How to Optimize Customer Relations with Customer Care / Service Center Intergration ? [ Paper by Prof. Dr. Daniel Baier and Detlef Dimkowsky, M.A. ]

How to Optimize Customer Relations with Customer Care / Service Center Intergration ?

[ Paper by Prof. Dr. Daniel Baier and Detlef Dimkowsky, M.A. ]

A Short Introduction

Methods of Resolution

Conclusions

Main Focus

[ 2 ]

A Short Introduction

FIRST OF ALL – INTRODUCING MYSELF…

contact information

phone +49 (0) 341 / 7 02 19 21fax +49 (0) 341 / 7 02 19 90 21mobile +49 (0) 172 / 3 63 95 77email [email protected]

internet http://www.bitonic-systems.de

bitonic systems GmbH

founded | January 2002locations | Leipzig / Halle (Saale)

competence | Marketing and sales, scientific consultingline of business | Life Science industries (Pharma, Biotech)

projects | Pharma CRM / Patient Relationship Management (pharmaceutical companies);

Pharma analytical applications – finance, marketing, sales / sales force controlling …

KnowBIT – Knowledge Management Biotech, Weinberg Campus, Halle.

Detlef Dimkowsky, M. A.* 29.11.1968

Study of African Linguistics, Economics and Social Science. University of Hamburg | University of Leipzig 1993 – 2001

Managing director | bitonic systems 2002 –

[ 3 ]

A Short Introduction

Customer Relationship Management (CRM): Current trends

Integrated Customer Relationship Management (CRM) „in times of stress“? See your chance!

40% of companies are going to plan the introduction of CRM in the next one or two years.Today about 75% of the companies investigate reinforced in keeping their customer relations.

Though:

About 80% of the CRM projects are aborted during the past years.[Upon what grounds ?]

Integrated CRM is an efficient instrument to generate the competitive advantages, especially in times of stress! [What effects can be generate by CRM ?]

Notwithstanding:

The change from the product to the customer oriented approach is a central point of CRM and a business critical factor in highly competitive and complex markets.

[How CRM can be successfully created ?Which factors and measures are most important ?]

[ 4 ]

A Short Introduction

Customer Relationship Management (CRM): Definition

Customer Relationship Management (CRM) DEFINES:

Corporate strategy and its implementation

‚Living Customer Orientation‘ within the enterprise‚Ecosystem‘ [Gartner, 2001], which pervades all parts of the enterprise

Customer Relationship Management (CRM) CONTAINS:

All customer oriented processes (360 degree view)All functions / departments within the enterprise

All communication channels from / to the customerAll processes in marketing, sales and service

The entire IT infrastructure of the enterprise, in particular the stock of customer information (communication systems, ERP, eBusiness, eCommerce)

CUSTOMER RELATIONSHIP MANAGEMENT(CRM)

operative(f.e. field service control)

collaborative(f.e. Detailing)

analytic(f.e. Targeting)

MARKETING STRATEGY

SERVICESALES

marketstarget groupscustomers

potentials...

productcampaign...

potentialsone-to-one...

field service controlfield service informationfield service reporting...

potentials…premium...

customer valuecustomer potential

...

service / call centercomplaint managementfield service support...

servicelevel

positioningfinancescontrolling…mergers & acquisitions

marketspotentials...

i

[ 5 ]

A Short Introduction

Customer Relationship Management (CRM): Current business environment

Business environment in the today markets / essential factors of CRM projects:

Tightened competition in increasingly saturated and transparent markets

Lack of differentiation of products and services offered

Increasing demands concerning the IT infrastructure of the enterprise (CRM, ERP, eCommerce, eProcurement)Targeting as a business critical factor (market share / segmentation, customer value)

Integrated communication by grouping all relevant channels of customer interaction

„We are drowning in information and starve for knowledge“ Naisbett, J. and Aburdene, P. (1980)

„Information gap“ – lots of gathered information in different data bases and systems, but…

… the covered knowledge is frequently not available for customer operations, decision support and management information processes in the enterprise

Insufficiant resources within the customer care / fulfillment processes

Current shortcomings and bottleneck factors:

Increased costs (of complexity / infrastructure) / increasing cost pressure

[ 6 ]

A Short Introduction

Customer Relationship Management (CRM): Objective target

Registered customers:

Increase of customer retention

Higher customer satisfaction (by customer care services)Selective prevention of customer loss

Increase of highly profitable customers

Tap the full potential of customer relations (cross / up selling)Customer value based organisation of sales and service channels (field service, service center, self services – internet)

New business / potential customers:

Market research (branding / publicity, profiling of attitudes / demands, creation of target groups)

New business

Methodology – selective and systematic approach (to tap the full potential of the target market)Precondition – comprehensive knowledge of market and customer behaviorBasis – customer data bank system (specific customer profiling / creation of target groups)

[ 7 ]

Main Focus

Service Center vs. Field Service: Advantages and disadvantages

+ Tele Marketing and Sales / Service Center

High affinity for the medium telephone (?)

Relatively low costs (especially HR)

High level of interaction with „forced“ feedback

Fastest achievement of a broad market reach

Spatial independent and versatile (by substitution / support of personal calls)

– Telephone service

Difficult accessibility

Increasing number of Tele Marketing Agencies;higher frequency of total calls per customer(tends to result in higher rejection rates)

+ Field service / Personal call

Personal interaction

Strong personal relation is possible

Highest level of interaction

Direct and private response / feedback

Construction of confidence

– Field service / personal call

Time consuming preparation process

High personell costs and travel expenses

Relatively low range

[ 8 ]

Main Focus

Service Center: Central questions and known problems

Is the service center established in conjunction with the whole business communication process ? >> Y/NIs a central customer data bank established to collect all relevant customer information ? >> Y/NAre the service processes co-ordinated in the entire company ? >> Y/N

meeting

FieldService

REQUEST

INFORMATIONRETRIEVAL

INTEREST

EMAIL

INTERNET (informations for insider)

TELEPHONE

LETTER

FAX

MARKETING

MED./ SCIENCE

SERVICE

DOCTORSTATUS

[ 9 ]

Main Focus

Service Center: … high complexity (business processes I – Inbound Service Center)

order request

serviceorder

CUSTOMER

withdrawalof material

service

bill/ credit noteTRANSPORT

ORDER

EXECUTION

ORDER

CONTROLLING

DEPOT

CALL

CENTER

material requirements

delivery note

material delivery

achievement INVOICING

access/dispatch

material/ supplierrequirements

order proposalRESSOURCES

MANAGEMENT

stock receipt

SUPPLIERdelivery of goods

demand

ACCOUNTING

CONTROL

delivery note

supplier bill

order

delivery note

accountspayable

result

budget

PERSONELL

DEPARTMENT

L+G-data

contract

assessment

BANK

bankstatement

outpayment

payment

payment

BUYING

DEPARTMENT

ACCOUNTANCY

MANAGEMENT

[ 10 ]

Main Focus

Service Center: … high complexity (business processes II – Outbound Service Center)

withdrawalof material

service

bill/ credit noteTRANSPORT

DEPOTmaterial requirements

delivery note

material delivery

achievement INVOICING

access/dispatch material/ supplier

requirements

order proposalRESSOURCES

MANAGEMENT

stock receipt

SUPPLIERdelivery of goods

ACCOUNTANCY

demand

ACCOUNTING

CONTROL

delivery note

supplier bill

order

delivery note

accountspayable

result

budget

L+G-data

contract

assessment

BANK

bankstatement

outpayment

payment

payment

CALL

CENTER

CUSTOMER

requestorder

ORDER

CONTROLLING

order

serviceorder

ORDER

EXECUTION

customer qualificationmarket research, etc.

MANAGEMENT

PERSONELL

DEPARTMENT

BUYING

DEPARTMENT

[ 11 ]

Main Focus

Service Center: Objective target

(8) Early-warning systems and opportunity management

(1) Targeting (sales effort in selected market segments) (2) Centrally managed services for time consuming, routine work (inbound call services and Email management in particular) (3) Increasing hit quota / high frequency of customer contact (4) Prompt reply in customer interaction process (5) Integrated data processing / handling

(6) Business process integration and workflow management (7) The ‚proactive service unit‘

(9) Planning and control at customer level

(10) Classification (ABC) at potential level

INTEGRATED ENTERPRISE SOLUTIONS

OPERATIONS

INTERNAL

employeemanagementshareholder

EXTERNAL

partnercustomer

PROCESS LEVELS

knowledge managementproject managementprocess management (CRM, SCM, ERP)

ANALYTICSOPERATIONS STRATEGY

[ 12 ]

Main Focus

Service Center: Target deployment – Example I

(3) Increasing hit quota / frequence of customer contact(4) Prompt reply in customer interaction

First example – optimized service quality (with registered customers):

Measure = customer valueDetermining factors = turnover potential (cross / up selling) and recommendation potential; Further factors like customer satisfaction or operating figures are considered.

Analysis methods = customer value, ABC classification

Results (selection) =

A customers shall „rewarded“ with cost intensive premium services;Customer contact occurs regular and active via field service / high frequency of sales calls, supported by service center activities / tele services;corporate publishing activities with high quality customer journals will be added.

B/C customers will be addressed with basic services at low cost level; like self services via internet and newsletter; service center activities shall occasionally applied.

>> Efficient customer care services as a result of fact based service level management

[ 13 ]

Main Focus

Service Center: Target deployment – Example II

(9) Planning and control at the customer level (10) Classification (ABC) at the potential level

Second example – optimized sales performance (with registered customers):

Measure = customer valueDetermining factors = turnover potential (cross / up selling) and recommendation potential; Further factors like customer satisfaction or operating figures are considered.

Analysis methods = customer value, ABC classification

Results (selection) =

A customers shall further addressed with high frequent sales calls;sales force will be supported by service center activities / tele services.

B/C customers will be addressed with a lowered frequency of sales calls; high frequency of service center activities / tele services;

>> Efficient sales performance as a result of fact based sales controlling

[ 14 ]

Main Focus

Service Center: Target deployment – Example III

(9) Planning and control at the customer level (10) Classification (ABC) at the potential level

Third example – campaign optimization [Call – Mail – Call](for new customer acquisition / (re)launch of a product):

Measure = potential (interested person, customer profile), response behaviour (test mailing + mailing)

Analysis methods = response analysis, ABC classification, conjoint analysis

Results (selection) =

significant high response rates (up to 35 % are possible!);

considerable cost saving effects as a result of detailed targeting in the campaign setting process(reduced amount of total mailing output, less handling costs of the campaign)

>> Efficient campaign / direct marketing activities as a result of fact based targeting / campaign processing

[ 15 ]

Methods of Resolution

FIRST CLASS CUSTOMERS! – Fact based customer knowledge I

>> Business Intelligence (BI) forces ‚turning-off‘ spread sheet applications!

>> Integrated analytical application (Data Warehouse, OLAP, Data Mining) as central parts of both Decision Support (DSS) and Management Information Systems (MIS).

Is the systematic and overall gathering of market and customer information realized at the enterprise ?Is the entire data set which is relevant for the customer management process available in the company ?Are analytical applications deployed in the entire organisation to answer and report specific questions / problems ?

different views

Product Management Controlling

Regional Management Ad-hoc

DATA CUBE

TIME

PRO

DU

CT

[ 16 ]

Methods of Resolution

FIRST CLASS CUSTOMERS! – Fact based customer knowledge II

Relevant internal data sources as part of the customer data management (selection): Customer data bank(s) / CRM, log files from enterprise web portals / CMS, ERP systems.Integration of external data sources, for example:customer and campaign data – call / service center, external market research data, purchased adress data, tracking data from internet market places and portals.

DeltaMiner SQL-Server (OLAP) Facts Tables SQL-Server (relational)

Data Analysis OLAP-Transformation

(periodic) Processingof Import,

Structure and Data

SQL Drill Through

[ 17 ]

Methods of Resolution

FIRST CLASS CUSTOMERS! – Fact based customer knowledge III

External DataExternal Data CENTRAL DATA POOL

SAP | ORACLE | SQL-Server | iHistorian | dBase | Access | Text | Excel

Central connection withthe reporting server

Analysis, Reporting,Planning, Simulation

Data Banks on thecentral OLAP-Server

LocalUserCubes

DeltaMinerImportWizard

MinerPivotizer | AnalyzerReader | ViewerWord | Excel | HTML/ XML

Export of the results forthe external reporting

[ 18 ]

Conclusions

FIRST CLASS CUSTOMER COMMUNICATION! – AT A GLANCE

The COMMUNICATION CENTER (inhouse or service provider) is an essential and cost effective instrument for both customer service and the acquisition of new business in today‘s markets.INTEGRATED COMMUNICATION SERVICES (inbound / outbound calls, Email management, fulfillment) are increasingly important within the marketing mix of a company.INTEGRATED ANALYTICAL APPLICATIONS are an business critical factor on the way toFIRST CLASS CUSTOMER COMMUNICATION!

EFFECTS

COST

EFFICIENCY

ACCEPTANCE

PUSH TO PULL

CHANNEL INTEGRATION

CUSTOMER KNOWLEDGE

SALES FORCE

E-COMMUNICATION SERVICE CENTER

ONE-TO-ONE MARKETING

INTEGRATED CUSTOMER COMMUNICATION

CONSUMER

Advantage 1 forthe customer

CONSUMER

Advantage 2 forthe customer

CONSUMER

Advantage 3 forthe customer

[ 19 ]

Conclusions

FIRST CLASS CUSTOMER COMMUNICATION! – BY EXAMPLE [bitonic iDetailing]

CUSTOMER PROFIL

customer interestscustomer behaviourcustomer wishes

e-DETAILINGContent

ManagementPersonalization

Virtual Detailing

MARKET INFORMATION

socio-economicsdemographicsmicro-geographics

COMPANY INFORMATION

target group managementproduct management

distribution data

ANALYSISANALYSISintelligent customerinteraction

TECHNO

LO

GY

ORGANIS

ATIO

NVIRTUAL DETAILING INTERNET

VIDEO CONFERENCES EMAIL

SERVICE CENTER FIELD SERVICE

CUSTOMERS

[ 20 ]

Conclusions

FIRST CLASS CUSTOMER COMMUNICATION! – SUMMARY

FIRST CLASS APPROACH AND METHODS:

Identify! FIRST CLASS CUSTOMERs / POTENTIALs by ANALYZING CUSTOMER PROFILES >> Success factor(s)! Address and tap the full potential!

Realize! FIRST CLASS SERVICES FOR FIRST CLASS CUSTOMERs with FACT BASED SERVICE LEVEL MANAGEMENT

>> Success factor(s)! Selected premium services and high quality programs to reach customer satisfaction for A customers; Addressing B/C customers primary via cost effective instruments like electronic self services and newsletter.Measure! FIRST CLASS COMMUNICATION FOR FIRST CLASS CUSTOMERs with ANALYTICAL APPLICATIONS(as an essential requirement for targeting and customer process performance measurement)

>> Success factor(s)! Comprehensive market and customer knowledge is a necessary condition for market success.

Relevant customer data / information is often gathered but not available in the enterprise!Enhance hidden knowledge and make it available in the management / decision process of your organisation.