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C ustomer R elationship M anagement. Prepared by: Larry Eisenberg Ron Fogarty Doug Marren. Greenberg, Paul, CRM at the Speed of Light , McGraw Hill 2001. Objective of Customer Relationship Management (CRM) Presentation. Why topic is important to GM’s Define CRM

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Customer Relationship Management

Prepared by: Larry Eisenberg

Ron Fogarty

Doug Marren

Greenberg, Paul, CRM at the Speed of Light, McGraw Hill 2001

Objective of Customer Relationship Management (CRM) Presentation

  • Why topic is important to GM’s

  • Define CRM

  • Present a real world CRM case

  • Learn about best practices to

    implement CRM

What Makes CRM Important to GM’s?

  • Worldwide CRM Spending, in 2002, is estimated to be $14 billion and $20 billion for 2005 (1).

  • Why is spending increasing? Because being “customer centric” through technology increases revenues, cuts costs, and offers strategic competitive advantages.

  • Your company may have or will implement some CRM applications. As a result of change, or potential change, let there be understanding.

(1) Source: Aberdeen Group, July 2002

What is CRM?

2 Part Answer:

  • CRM Is a Business Strategy: Focus on profitability, revenue and customer satisfaction by:

    • Organizing your customers.

    • Fostering customer-satisfying behaviors and implementing customer centric processes.

  • And Also A Technology: Should enable greater customer insight, produce more effective customer interactions and should integrate of all customer channels and back-office functions.

Ed Thompson, Gartner Group, CRM: The Past, Present and Future: YEA Presentation 03/2002

CRM Goals

  • Cut Internal Costs

    • Improve your Processes

      • Ex: Remove customer hold times.

      • Centralize data from every department

  • Increase sales

    • Automate the sales process

    • Perform more lucrative marketing campaigns

  • Gain A Competitive Advantage

    • Ex: Amazon.com Data Mining

Traditional Customer Facing Systems







Contact Center



















Patricia Seybold, An Executive’s Guide to CRM: How to Evaluate

CRM Alternatives by Functionality, Architecture & Analytics, March 2002, pp 7-10.

With This Strategy:

  • From a Customer-Viewpoint:

    • We present One Face to the Customer

  • From a Knowledge-Viewpoint:

    • We become more efficient.

      • If HP knew what HP knows, we would be three times as profitable.

  • From a Campaign Management-Viewpoint:

    • We target advertise based on demographics

Charles Despres and Daniele Chauvel, “How to Map Knowledge

Management” Mastering Information Management, Prentice Hall 2000, pg 170

Sales Force Automation

  • Contact Management

    • Name, address, titles, etc.

  • Account Management

    • Corporate Information

  • Sales Process Management

    • A map that shows every step of sales process

  • Communication Tools

    • generate quotations, proposals, trip reports, expense reports, etc.

  • SFA continued…

    • Store competitive information.

    • Track customer and territory performance.

    • Customer Interfacing Information

      • When your customer called in for:

        • help, orders, asked for on-site assistance, checked order status.

    • Can see data from web access

      • e-Purchases, e-troubleshooting, etc.

    Contact Center

    • Contact Center Applications:

      • Telephony Applications for service, sales and marketing.

        • Automated prompting software that helps the agent solve the customer’s problems.

    • Centralized Database contains outside sales’ quotations, proposals, trip report, etc.

    Ex: Soffront SFA

    www.soffront.com/ppdemos, viewed 27 September 2002

    Campaign Management with CRM

    • Creating Personalized Marketing Efforts

      • Helps retain good customers.

        • And reduces costs of new acquiring new customers.

      • Identifies customers that are about to take their business elsewhere.

    • Plan and monitor all marketing activity from beginning to end.

    Greenberg, Paul, CRM at the Speed of Light, McGraw Hill 2001

    Ex: Campaign Management

    • Ex: Annual Marketing Budget is $12,000,000/year

    • 10 Million customers in database:

      Option 1: mail everyone: $.30/mailing = $3,000,000 * 4 mailings per yr.

    • campaign cost: $12,000,000

    • campaign results: $50M in revenue

    Ex: Campaign Management cont…

    Option 2: Make educated guess of who to mail to:

    • Deduce 6 M of 10M people should receive:

    • 6,000,000 * $.30 = $1.8M * 4 = $7.2 M

    • Campaign Results: $50M in revenue

    Ex: Campaign Management cont…

    Option 3: Data Mine and Build a Model:

    • Deduce only 3M of 10 M should receive

    • 3,000,000 *$.30 = $900,000 * 4 = $3.6M

    • Comparing Option 1 to Option 3: $8.4M savings to generate same revenue.

      • You are the company hero.

    In Summary

    • At the end of the day, it’s about being customer-centric.

      • Improve business deficiencies

      • Get a sales lift from existing customers

      • Find new customers

    Why Retain Customers?

    Why Retain Customers?

    • A 5% increase in customer retention can improve business profitability by 50%.

    • It costs 7 to 10 times as much to get a new customer as keep a current one.

    • A 2% loyalty increase can translate into a 10% across-the-board cost saving.

    source: Intermedia Interactive Solutions, www.intermediainc.com, viewed 11/2/02

    Why Retain Customers?

    • Recession Survival

      • In a down economy, repeat business is the most secure and profitable source of revenue

    source: Larstan Business Reports, www.larsten.net, viewed 11/2/02

    Why Retain Customers?

    • Repeat Customers Buy More

      • Research shows that the longer customers stay with a firm, the more they spend per transaction

    source: www.marketingprofs.com, viewed 10/23/02

    Why Retain Customers?

    • Company Reputation

      • High retention rates enhance the firm’s reputation within the industry and among potential customers

      • Word of mouth marketing

    source: www.marketingprofs.com, viewed 10/23/02

    Why Retain Customers?

    • Repeat Customers are Forgiving

      • Loyal customers tend to be more understanding when problems develop.

    source: Susan Keaveney, Denver Business Journal, 4/8/02

    Why Retain Customers?

    • Improved Morale and Productivity

      • Employees will be more satisfied, and in turn more productive.

    source: www.marketingprofs.com, viewed 10/23/02

    CRM Spending

    CRM Spending: Current / Future

    (1) Source: Aberdeen Group, July 2002

    CRM Spending by Industry

    2002 Spending

    • Manufacturing$ 1.7 billion

    • Financial Services $ 1.4 billion

    • Retail and Distribution $ .95 billion

    • Business Services$ .78 billion

    • Government and Education$ .58 billion

    (1) Source: Aberdeen Group, July 2002

    Suppliers of CRM

    • Leading CRM Suite Suppliers

      • Oracle

      • PeopleSoft

      • SAP

      • Siebel

    • Small to Medium Enterprise Supplier

      • Front Range Solutions

    Source:Patricia Seybold Group, An Executive's Guide to CRM, 3/2002, p. 11

    Giga slide

    Source: Giga Information Group, YEA presentation, 3/02


    • Over $9.4 billion annual revenue

    • World’s largest information software provider

    • Strong in ERP market

    Source: 2002 CRM Solutions Guide, June, 2002, www.crmguru.com, viewed November 1, 2002


    • $2 billion annual revenue

    • ERP and CRM provider

    • CRM suite of over 22 products

    Source: 2002 CRM Solutions Guide, June, 2002, www.crmguru.com, viewed November 1, 2002


    • $2 billion annual revenue

    • International business software provider

    • ERP and CRM provider


    • $1.7 billion annual revenue

    • Leader in High-end CRM market

    • Leads industry in specific application suites


    Small-Medium Enterprise CRMsolution

    • Pioneered Sales Force Automation

  • Goldmine Front Office

    • Sales Force Automation

  • Heat

    • Customer Service

  • CustomerIQ

    • Web-based CRM

  • Case Study - Motoman

    CRM Solution – Clarify CRM Suite

    General Purpose

    World Solutions

    Clean Room


    Motoman, Inc.

    • Headquartered in West Carrollton, OH.

    • 420 Employees

    • Annual Sales of $115M in North America

    • 30-40 different types of Robots

    • Customers – Concentration on integrators with specific market capabilities.

    Gary Pope – Director of IT; Motoman, Inc. phone interview 23 Oct 2002

    Motoman continued…

    • Gary Pope – Director of IS

      • Responsible for IS, telecommunications, security systems.

      • Reports to the CFO

      • CFO Reports to the CEO

      • No IT outsourcing whatsoever.

    Annual Budget

    • IT Annual Budget

      • Expenses: $2.4M

        • Of that $1M of that is capital depreciation

        • $700k: Manpower related – salaries, insurance, etc.

      • Capital: $500k

    Case Study: Motoman

    IT Staff

    • 10 people

      • Including Gary Pope, the Director of IS

      • 3 Programmers (at time of installation)

      • 6 individuals to provide desktop support, telecommunications, network.

    Case Study: Motoman

    Reasons for CRM

    • Data security

    • Wanted to more effectively communicate with customer

    • Increase in Productivity/Efficiency

    Case Study: Motoman

    IT’s Role In CRM

    • IT Assisted during evaluation and took lead during implementation.

    • CRM Evaluation Program Leader

      • Determined who Motoman should use, to what extent it should be implemented.

    Case Study: Motoman

    Prospective Vendors

    • After a year of evaluation, it came down to:

      • Siebel, Clarify, PeopleSoft/Vantive, SAP

    • Toss-up between Clarify and PeopleSoft

      • Finally selected Clarify’s CRM Package.

      • Motoman evaluation team made the final decision.

    Case Study: Motoman

    CRM Cost

    • Clarify - $343,000

      • Includes: Software, license for 100 users, Maintenance

    • External Consulting – $250,000,

      • 312 man days, 4 month schedule

        Plus additional $80,000 from Clarify

      • Training for Integrator

    Case Study: Motoman

    Clarify CRM Components

    • Customer Service:

      • Helpdesk

      • ClearSupport: tracks cases

      • ClearLogistics: Field Operations, Depot Repair, Order Operations.

    • Sales Force Automation Tools

      • ClearSales

      • Trip Reports

      • Traveler

    Case Study: Motoman


    • Timeline:

      • Selection process – approx. 1 year.

      • Internal Audit – 6 months

      • February 2001

        • Purchased software, hardware and put out contract for the integration

    • 9 July 2001

      • Customer Service Group go-live date.

    • 1 August 2001

      • Sales Force go-live date.

    Case Study: Motoman


    • Hired an integrator to help install

    • Tried to keep customization low

      • Wanted future software releases to still function.

      • Quicker, cheaper.

    • Some minor items had to be modified within the program.

      • Pull-down menus, options, etc.

    Case Study: Motoman

    Implementation cont…

    • This integrator had never implemented Clarify before.

      • This was known ahead of time.

      • Wanted to have opportunity to learn Clarify.

      • $330k cost incurred to use them.

        • Would have cost an additional $200k-$300k to go with a consultant that had the experience.

    Case Study: Motoman

    Where The Program Falls Short

    • Poor Ongoing Support from Clarify

      • Lack of support due to change of ownership that occurred twice during Motoman’s implementation process.

      • Clarify’s lack of focus on Motoman as a Customer

        • Motoman paid for the system before the first sale of the company occurred.

    • Field Sales force is not synchronizing reliably due to software bug.

      • Lack of development effort to correct synchronization process.

    Case Study: Motoman

    Satisfaction Level

    • From Customer Service view: Very satisfied.

    • Sales Force view: Not satisfied due to synchronization problems.

    • Upper-management: Not satisfied due to fragmented report content.

    Case Study: Motoman

    8 Critical SuccessFactors for Successful CRM Implementation….

    According to the Gartner Group, 60% of companies implementing CRM in 2002 will fail—and that’s expected to rise next year.

    8 Critical Success Factors…

    1. Get Executive support up front

    ◊ Any strategic initiative will need top down support

    ◊ Considerable financial investment

    2. Establish measurable business goals

    ◊ Sounds easy but often overlooked

    ◊ Goals should be measurable

    ◊ Will better define needs

    Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)

    8 Critical Success Factors…

    3. Align Business & IT Operations

    ◊ Requires the partnership of business sponsors and technical personnel.

    4. Let Business Goals Drive Your


    ◊ All configuration decisions need to be based on business goals. If a feature doesn’t directly help your business goal, you probably don’t need it.

    Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)

    8 Critical Success Factors…

    5.Minimize customization

    ◊ Number one reason for budget overruns and missed deadlines.

    ◊ Seek out-of-box functionality that fits your needs.

    6.Actively involve end users in design

    Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)

    8 Critical Success Factors…

    7.Use a phased rollout schedule

    ◊ Quicker ROI—get that first win.

    ◊ Apply what you learn to subsequent phases

    ◊ Easier on resources (capital, training, personnel)

    8.Measure, monitor, and track

    ◊ Hard to measure without clear objectives

    ◊ Survey customers

    ◊ Share feedback with stakeholders

    Steve Mankoff, Senior VP, Seibel Systems “10 Critical Success Factors for CRM” (8/01)

    CRM is about being customer centric, using technology to enable that strategy, with the goals of growing your business, cutting costs, and/or gaining a business advantage

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