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How BI and CRM
Can Work for you
Sheryl Kingstone, Program Manager,
CRM Strategies,
The Yankee Group
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Agenda
 The State of Traditional CRM
 Customer Centric CRM--Rethinking
CRM From the Outside
 Conclusions and
Recommendations
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Businesses Initiate CRM Projects
for a Variety of Reasons
 The essence of customer relationship
management is to balance the following desires:
• Increase revenue through differentiated products and
•
•
services
Decrease sales, marketing and service costs through
better execution
Enhance the customer experience for improved loyalty
 Many CRM implementations have done very little
to meet the top goals and objectives of the many
businesses
 Effective implementations of CRM are critical to
the success of just about every company
 Customers, after all, are any company’s most
important asset
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Technology Executives Are Realigning IT
Resources Accordingly…
2004 Versus 2003 IT Budget Allocation: Enterprise are
allocating more IT spending to edges of the enterprise at the
expense of foundational, core and other internally facing
technologies.
2.00%
1.63%
1.50%
1.00%
0.50%
Foundation
Core
Other
Edge
0.00%
-0.50%
-0.38%
-1.00%
-1.50%
-1.13%
-1.53%
-2.00%
Source: The Yankee Group 2003 Edge of the Enterprise Survey
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The State of the CRM in Organizations
CRM remains important, but current initiatives are
being reevaluated and alternative approaches are
being considered more seriously
Priority to be more customer centric and
understanding behavior and needs is leading to fewer
failures around many CRM projects, but
disillusionment remains
Leveraging and integrating existing IT investments
and focusing on more digestible projects and
implementations
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The Shortcomings of Traditional CRM:
Too much M and not enough C and R
Customer: Internally focused deployments
in silos are not customer-centric
Relationship: Limited customer-centric
processes and in-context information didn’t
enhance the relationship or improve loyalty
Management: Only management-level
employees can leverage operational data
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Traditional CRM Implementations do
Little to Improve the Quality of Customer
Care
 Businesses that do not prioritize customer centricity as a
necessary initiative will see a negative impact on
corporate performance
• high customer churn
• low customer satisfaction
• plummeting employee moral
• decrease in market share
• increase in cost through fragmented business processes
 Happy customers buy more than unhappy ones and they
do so for a much longer period of time
 Unhappy customers cannot only decrease future wallet
share, but also inhibit the growth for potential new
customers
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Marketing and Analytics Are
Critical for Customer-Centric CRM
Past
Siloed applications for
sales and service
Tactical marketing
automation
Disconnected
campaign activity
Basic personalization
Query-driven analysis
Current or historical
reporting
Departmental CRM
Present
Semi-integrated
enterprise
application
Data-driven
marketing
360-degree view of
operational customer
data
Analytical-based
decisioning
Combining current
with historical
Operational CRM
Future
Near real-time blended
enterprise
Role/contextual driven
interactions
Dynamic navigation
and content based on
analytic infrastructure
Predictive and proactive notification
Quantitative and
qualitative real-time
decisioning
Customer Centric CRM
Customer-Centric CRM requires all business processes throughout the
extended enterprise be optimized around customer lifecycle care
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Delivering on Customer-Centric CRM
 Shift focus from internal fragmented processes
towards a seamless 360-degree view of
customer-facing processes aligned with every
customer, partner and employee
 Leverage customer data for differentiation to
improve customer satisfaction, retention, loyalty
and corporate performance
 Integrate CRM metrics and key performance
indicators into an overarching customer strategy
to optimize business processes and make better
decisions on both a tactical and strategic level
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A Natural Extension of CRM Initiatives
 Many enterprises value their CRM initiatives but don’t
understand how to maximize the value of their CRM
investments.
• More than 75% of enterprises have a CRM strategy as well as
•
the necessary data for a 360-degree view of the customer
CLC builds upon current CRM initiatives by delivering high value
information across the customer relationship lifecycle using the
360-degree view
 Customer-centric companies use every customer
touch-point to stimulate interest, close business,
satisfy a need or demonstrate commitment to the
relationship. It ensures that every customer contact
produces value.
• Improve revenue by targeting customers specific desires and
•
•
increasing customer wallet share
Reduce costs through more efficient and effective execution
since not all customers are created equal
Enhance the customer experience by providing differentiated
products and services
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The Driver of Business Intelligence
& Analytics
 Significant investments in operational systems have
delivered value primarily through automation and
efficiency
 Focus shifting toward gaining insight from those
systems
 Explosive growth in data volumes and data source
proliferation
 Insight and predictive analytics necessary to derive
next level of value from these investments
 Maximum value created by implementing insight and
predictive directly into business processes
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Stages of Analytics
4.
Dynamic
3.
Performance
2.
Exploratory
1.
Transactional


Query-based
Reports
Flat data with point
in time information,
inventory status
and revenue
breakdown

OLAP

Historically “what if”
analysis based on
multiple dimensions?

Analytical

What do I do next
based on known
facts and various
recommended
options?

Predictive

What do I do now
based on pervasive
real-time data?
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Effectiveness of Data Warehousing
and & Analytics
Impact of Data Warehousing and Analytics
Negative Impact
11%
Very Little
Impact
11%
Positive Impact
32%
Biggest Bang
for the Buck
14%
Very Positive
Impact
32%
Biggest KPI Impact
Improve
Customer
Retention
17%
None of
these
8%
Increase
New Sales
14%
Improve Win
Rate
11%
Improve
Customer
Profitability
10%
Improve
Decision
Making
26%
Increased
Deal Size
14%
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The Good: We Have the Data
and Analysis
The majority have the necessary data and
ability to analyze the information ……….
Customer
Satisfaction
Has some or
none of the
information
15%
82%
Customer
Retention
73%
Customer
Segmentation
Customer Lifetime
Value
Has most or all
of the
information
85%
70%
63%
Customer
Profitability
61%
Cross Sell
Opportunities
60%
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The Bad: Companies Have Data, but
Lack Actionable Information
The larger the organization, the more data and analysis is
being leveraged. Manufacturing organizations were less
advanced than other verticals such as banking and
telecommunications.
87%
Name
86%
85%
80%
Services
79%
Call History
77%
50%
Past Channel Use
41%
37%
Customer Lifetime Value
29%
24%
Customer Profitability
19%
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The Ugly:Critical Data Still Locked away
Investments in the 360-degree view have
not increased efficiency
We still have too many
places to find information
We cannot efficiently get the
right information at the right
time
Very efficiently
28%
Not a Challenge
36%
Challenge
64%
Somewhat to
not at all
efficient
72%
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Analytics Powers Customer-Centric CRM
 Smart businesses understand that the
only way to offer profitable,
differentiated services and products is to
better understand their customers
 By gaining insight into both individual
customers and target market segments,
these companies can boost sales and
optimize business performance
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Analytics and Business Intelligence
Increases Sales and Profitability
 Improve pipeline visibility and
forecast accuracy
 Align sales personnel and
resources with largest potential
opportunities
 Enable fact-based selling
 Optimize product and pricing mix
 Match optimal product/offer to
customer segment or individual
customer
 Maximize share of wallet with
real-time information and
recommendations
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Increase Marketing Effectiveness and
ROI
 Tailor marketing offers based on
projected customer value to expand
future revenues
 Identify product and market
opportunities
 Increase the lifetime value of your most
important customers
 Identify high potential customer
segments or groups
 Deliver dynamic, real-time offers based
on customer behavior
 Measure and improve lead to sales
acceptance & closure
 Measure campaign effectiveness based
on true success metrics
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Retain and Maximize Value of
Existing Customers
 Achieve operational efficiency by
managing to key service performance
metrics
 Increase customer loyalty and lifetime
value by tailoring service levels
 Track customer satisfaction by product,
segment and cost to serve
 Increase customer satisfaction and
decrease costs by predicting service
issues
 Maximize installed base revenues through
identification & intervention of customers
about to churn
 Turn service calls into sales opportunities
through enhanced cross-selling
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SAP CRM 4.0 Come of Age for CRM
 SAP Sales
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SAP CRM 4.0 Come of Age for CRM
 SAP Marketing
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SAP CRM 4.0 Come of Age for CRM
 SAP Customer Interaction Center
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SAP Summary
 SWOT Summary
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Technology, Data and Processes
Create the Foundation
Technology
Foundation
Actionable
Insight
•Customer-facing
•Seamless beyond
corporate
boundaries
•Rea- time
analytics
Quality
Data
•Value-added
information
•Consistent
Process
Efficiency
Profit
&
Competitive
Advantage
•Real-time across
all channels
Performance
Effectiveness
People/Process
•KPI’s and metrics aligned
w/corporate goals
•Differentiated products and
services
•Seamless processes
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True 360° View of Customer Interactions Cross
Receive
Channel, in Real-Time
Marketing Promotion
Service
Inquiry
Browse Site,
Request
Information
Sales Rep
Contact
Re-order
Online
Track Order
Shipment
Receive Notification
of Fulfilled Order
In-Person
Meeting
Approve Quote,
Place Order
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Success Demands Integrated Insight
 Without integration across corporate and
departmental boundaries, business can’t
answer these questions:
•
•
•
•
•
Which prospects look like my most profitable
customers?
Which promotions produced the most qualified
leads?
Which products are the most profitable over 3-5
years?
Which customers are likely to respond to which new
product offering?
What product and service mix will increase customer
satisfaction and reduce churn?
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Case Study—Real Time Visibility
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Case Study—An Optimized Process
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Case Study—Focus on Customer Experience
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Recommendations
 Dialogue is not simply more effective automation and
integration of basic analytics and marketing campaign
processes.
•
Effective dialogue must incorporate some planned
campaign activity as a starting point and more situational
sequences of messages. Each interaction contributes to a
more dynamic customer profile and a more productive set
of subsequent interactions.
 Meticulous data-management technology and
processes is critical to success.
•
The famous line “garbage in, garbage out” fits perfectly. It
is critical to ensure the integrated view of the customer is
not only consistent across the entire organization.
 Closed-loop programs are critical to reduce marketing
waste, but only deliver “short term” ROI.
•
•
Even the most impressive closed-looped marketing ROI
figures do not guarantee long- term business success.
Understanding revenue growth and market position
requires long term analysis of brand balanced against
acquisition and retention.
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Recommendations
 Enterprises must put an end to business as usual and
optimize the CRM investment around the customer
lifecycle.
•
Customer-centric CRM optimizes the customer
experience across sales, marketing and service
interactions. With effective CRM, customer relationships
can be appropriately managed to maximize revenue and
lifespan while keeping operational costs low.
 Sales must create strategic account plans across all
departments based on customer-facing qualitative
and quantitative metrics that can be analyzed against
corporate goals.
•
In a customer-centric company, the sales department is
aligned with strategic customers and prospects. The
tools maximize sales efficiency (such as ease of use and
integrated productivity tools) as well as sales
effectiveness tools that help guide and optimize each
interaction.
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Recommendations
 Marketing must have real-time analysis for creating a
profitable and enhanced customer experience both
online and through assisted channels such as contact
center.
•
Marketing needs to incorporate a combination of planned
campaign activity as a start, and more situational
sequences of messages where greater understanding of
the customer is achieved through channel- and contextspecific interactions to optimize any cross-sell
opportunities.
 Service must deliver higher customer satisfaction at a
lower cost by improving agent productivity and
effectiveness.
•
It’s critical to provide guidance and in-context
information not only through improved customer selfservice, but also through assisted service channels such
as customer service representatives. Customers and the
employees need to get at the right information at the
right time to maximize the profitability of each
interaction.
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Thank You!
Sheryl Kingstone, Program Manager, CRM Strategies
skingstone@yankeegroup.com