0443dcrm evolution (1)

7/29/2019 0443dCRM Evolution (1)

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Amity Business School

Evolution of CRM

1960's Direct mail marketing

Early 1980's Database marketing

Late 1980's One to one marketing

Early 1990's Loyalty Marketing

Late 1990's Relationship Marketing


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The Emergence of a Customer Relationship Strategy

More competitors

Shorter product life cycles

The explosion of new technologies and new distribution channels.

The keys to build an effective customer strategy includes

Identifying unique characteristics of each customer within the organizations

customer segment profile.

Modelling the current and potential value of each segment.

Creative pro-active strategies and operational plans, or business rules, which will

support the desired experience for the customer, starting with the highest value

customers.


3/23


Study published in Harvard Business Review by Reicheld

& Sasser concluded:

Some companies can boost profits by almost 100% by retaining just 5% more of

their customers.The Graph below depicts how investment in customer relationships can improve

customer profitability over time. Increased purchases and referrals make significant

contributions in total profitability.

Bad customer service carries a very high opportunity cost. In a study conducted by

Ventura, Bob Tyrell, the chairman of the Henley Centre examined the cost of bad

customer service using models of profitability.


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The study concluded:

In a typical medium-sized company, bad customer service can result in

lost revenues of 1.8 billion pounds over 5 years and millions in lost

profits.

Reducing customer service problems by one percentage point can

increase profits by millions over 5 years.

Eliminating all customer service problems could double profit growth

over a 5-year period. There is undoubtedly a strong relationship between

improved customer service, greater profitability, and an increasing share

price.

The telecommunications industry is the most focused on relationship-

based


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Swift work exclusively in relationship-based strategies.

In terms of bottom line impact, PIMS Strategic Planning Institute has

measured the financial ramifications of service delivery on sales growth,

market share, return on equity and return on sales.

The PIMS study shows how vital effective Customer Relationship

Management is to financial success. The outcome can be tremendous and is

not limited to the incremental expenditures made by individual customers.

According to industry research, a satisfied customer, on average, will spread

the good word to three or four people, however, dissatisfied customers, on

average, will tell seven to ten people.

There is a natural balance, which needs to be considered when

organizations explore customer relationship and loyalty initiatives. Frequently

a small group of customers have a far higher value to the organization.


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Product differentiation is disappearing.

Technological innovations can be quickly copied.

Service differentiation act as a competitive advantage.

Industry analysts have reported that 70% of repeat

purchases are made out of indifference, Not out of loyalty.

Building loyalty begins by understanding that it is a

behavioral issue, the combination of positive past

experiences with product and services.

A customers relationship with a company affects product

attitudes and influences future purchasing decisions.

Why is there so much customer turnover anyway?


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Swift Matrix


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Relationship and Product strategies

Customer Loyalty.

Customer A was satisfied with the product purchased, but dissatisfied with his

relationship with the company (VULNERABLE) to switching.

Customer B is the type of customer every company desires: (LOYAL) very satisfied

with the product and the relationship with the company.

Customer C is the type of customer that nobody wants the misfortune of coming across

- a (SABOTEUR) to the organization. A bad experience with the product coupled to abad relationship with the company, will guarantee that he/she will never buy from the

company again.

Customer D was not satisfied with the product, but is (HOPEFUL) that the next

purchase will be satisfactory. A good relationship creates a reservoir of good will upon

which the customer is willing to give the company or product another chance.

The Swift Matrix


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The Swift Matrix provides a framework for better understanding the problem of the

customers turnover and direction, and about where to look for opportunities toimprove.

The key is to focus on the customers relationship with the company. Although customers

C and D both had poor product experiences, customer Ds willingness to continue a

relationship with the company dramatically differs from the behavior of the saboteur.

As well as the quantitative benefits, there is an increasing recognition of the qualitative

benefits of building relationship equity.

Customers who have positive attitudes can become part of your sales force by referring

others and by providing references.

Relationship equity also plays a significant role in customer forgiveness.

It may be overwhelming for a company with thousands, even millions of customers to

realistically implement a customer relationship building initiative across their entire

customer base.


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The concept of value is defined differently across companies, butin general there are some common dimensions.

Long-term value (Net present value of lifelong purchases)

Sphere of influence (Ability to generate positive word-of-mouth or

referrals.)

Growth potential

Profitability

History

Life events


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Identifying customers value

Company deploy revenues to nurture,

cultivate and grow CRM

Helps in understanding the

complete analysis of a customer.


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Customer E is high value but disloyal and represents a group that

deserves the greatest amount of attention. The company is at risk

of losing profitable, influential customers.

Customer F is what makes companies thrive. High value and

loyal, these customers are truly golden. Companies must pay thegreatest attention to this group as a way of expressing

appreciation for their ongoing business and recognizing their

importance.

Customer G, low value and disloyal, does not represent a group

with much long-term potential. If they choose to switch the

economic loss is minimal.

Customer H, low value but loyal, can be over-serviced.


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To enhance customer relationship strategy is 4 fundamental steps:

1. Identifying unique characteristics of each customer within a given customer

segment.

2. Modeling the current and potential value of each segment.

3. Starting with the highest value segment, creating pro-active strategies and

operational plans or business rules which will be followed.

4. Redesigning the organization, process, technology and reward systems

necessary for implementing the relationship strategies.

Modelling customer value is a critical piece of information for knowing whichcustomers deserve the greatest amount of attention.


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Technology Changing the way Business Works

Work Comes to People

OfficeHome Transportation

Hotel Airport

Today

WAN/

Internet

People Went to Work

Yesterday

Architect the network to allow the work to go to the people
http://thumbpicked%2830%29/http://thumbpicked%2814%29/http://thumbpicked%281%29/


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Todays Business Expectation

Establish an architecture that supports

Any person to work fromAny Place and get access to

Any information regardless of application via

Any Device that the person may possess,

24*7*365


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Emerging Trends in CRM

E-CRM : The key to meeting todays customers expectations isElectronic Customer Relationship Management (eCRM) an

approach that integrates all of your customer information and

makes it available for each customer contact, so you can provide

the kind of consistent and effective personalized service

customers want.

Contact Touch points are e-mail, instant messaging,

voice-over Internet, Web chat, voice mail or live help

desks, e-CRM provides a solution that brings them alltogether for each and every customer contact.


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The mCRM market is still at a nascent stage in India.

CRM applications are fast catching up on the mobile side,complementing front-end software on laptops/PCs.

Indian companies need to gear up for such solutions to gain a

competitive edge and push their marketing, sales force and CRM tothe phone.

The country witnessed a 54% y-o-y growth in subscriber base,

adding over 100 million new users. With the mobile penetration

level having exceeded 25%, considerable growth potential still

remains.

According to Frost & Sullivan, the enterprise mobility market in

India is worth about Rs 354 crore growing at 30-40% over the past

three years.


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Girish Trivedi, Deputy Director, ICT Practice, Frost & Sullivan South Asia &Middle East, said-

Some of the key drivers for this growth are the increasing competition to

address customer demand, the need to offer better accessibility to sales

representatives and most importantly mobile phones becoming computers.

"The advantages of mobility are universal be they for an SMB or a large

enterprise. However, mobility deployment in SMBs is much easier to control

given the lower number of users in the system"

- Thomas Abraham

MD Sage Software India Pvt Ltd.


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mCRM offerings

Oracle Mobile Sales Assistant

This product is a part of the Oracle CRM On Demand family of products and isavailable for both the BlackBerry and iPhone platforms. In contrast tobrowser-based mobile CRM solutions on the market today, Oracle MobileSales Assistant is a rich (Java) client application that also supports offline

usage.

Salesforce Mobile (from Salesforce.com)

A new addition to the Salesforce CRM family, the solution enables

organizations to deploy applications on wireless devices, including the AppleiPhone, RIM Blackberry, Palm Treo, and various Windows Mobile models.The application requires no cradling or synchronizing of mobile devices.Data is exchanged automatically over the air. No server software is requiredon the part of companies that use it.


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mCRM offerings

Microsoft Dynamics CRM Mobile Express

Mobile Express is an online-only Web-based mobile access solution that

supports any phone with a browser and Internet access and is available to

customers at no cost. Microsoft Dynamics CRM Mobile Express provides

online access to CRM using any Web-enabled mobile device.

Sage mobile CRM

Sage offers Mobile CRM with SalesLogix. This can work as a 'disconnected

client' on a Blackberry or Pocket PC device and is suited for salespersons 'on

the move' with limited Internet access. The other option is an 'always

connected' scenario for those seeking online updates and downloads.

CDC Mobile CRM Solution

This Mobile CRM solution brings your service team, technicians, field sales

staff, delivery team, partners and a host of other field personnel into the

umbrella of the enterprise CRM solution.


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WorldwideBPO Market Place

Card

Services

Billing

Insurance

CRM

HR

Payments

F&A

Credit

Services

Supply

ChainContent

Mgmt

35%

22%

16

7%

6%

6%

4%2%

1%1%

2008 BPO Market - $188 Billion 2005 - 2008 Growth ($M)

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

0 8 10 12 14 16 18

MarketSize

2005 2008 % CAGR

Insurance Services

Content ManagementServicesCredit Services

PaymentServices

Supply ManagementServices

Billing and ClearingServices

Card ProcessingServices

HR Services

Finance & AccountingServices

CRM Services


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Worldwide BPO Market Place

Mexico

5%

Ireland

5% C & EE

4%

China

2%

Others

5%

India

37%

Canada

27%

Philippines

15%

India remains a destination of choice for BPOservices, especially back-office and KPO services;

In 2008, size of Indian BPO Market =

$10.9B; estimated to employ 700,000

Canada as a near-shore destination continues to

diminish as its currency has strengthened and

higher adoption of offshore locations Philippines continues to grow as a preferred

destination due to better cultural alignment with

North America. Today it is the #1 destination for

voice based services

Eastern Europe is emerging rapidly especially as

an alternative to service Europe

KPO and judgment based work continues to grow

rapidly but requires domain expertise.

Investment in platforms continue to accelerate.

The number of Indian KPO professionals is set to

leap from 75,000 in 2006 to 250,000 employees by

2010

2007 BPO Delivery Destination

Vertical-

Specific

18%

F&A

22%

Other

Horizontal

Services

4%

KPO

8%

HR

Management

3%

ProcurementServices

1%

Customer

Support44%

Indian BPO Services 2007-08

0443dcrm evolution (1)

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