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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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c ustomer r elationship m anagement
Customer Relationship Management

Prepared by: Larry Eisenberg

Ron Fogarty

Doug Marren

objective of customer relationship management crm presentation
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
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

2 part answer
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
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
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
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
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
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
  • 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
Ex: Soffront SFA

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

campaign management with crm
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: 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
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 cont1
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
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 customers1
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 customers2
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 customers3
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 customers4
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 customers5
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 customers6
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 current future
CRM Spending: Current / Future

(1) Source: Aberdeen Group, July 2002

crm spending by industry
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
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
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

Case Study - Motoman

CRM Solution – Clarify CRM Suite


General Purpose

World Solutions

Clean Room

motoman inc
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
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
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
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
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’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
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
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
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
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
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
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

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
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 factors1
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 factors2
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 factors3
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