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Building Customer Relationships

Building Customer Relationships. Dallas. Brad Ball Senior Customer Relationship Manager Corporate Global Marketing & Communications Hewlett-Packard Company Palo Alto, California. HP Company Overview - 1961-today. Net revenue $88 million Net earnings: $6 million Fortune 500: #460

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Building Customer Relationships

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  1. Building Customer Relationships Dallas Brad BallSenior Customer Relationship ManagerCorporate Global Marketing & Communications Hewlett-Packard Company Palo Alto, California

  2. HP Company Overview - 1961-today • Net revenue $88 million • Net earnings: $6 million • Fortune 500: #460 • Number of products: 400 • Employment 5,040 • Global presence 50 countries • $47.1 billion • $2.9 billion • #13 • 36,000 • 124,600 • 120 countries • Split: Agilent Technologies & HP • New CEO: Carly Fiorina

  3. “Many people believe we have entered the age of the internet. Actually, it’s more accurate to say that we’re living in the age of the customer”(Anne Busquet, President, American Express Relationship Services)

  4. Because…. it’s a dog eat dog world…. ….and (we all are) wearing milk bone underwear. (Source: Norm, Cheers) Why do we now care so much about Customers?

  5. Objectives of any business GET customers GROW customers KEEP customers

  6. Virtual & Extended Virtual Enterprise Suppliers Customers Core Competence Partners Employees But Businesses are Transitioning to Virtual Enterprises Monolithic (or vertically IntegratedEnterprise Model) Channels of Distribution Services Products

  7. The Whole Customer Experience Meeting Customer Needs 1.Choosing "Complete Solutions that increase productivity and throughput" 7.Disposing 2.Ordering ”Upgradability” ”Available when I need it" 6.Supporting 3. Installing "Fast Repair ”Out-of-the-box experience" "Quality --doesn't break and increases throughput" 4.Learning 5.Using "Easy-to-use documentation and training" Phases of the Customer Lifecycle

  8. Why Use Loyalty Information Strategically? Three areas of focus: Reduce customer defections by eliminating dissatisfiers Strengthen the loyalty of current customers by improving value Acquire new customers from competitors by capitalizing on competitor’s weakness Your Customers A Loyal Favorable Vulnerable Alienated B improve loyalty B A C reduce defection increase acquisition C Alienated Vulnerable Favorable Loyal Competitor Customers

  9. Repurchase & Share of Wallet Intent to Repurchase Profit Market Share Revenue CustomerLoyalty Why is Customer Loyalty Important? Some facts about customer retention: • 5% improvement in retention rates will increase profits by 25%- 85% • high selling costs are a symptom of low retention rates • dissatisfied customers tell 8-10 people (or more!) • most companies hear complaints from only 4% of dissatisfied customers

  10. HP’s Vision for Capturing the Whole Customer Experience Customer Loyalty Customer Relationship Mgmt Data-Enabled Business Processes Customer Data Collection Universal Customer Identification

  11. Why is customer intimacy important to IS? • IS is moving from a cost based organization to a value added organization • Loyalty metrics provide the funding model for future projects

  12. Why is customer intimacy important to Marketing? Better customer loyalty Higher customer satisfaction Higher share of customer Increase revenues from existing customers (cross-sell, up-sell) Reduce costs in sales, marketing, customer service(relief from margin erosion)

  13. Customer Relationship Development Brand Web Individual Customer Sales Service

  14. Customer Relationship Marketing Website Call Centers Customer Information Management Channel Partners Sales Reps

  15. Customer Relationship Marketing is a logical extension of providing customer centricsolutions to create value and increase profitability through customer loyalty

  16. A profession no less a craft, is shaped by its tools. The profession of marketing, its theories, its practices and even the sciences that it draws on are determined by the tools at its disposal at any moment. When tools change, the discipline adjusts , sometimes quite profoundly and usually quite belatedly.”(John Deighton, Associate Professor of Marketing Harvard, HBR 11/12-96)

  17. New Marketing Tools/Applications • Datamining • Datawarehousing/marts • OLAP tools • Relational databases • CRM/eCRM • E-commerce • E-business • E-focus groups • Internet surveys • etc.

  18. The Digital Economy is anEvolutionary Extension of the IndustrialAge However different yet similar rules apply….. The net Channel

  19. On-line you don’t differentiate yourself by what you sell…… • You have to differentiate yourself by HOW you sell-by the experiences that you create around finding, trying and purchasing. • (Jeffrey Rayport, Harvard Business School)

  20. Currently 28%, which is up significantly from 15% during the first quarter of ‘99 Source: Zona Research 8/30/99 What Percentage of Marketing Executives are responsible for formulating and directing e-commerce strategies?

  21. Communication Transaction Interaction E-Services Generation Revenue Enterprises Virtual Improvements E-Business Operational E-Commerce Cost Reductions Home Pages E-Mail Internet Evolution People & Services Processes Business Evolution Information Technology Evolution • Security • Reliability • Portals • XML • Emerging Internet Industry • TCPIP & Web • Browsers • IP Technology • HTML • IP Telephony • High speed Networking • Broadband • Interoperability Software • Ubiquitous Access Tools

  22. The Customer Intimacy Application Architecture Operational Business Operations Mgmt. Analytical Business Performance Mgmt. Data Warehouse ERP/ERM Supply Chain Mgmt. Legacy Systems Back Office Order Mgmt. Order Promising Customer Activity Data Mart Customer Data Mart Product Data Mart FrontOffice Customer Service Marketing Automation Sales Automation Closed Looped Mobile Sales (Product CFG) Field Service Vertical Apps MarketingAutomation Mobile Office Category Mgmt. Campaign Mgmt. Voice (IVR, CTI, ACD) Conferencing Mail Portal/ Extranet Direct Interaction Customer Interaction Web Conference E-Resp. Mgmt. Collaborative Business Collaboration Mgmt. Source: Meta Group

  23. The Customer Intimacy Business System The “usual” business focus

  24. Tips on Achieving Customer Intimacy IS is the engine that drives successful initiatives It is not the IS dept’s job to think & dream up the organizations systems to connect them to the customer.(Regis McKeena) Implement marketing tech. projects in small pieces(Mary Kelley, Schwab) Make sure Marketing and IS share the same strategy/mission(Jon Noredeen, CIO, Spiegel) Everyone becomes a Marketer

  25. Some Final Words (of Wisdom?) • Technology is ensuring that whatever the B2B or B2C model used, it will have to cater to customer needs explicitly and energetically. • It’s amazing: marketing technology has come all this way to finally get back to the basics(of marketing). • (Source: Bob Donath, Bob Donath & Co.)

  26. And Finally…... • Companies that figure out how to leverage IS to build loyal, lasting relationships with customers will be tomorrow’s winners! • (Source: Jennifer Bresnahan, CIO Magazine)

  27. Any comments, agree, disagree, let me know... Bradley_Ball@HP.com

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