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Customer Relationship Management (CRM). Scott Hopper Monica Brooks Jessica Jetton. Case Studies: United Parcel Service (UPS) Royal Bank of Canada (RBC) Financial Group. Agenda. CRM Background & Industry Information CRM In Action: Case Studies United Parcel Service (UPS)

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Scott Hopper Monica Brooks Jessica Jetton


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    1. Customer Relationship Management (CRM) Scott Hopper Monica Brooks Jessica Jetton Case Studies: United Parcel Service (UPS) Royal Bank of Canada (RBC) Financial Group

    2. Agenda • CRM Background & Industry Information • CRM In Action: Case Studies • United Parcel Service (UPS) • Royal Bank of Canada (RBC) Financial Group • Lessons Learned

    3. Presentation Focus • Present overview information on Customer Relationship Management (CRM) and its impact on the way people conduct business • Discuss real-life CRM implementations • Discuss Successes • Discuss Areas of Opportunity for Improvement • Discuss industry leading CRM best practices

    4. “CRM, or Customer Relationship Management is a company wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty.” What Is CRM? “At its core, CRM is a simple, intuitively appealing concept: attract new customers, know them well, give them outstanding service, and anticipate their wants and needs.” Source: Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., “Realizing Business Benefits Through CRM: Hitting the Right Target in the Right Way” MIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94. www.destinationcrm.com/articles/, “What is CRM?”, viewed October 12th, 2004.

    5. History • Mass Marketing • All customers treated as if they had same needs and preferences • Target Marketing • Focused on market segments • Relationship Marketing • Each customer’s individual needs are targeted by building relationships Source: Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., “Realizing Business Benefits Through CRM: Hitting the Right Target in the Right Way” MIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94.

    6. What Does CRM Do? • Sales • Up-sell and cross sell products more effectively • Help sales staff close deals faster • Marketing • Simplify marketing and sales processes • Discover new customers • Customer Service • Provide better customer service • Make call centers more efficient

    7. Why Use CRM?

    8. Goals • Make it easy for customers to do business • Focus on the end customer • Redesign front office and examine information flows between the front and back office • Foster customer loyalty by becoming proactive with customers • Build in measurable checks and balances to continuously improve Source: Chen, Injazz J., and Popovich, Karen, “Understanding customer relationship management (CRM) People, process and technology” Business Process Management Journal, Vol. 9, 5, 2003; ABI/INFORM Global, pages 672-688.

    9. Who Uses CRM? “One survey of more than 1,500 companies by The Data Warehousing Institute (TDWI) in 2000 found that 91 percent either have or plan to deploy a CRM solution in the near future.” “78 percent of companies said they were using some form of CRM” Bain & Company survey of 708 corporate executives 2002 Source: Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., “Realizing Business Benefits Through CRM: Hitting the Right Target in the Right Way” MIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94. www2.cio.com/metrics/2003/metric544.html, “The Right Tool”, viewed November 1st, 2004.

    10. Who uses CRM? • Cingular Wireless • Improved sales productivity by providing a comprehensive view of the customer, improving lead generation, and providing a full-functional wireless solution to sales force. • Honeywell • Improved customer service by increasing after-market spare parts revenue by 100%, improving service request closure rate from 45% to 83%, and improved customer satisfaction by 38%. • DHL • “By providing a transparent view of the customer, Siebel will help DHL to achieve an estimated 1% increase in revenue by the end of 2005” –Ulrik Topp Global Sales Development Director DHL Source: www.siebel.com, customer case studies, viewed 11/9/04

    11. CRM Budget Change for 2003 Companies surveyed by Aberdeen Group in January 2003 Source: Aberdeen Group, “CRM Spending and Satisfaction Report”, February 2003, pages 1-18.

    12. CRM Market “AMR Research estimates that the Customer Relationship Management (CRM) market will grow to $10.8B in 2004, a $1B leap from 2003.” Source: Preslan, Laura, “Investment Priorities for CRM in 2004”, AMR Research, Thursday, Jan. 8, 2004.

    13. CRM Market Source: Aberdeen Group, “Worldwide CRM Spending”, Market Analysis Service, June 2003, pages 1-57.

    14. CRM Spending by Region Source: Aberdeen Group, “Worldwide CRM Spending”, Market Analysis Service, June 2003, pages 1-57.

    15. US CRM Spending by Industry Source: Aberdeen Group, “Worldwide CRM Spending”, Market Analysis Service, June 2003, pages 1-57.

    16. Reasons for CRM’s Increased Popularity • Easier to retain customers than attract new customers • CRM has become more affordable and the technology is more advanced • The definition of CRM is being expanded to include initiatives like loyalty programs Source: www2.cio.com/metrics/2003/metric544.html, “The Right Tool”, viewed November 1st, 2004.

    17. CRM Software Leaders

    18. Top CRM Software Suppliers in 2002 • Siebel – 21.6% • SAP – 12.4% • Oracle – 5.7% • PeopleSoft – 4.9% • Peregrine Systems – 3.0% • Others – 52.4% Source: Aberdeen Group, “Worldwide CRM Spending”, Market Analysis Service, June 2003, pages 1-57.

    19. Siebel • Market Cap - $4.86B • Revenue - $1.31B • NASDAQ: SEBL - $9.56 (11-13-04) • 5000 employees • Founded: 1993 • 2.8 million employees at more than 4,000 organizations use Siebel products • Siebel Systems is the world’s leading provider of customer relationship management (CRM) solutions and a leading provider of applications for business intelligence and standards-based integration. Source: www.siebel.com, viewed 11/9/04

    20. SAP • Market Cap - $56.32B • Revenue - $9.28B • NYSE: SAP - $45.23 (11-13-04) • 30,942 employees • Founded: 1972 • “mySAP Customer Relationship Management is the only CRM solution that connects your employees, partners, processes, and technology in a closed-loop customer interaction cycle.” Source: www.sap.com, viewed 11/9/04

    21. Oracle • Market Cap – 68.67B • Revenue – 10.30B • NASDAQ: ORCL – 13.39 (11-13-04) • 41,658 employees • Founded: 1977 • “Oracle's integrated CRM applications give you information-driven sales, service, and marketing because they're built on an open, standards-based architecture that streamlines business processes, improves data quality, and allows all your key divisions to draw from the same source of data.” Source: www.oracle.com, viewed 11/9/04

    22. Benefits Summary CRM creates value through three key levers: • Acquire – increase number of profitable customers • Develop – increase profit from existing customers • Retain – extend duration of customer relationship

    23. Existing Customers #1 Priority • Cheaper to retain customers than to add new customers • Retain customers mean sales volumes increase per customer • Up-sell and cross-sell “It costs about five times more to gain a customer than to keep one. And it is estimated to cost 10 times more to get customers back if they are dissatisfied.” Source: Massnick, Forler, “Customer Service Can Kill You...” Management Review, Mar 1997; 86, 3; ABI/INFORM Global pages 33-35.

    24. Difficult to Acquire New Customers Annual Credit Card Acquisition Mail Volume (in Billions) Percent Response to Credit Card Direct Mail Offers Source: BAI Global, Inc., Mail Monitor, $Q’02, Synovate.

    25. Keys to Success • Top Management Commitment • Project Teams with representatives from all departments • Project Champion • Company data must be shared enterprise-wide • Vision and communication

    26. Reasons for Failure • Not understanding the needs of the end user • Considered an IT project rather than a business strategy • Accessibility - Not training users to effectively use the solution • Inability to integrate different data sources in to a single system • Understanding expectations

    27. Success and Failure Rate of CRM Projects “Some 80% of the responding marketing, customer-service and sales execs at 96 companies characterize their organizations’ CRM efforts as very successful or somewhat successful.” “Fifty-five percent of all customer relationship management (CRM) programs fail, according to Stamford, Conn.-based Gartner Inc.” Source: Yu, Larry, “Successful Customer-Relationship Management” MIT Sloan Management Review, Vol. 42, No. 4, pp18-19. Melymuka, Kathleen, “You Can Avoid CRM’s Pitfalls” Computerworld, Feb 11, 2002; 36, 7; ABI/INFORM, page 30.

    28. CRM In Action: Case Studies United Parcel Service (UPS)

    29. UPS • World’s Largest Package Delivery Company • Leading global provider of specialized transportation and logistics services • Founded in 1907 in Washington • $33.5 billion in revenue in 2003 • 357,000 employees worldwide Source: http://www.ups.com/content/us/en/about/history/index.html, viewed 10/28/04

    30. UPS Products and Services • SonicAir • Next Day Air • 2nd Day Air • 3 Day Select • Ground • Worldwide Express • Worldwide Expedited • Standard to Canada Source: http://ups.com/content/us/en/resources/select/index.html , viewed 10/28/04

    31. UPS IT Environment • Kenneth W Lacy- Senior Vice President and CIO • $1 billion a year on technology infrastructure • 4,700 technology employees • 14 mainframes, 6100 servers, 120000 PCs • 115 million hits and 9.1 million tracking requests per business day Source: http://ups.com/content/us/en/about/facts/technology.html, viewed 10/28

    32. UPS Technology Awards • Winters Corp. 2003 Top Ten Grand Prize Winner • Computerworld 100 Best Places to Work in IT, 2003 • CIO 20/20 Vision Award, 2002 • CIO 100 Enterprise Integration Award, 2002 • Computerworld Premier 100 IT Leaders, 2002 Source: http://.ups.com/pressroom/us/awards/ecommerce

    33. UPS Financial Performance Source: http://finance.yahoo.com/q?s=UPS, viewed 11/3/04/

    34. UPS TEAMS - Seibel Implementation • Next generation in UPS sales force automation • Total enterprise account management system • Provides integrated tools to help the sales force do the job more effectively and efficiently • Supports opportunity and account management with increased capabilities for planning and documenting sales calls Source: UPS, Overview of UPS TEAMS, 2004

    35. Why UPS Changed from Link to Teams • UPS deployed Link in 1999- technology has improved dramatically since then • TEAMS can be used across the entire UPS sales enterprise • Future phases of TEAMS will have increased flexibility to enable UPS to integrate the core UPS sales force with the sales forces from other business units in order to establish one coordinated sales effort • TEAMS has the flexibility to support enhancements such as wireless capability Source: UPS, Overview of UPS TEAMS, 2004

    36. UPS Sales Enterprise Domestic and International Core UPS Additional Business Units UPS Sales Enterprise

    37. Other Sales Business Units E-Commerce Supply Chain Solutions UPS Capital Other Sales Business Units

    38. Interacted with Michael Carey, Project Manager CRM Technology, October 14,2004 Time and Budget Challenges Advantages Lessons Learned UPS TEAMS

    39. Time and Budget • Project was on time and on budget- not at liberty to share the specific budget • Beta Test in Central Pennsylvania, Sweden and Austria, May 2004 • Project Roll Out: June 15th – September 17th, 2004 for US, Sweden and Austria employees • Future releases will cover additional countries and the rest of the UPS sales force (i.e. E-Commerce, Supply Chain Solutions, UPS Professional Services, etc.)

    40. Challenges • Aligning the arrival of new Laptops, new Sales Applications, new Operating System, new wireless cards, and new training documents • Seibel Application Training • Coordinating the trainers • Gathering the right training resources (e.g. ability to speak multiple languages, etc.) • Scheduling employees for training classes

    41. Advantages of UPS TEAMS • Home Page • Calendar • Opportunities • Queries • Data Synchronization • Team Selling

    42. Advantages of UPS TEAMS • Home Page • Quick look at daily calendar, Slim leads and opportunities • Helps prioritize the sales person’s time and keep the focus on accounts that need attention Source: UPS, Overview of UPS TEAMS, 2004

    43. Advantages of UPS TEAMS • Calendar • Automatically integrated with activities • Immediately populates events such as adding and/or updating activities, eliminating dual entry Source: UPS, Overview of UPS TEAMS, 2004

    44. Advantages to UPS TEAMS • Opportunities • Provides flexibility to create a single product opportunity or a multi-product (portfolio) opportunity • Provides the ability to link an opportunity to more than one marketing initiative Source: UPS, Overview of UPS TEAMS, 2004

    45. Advantages of UPS TEAMS • Queries • Query Assistant allows for filtering data quickly and easily • Provides capabilities for pre-defined queries and personalized queries Source: UPS, Overview of UPS TEAMS, 2004