CRM

CUSTOMER VALUE MANAGEMENT

Customer Value Management Metrics

Optimizing resource allocation and investments based on Customer value

Customer Engagement Modelling

Traditional Marketing Metrics

E.g.,

Market share

No Customer level data

Sales growth

Marketing effectiveness metrics

(a) Customer acquisition rate

(b) Acquisition cost

Customer service Metrics

Retention Rate

Active customers / Probability of being active

Customer life duration

Win-back rate

Customer Value Management Metrics

Customer value based metrics

Size of wallet

Share of wallet

Expected share of wallet

Strategic Customer Based Value Metrics

Past Customer value (Revenue / Margins)

Potential value (Revenue / Margins)

Reference and influence value

RFM Value

Customer lifetime value

Customer equity

Strategic partnership / willingness to engage in a long term strategic manner

Customers current / potential use of companys range of products and services

Joint marketing efforts / campaigns / PR value and potential

Customer Value Measurement

Scoring system for Customer value

Factors to be considered

Weightages

Data gathering

From different systems

Financial (GL, Orders, AR, product margins, etc)

customer service system, sales and marketing systems

Customer
Value
Management
Customer
value
based Interactions, Account
Planning and SAM, Marketing and sales actions,
Service delivery, Investments, etc.

CRM
MEASURING ROI

CRM ROI Measurement

Complex to measure

Multiple initiatves result in increase of revenues and profits; Difficult to isolate

CRM impact

Some costs are basic costs that do not contribute to increase in revenue Not
necessarily CRM costs - e.g., process optimization

Some costs are shared systems and people allocation is a complex process and
ridden with conflicting claims

ROI is easier to measure in simple, isolated projects but complex in ECRM

Returns are long term how many years to consider for measuring ROI?

Intangible benefits quite difficult to quantify

CRM Is it a necessity or an option?

Understanding and arriving at a consunsus among the stakeholders

necessary to measure the ROI in a standardized manner

CRM
TRENDS AND CHALLENGES

Emerging Trends

Mobile CRM (mCRM)

Social CRM

Industry specific CRM solutions

Customer

Value on Customer Experience

Demands increasing

Shortened customer loyalty

Fast changing Customer preferences

Preferences green initiatives, corporate social responsibilities

Regulatory and compliance mandates

Non-market forces activist groups, traditional and social media

Data privacy issues

Social CRM

Data Privacy

Customer concerns and activists groups

Regulation / legal aspects

Understand the quid pro quo customer needs for personalized

service and privacy

Post / publish company policy

Permission marketing

Privacy settings, Opt-in and Opt-out , cookies

Contractual aspects, Operational processes to honor obligations