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Customer Relationship Management Barr, Fink and Pape October 2001

Customer Relationship Management Barr, Fink and Pape October 2001. Presentation Goals. Define CRM CRM real life experiences Review of critical success factors CRM future directions. CRM Defined. A Strategy A Process An Integrated Architecture The Outcome. CRM Defined. A Strategy

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Customer Relationship Management Barr, Fink and Pape October 2001

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  1. Customer Relationship Management Barr, Fink and Pape October 2001

  2. Presentation Goals • Define CRM • CRM real life experiences • Review of critical success factors • CRM future directions

  3. CRM Defined • A Strategy • A Process • An Integrated Architecture • The Outcome

  4. CRM Defined • A Strategy • “Needed to completely integrate a business in order to get a holistic view of the customer and their relationship to the entire enterprise.”1 1www.american-crm-directory.com

  5. CRM Defined • A Process • “CRM is the ongoing process of identifying and creating new value with individual customers, and sharing the benefits over a lifetime association. It involves the understanding and managing of ongoing collaboration between suppliers and selected customers for mutual value creation and sharing.”2 2 "CRM is a strategy, not a tactic" Ivey Business Journal; London; Sep/Oct 2001; Ian Gordan

  6. CRM Defined • An Integrated Architecture • “It is a blend of internal business processes: sales, marketing, and customer support with technology and data capturing techniques.”3 3 www.american-crm-directory.com

  7. CRM Defined • The Outcome • “When effective, CRM will be used to learn more about customer needs and behaviors in order to develop stronger relationships.”4 4 www.cio.com/research/crm/edit/crmabc.html

  8. Critical Considerations • 20% of your customers provide 80% of your business.5 • Not all customers are created equal. • Therefore, Customer Relationship Management is vital to the survival of your company. 5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; M. A. Hamlin

  9. Critical Considerations 6 "The Truth about CRM" CIO Magazine; May 1, 2001; Susannah Patton

  10. Financial Impact • In 2000 • $3.9B on CRM software and by 2005, $11.9B (Datamonitor).7 • In 2001 • $5.4B to between $11B and $16.9B by 2003 (www.American CRM Directory.com) • In 2001 • $20.4B CRM market will grow to $46B next year (Meta Group)6 7 "CRM Market will double" Credit Union Magazine; Madison: Sep 2001; Schmidt and Sweeney

  11. Industry Leaders in CRM Software • Siebel (www.siebel.com) • Founded 1993 • 2000 Revenue - $1.79B • Database systems and Sales and Managerial Software • Oracle (www.oracle.com/corporate/story.html) • Founded 1977 • 2000 Revenue - $10.1B • Database systems and Sales and Managerial Software

  12. Industry Leaders in CRM Software • Convergys (www.convergys.com) • Founded 1998 • 2000 Revenue - $2.16B • Sales and Managerial Software applications “500 or more companies claiming to make CRM software, only about 200 of them can legitimately make that claim.” - Gartner Group8 8 "http://www.crm-forum.com/cgi-bin/item.cgi?id=41548&d=564&h=570&f=569

  13. Reasons for Failure 5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin

  14. Why Bother? • “It’s expensive, hard to implement, time consuming and it may not work.”9 9 http://www2.cio.com/archive/050101/truth_content.html

  15. Why Bother? Because... • “Businesses typically lose 15-20% of their customers each year.” - Grace Butland10 • “Companies can boost profits by almost 100% by retaining just 5% more of their customers.” - Reichheld and Sasser10 10 http://www.more business.com/running_your_business/management/d935705915.brc

  16. Tipper Tie • $94M a year division of Dover Corp. • Market leader in aluminum clips for the food industries. • “CRM, or any software, won’t increase sales. But the applications could help them understand our customers better.” - Kendra Bender, IT Manager11 11 "CRM Made Simple" CIO Magazine; Sept 15, 2001; Stewart Deck

  17. Tipper Tie • The Pressures • Alternative packaging methods began making inroads with Tipper Tie’s customer base • Lead • Kendra Bender IT Manager • Budget • Annual IT Budget $1M • CRM Estimated $250K • IT Staff of four 12 Kendra Bender, IT Manager Tipper Tie, Interview November 2001.

  18. Tipper Tie • Strategy • Process • Integrated Architecture • Outcome

  19. Tipper Tie • Strategy • The company needed to change the way its customer-facing staff worked, including the eight call center operators, 16 member field sales force and 8 repair technicians.

  20. Tipper Tie • Process • TT needed a system to trim the cost of generating sales leads and produce more sales from its best customers by providing better service and better communications between its service channels.

  21. Tipper Tie • Integrated Architecture • Utilized Siebel Systems’ stand-alone call centers and sales force CRM modules to link the sales reps in the field and the call center into the same continually updated customer data view. • “Cross functional and pilot teams are keys to success…it saves a tremendous amount of time and effort later on by including their insight expertise and gaining their support.” - Elizabeth Herrell, Giga Information Group13 13 http://www.cio.com/archive/091501/simple_content.html

  22. Tipper Tie • Outcome • Bender estimates that Siebel system will pay for itself in a little over two years. • Each sales rep has approximately 18 more days per year in face-time selling that they would have spent generating reports or dealing with the peripherals. • TT is much more responsive to customers by providing better communication between the customer and the company

  23. Monster.com • $485.9M division of TMPW • Global leader in on-line information and opportunities for job seekers and employers • 8 million job seekers and over 400,000 job opportunities throughout North America, Europe and Asia. • “CRM is not for the weak spirited. It requires a lot of management and money.” - Ned Liddell, VP Business App. Dev.14 14 "The Truth about CRM" CIO Magazine; May 1,2001; Susannah Patton

  24. Monster.com • Pressures • Monster was facing phenomenal global expansion and needed accurate and fast data for all involved. • Lead • Jocelyn Talbot, SVP of Telesales • Budget • Annual IT ~$20M • Estimated CRM $1-1.5M • Actual CRM costs ~$4M • IT Staff • 50 people worldwide, not including the development group for the web-sites 15 Ned Liddell, Director Business Systems Monster.com, Interview November 2001.

  25. Monster.com • Strategy • Merge data from legacy system and failed Siebel rollout in order to facilitate its global market expansion.

  26. Monster.com • Process • Hire Akibia to create a single database from legacy systems and customized applications to use this new database more efficiently

  27. Monster.com • Integrated Architecture • Akibia continued to work with Monster.com employees to • help with database-specific issues • analyze country-specific business processes • computer telephony integration

  28. Monster.com • Outcome • “In addition to providing hundreds of global employees with synchronized customer data, the system has proved flexible as Monster.com evolves its business model.”16 16 "Online recruiter faces 'monster' headaches with CRM" INFOWORLD; Feb. 26, 2001; Heather Herreld

  29. Critical Success Factors • Evaluate current customers’ impact on business. CRM must start with determining what kind of customer information the company is looking for and what it intends to do with the information. • Evaluate business environment to understand how current customer relationships impact business retention and growth.

  30. Critical Success Factors • Develop a strategy that is well articulated to give unequivocal direction and value to all employees • Strategy must not only parallel current mission but be able to adjust with changing business requirements • Strategy must be embraced by the CEO, COO, CMO and supported by IT

  31. Critical Success Factors • Find the CRM vendor that can meet your requirements not define them • Gartner Group reports even the highest rated CRM application suite only delivered 51% of the necessary components to get a complete view of the customer.14 14 "The Truth about CRM" CIO Magazine; May 1, 2001; Susannah Patton

  32. Critical Success Factors • Methodical approach to rollout • Handpick dynamic employees to “sell” new systems to their co-workers • Make information from all parts of the enterprise available to employees who deal with customers

  33. Critical Success Factors • Work hand-in-hand with vendor(s), consultants and users to ensure progress being made is reflective of the planned CRM solution. • Watch for implementation atrophy • Good project management = 50% you + 50% client • Open your enterprise to make it easier for customers to use your systems

  34. Critical Success Factors • Evaluate and update the strategy • The goal is to lock customers into a mutually beneficial long-term relationship. The CRM strategy aligns an entire organization toward customers in a way that benefits partners, suppliers and improves the financial bottom line.

  35. The Future of CRM • Impacted by the downturn in the economy, however not necessarily negative. • “You have to grow and retain the existing customers.” - Nelle Schantz17 17 "Analytical CRM is the next step" Insurance and Technology; New York; Oct 2001; Gregory MacSweeney

  36. The Future of CRM • Analytical CRM • “Many companies have already invested in operational CRM products…now that the hardware is in place, companies want the ability to build one view of the customer. Get the customer data, clean it, do some pretty serious data mining and then deploy the knowledge to the front offices.”17 17 "Analytical CRM is the next step" Insurance and Technology; New York; Oct 2001; Gregory MacSweeney

  37. “The days of mass marketing are over. If you don’t know your customers intimately, you don’t know where your next profit is coming from.” -Timothy Goh Director of CRM, Sing Tel Mobile 5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; Michael Alan Hamlin

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