Customer Relationship Management Barr, Fink and Pape October 2001.

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

Customer Relationship Management

Barr, Fink and Pape

October 2001

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

Presentation Goals

Define CRM

CRM real life experiences

Review of critical success factors

CRM future directions

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

CRM Defined

A Strategy

A Process

An Integrated Architecture

The Outcome

1www.american-crm-directory.com

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

2 "CRM is a strategy, not a tactic" Ivey Business Journal; London; Sep/Oct 2001; Ian Gordan

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

3 www.american-crm-directory.com

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

4 www.cio.com/research/crm/edit/crmabc.html

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

5 "CRM: Craze, Cult or Whim?" Far Eastern Economic Revue, Hong Kong; Oct 4, 2001; M. A. Hamlin

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.

6 "The Truth about CRM" CIO Magazine; May 1, 2001; Susannah Patton

Critical Considerations

Typical Cost Allocations

23%

38%

28%11%

SoftwareServicesHardwareTelecommunications

7 "CRM Market will double" Credit Union Magazine; Madison: Sep 2001; Schmidt and Sweeney

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

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

8 "http://www.crm-forum.com/cgi-bin/item.cgi?id=41548&d=564&h=570&f=569

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

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

Reasons for Failure

0%

5%

10%

15%

20%

25%

30%

%of Failures from 900respondants

Could not adapt totechnology

Company politicsand inertia

LimitedUnderstanding

Poor planning, lackof CRM skills,budget limitations

Software problems

9 http://www2.cio.com/archive/050101/truth_content.html

Why Bother?

“It’s expensive, hard to implement, time consuming and it may not work.”9

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

10 http://www.more business.com/running_your_business/management/d935705915.brc

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

11 "CRM Made Simple" CIO Magazine; Sept 15, 2001; Stewart Deck

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

12 Kendra Bender, IT Manager Tipper Tie, Interview November 2001.

Tipper Tie

The PressuresAlternative packaging methods began making

inroads with Tipper Tie’s customer base Lead

Kendra Bender IT Manager Budget

Annual IT Budget $1MCRM Estimated $250K

IT Staff of four

Tipper Tie

Strategy Process Integrated Architecture Outcome

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.

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.

13 http://www.cio.com/archive/091501/simple_content.html

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

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

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

14 "The Truth about CRM" CIO Magazine; May 1,2001; Susannah Patton

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

15 Ned Liddell, Director Business Systems Monster.com, Interview November 2001.

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

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

Monster.com

Strategy Merge data from legacy system and failed

Siebel rollout in order to facilitate its global market expansion.

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

Monster.com

Process Hire Akibia to create a single database from

legacy systems and customized applications to use this new database more efficiently

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

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

16 "Online recruiter faces 'monster' headaches with CRM" INFOWORLD; Feb. 26, 2001; Heather Herreld

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

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

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

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.

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

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

14 "The Truth about CRM" CIO Magazine; May 1, 2001; Susannah Patton

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

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

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

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

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

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

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.

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

17 "Analytical CRM is the next step" Insurance and Technology; New York; Oct 2001; Gregory MacSweeney

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

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

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

“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