CRM
Customer Relationship Management
Rich DuBose, Arnold Kelly,
Mellisa Thom and Ben Wylie
Outline

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
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
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

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
General elements of CRM
Spending and trends
CRM ROI
Why some company succeed and others fail at CRM
Industry uses
12 key applications
Top 5 providers of CRM
Mini case studies - Square D and Graybar
Argosy Gaming case study
Don’ts of CRM
Best practices
CRM Defined

“CRM is a technology-enabled business
strategy whereby companies leverage
increased customer knowledge to build
(1)
profitable relationships.”

CRM is first and foremost a business
strategy, not merely a software package.
(1) A Strategic Framework for CRM, by Patrick Sue and Paul Morin. February 2001
Functional Elements of CRM
Sales
Marketing
• Market Research
• Product Development
• Market Assessment
• Market & Customer
Segmentation
• Sales Automation and
Management
• Customer Profiling
• Account Management
• Opportunity Management
• Product Lifecycle
Management
• Product, Price, and
Contract Negotiation
• Product Pricing and
Profitability
• Sales Alignment and
Incentives
Customer Service
• Customer Inquiry
• Customer product
support
• Customer Information
Management
• Call Center
Effectiveness
• Trouble Analysis &
Resolution
• Billing
Customer Relationship Management Solutions
• Data Warehouse Management and Decision Support
• Integrated Customer Management Systems
Marketing Functionality

"Half the money I spend on advertising is wasted; the
trouble is I don't know which half." John
Wanamaker, the department store pioneer, stated in
1886

A CRM can greatly enhance a company’s marketing
efforts in the areas of :






Market research
Price planning
Product development
Market assessment
Customer segmentation
Product lifecycle
Marketing Functionality Cont...

Example: Hewlett-Packard



Previously, HP sent out mass emails to update
customers on sales offers, new products, technical
support, etc.
After implementing a CRM, these efforts become
much more customers specific
85% of customers said they were satisfied with the
content of the emails and additional revenue
increase by $15M
Sales Functionality

Common functions implemented:
 Provide the sales force with detailed and current
information, such as:
 Buying preferences
 Pricing
 Inventory levels
 Billing information
 Automate the sales processing activities (SFA).
Sales Functionality Cont...

Example: Empire Blue Cross and Blue Shield
 Extremely complex and highly manual sales
process
 33 redundant audit checks and took approximately
27 days
 On-line quote system developed
 Sales processing steps streamlined and automated
Service Functionality


CRM can be used to capture such things as:
 Customer’s complaint history
 Outstanding customer services requests
 Billing information
 Customer preferences
 Tracking unresolved issues
Service representatives are much more prepared to
service their customers
Service Functionality Cont...

Example: Marriott International
 Collect data on customer preferences and
spending
 Data shared by all Marriott Hotels nationwide
 Once you check in they already know your
smoking preference, which floor you prefer, any
allergies, complaint history, whether you drink,
etc.
Enable Enterprise-wide Information Integration
Collecting and integrating data from every point in the organization will allow
customer relationship, life cycle and event information to be analyzed and driven
through the marketing organization to the front-line, enhancing sales and retention.
Sales
Support
Front line
Phone
Branch
Mobile Sales Force
Marketing and Sales
Support
 Customer demographic and
purchased services data.
 Marketing campaign tracking
and offer development
 Customer and profitability
data matched for service
development and pricing
 Attrition data for retention
modeling
 Customer value and preference
information for customized
experience.
Internet
Customer
Enable Enterprise-wide Information Integration
Collecting and integrating data from every point in the organization will allow
customer relationship, life cycle and event information to be analyzed and driven
through the marketing organization to the front-line, enhancing sales and retention.
Sales
Support
Front line
Phone
Branch
Mobile Sales Force
Internet
Back Office Operations
 Customer relationship
information and contact
history available for issue
resolution
 Information gathering
follow-up or alert
messaging to front line
 Rules development for
value-based decisioning
for all product support
Customer
Enable Enterprise-wide Information Integration
Collecting and integrating data from every point in the organization will allow
customer relationship, life cycle and event information to be analyzed and driven
through the marketing organization to the front-line, enhancing sales and retention.
Sales
Support
Front line
Phone
Branch
Mobile Sales Force
Customer
Internet
Customer Touch Points
 Customer relationship data
gathering
 Delivery of customized service
delivery or sales offers
 Customer value information
available for decisions
 Product information and sales
process automation enables
effective targeted sales efforts
 Relationship and contact
information allows sales reps
“know” each customer
Demonstration
Worldwide CRM Spending
30,000,000,000
25,000,000,000
20,000,000,000
15,000,000,000
10,000,000,000
5,000,000,000
2001
2002
2003
2004
2005
Years
Based on report by Aberdeen Group entitled “Worldwide CRM Spending: Forecast and Analysis 2001 - 2005”.
Forces Driving Spending



“Only 7% of global companies have reached mature
CRM deployments, indicating more spending to
come.” (1)
According to Gartner Group “CRM remains one of the
top three, if not number one, business priorities in
2001.”
“The average company loses 20% of their customers
each year and the number is rising.” (2)
(1) Data Warehouse Institute survey. CRM is Anything but Dead CRM Industry. June 2001
(2) Maximizing CRM Performance with Strategic Performance Measurement by James
Brewton
Forces Driving Spending Cont...


“It costs up to 10 times as much to acquire a
new customer as it does to keep an existing
one.”
Reasons growth is not higher:




Hard to prove ROI
Expensive customization
High failure rate
Slow economy has force IT budgets to tighten
Maximizing CRM Performance with Strategic Performance Measurement by James Brewton
Trends in CRM

Mobile CRM (mCRM)



PalmPilots, web phones, and pagers are becoming
less expensive and more widely used
Siebel and Sprint recently signed a join venture
selling wireless CRM
Domestic businesses are expected to spend $74B
on wireless service by 2005
Wireless CRM: Strings Attached by Marc Songini Computer World, November 2001
Trends in CRM Cont...

Netsourcing - Application Services Providers
(ASPs)



ASP work better in smaller organizations - less
customization
CRM applications are the second largest segment
of hosting sales, led only by E-commerce
applications
By 2003, Forrester predicts hosted CRM
applications will account for almost $2.5 billion in
revenue
The Forrester Report by Stacie S. McCullough. December 1999
CRM ROI
Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies
CRM ROI Cont…

Possible Returns
 Up to 10 X’s more costly to generate
revenue from new customer than existing
customer
 5% Increase in retention rate can increase
company profits by 60-100%
 6 X’s more costly to service customer
through a call center than via the internet
 Loyal customer referrals generate business
at little or no cost
Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies”
CRM ROI Cont…
Investments
 Upfront costs
 Takes time
 Need to create measuring metrics
 It is marketing rather than sales
 Switching from product focus to
customer focus

Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies”
Succeeding VS Failing

Keys to Success
Managing the data
 Managing the customer
 Business process before implementation
 All levels must buy in
 Flexibility on the company’s side
 Relationship vs database

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”
Succeeding VS Failing Cont…

CRM Mistakes
Implementing CRM before creating a
customer strategy
 Rolling out CRM before changing your
organization to match
 Assuming that more CRM technology is
better
 Stalking, not wooing, customers

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”
BMC “Learning from Failure”
BMC Software
 Systems-management software
provider
 Based in Texas
 Failed Two Times Before Succeeding

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”
BMC’s Failures
No research
 No top-management involvement
 Software would change culture

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”
BMC’s Successes
Recreated the strategy
 Communicated benefits across the
company
 Changed the culture not just the process

Source: Rigby, Reichheld and Schefter, “Avoid the Four Perils of CRM”
Industry Uses

Airlines


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Banks



AA
Aadvantage Frequent Flyer Program
Barclays
Realize profitability of customers
Car Rental Companies


Enterprise
ECARS System
Source: Swift, “Accelerating Customer Relationships: Using CRM and Relationship Technologies”

Enterprise Computer Assisted Rental System
(Ecars) - introduced in 1992 now supports 1.4
million transactions logged every hour


Locates cars, tracks customer preferences,
measures customer satisfaction ratings
Uses Enterprise Service Quality Index(ESQI)to
measure satisfaction - compensation for
management is tied to results

Enterprise uses its Automated Rental
Management System (ARMS) to allow
insurance companies to access rental
information


Allows agent to book reservations, EFT, and
reporting to support claims processing
Allows electronic monitoring of repair shop
progress
(CIO Magazine - Nov 2000)
Gartner’s 12 Key
Application Components
Gartner’s 12 Key Application Components
Opportunity Management System
(OMS)
 Sales Configuration System (SCS)
 Partner Relationship Management
(PRM)
 Interactive Selling Systems(ISS)

Gartner Nov 2001
Gartner’s 12 Key Application Components
Incentive Compensation Management
 Content Management
 E-Service
 Call Management

Gartner Nov 2001
Gartner’s 12 Key Application Components
Field Service and Dispatch(FS/D)
 Personalization
 Data Mart/Analytical
 Campaign Management System

Gartner Nov 2001
Today, for a B2B CRM application suite, three vendors can deliver features
across all 12 key functionality components: Siebel, Oracle and SAP
•Gartner Nov 2001
Feature ratings are based on the current
shipping versions of the following
vendors' CRM suite offerings:
•Clarify eFrontOffice v.10 by Amdocs
(i.e., an agreement for Amdocs to
purchase Clarify CRM products from
Nortel E-Business is expected to close by
February 2002.)
•E.5, release 5.5 by E.piphany
•Kana iCARE by Kana
•Oracle CRM 11i v.5 by Oracle
•PeopleSoft 8 CRM by PeopleSoft
•SAP CRM 3.0 by SAP
•Siebel 2000 by Siebel Systems
The scores in Figure 1 are based on vendors scoring 1 point for a 1/4 circle rating, 2 points for a
1/2 circle, 3 points for a 3/4 circle and 4 points for a full circle with 48 points equal to 100
percent. In the past year, SAP's scores improved the most, followed by Amdocs/Clarify, Siebel,
PeopleSoft then Oracle (see Figure 2). Today, Gartner estimates that Siebel still provides almost
twice as many features as the next closest competitors; and Siebel remains the only vendor to
meet more than 50 percent of the horizontal functionality requirements for a B2B large enterprise
CRM application suite.
•Gartner Nov 2001
North American CRO Magic
Quadrant - Gartner March 1, 2002
CRO stands for customer
relationship optimization, and it
is the alleged potential new
direction for customer
relationship management
(CRM). "It's no longer about
managing your customers," the
NRF session description stated.
"It's about strategically investing
in customer segments that will
make the most money."
http://www.computerworld.com/itresources/rcs
tory/0,4167,STO67518_KEY51,00.html
http://www.gartner.com/reprints/ncr/104847.html
Key CRM Providers
PeopleSoft
 Siebel
 SAP
 Oracle
 Convergys


Leading provider of enterprise applications
that tie together customers' back-office
operations

Software addresses such tasks as accounting,
human resources, manufacturing, and supply
chain management

Services such as consulting, maintenance, and
training account for about two-thirds of sales

Customer relationship management software
has rekindled licensing sales growth and
helped offset a slowdown in the broader
enterprise software market, but it has also
exposed PeopleSoft to more direct
competition with companies such as Oracle
and Siebel Systems. (www.hoovers.com)

Headquarters:
Pleasanton, CA

2000 revenue: $1.7 billion

Customers: 4,600

Employees: 8,000
Worldwide



World's leading provider of eBusiness
applications software
Provides an integrated family of eBusiness
applications software, enabling
multichannel sales, marketing, and
customer service systems to be deployed
over the Web, in call centers, in the field,
through reseller channels, and across retail
and dealer networks
Sales and service facilities are located in
more than 32 countries.

Founded: 1993

2001 revenue: $2.05
billion

2001 net income:
$255 million

Employees: 7,400+

29 Years in the Business of E-Business


10 Million Users, 44,500 Installations,
1,000 Partners, and 21 Industry
Solutions.
2000 Sales (mil.): $5,881
1-Yr. Sales Growth: 14.3%

2000 Net Inc. (mil.):
$596
1-Yr. Net Inc. Growth:
(1.6%)

2000 Employees: 24,480
1-Yr. Employee Growth:
12.8%

Founded in 1972 - recognized leader in
providing collaborative e-business
solutions

Headquartered in Walldorf, Germany

World's largest inter-enterprise software
company, and the world's third-largest
independent software supplier overall

Employs over 27,800 people in more
than 50 countries

World's leading supplier of software
for information management, and the
world's second largest independent
software company

Headquartered in Redwood Shores,
California

First software company to develop and
deploy 100 percent Internet-enabled
enterprise software across its entire
product line: database, server,
enterprise business applications, and
application development, and decision
support tools.

2001 Sales (mil.): $10,860
1-Yr. Sales Growth: 7.2%

2001 Net Inc. (mil.):
$2,561
1-Yr. Net Inc. Growth:
(59.3%)

2001 Employees: 42,927
1-Yr. Employee Growth:
3.9%

(CVG) is a provider of
Employees: 46,000
outsourced billing and
customer management
solutions, which
encompass activities
such as targeting,
acquiring, serving and
retaining customers on
behalf of its clients.
Market Cap (Mil) $ : 5,155.226
Complete Financials: Dec 2001
Updated: 04/05/2002
Revenues For the FY ended
12/31/01, increased 6% to
$2.32B.
Net income decreased 27% to
$138.8M.
Mini-Case Studies

Began in 1902 , is a market-leading supplier of electrical
distribution, industrial control and automation products

A new safety switch with the company's new logo, a "D" (for
Detroit) inside a square became the industry standard and many
customers began asking for "the square D switches." The
trademark was developed in 1915 and the name Square D
Company was formally adopted in 1917. To this day, Square D is
one of the few companies ever named by its customers.

On May 24, 1991, Square D Company merged with Schneider
Electric of Paris, France the world's leading manufacturer of
electrical distribution and industrial control and automation
products and systems, and the only manufacturer dedicated to
the distribution and control of electricity.
(www.squared.com)
Information Technology

Web server-enabled equipment for the plant floor



E-Way



Equipment, including power monitors and PLCs, can automatically alert
plant officials to emerging problems by audible alarm or e-mail
Built-in server technology allows plant personnel to remotely monitor,
diagnose and correct equipment problems and remotely change set
points
Online quote and order management system for distributor network
Check pricing, stock availability, and obtain shipping information
Digest Plus Selector



Online product selection with more than 66,000 part numbers
Search an electronic version of Square D's catalog based on the electrical
characteristics of the application
Generates a bill of materials to send to the distributor of choice for
pricing and ordering
(http://www.controleng.com/archives/news/2000/july/gm0720a.htm)
Information Technology

An employee Intranet


Powered by an Infoseek Corp. search engine. The site includes
everything from employee telephone directories to spec-writing tools
and news on customer-segment marketing activities. Employees can
access the site remotely
Customer Information Center



Uses sophisticated customer relationship management (CRM)
technology to give technicians instant access to a complete customer
history, and knowledge management and case management tools to
access a database of technical solutions to almost any question
Links customer service representatives and technical experts around the
country in a virtual technical support center through Soft Phone
technology from Lucent.
Extended nationwide in late 1999, the CIC now answers more than
13,000 calls each week from customers, distributors and employees.
(http://www.controleng.com/archives/news/2000/july/gm0720a.htm)
Successful CRM
Implementation





Began in 1993, after Schneider Electric acquisition
Reorganized the company’s three basic business units around
customer segments - Industrial, Residential, Construction, and
OEM
Only after internal systems were refocused on the customer did
Square D start using high-tech applications to upgrade its
customer-facing processes
According to Chris Curtis, VP of US marketing, managers were
taken out of their line jobs for months at a time to understand
issues involved in implementing the software
In 1996, $75 million was invested in an order-management
system that let sales engineers create proposals for customers
based on what the factory floor could deliver
(Harvard Business Review - Feb 2002)
•World leader in collaborative (CRM) solutions
that increase customer revenue, profitability, and
customer loyalty
•Transformed how organizations support their
customers, partners and associates at more than
500 organizations representing over 100,000
users.
•Relavis eBusinessStreams - CRM automation that
allows an organization to efficiently and effectively
interact with their customers, prospects, partners
and internal associates
•Received the 2001 IBM Beacon award for
"Greatest Business Impact," and the 2001 Lotus
Beacon Award for "Best eBusiness CRM Solution."
Relavis is honored to have won the Beacon Award
seven times
"A tremendous benefit from using
OverQuota is that we are able to use
existing infrastructure for workflow
communications. We have been using
Lotus Notes in our worldwide
operations since 1998," said Lee
Chong Leong, telecommunications
manager, Asia Pacific, SchneiderElectric.

In 2001 Graybar selected the mySAP.com(R) ebusiness platform to run its business systems
applications


One of the largest ERP projects in U.S. industry
Will deploy the entire suite of mySAP.com solutions
including







mySAP(TM) Customer Relationship Management
mySAP(TM) Supply Chain Management
mySAP(TM) Human Resources
mySAP(TM)Enterprise Portals
mySAP(TM) Business Intelligence
Graybar’s new platform will run on IBM hardware
DeLoitte Consulting is assisting in implementation





A Fortune 500 service provider of wholesale
distribution of electrical and comm/data equipment
and integrated supply services
Serves contractors, industrial plants, telephone
companies, power utilities and commercial users
One of the largest employee-owned companies in the
US, with approximately 9,500 employees and 275
stocking locations
In business 131 years
Annual sales in 2001 - $4.7 billion
Graybar plans to go live with “just a sliver of mySAP CRM,” Graybar VP
Beatty D'Alessandro told CRMDaily. “We were advised by our
implementation partner, SAP and other companies in our industry that
CRM implementations can be a bear.”
"We seriously considered both companies," (Siebel) Beatty D'Alessandro,
vice president IT strategy for Graybar Electric, told CRMDaily.com.
"But in the final analysis we bought the whole mySAP suite."
D'alessandro added: "Our feeling was that a completely integrated solution
was preferable to a bolt-on (CRM) strategy."
Another consideration, he added, was that SAP appeared to be committing
a significant amount of corporate resources to its CRM product.
"So, in whatever areas there were perceived inequities between SAP and
Siebel, it was clear to us that SAP was spending the money to catch up
with Siebel," D'Alessandro said.
(http://www.crmdaily.com/perl/story/16309.html)
Argosy Case Study
Company Overview
CEO:
James Perry
Revenue: $595 Million
Stock: NYSE Symbol-AGY
$40.65
Employees:4,900
Source: www.argosycasinos.com
Jeff Poure, MIS Director
CIO
CEO
Current System

Player Tracking System
Built primarily as accounting/slot system,
not marketing
 Only provide us with transactional data



Not customer centric, slot machine is center of
universe
Not flexible

Difficult ad-hoc queries
Source: Argosy Marketing Report 2001
CRM Strategy
Use knowledge of customers profiles
to develop offers and programs
which appeal to our most
profitable customers
Source: Argosy Marketing Report 2001
How Argosy’s Goal was Defined

Committee
Property Operating Committees
 Executive Committee
 Legal Staff
 Marketing Staff
 MIS Staff (including IT Supplier
Representation)

Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
Argosy Partners with NCR Terradata
for CRM Development

Why NCR?

“Value Added Supplier”


Harrahs (1998)
Application Server Evaluation Model (ADEM)


Evaluates IT Supplier on the basis of Technology,
Market Momentum, Best Practice, & Database
NCR won Technology & Database, and was second
in Best Practices – Overall highest score
Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
CRM Application Scope

7,724 Hours (3+ Man years)


Estimated Cost = $849,640


Only NCR Applications and Database
Developers time
Not including Software Licenses or Servers
Two new full time MIS positions
Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
CRM Application Operation

Data collection during registration –
Data Card

Player Data






Name
Address
SSN
License No
Age
And More!
Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
CRM Application Operation

Data collection during the visit

Wins / Losses


Tables vs. Slots
Preferences / History



Restaurants
Smoking vs. Non-Smoking
Magazines
Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
CRM Application Operation
•Prior to CRM Application
•Archaic Marketing campaigns based on recent nature of ones visit
Number of Patrons Mailed To
Number of Patron Coupons
Mail Response Rate
Slot Patrons
Table Patrons
Total Patrons
Casino Revenue
Win Per Patron
Group A(280+)
5,821
1,973
Group B(200-279)
4,144
1,140
Group C(130-199)
8,205
1,511
34%
28%
18%
1,537
419
1,956
979
177
1,156
1,301
202
1,503
$736,376
$373
$218,550
$192
$205,715
$136
Source: Argosy Marketing Report 2001
CRM Application Operation
•Allows a more granular view at customers
•Greater Market Segmentation to identify most profitable customers
•Redirect Resources away from marginal customers
Age
Total
Male
21-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65+
TOTAL
835
852
934
966
1,043
1,004
958
708
520
1,060
8880
405
423
449
448
446
403
391
285
216
399
3865
Female Unknown Male Slot
417
409
467
496
561
573
540
403
291
624
4781
13
20
18
22
36
28
27
20
13
37
234
179
191
219
261
290
254
261
174
137
209
2175
Female
Slot
Unknown
Slot
Male
Table
311
277
326
377
438
446
395
298
215
321
3404
7
6
12
15
20
18
20
18
20
14
150
226
232
230
187
156
149
130
111
79
190
1690
Female Unknown
Table
Table
106
112
141
119
123
127
145
105
76
303
1357
6
14
6
7
16
10
7
6
3
9
84
Total
Slot
Total
Table
497
494
557
653
748
718
676
486
362
558
5749
338
358
377
313
295
286
283
222
158
502
3132
Source: Argosy Marketing Report 2001
CRM Application Operation

Better understanding of Customers and Revenue
Sources


Customer Lifetime Value = CONFIDENTIAL
Identification of most profitable customers



40 to 50 + Years Old with disposable income and time –
retirement age
Average player spends $25-$30 a time and comes
frequently, at least once a week…seeking social setting
80 percent of Argosy’s Revenue comes from slot
machines
Source: Argosy Marketing Report 2001
CRM Application Operation

Rewards Programs

Customized for individual market segments




Right Offer, Right Customer, Right Time, Right Decision
Targeted mailings
Based of points
Incentive Programs
Source: Argosy Marketing Report 2001
Implementation

Argosy is implementing CRM
Package in two phases
Phase I – June 4, 2001 to October 4, 2001
 Phase II – October 5, 2001 – June 8, 2002

Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
Property Implementation Timeline
Phase I
October 2001,
Lawrenceburg, IN
December 2001,
Riverside, KS
February 2002,
Sioux City, IA
March 2002,
Alton, IL
March 2002,
Baton Rouge, LA
Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
Implementation

Phase I Criteria for Success



Have increased ability to view, analyze and act upon
detail player data down to the transaction level by
individual player, player segments or groupings.
Develop and agree to a methodology and calculation
for the “Lifetime Value” of a player.
Have the ability to analyze and evaluate Argosy
customers’ hotel, restaurant, entertainment, and offer
preferences at the customer level.
Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
Implementation

Phase I Criteria for Success - cont.



Capture and maintain customers’ needs and
preferences for the purpose of determining
offers/programs, which will appeal to out most
profitable customers.
Increase analytical capabilities to drive more complex
segmentation and communication strategies for the
purpose of increasing customer trips/rate-of-pay,
frequency of visits, and for finding new/profitable
opportunities.
Ability to have a unified/consistent customer reward
program across the enterprise.
Source: Interview with Jeff Poure, Argosy Gaming Co. MIS Director
Is Phase I a Success?
“Yes, this phase has been considered a success. It(the
CRM package) has given us the ability to more
efficiently identify our key customers, anticipate their
needs and respond to them quickly.”
“…the application has allowed us to better serve our
customers”
“…give us the ability to improve customer retention”
-Jeff Poure, MIS Director
Don’ts of CRM
Data is ignored
 Politics rule
 IS organization and business users do
not work together
 No plan exists
 CRM is implemented for the enterprise,
not the customer

Source: Gartner, “Seven Key Reasons Why CRM Fails – And How to Avoid Them”
Don’ts of CRM Cont…
 Flawed
process is automated
 No attention is paid to skill sets
Source: Gartner, “Seven Key Reasons Why CRM Fails – And How to Avoid Them”
CRM Best Practices
CRM Best Practices consists of the
following:





Customer Involvement
Involve the correct sources early to develop
CRM Strategy
Understanding of Information Technologies
place
CRM Organizational Culture
Incremental Implementation
CRM Best Practice
Customer Involvement

Focus Groups


Customer Survey


If Feedback being passed to Top Management is being acted
on, then change will happen
Concentrate on your customer Lifecycle value



Prior to, during, and after CRM implementation
Which Customers repay investment?
Which Customers just take up resources and should be
considered competitors?
Segmentation Analysis
Source: www.CRM-forum.com
CRM Best Practices
Involve the “Right” People

Marketing


Provide means of determining our customers?
Business Strategists

What are our organizational goals (i.e. growth)?
Source: www.CRM-forum.com
CRM Best Practices
Involve the “Right” People

“Value-Added” IT Suppliers (If required)


Practical experience in CRM
CRM experience in same/similar industry


Can provide knowledge of CRM application(s) to allow
Marketing and Business strategists to evaluate the
opportunities
To often companies allow technology vendors
to dictate the manner they manage customers
because the vendor has implemented CRM

CRM is to be customized, not for software but for
strategy
Source: “Avoid the Four Perils of CRM,” Darrell K. Rigby, Frederick F. Reichheld, Phil Schefter; Harvard Business Review, Feb 2002
CRM Best Practices
Involve the “Right” People

Involve TOP MANAGEMENT from the start

For CRM to be successful, Top Management must…



Clearly communicate a vision for the future of the organization
that indicates the benefits of CRM
The will power to make CRM work across functional boundaries
Without Top Management participation or a
Strong Top Management

A common result is that a strong-willed committee
member will shape the final implementation that will
address their desires and not the organizations as a
whole
Source: “Avoid the Four Perils of CRM,” Darrell K. Rigby, Frederick F. Reichheld, Phil Schefter; Harvard Business Review, Feb 2002
CRM Best Practices
Implementation

Should not expect to be able to
implement CRM in one major
undertaking

Implement CRM in increments

Each Increment should have…
• Its own business case
• Measures of success
• Evaluation of how customers perceive the results of
this step
Source: www.CRM-forum.com
CRM Best Practices

While Top Management successful within ones
organization, employees make CRM successful
with your customers


Companies serious about CRM tie employee
incentives to customer indicators such as retention
and satisfaction. The more serious a firm is about
CRM, the sooner they will adjust the compensation
plan.
No less than 100 percent user buy in is acceptable..
Source: www.CRM-forum.com
Conclusion
What must we understand?



Expect a continuing evolution of CRM
 As it evolves, customers will become more and
more familiar with what it can do for them
If we an organization adopts CRM they must
understand that the strategy will not be delivered by
IT alone
The primary CRM objective is to improve the
interface between an organization and its’ clients. In
doing so, for a CRM initiative to be successful
substantial re-organization of the organization
dealing with customers may occur
Source: www.CRM-forum.com
QUESTIONS
???