CRM is ultimately a philosophy of how your business
processes are organized There is a technical side of it, but the emphasis is how well you have integrated the customer experience into your entire business process It engenders business change and is one of the goals of CRM Is an enterprise-wide initiative and aims at integrating the front-end customer facing systems with the back- end systems that actually deliver the product and value to the system.
Contd. It involves not only the top management but the enterprise as a whole with all the functional departments Requires change management in the following aspects: Processes Goals Orientation Focus Technology Performance and effectiveness
CRM Implementation Roadmap Helps the firm to develop a positive cultural acceptance of CRM Enables the firm to deal with organizational changes, new businesses, customer needs and CRM technologies
Stages of CRM implementation Roadmap Scenario analysis Purpose definition Business planning Process design Technology and vendor selection Solution development Implementation Measurement Scenario Analysis This involves evaluating the environment What is the business of the firm? Who are its customers? Where is the firm placed with respect to its competitors? What is the current business scenario and how is it likely to evolve in the future in short, medium and long term? Based on this the firm can define what it needs to improve its performance against its competitors in the market by developing relationship with the customers
Purpose definition After scenario analysis the firm needs to define its purpose for going in for CRM Firms generally go for CRM to build more effective, efficient and long lasting relationships with their customers The company should not merely go for this because of their competitors or because it is the latest technological trend Planning Here CRMs overall objectives at the department and enterprise level need to be defined This includes documentation of high level CRM business goals in the form of business document that forms the focal point of strategy formulation Also includes details of what needs to be done and who would be responsible for what Changes in following areas are expected: Business focus Organizational structure Business metrics Marketing focus Technology Process Design Here the firm looks at the existing processes and try to redesign them to make them more customer centric Also effectiveness and efficiency of these processes need to be considered at this stage Technology and vendor selection All the available technologies and vendors are evaluated at this stage Technology is evaluated on some of the parameters like: Compatibility with the existing system Capability of the solution in terms of functionality, Service capabilities of the vendors
Solution Development Includes the following aspects: Customization of features Development of new features required Process integration and testing Design of the database Implementation Here finally the system is put in place System is deployed and documentation is done properly for future reference End users need to be trained Solution needs to be sold internally so that it gets positive response from the employees
Measurement Here development of metrics to measure the performance of CRM solution and comparing with the desired performance is done Success is measured in terms of how well CRM has been able to solve business problem Should also include user feedback to improve the usability of CRM and business effectiveness Technological Issues Functionality Flexibility in incorporating changes Customization Scalability Fit with existing infrastructure (legacy system) Fit with global best practices Upgradeability Commercial impact Compatibility with other CRM solutions Degree of integration
Vendor Issues CRM expertise Expertise in the industry Geographical implementation experience Focus of vendor on CRM Credentials of the vendor like financials, client list, life history etc Vendors understanding of firms business problems Preferred implementation partners Technical handholding expected Training and maintenance
Requirement of CRM Program A clear understanding of and commitment to the companys customer focus Vigilant adherence to detailed goals Commitment from both executives and line workers And a constant awareness of the customers viewpoint Contd. It is difficult to develop CRM strategy without an understanding of the value of the customers and their needs A company should have strategic approach to treat different customers differently Without a proper CRM strategy, it will be difficult for the company to target its limited resources at its most valuable customers
Issues to be addresses by CRM vision and strategy Which customers to target? How to deal with rapidly increasing channel fragmentation and media complexity so that it has a positive effect on companys communication with its customers How should company balance quality of experience, cost to serve and profitability of the customer What is the appropriate level of CRM integration for the company How to get the customer insight on companys products and initiatives What should be the corporate strategy for unprofitable customers
CRM across Company Functions Marketing Account management expertise Research & Development Specifications that define requirements Logistics Knowledge of customer service requirements Production Manufacturing strategy Purchasing Sourcing strategy Finance Customer Profitability Reports Measurement of CRM success A research study conducted illustrates the following four overreaching measurements for CRM success CRMs ability to impact corporate strategy (25%). Successful technology integration (23%) Enhanced strategic partnership (20%) Assimilation of CRM related technologies (18%) CRM Business Plan Includes several discrete components that, when combined explain the value proposition and tactical implementation plan for CRM Also includes: The requirement for new technologies The impact on existing technologies Ongoing support and maintenance required CRM alternatives Contd. The planning begins with development of strategy followed by selection of technology to support the strategy The acquisition and implementation of technologies should allow the company to achieve its vision for CRM This can be accompanied by effective change management and technology enabled evolution
Issues to be addressed before implementing CRM Are various customer touch points (access tools) well integrated? How well do you empower customer service employees with the ability to answer customer questions? How well does your customer support assist people who need help with your website or product? How well are your internal departments connected? Are they able to ensure cross- dissemination of information quickly and efficiently? Implementing CRM Strategy If we implement CRM without a plan, its likely to fail. To make the road ahead clearer and enable us to accomplish our goals, we need to choose among the four major CRM strategies Enterprises seldom limit themselves to just a single CRM strategy However, based on an enterprise's goals and culture, one of four strategies is likely to predominate Contd. Gartner defines it as a business strategy designed to optimize profitability, revenue and customer satisfaction. So, enterprises will pursue a wide variety of CRM strategies. One of the fallacies concerning CRM is that it looks the same at all enterprises. In reality, enterprises tend to pursue four different "flavors" of CRM, depending on which of four strategies they are emphasizing Strategy No. 1: Extend Depth and Breadth of Relationships Most-common strategy that enterprises pursue, often without overtly thinking about it. The goal is to get a larger share of the customer relationship. Common terms include "up sell" and "cross-sell." The presupposition is that the enterprise is underrepresented in the customer's thinking, and that it can expect a larger "fair share" of the relationship Contd. Information on the state of the current relationship is important to this strategy, as is the upside potential and the levers that influence the customer. Hence, it is extremely data-intensive and data- dependent. Enterprises that emphasize this strategy will place a heavy burden on related IT initiatives, such as data warehousing and business intelligence Typical Systems Used Campaign management systems (CMSs), Analytics/business intelligence and Lead management Traditional Metrics Cross-sell ratio, Close rate, Average sales price, Average increase in order size, Involuntary attrition rate and cost, Cost per lead, Average order size and Response rate Pros & Cons of This Strategy Pros: Easy connection to revenue; High payback Cons: Data-intensive; Requires systems infrastructure, which often requires retraining the marketing department Strategy No. 2: Reduce Delivery Channel Costs and Create Barriers to Entry The idea here is to move customers and transactions away from high-cost channels (the labor-intensive channels) to low-cost channels (such as the Web). Is aimed at using CRM to make the enterprise more efficient, so much of the focus is on such areas as revenue, channel costs, detailed transaction data and changes in usage patterns over time. Typical Systems Used E-service/self-service, Interactive Voice Response (IVR) and Marketing Resource Management (MRM) Traditional Metrics Used Cost per transaction, Revenue per customer, Revenue per new customer, Number of channels used, Transaction errors per agent and Average acquisition cost Pros & Cons Pros: Direct impact on bottom line; builds competitive advantage Cons: May conflict with customer desires; Requires a multi- touch point strategy; and may have unintended consequences for example, using Web self- service to offload a call center can cause remaining calls to become longer and more complex, which results in a need for more agents of higher caliber to handle more-complex questions Strategy No. 3: Reinforce Brand People claim that, in the age of CRM, the brand is dead. In fact, exactly the opposite is true. The brand has become more important, because CRM is the fulfillment of the promise created around the brand. In other words, a brand promises customers. CRM is the ability to make that promise a reality. This strategy emphasizes the handoff from branding media (such as television) to more-interactive media for example, the call center Typical Systems Used Call center, Sales force automation (SFA), Opportunity management, E-commerce and Unassisted selling Traditional Metrics Abandonment rate, Once-and-done rate, Pipeline forecast volume, Calls per day, Revenue per salesperson and Number of new customers Pros & Cons Pros: Synergistic with other marketing goals; gives consistency for customers Cons: More qualitative in nature; requires a long-term view of the relationship Strategy No. 4: Create Customer Satisfaction and Loyalty The goal here is to create happier customers. It is usually done in the area of customer service and support, but it may also include operational systems that enable customers to have access to needed information. A fundamental of this school of thought is that every interaction with the customer does one of two things: creates satisfaction or destroys it. This strategy works to ensure that the interactions go well Typical Systems Used Billing and partnership relationship management (PRM) systems Traditional Metrics Customer satisfaction score, Average duration of relationship, Profit per time period, Voluntary defection rate, Lifetime value and Quote-to-close cycle time Pros & Cons Pros: High correlation between satisfaction and longevity; Builds on the back of necessary systems Cons: Extremely qualitative, so difficult to quantify; hard to make links between satisfaction and loyalty