Customer “Churn”Customer “Churn”

Only 4% of dissatisfied customers complain yet 65 to 90% never buy from the same vendor again

“Churn Analysis” by Rockfeller Corp, U. S.o Customers who (unfortunately) died 1%o Customers who moved away 3%o Customers who have a friend supplying same goods /

services 5%o Customers who switched to competition 9%o Customers who were dissatisfied with the company’s

product / service 14%o Customers who believed that the company does not

care about them 68%

The Profitability Squeeze

“ In recent work with over 15 major banks in the US, Canada, Latin America, Europe, and Australia, the study Concluded that the top 20% of customers provide 120% to 150% of profits in many bank product lines.”

“ On the other hand, the worst 50% of customers are currently unprofitable to serve, many do not even cover variable costs.”

“ For clients with low current value and low potential, the strategy should be to reduce costs of servicing them - use lower-cost channels, reduce credit risk, and , in some cases, fire them ! ”

Differentiating CustomersDifferentiating Customers

Customers Net Contribution

What do companies look for in a CRM solution?What do companies look for in a CRM solution?

o Prompt Customer Serviceo Differentiating customer and Designing differentiated offeringso Retaining existing profitable customerso Exploiting cross-sell potentialo Maximizing lifetime valueo Company perceived as efficient & sensitive to customer’s needso Nothing is forgotten along the wayo Reduced sales time, higher closure rateo Measurable performance parameters for the Sales Forceo Quick and Accurate MIS – Pipeline, Profitability, Efficiency, Exceptions…o High level of productivity of sales, service, and call-center staffo More effective marketing campaigns – higher hit ratio, lower costs…o Reduced cost of Customer acquisition, service and retention….o Multi Channel integrationo Real-time integration with back-end systemso Simple and streamlined processeso Assistance in customer engagement

TechnologyTechnology

Specialized Equipmento ACDo IVRo Predictive Dialero CTIo Voice Loggers

Software enabled Conceptso E-mail Integrationo Workflow and Assignmento Data Synchronization

Enterprise CRM solutionso Comprehensiveness of offering

Sales, Service, Campaign, Marketing, Analytics….o Multi Channel capability

Telephone, Web, E-mail, WAP, ATM….o Ease of integration with Legacy systems

Technology - Specialized Equipment - 1Technology - Specialized Equipment - 1

Automatic Call Distributor (ACD)

Specialized telephone system designed to handle a high volume of calls and provide access to groups of agents

Handles a high volume of incoming telephone calls and routes these calls to groups of agents

Can be standalone, or can also be part of PABX

Prominent vendors include Aspect, Avaya, Nortel, Siemens

Technology - Specialized Equipment - 2Technology - Specialized Equipment - 2

Interactive Voice Response (IVR)

Caller can enter information through keypad or verbally

Caller receives information from the system through pre-recorded, digitized voice

Uses information from its own database (to screen and route calls) or connects to host computer, allowing the caller to interact with information residing in the host database

Callers can also use this system to perform functions like

• tracing packages (courier companies)• checking account balances (banks)• ordering products or services (mail order)

• Prominent Vendors include Edify, Avaya, IBM, Nortel

Technology - Specialized Equipment - 3Technology - Specialized Equipment - 3

Predictive Dialer

A predictive dialer is a computerized system that automatically dials batches of telephone numbers for connection to agents assigned to sales or other campaigns.

Increases efficiency of the calling process by screening out no answer, busy, out of order and answering machine calls

the predictive dialer uses a variety of algorithms to predict both the availability of agents and called party answers, adjusting the calling process to the number of agents it anticipates (or predicts) will be available when the calls it places are expected to be answered.

The predictive dialer monitors the answers to the calls it places, detecting how the calls it makes are answered. It discards unanswered calls, engaged numbers, disconnected lines, answers from fax machines, answering machines and similar automated services, and only connects calls answered by people to waiting sales representatives. Thus, it frees agents from listening to unanswered or unsuccessful calls.

Prominent vendors include Divine, SER Solutions, Stratasoft

Technology - Specialized Equipment – 4Technology - Specialized Equipment – 4

Computer Telephony Integration (CTI)

Interface between an ACD and a software application

Supports Screen pops which bring up the customer's data or profile automatically

Used to customize call routing, activate features and update host databases based on call features

Automated Number Identification (ANI) is supported

Prominent vendors include Avaya, Cisco, Genesys, Intel

Technology - Specialized Equipment – 5Technology - Specialized Equipment – 5

Voice Loggers

Keep a log of all calls received along with voice recording

Serve statutory requirements as in banks (typically forex/treasury operation)

Serve the purpose of agent monitoring/supervision/training

Easy retrieval by agents when needed

Prominent vendors include Dictaphone, Eyretel, Mercom, e-talk

Technology - Software enabled Concepts - 1Technology - Software enabled Concepts - 1

Email Integration

Email is standard method of delivery for call centers and customer response units

Widespread availability of Email to customers at their workplace as well as home makes this a preferred channel

Asynchronous response & communication possible leading to increased productivity

Provides convenient record of communication

Can be easily configured for automated responses

Technology - Software enabled Concepts - 2Technology - Software enabled Concepts - 2

Workflow Management

Enables automation of organization level workflow processes

Uses processes of sales, marketing, and service departments to determine business workflow

Automatic enforcement of business policies and procedures

GUI featuring a familiar flowcharting methodology for designing workflow processes

Technology - Software enabled Concepts – 3Technology - Software enabled Concepts – 3

Assignment Management

The Assignment tool allows companies to define rules that automatically assign data ownership to the appropriate people

Enables assignment of opportunities, accounts, service requests, etc.

Sales : Accounts / Opportunities are assigned based on position and geography (for example)

Service :

Service Requests are assigned based on product expertise, workload, language, last call handled…

Technology - Software enabled Concepts – 4Technology - Software enabled Concepts – 4

Data Synchronization (Mobile Clients)

Ideal solution for Field personnel (Sales/Service)

Designed to operate without a real-time connection to any server.

Subset of server database available for users to work on

Periodically accesses the server via a modem, WAN, LAN or other network connection to synchronize data changes with the server

Technology - Enterprise CRM solutions - 1Technology - Enterprise CRM solutions - 1

Comprehensiveness of FunctionalitySales (for example)

o Lead generation and trackingo Account managemento Contact managemento Marketing encyclopediao Forecastingo Win/loss analysiso Sales administrationo Field saleso Call center telephone saleso Distributors or agentso Order managemento Order fulfillmento Integration of marketing and customer service functions…..

Technology - Enterprise CRM solutions - 2Technology - Enterprise CRM solutions - 2

Multi-channel Contact Server

Platform for managing customer contact transactions across all communication channels and providing a portal for enterprise resources

Capability of capturing and using detailed information across multiple customer touch points

Ability to define uniform and sophisticated set of front-office business processes that effectively interact with back-office business functions.

Use of supportive middleware solutions as intermediary between contact & enterprise back office

Multi-channel CRM solutionMulti-channel CRM solution

Channel PartnersChannel Partners

Web & EmailWeb & Email

Field Sales Field Sales

Call CenterCall Center

CustomersCustomers

CustomerCustomerInformationInformation

MarketingMarketing

AnalyticsAnalytics

Back OfficeBack Office

Technology - Enterprise CRM solutions - 3Technology - Enterprise CRM solutions - 3

Enterprise Application Integration

Provides components for bi-directional real-time and batch solutions for integrating CRM application with other applications

Key issues include o data cleansing and consistency o business process coordination o transactions between participating front-and back-end systems

Success of eBusiness implementation…Success of eBusiness implementation…Tom SiebelTom Siebel

Know your Customer Use multiple channels of interaction Personalize the customer experience Optimize the value of every customer Focus on 100 percent customer satisfaction Develop and maintain a global, customer-centric

architecture Leverage and extend the eBusiness ecosystem Cultivate an organizational culture built on eBusiness

excellence and innovation

Notice that six of these eight principles mandate integration of enterprise systems.

Integration Examples…Integration Examples…

Organization: Comp USA – largest US retailer of desktop computers and software

Problem:The System denied 2000 sales and service representatives ready access to the legacy warranty system causing poor service levels and customer dissatisfaction

Solution:Integration of Warranty system and other back-end legacy systems with the front office CRM solution led to a 15% increase in sales, higher rate of problem resolution on 1st call and 15% decrease in service dispatch rate

Integration Examples…Integration Examples…

Organization: Mariott Hotels

Problem:The size of the business made personal touch with customers difficult

Solution:Integration of data-warehousing system, which held transactional information of customers, with the CRM system. Now, Mariott’s call center agents while accepting bookings from past customers would suggest an individualized itinerary based on past transactions – a round of golf, a day at the spa…

Today’s Extended EnterpriseToday’s Extended Enterprise

Companies typically buy best-of-breed applicationso Tailored to suit a particular requiremento Diverse features with state-of-art technology

Critical transactions/business processes from such best-of-breed applications need to be integrated so that zero-latency is achieved

An order generated through the CRM System o needs to be initiated in ERP and

should automatically generate an increase in the production levels managed by a vendor’s SCM System.

Enterprise Application Integration : Before IntegrationEnterprise Application Integration : Before Integration

A Call Center Agent desktop had 16 different applications including excel files

User had to move between applications to complete the customer request

Request logging occurred on different applications

Typical Call Center Scenario

CALLSCALLS

Call CenterCall CenterNew/Existing CustomerNew/Existing Customer

SiebelSiebel

CTISCTIS

Vision +Vision +

Excel FilesExcel Files

AccessesAccesses

To complete the callTo complete the call

Enterprise Application Integration : After IntegrationEnterprise Application Integration : After Integration

A Call Center Agent will have Siebel as the Single Window Single Window ApplicationApplication on the desktop to service all customer queries

Branch users can also service customers using Siebel

Result: Result: Single Window Customer Service across all Customer Contact Centers

CALLSCALLS

Call Center/BranchCall Center/BranchNew/Existing CustomerNew/Existing Customer

To complete the callTo complete the call

SiebelSiebel

M

I

D

D

L

E

W

A

R

E

LEGACYLEGACY

AccessesAccesses

How a bank can enrich CRM by EAI . . .How a bank can enrich CRM by EAI . . .

Enable ‘Self-Service’ by Customers – they can call the IVR of the Call Center to enquire account balances

Automatically trigger SMS messages to Customer when Account Balance falls below a minimum threshold

Send email or fax reminders to Customers whose Credit Card payments are due

Automatically make an offer for an unsecured loan to a Customer with good credit standing who tried to overdraw his account on the ATM on the previous day

Challenges to Successful CRM Challenges to Successful CRM ImplementationImplementation

Let us now look at the pitfalls…Let us now look at the pitfalls…

Top Four ChallengesTop Four Challenges

o Integration of Different Data Sources into the CRM System (46%)

o Training Users to Effectively Utilize the CRM Tools (31%)

o Participation of Different Departments (27%)

o Integration with Back-Office Applications (22%)

Major Reasons Why CRM FailsMajor Reasons Why CRM Fails

1. Data is ignoredo At its core, CRM is about data

- customers, products, inventory...o Huge amounts of data must be in the right place in the right formato Must have a detailed understanding of the quality of the data

… how to clean it up… how to keep it clean… where to source it… what third-party data is required

A foundation of good data is an imperative for CRM investments to pay off

Action Item: Must have a Data Quality Strategy Devote one-half of the total time-line of the CRM project to define data elements

and data cleansing

2. Lack of integrationo In Financial sector, agents need Real Time access to customer’s financial datao Without integration, quality of service would deteriorate

Action Item: Consider implementation of a middleware to integrate disparate systems Provide access to transaction data directly from CRM through middleware

Major Reasons Why CRM FailsMajor Reasons Why CRM Fails

3. Politics rules (“information is power”)o Every business unit in the organization believes it “owns” the customero Will not hence share data or support other units

Action Item: Formulate CRM strategy at the enterprise level Appoint a senior manager to oversee cross-departmental issues

4. A flawed process is automatedo Customer-related processes in most organizations are flawed because of years of minor

corrections and neglect of customers’ demandso Automating a flawed process makes it run faster - a real danger because the enterprise

can more quickly and efficiently anger its customers

Action Item: Use CRM as a springboard to examine all customer-related processes Remove those that are not needed; rework those that IT impacts

Major Reasons Why CRM FailsMajor Reasons Why CRM Fails

5. No attention is paid to skill setso It is not enough to install CRM software - you have to train and persuade employees to

use ito All the money in the world can’t save a CRM project if employee training for using the

new tools is shortchanged

Action Item: Educate employees on the benefits of the CRM initiative Train them to use the tools to communicate with the users more effectively

Rule of thumb: For each dollar spent on software, $1.50 should be spent on training

Major Reasons Why CRM FailsMajor Reasons Why CRM Fails

6. Aim of the CRM plan: a “comprehensive” solutiono Project scope is too vasto “Big Bang” implementation has high risk of failure

Action Item: Start small and get early wins Necessary for executive buy-in for funding support

7. “What’s In It For Me?” question is not addressedo Employee buy-in for CRM is critical

Action Item: Explore ways for CRM to enrich the jobs of employees Institute performance measurement system that is aligned to CRM goals - it

should drive the reward system:

What gets measured and rewarded gets done!

Five Myths About CRM ProjectsFive Myths About CRM Projects

1. CRM is Primarily About Technologyo “A bad workman always blames his tools.”o CRM is primarily about People And Processes .

… Focus on the business issues

… Select the tool to fit the CRM model

2. Successful CRM Projects are Managed by ITo Must be driven by Business unitso Unprofitable to implement CRM without making

business process improvements

3. Executive Buy-in is the Keyo All end-users must be given strong reasons for buy-in

Five Myths About CRM ProjectsFive Myths About CRM Projects

4. CRM systems are intuitive, so users will only need some initial hand-holding

o Important to clearly demonstrate the user benefits as well as the corporate benefits of CRM

o Training prior to roll-out; follow-up session within the first 30 dayso Accessible help-desk support from the first date of launch

5. We need to roll this out across the enterprise ASAPo Better to start off with small departmental or functional wins, rather than the “big

bang” approach, because of the sheer complexity of the business processes behind customer-facing applications

o Develop the enterprise vision at the beginning of the initiative, but implement in smaller increments

The implementation methodology The implementation methodology must address the People, Process and must address the People, Process and

Technology factorsTechnology factors

Pre-requisites for a successful CRM ImplementationPre-requisites for a successful CRM Implementation

Organization-wide Customer Focus and culture

A Customer commitment that is mandated Top-down

Well thought-out processes for Customer-interaction

A CRM system that offers the required features and functionality

A system of measurement, rewards and recognition to foster customer focused behavior