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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

Customer relationship management

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

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





Customer relationship management















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

    Customer relationship management

    • $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

    Customer relationship management

    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

    8 critical success factors for successful crm implementation
    8 Critical SuccessFactors for Successful CRM Implementation….

    Customer relationship management

    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… implementing CRM in 2002 will fail—and that’s expected to rise next year.

    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… implementing CRM in 2002 will fail—and that’s expected to rise next year.

    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… implementing CRM in 2002 will fail—and that’s expected to rise next year.

    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… implementing CRM in 2002 will fail—and that’s expected to rise next year.

    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)

    Customer relationship management

    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