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K ey Sources of the course:K ey Sources of the course:

Harvard Business ReviewHarvard Business ReviewCRM by Ed PeelenCRM by Ed PeelenSnezana DraSnezana Drag gicevicicevicGeraldineGeraldine ClaessensClaessens

E mail: contact@r oger claessens.be - Internet: www.r oger claessens.be

R.J.ClaessensR.J.Claessens &&PartnersPartners

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Th e k ey messa ge of th e cou rseTh e k ey messa ge of th e cou rse

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We are in it, togeth er!

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In 2003 , acco rdin g to H arvard Business Revie w, 82% of intervie wed comp anies in th e USA , stated th ey wou ld intr oduce CRM, a lar ge jump f r om th e 35% w h o emp loyed CRM in 2000 .

W hat changed?

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The approach changed!

Rat h er th an use CRM to trans for m entire businesses, comp anies using CRM succ ess fully h ave dire cted th eir invest ments toward solvin gclearly de f ined pr o blems with in th eir customer

relati onsh i p base

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The approach changed!

CRM today result in h

igh

ly focu sed pr ojects th

at are relatively narrow in their scope and modestin their goals.

Th ere is also an understandin g th at h igh ly accu rate and timely data are not req uired every wh ere

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Ach ievin g succ ess with CRM is mo re diff icu lt th an ex pected and it is not just a matter of marketingand IT.

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Intr oductionIntr oduction

The philosophy of Customer RelationshipManagement is this :

CRM is abou t Kee ping th e old-time s pirit of customer conne ction even wh en you c an not sh ak e every h and .

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The philosophy of CRM is:

It is a comprehensive approach for creatin g,

maintainin g and ex pandin g cu stomer relati onsh i ps. CRM is a way of th ink ing abou t and dealin gwith customer relati onsh i ps

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The focus is on:W h at will th e customers buy, wh en, wh y and for h ow muc h?

W h at creates value for th em?W h at does create a str uc tural bond ? W h at servi ce can we pr ovide th at does create a

premium ?

W h at abou t mar k et segmentati on?

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W hat CRM systems do!

Th e primary task of a CRM syste m co nsists in

suppo rtin g o r per for ming th e activities inv olved in customer conta ct pr ocessesTh e secondary task is related to p r ovidin g

customer and mana gement infor mation

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The concept of CRM is:

C ustomer relati onsh i p m ana gement (CRM) is a business strategy to sele ct and mana ge th e mo st valuable customer relati onsh i ps. CRM req uires a customer -centri c business

ph ilosoph y and cu lture to suppo rt eff ective mar k etin g, sales, and servi ce pr ocesses.

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The concept of CRM is:

CRM a pp lications can enable eff ective customer relati onsh i p m ana gement, providedthat an enterprise has the right leadership,strategy, and culture

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CRM sh ould th e end of th e r oadCRM sh ould th e end of th e r oad

CRM is a great conce pt BU T you m igh t wonder if it is wo rth th e effo rt relative to your customer

base and ex penses inv olved ? It is th e ultimate ph ase AF T ER a solid mar k et

resear ch and a strate gic p lannin g p r ocess!

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Is th e issue we analyse strate gic?

W h ere cou ld we mak e mo re money ? D o we need per f ect data ? W h at is th e next ste p?

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Is it strategic?A lar ge and comp reh ensive CRM pr og raminv olves comp licated business and tech nology

issues and req uires invest ments of time and money. Before spending money , k ey mar k etin gquesti ons need to be addressed W hat are your key marketing questions?

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Is it strategic?An exa mp le: A w ell trained and pr oactive sales for ce is a strate gic necessity; th is req uires

th e righ t infor mation!

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W here could we make more money?It is possible to use CRM to manage the entirerelationship cycle: that is usually a bad idea!

Lar ge syste ms usually do not pay back .The focus of CRM should be the weak pointsthat undermine performance

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W here can we make more money?Focusing on weak points can not only be an eff ective way to build a succ ess ful CRM

pr ogram but can also pu t it back o n track in case you started one.

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Do we need perfect data? Per f ect real time infor mation com es at a very

h igh cost

Th e req uirements for real time and goo d data are quite diff erentExamp le: Ou tstandin gs on a current accou nt(real time) vers us portfolio mana gement data (goo d data)

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W hat is the next step? Narr ow ly focu sed CRM syste m of ten reveal

additi onal oppo rtunities for business

imp r ovements.All th e small imp r ovements tak en togeth er, can amou nt to a br oad CRM a pp lication th at extends acr oss th e bank .

The key is to make sure the step by stepapproach fits into a defined strategic plan

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W hat is the next step?In mo st cases, th e oppo rtunities for devel opm ent lie in th e activities ad jacent to th e customer

relationship cycle.Ultimately, CRM can be th e glue th at binds togeth er all activities related to a customer.

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Customer relationship cycle.

Devel opm ent

Sales

Ex perien ceRetenti on

T ar getin g

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Business before technologyW e should look at what CRM should do, notso much on what it can do

CRM de pends mo re on strate gy th an on th e amou nt s pent on tech nologyStrategy is abou t th e way you allocate your resour ces to c reate a competitive advantageand superior performance

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Implementing CRM before creating a customerstrategy = like building a house without anarchitectural plan

Eff ective CRM is based on segmentati on analysis C ustomer strate gy is desi gned to ach ieve some

s pecif ic mar k etin g go als

Technology is not a marketing strategy

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Introducing CRM before changing yourorganisation into a customer focusedorganisation = like painting without sanding

CRM will succ eed only AF T ER th e or ganisati on and its pr ocesses jo b des cri ptions, per for mance meas ures, comp ensati on syste ms, trainin g

pr ograms, and so on- h ave been str uc ture to

pr ovide superior customer value

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Assume that more technology is better = is likebuilding without foundationT o start, see wh at lower-tech alternatives off er;

th

ere may be no need for mo re in th

e very near futureIn th e future as seq uence of individ ual sof tware solutions may lead to each ste p rein for cing th e

next ste p

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Define the right customers you want to establisha relationship with = a two way street

J ust because mana gers can contact customers, does not mean t

hey s

hou ld by all means and for wh atever reas on.

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How do consumers define us in terms of competition?

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How do consumers define us in terms of competition?

C ostT ime

Q ualityOppo rtunityInfor mation

Kn ow ledge C h oice C ulture

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W hy might you consider CRM?

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W hy might you consider CRM?1. Gat h er customer infor mation quick ly2. Identi f y th e most val uable customers

3. O btain loyalty by pr ovidin g cu stom ized pr oduc ts4. Possibly red uce cost of servin g th ese customers5. Mak ing it easier to acquire similar customers

6. Retenti on of existin g pr of itable customers 7. Gettin g th e maximum ou t of existin g cu stomers8. It can function as an early warnin g syste m

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W hy might you consider CRM?

Current situation

Medi umter m

Long ter m

Finan cial pers pective

T urnover Increased turnover

Val ue

Customer pers pective

Satis f action Individ ual satis f action

Comm itment

Commu nication One way Attuned M ulti-ch annels

Or ganisati on Data Kn owledge Integrated image

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The ultimate goal of CRM :Th e goal is to encou rage th e customer to m ak e its future pu r ch ases f r om you and red uce th e

sh

are of pu r ch

ases bein g made f r om th

e comp etiti on DUE T O T HE FA CT customerknowledge has been accumulated and th ere fore it will be mo re diff icu lt for th e

comp etiti on to off er a similar pack age

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CRM is only a part of the sales performance!

How would you assess your overall sales

performance?

Please rate th e questi ons h erea f ter as follow s Not effective Extremely effective1 2 3 4 5 6 7 8 9 10

(Sou r ce HB R 08/0 6)

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Salespeoples capabilitiesFindin g cu stomers identi f yin g sales

oppo rtunities

Winnin g cu stomers convertin g oppo rtunities into businessKee ping cu stomers cementin g cu stomer relati onsh i ps - CRM

Not effective Extremely effective

1 2 3 4 5 6 7 8 9 10

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Sales Managers' skillsPlannin g fo r gr ow ing businessC oach ing g ivin g c lear dire ction, ex pectati ons and f eedba ck M otivatin g recog niti on and rewards


1 2 3 4 5 6 7 8 9 10

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Support systemsRe cr uitin g and h irin g ca pabilitiesPer for mance mana gement syste msOppo rtunities mana gement syste msStrate gic accou nt mana gement syste ms CRM syste msT

rainin g and devel opm ent syste ms


1 2 3 4 5 6 7 8 9 10

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Sales organisation climateClarity of go als and ex pectati onsStaff dedi cation to ach ieve ch allen ging go als

Staff initiative Ack now ledgment of goo d wo r k


1 2 3 4 5 6 7 8 9 10

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Th e total score for your sales or ganisati on is: ..

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Avera ge for h igh -per for ming o r ganisati ons 123Avera ge for low-p er for ming or ganisati ons 109

W e shall put the spot on CRM, but it is only a partof a bigger picture( US based comp anies)

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Th e str ucture of th e cou rseTh e str ucture of th e cou rse

CRMCRMIntroductionIntroduction

ORGANISATIONORGANISATION MAR K ETINGMAR K ETING ANALYSISANALYSIS

1_ Elements of CRM1_ Elements of CRM

2 _Customer 2 _Customer --supp lier supp lier

3 _ Strate gy3 _ Strate gy

4_Relati onsh i p o riented4_Relati onsh i p o riented

1_C ustomer k nowledge1_C ustomer k nowledge

2 _Customisati on2 _Customisati on

3 _Commu nication3 _Commu nication

4_Relati onsh i p po licy4_Relati onsh i p po licy

1_ 1_Relati onsh i pRelati onsh i p DataData

2 _Data minin g2 _Data minin g

3 _Data sele ction3 _Data sele ction

4_Data re porting4_Data re porting

SYSTEMSSYSTEMS

1_CRM syste ms

2 _ Imp lementati on

3 _ Th e future

4_C onclusion

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The four cornerstones of theelements of CRM are:

1. Customer k now ledge

2. Relati onsh i p strate gy3. Commu nication4. Th e individ ual val ue pr opo sition

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2 . Relationship strategy

A long lastin g cu stomer supp lier relati onsh i p

Th e k ey is not only th e stimu lation of a transa ction

Succ ess is not meas ured by mar k et sh are

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3 . Communication

Th e issue is to carry on a dial ogu e with

individ ual customers Sh if ts sh ou ld be possible between distrib ution

ch annels

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4 . The individual value proposition

Th e pr oduc t, servi ce and price are ada pted to th e individ ual cir cum stan ces

Th e or ganisati on h as to build up th e ca pacity tosupp ly custom isati on in one for m o r anoth er

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Systems

If a relati onsh i p mu st be maintained with a lar ge gr oup of cu stomers, a po rtion of w h ich re presents a low value to th e supp lier, th e use of IT becom es inevitable.

Inte grati on is th ere fore a mu st between f r ont-

mid- back off ice

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