1. sugik0907.ppt SWKO/HPC Customer Relationship Management Solution Sep 7, 1999 고 선욱 (seon-wook_ko@hp.com) "Enabling The Power to Personalize"

2. sugik0907.ppt SWKO/HPC Agenda Section 1: CRM 개요 Section 2: CRM Strategy Section 3: CRM Approach Section 4: CRM Architecture & Methodology Section 5: Conclusion

3. sugik0907.ppt SWKO/HPC Section 1: CRM 개요

4. sugik0907.ppt SWKO/HPC Acquiring and retaining valued customers is becoming increasingly difficult. "During the next five years, financial institutions lacking focused strategic effectiveness with regard to their customers, products and operations will operate at a serious competitive disadvantage." - Gartner Group, 1996 The focus is on understanding and serving the needs of the most valued customers. Products are Commodities Customers are more Sophisticated New Competitors in the Marketplace Pressures to hold down servicing costs

5. sugik0907.ppt SWKO/HPC One on One Customer Care ? WHO are they ? WHAT have they bought ? WHAT problems have they had ? WHAT might they want to buy ? HOW important are they to my company ? HOW vulnerable are they to my competition Treat each customer as a unique individual every time you interact with them

6. sugik0907.ppt SWKO/HPC What's In Source: "The One To One Future" by Don Peppers and Martha Rogers, Ph.D. A fundamental paradigm shift is occurring in how company market to customers. One-to-One Marketing Customized Products Share of Wallet Life Time Value Event Driven Marketing Know Your Customers Manage Your Customers Differentiate Customers Cross-sell / Retention l0% of Market, l00% of Customer Mass Marketing Standardized Products Market Share Present Value Program Driven Marketing Know Your Products Manage Your Products Differentiate Products Acquisition 100% of Market, 10% of Customer What's Out

7. sugik0907.ppt SWKO/HPC Database Marketing/Campaign Management Evolution Stage 1Stage 2Stage 3Stage 4 List Pulling Database Marketing Behavioral- Based Interactive Marketing Enterprise Customer Management Characteristics Business sponsor Marketing is main sponsor Marketing and LOB manager(s) collaborate Embraced by top management, drive for ROI Strong customer vision, led by CEO, dominates institution Types of providers Service bureau based Service bureau and consultant driven Consultants and vendors lead, service bureaus lag Vendors and FSIs lead, consultants are implementers View of customer No customer view, stale data Better view of customer, open DBMS Sophisticated use of customer analysis, predictive scoring Integrated campaigns linked to customer life cycle analysis Value to customer Very limited add value Added value from well designed and executed campaigns Targeted one-to- one offers, channel flexibility have appeal Proactive customer treatment programs, need/benefit focus Channel impact Difficult to measure value or coordinate with channels Measurement and coordination slow, limited to one or two channels Better execution with channels, improves channel effectiveness Cross-channel integration is used, customer driven

8. sugik0907.ppt SWKO/HPC Marketing Evolution  Product oriented  Market share focus  Manually intensive  Limited metrics  Programmer oriented  Limited tools 1st & 2nd Generation  Proprietary/ service bureau  Snapshot of data List Pull  Better targeting  Changing focus from market share to profitability  Wave, Multi Step Campaigns  Marketing “hands off”  Sophisticated tools 3rd Generation  Open relational  Customer view  Promotion history DatabaseMarketing  Segment driven  Campaign ROI  Actual versus proforma  Trigger & behaviour based campaigns  Lifecycle Campaigns  Dynamic scoring  Response attribution  Customer & HouseHold view  Closed-loop in MDB  Daily updates Behavior Based Mktg.  Cross-functional teams managing value optimisation  Integrated CM, touch point applications & warehouse  Dynamic offer generation  Complete customer & HouseHold view across product and channel Continuous Customer Mgmt Process Application Technology

9. sugik0907.ppt SWKO/HPC Customer Experience  5-20 Campaigns per year  Quarterly  10-20% Customers  RFM, Demographic  Campaign execution  Direct Mail List Pull  10-50 Campaigns per year  Monthly  5-10% Customers  Scores, value  Campaign execution  Campaign response rates  Direct Mail  Limited Inbound DatabaseMarketing  500-5,000 Campaigns per year  Weekly  <<1% Customers  Triggers, risk, value  Measurement  Campaign ROI  Direct Mail  Inbound/Outbound  Email/Internet  Relationship Manager Behavior Based Mktg. Frequency/Segments Objectives Channel/IntegrationContinuous Customer Mgmt  Optimisation  Simulation  2-10,000 Campaigns per year  Daily  <<1% Customers  Triggers, risk, value  Real time channel integration  Dynamic scripts

10. sugik0907.ppt SWKO/HPC Section 2: CRM Strategy

11. sugik0907.ppt SWKO/HPC Customer Relationship Strategy 데이터의 특성 고객 기본 정보 Tier 1 Tier 2 Tier 3 주민등록번호, 생년월일 주소, 전화번호 나이, 결혼여부, 가족수 직업, 소득,e-mail 기타. 고객번호, 거래상품, 수익성 현거래내용 / 상태 거래이력, 잔고 기타. 주요거래채널, 사용빈도 고객선호도, 불만내용 고객 risk, 기타. { { accuracy acquiring accessing using updating storing Critical Success Factors { 거래 정보 성향 / 속성 정보

12. sugik0907.ppt SWKO/HPC Customer Relationship Strategy The Customer Relationship Strategy - major activities Segmentation Profitability Information – MIS, etc Planning Profitability Relationship pricing Predictability models Updating MIS Risk management Evaluating marketing activities Channel selection Application forms Data enhancement Notebook Customer complaints Operation datagap, datafill, data update “Loyalty schemes” Relationship management Credit management Marketing programmes © The Relationship Consulting Group Ltd MOTIVATION Prospective Customers Stimulate action Communication proposition Prompt buying decision Also applies to motivation of dormant/under-performing customers ACQUISITION New Customers Gain customer Delivery proposition Cement relationship Also applies to ‘re-acquisition of dormant/under-performing customers RETENTION Existing Customers Communicate commitment Deepen relationship Insulate Customer MOTIVATION Existing Customers Stimulate relationship Broaden proposition Induce lock-in            

13. sugik0907.ppt SWKO/HPC The CRM Process Customer Value Measurement Information Collection Channels Campaign Management Channel Feedbac k Analysis Busines s Rules Handoff to Channel s Value-Based Segmentation Data Warehouse Data Mart Optimisation Models Simulation & Test Plans Campaign Management Content Management Channel Management Action Selection Rule-Driven Triggers Customer Interaction Integration

14. sugik0907.ppt SWKO/HPC ARCHITECTUR E Enterprise Process Realignment Customer Centric Integration Customer Relationship Management Roadmap to Personalized Service Personalized Services Customer Relationship Management (CRM Phase II) Advanced Customer Contact Channel Enablement and Customer Intelligence Marketing and Decision Support (CRM Phase I) Branch & Sales Force Call Center E-Business Channels

15. sugik0907.ppt SWKO/HPC Operational Management Business Manager Customers Contact Channels Business Manager Informational Management Product Information Data Warehouse Customer Information Automated Tasks Business Processes Human Tasks Contact Management Workflow Information Access Customer Relationship Management Risk Management Enterprise Information Messaging Framework Middleware Call Center Security Customer Relationship Management framework

16. sugik0907.ppt SWKO/HPC Section 3: CRM Approach

17. sugik0907.ppt SWKO/HPC Building strong customer relationships requires focus in five key areas. Know Your Customers Service Your Customers Enable Your Workers Strategy Customer Valuation Behavioral Modeling Profiling and Segmentation Target Marketing and Campaign Management Customer Risk Analysis Customer Information FunctionalityIntegration Service Channels Operational Informational Technology Data Mining Query & Reporting Analytic Processing Information Access Data Warehouse Statistics Information Account Data Transaction Data External Data Customer Information Data Warehouse Extract EnhanceIntegrate Household ConditionCondition

18. sugik0907.ppt SWKO/HPC Achieving customer relationship management begins with a sound business strategy. Know Your Customers Service Your Customers Enable Your Workers Where Are They? Markets Which customers? n Customer values n Service requirements n Target segments n Product usage and behavior n Profitability and risk profiles Channels How Will You Reach Them? Products What Will They Buy? How to Enable the Workforce? Strategy n Market penetratioin n Market size / growth n Growth of targeted segments n Competitive position n Product pricing and bundling n Targeted segment needs n Features and requirements n Channel usage segment preference n Channel usage segment trends n Channel accessibility n Channel economics n Staffing & Skill Requirements n Education and Training n Access to Information n Personal Productivity Tools

19. sugik0907.ppt SWKO/HPC Capturing and transforming customer data is the foundation for successful customer relationship management. Demand Deposit Savings Brokerage Retirement Mortgage Consumer Loan Credit Card Insurance Account Data Transaction Data Transactions Channel Usage External Data Demographics Credit Bureau Customer Lists Life Events Customer Information Data Warehouse Extract Enhance Integrate Household ConditionCondition Information

20. sugik0907.ppt SWKO/HPC A suite of business functionality is built on the integrated customer information. Customer Valuation Behavioral Modeling Profiling and Segmentation Target Marketing and Campaign Management Customer Risk Analysis Customer Information Functionality

21. sugik0907.ppt SWKO/HPC The solution suite delivers the business application functionality for financial services marketing priorities. Customer Valuation Ability to value current profitability and life-time potential of a customer based upon revenues, costs and future predictive behavior Customer Risk Analysis Ability to assess the current and future risk associated with a customer Profiling and Segmentation Ability to cluster like-minded customers, enabling market segmentation and cluster modeling Behavioral Modeling Ability to model future customer behavior based upon knowledge of current customer behavior Target Marketing and Campaign Management Ability to create and manage marketing campaigns which target the right product, for the right customer, through the right channel Functionality

22. sugik0907.ppt SWKO/HPC A fully functional customer relationship management solution requires a solid technology base. Customer Valuation Behavioral Modeling Profiling and Segmentation Target Marketing and Campaign Management Customer Risk Analysis Customer Information Data Mining Data Warehouse Statistics Information Access Analytical Processing Query & Reporting Technology

23. sugik0907.ppt SWKO/HPC Leadership in personalized services requires integrating this informational environment with the operational systems. Service Channels Transaction and Product Systems Business Managers Call Center Fax Phone Mobile - PDA Internet - PC ATM & Kiosk Branch Home - TV Operational Informational Marketing Integration

24. sugik0907.ppt SWKO/HPC Section 4: CRM Architecture & Methodology

25. sugik0907.ppt SWKO/HPC Customer management flow Business Lines Enterprise Integration Intelligence Derivatives Points of Impact Business Process Software Decision Design Rapid Feedback Loops Response Rates Campaign Management Direct Mail Mail Branches Call Center Risk Score Propensity to Buy Profit Profile Application Data Credit Bureau Data DemographicData Credit Cards MortgagesDeposits Decision Engine UnderwritingWorkflow Interaction Coordinator LoansInsuranceInvestments Internal Data Attrition Score TelemarketingWebATMCollections

26. sugik0907.ppt SWKO/HPC Sample CRM architecture Customer Data Update Report File Outbound Inbound “Customer Data” DecisionEngineDecisionEngine Web OtherOther Direct Mail Telemarketing Branch Call Center Marketing Campaigns Report File Response Card/Coupon Campaign Management Decision Engine Operational Systems CollectionsCollections Interaction Coordinator CoordinatorInteraction Decision Engine Post-Booking Risk Mgmt. Post-Booking Decision Engine Originations & Underwriting Underwriting Decision Engine

27. sugik0907.ppt SWKO/HPC Sample CRM Architecture Customer Knowledge Data Mart Transformation Contact History Web Interaction Order E-Mail Disposition HP Warranty & Registration SAP (Financial) External DB Products Customer Segmentation Customer Valuation Behavior Analysis Loyalty Program Design Marketing Analyst Marketing App Server OLAP Data Mining Identify / Differentiate Campaign Mgmt Server Campaign Design Campaign Measurement & Analysis Marketing Analyst Interact / Customize E-mail List Personalization Server CTI Server Contact Mgmt. Server HPSV Web User Score Campaign Response Campaign Response

28. sugik0907.ppt SWKO/HPC Initial Presentations Initial Presentations Scope Definition Solution Marketing Reference Site Visits Initiation - Scoping Solution Design - Assessment and High Level Design Assessment Service Strategy Service Strategy Solution Road Map CI Architecture Benefits Analysis Product Selections Product Selections Integrated Designs Budgeting and Acquisition Detailed Project Plan Detailed Design - Integrated Design Deployment - Solution Build Contact Channel Management Contact Channel Management Electronic Commerce CRM Campaign Management Operations Intellectual CapitalMarket ResearchReferences Product Information FOCUS PM Project Management Methodology CRM Service Delivery Methodology

29. sugik0907.ppt SWKO/HPC HP recommends a phased approach in order to meet business requirements and critical project deadlines Deliver database marketing functionality to acquire new high value customers Analysis, campaign management and reporting functionality Integration with outbound telemarketing and mail Small number of users (<10) Minimal technology automation Integrate marketing analysis and campaign delivery with all channels Event triggered marketing integrated with all customer contact points (“one-to- one” marketing) Integrated, real time customer information analysis Knowledge capture through all delivery channels Marketing Database and Marketing Management Applications Phase 1 Full Function Marketing Data Base and Operations System Phase 2 Integrated Marketing Operations System Phase 3 Enhance sophistication of access and analysis; automate system operations Enhanced marketing database functionality More sophisticated analytical capabilities Broader set of EIS tools Process automation Network and systems management Metadata management Objective Scope

30. sugik0907.ppt SWKO/HPC The project team will utilize rapid development methodologies in order to deliver each Phase

31. sugik0907.ppt SWKO/HPC Section 5: Conclusion

32. sugik0907.ppt SWKO/HPC 성공적인 CRM 구축을 위한 접근 방법  기업 환경을 고려한 Master Plan 수립  중장기 계획에 따른 체계적 접근  투자 효과를 고려한 접근 방법  경영 환경 및 IT 의 변화를 고려한 기반 구조 구축  Business & IT Alignment  Data Warehouse  고객 데이터의 정보화  고객 정보 수집 ( 기존고객, 신규고객, 잠재고객 등 )  고객 정보 관리 체계 ( 고객정보입수방법, 정확도, 변경방법 등 )  과학적 / 체계적 마케팅 시스템  분석 / 활용 능력의 강화  분석 결과에 따른 고객 속성별 마케팅 전략 수립 / 실행 /Feedback

33. sugik0907.ppt SWKO/HPC 프로젝트 성공을 위한 Key Point  장기적 안목에서 경쟁력 확보를 위한 투자  단기적인 성과에 조급해서는 안됨  평균적으로 1 년 이상의 구축 소요 기간 필요  기업의 정보 요구에 부합하는 정확한 고객 정보의 관리  지속적으로 정확한 고객 정보의 유지 관리  고객 중심의 조직 구조로의 변화  기업 내부의 고객 중심적인 인식 및 구조로의 변화  소규모 그룹 중심 ( 프로젝트팀, 업무담당자, 정보관리자 등 ) 의 전유물화 배제  정보 분석 및 활용과 Feedback 의 유연한 연계  활용 결과의 지속적 축적 및 반영을 통해 최적의 시스템 유지  ROI 를 어떻게 측정할 것인가 ?

34. sugik0907.ppt SWKO/HPC Why are current efforts failing to achieve the desired results?  Misalignment between IT and Business  Many claim to address CRM but no single vendor can address the entire complex value chain  Very difficult to bridge the informational and operational linkage

35. sugik0907.ppt SWKO/HPC  Methodology  Partners  Technology  Integration  Expertise HP delivers superior customer relationship management results in five key areas. HP's Customer Relationship Management solution enables every institutions to transform themselves into a customer-oriented business by leveraging information as a strategic asset.