality and increased ability and need for customization) usually

costs around $1500/user.

An enterprise system (which supports over 500 users and has a higher range of

functionality and introduces dramatic change management issues and

requirements for customization) costs around $3500/user. Some vendors quote

this functionality for $2000/user.

Implementation and customization costs will add from 25% (limited system) to

100% (departmental) to 300% (enterprise) for software installation,

implementation, and customization. Some vendors estimate as much as 500% for

implementation and customization. This does not include vendor maintenance and

ongoing customization costs as well as cost of organizational process changes.

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Chapter # 10. E-CRM

10.1 E-CRM: Delivering a Superior Internet Customer Experience

How one Internet retailer delivers the highest quality customer experience, builds

customer loyalty, and drives revenue

Retailing Healthcare and Pharmaceuticals on the Internet

In 1997, a billion-dollar retailer of pharmaceutical, health, and beauty products

decided to expand its business to the Internet, launching a web retail operation as a

division of its brick-and-mortar operationthe first in its industry to go online. As

with many of the early web-based forays into e-commerce, this site was deployed

primarily to establish a web presence for the company. The initial site was not

designed, however, to anticipate the high volume, high availability, and competitivefunctionality required as traffic and content grew and new players entered the market.

The site, its applications, and its underlying infrastructure couldnt scale to

accommodate thousands of orders per day, couldnt be enhanced in web time, had

inadequate capability to support applications and was unstable as a whole. In addition,

the order fulfillment process was unable to scale to keep pace with growth of the

Internet business channel. The company decided to discard the entire homegrown

site and began again.

EMC and Its Partners Step up to Meet the Challenge

In 1999, the company turned to Oracle, EMC, and Cisco to help implement an e-CRM

application solution that could deliver:

A highly available, scalable, secure, and manageable technology infrastructure that

would keep pace with rapidly changing customer numbers and market conditions

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So, what really matters?

Class A customer support centers characterized by the following:

Customers information is up to date and accurately inserted in the data base, and it

is accessible to all customer facing points.

Staff has been carrying out customer support training and attaining in house

standards.

Calls and e-mails responses are regularly audited and monitored to maintain level

standards.

Internal process exceed customers expectations

GAP analyses are carried out on regular basis (quarterly, annually) for individuals

and also for processes.

Statistical data should not be all that matters, well after all what do they actually tell

you or indicates? The quantitative approach is rather to satisfy internal demands than

customers.

How many repeated customers do you have each year? This is really what matters,

quality of service leads to a greater customer satisfaction and repeat of business which

by its role will be reflected in the balance sheet eventually. Internal slogans are for

internal consumption. For customers, perception equals reality.

10.3 Customer Relationship Management

Customer relationship management (CRM) is the most talked about of the three

enterprise applications that are the focus of this paper. As the economy remains

sluggish and customers remain cautious, the need and desire to get closer to customers

are the primary means of differentiation in the marketplace. Companies seeking this

differentiation must ask the questions below.

1. What does getting close to customers mean?

2. How do we get close to customers today?

3. How do I drive or extract new revenue using CRM?

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The first question has many possible answers. Indeed, the companies that explore all

possible methods are better positioned to get a better picture of a customer. For my

purposes, I will only focus on a few critical aspects. The first is to uncover patterns of

buying from the customer base. Uncovering these trends is fundamental to any

business. One might argue that an expensive CRM system is not required to do this.

To a certain extent, this is true. However, analysis of buying patterns is different from

that of buying history. A customers buying history is only one component of the

pattern. Others include the financial market, demographics, geography, recent

marketing messages, and other parallel actions such as sales, new product

introduction, competitive offerings, positioning tactics, and pricing. In The Clue train

Manifesto: The End of Business as UsualWeinberger and Searls make the following

point.

The first markets were markets, not bulls, bearsnot demographics, eyeballs or

seats. Most of all, not consumers. The first markets were filled with people, not

abstractions or statistical aggregates; they were the places where supply met demand

with a firm handshake. Buyers and sellers looked at each other in the eye, met, and

connected.where people came to buy what others had to selland to talk.

While Weinberger and Searls were trying to make a bigger point about the Internet

and its role in current market philosophy, the germane point here is the notion of

connection. More than anything, strategic companies are trying to figure out how to

more effectively connect with customers. They believe that will be a sustaining factor

in their survival.

The second question above is equally important. Making customers feel unique

because you understand their likes and dislikes is difficult but critical. CRM systems

allow a vast amount of input about a customer in order to build a comprehensive

profile. The simplest example (and one of the most common) is the contact manager

concept. There are many sales tools for contact management. An integrated CRM tool

can add real-time integration to other systems (e.g., financial, order management, and

quality control). Giving the presales team, customer representatives, and post-sales

team the ability to input information about a customer cycle over time builds a profile

that enables each team member to serve the customer better. Giving sales

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management one-click reporting capability on leads, problems in the pipelines,

breakdown of revenue by product, or other metrics can ensure a more successful

forecasting and market strategy implementation.

Hospitality industries also use CRM systems to get closer to customers. Customer

loyalty programs like frequent flyer and preferred guest programs can record

recurring customers preferences and then target specific services to specific

customers. Grocery chains monitor purchases to effectively market specific products

or offer discounts. Also, if such monitoring identifies that a customer has moved, they

will send a moving special coupon book to the customer. Even in the restaurant

industry, companies like Union Station in New York track patterns to record favorite

tables, bottles of wine, and health concerns for patrons. These efforts help businesses

know their customers better in order to better serve them.

The third question, however, requires more complex analysis. How can a business

derive new revenue opportunities from this data? Sometimes customer buying

patterns can offer new streams of revenue. This complex field of analytics is the most

difficult aspect of CRM engines, but it can reveal important data. For example, one

retailer found that if it lowered the price of a can of tennis balls by $.25, the sale of

tennis rackets (a higher margin item) increased. In addition, grocers can track not only

the brands customers like within a given product set, but they can correlate that

information to the shelf position where it is stocked. By measuring trends over time,

grocers can determine the impact of shelf position on customers buying habits. Using

this information, they can broker better deals with the suppliers by marketing

premium shelf space. To increase customer satisfaction and effectively manage

distribution, many businesses tie their distribution systems into the National Weather

Service because a major weather event could affect operations. To keep customers

satisfied, businesses that supply rock salt and snow shovels must be well stocked for

that first, possibly unexpected snowstorm. Examples abound, but the point is that

knowing your customers today is as important as ever. No so-called new economy

will ever change that. However, we have new, complex tools to help us do this; they

collect and analyze information to help us gain closer relationships to customers,

derive new revenue opportunities, and target marketing initiatives for maximum

impact. We must also realize that these customers have more ways to interface with

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organizations todaywebsites, sales reps, cashiers, and call centers to name a few.

Using a method (such as CRM) to get a macro view of the customer is invaluable in

todays fragmented communication environments. However, like ERP systems, CRM

systems will only be effective if organizations socialize the project goals and actually

use the tools. These are a CRM implementations biggest challenges today. It is not

the software; it is establishing use of the software. Many corporations have failed at

this. CIO Magazine reports one Fortune 500 organization is on its fourth try at CRM

because the sales force has rejected all previous attempts at sharing customer

information (Koch). Changing mindsets must be a top priority.

CRM systems are evolving. Indeed, out-of-the-box products exist that can marginally

increase an organizations effectiveness. However, the next generation of CRM is

trying to integrate more effectively with an organizations

Documents

21031949 CRM Project Report