1. CRM

2. Internet: Production and Distribution are Separate
Distributors
Customers
Producers
Brokerage
Investment Funds
Credit card
Software Company
Mortgage
Travel
Horizontal Portal
Finance Portal
Aggregators
Financial Marketplace

3. Internet: Production and Distribution are Separate
Distributors
Customers
Producers
Service Provider
Delta Air
Financial
Marketplace
E-loan
Horizontal Portal
Yahoo!
Producer
Ford Motor
GE Medical
Focused
Distributor
Amazon.com
Affinity Portal
iVillage
Vertical Portal
Quicken.com
Financial Product
AllState
Farmers Ins.

4. Financial Marketplace
New Value Web
Horizontal Portal
Yahoo!
Customer
Focused
Distributor
Amazon
Physical World
Call Centre
Vertical Portal
Quicken.com
Distributor
Financial Marketplace
E-Loan
Producer
Insurance Co.s
Allstate, GEICO
Software
Quicken2000

5. Traditional Organisation is Changing….
Customer
Product
Infrastructure

6. Internet: Traditional Organisation Will be Unbundled
Scale war; a few big players
Battle for scope; a few big players
Capability war; low entry cost, many small players
Competition
Cost and efficiency focused
“Customer comes first”
Employee focused, creative “stars”
Culture
Fixed cost is high, volume is essential
Customer acquisition cost is high, has to sell masses
First mover advantage and speed are important
Economics
Infrastructure
Customer Relations
Product Innovation
Source: Hagel & Singer, Unbundling the Corporation. Harvard Business Review, Apr’99

7. CUSTOMER RELATIONSHIP
Product Management
Customer Relationship Management
One time interaction
Focus
Constant interaction
Short term
Process
Long term
Mass
Communication
Personal
Market survey
Feedback
Constant dialog
Market share
Success criteria
“Wallet share”

8. CRM PROCESS Communication Personalise Know Your Customer
Product/ service
Communication
Channel
Price
Know Your Customer
Information gathering
Customer differenatiation
Communication

9. Review of the CRM space Overview of CRM Products
Critical Success Factors for CRM Implementation

10. The Evolution of Space CRM Systems eCRM Systems Sales Force Automation
CRM Products
The Evolution of Space
CRM
Systems
eCRM
Systems
Sales Force
Automation
Systems
Contact
Management
Systems
Functional Objective
Vendors
Automate FIs internal processes of Sales & Accounts Management
Sales Logix, Saratoga, First Wave
Improve workflow and automate lead tracking
GoldMine, ACT
Have organized, automated processes for sharing comprehensive CRM data with remote sales agents & business partners
Siebel, Oracle, Janna
Have web-based platforms which enable dynamic profiling of customers, interactive personalized scripting & customer treatment
Combination of Integrated web technologies

11. Review of the CRM space Overview of CRM Products
Critical Success Factors for CRM Implementation

12. The Environment A variety of financial products
Critical Success Factors
The Environment
A variety of financial products
Gamut of delivery channels & partners
Variety of modalities in far flung territories
Dispersed, incentive-differentiated sales organizations
Management by effective, entrepreneurial business divisions

13. Critical Success Factors
To Succeed in this rapidly evolving environment following are the critical success factors which Client must focus on

14. e-Enabling of entire CRM infrastructure (evolve into eCRM)
Critical Success Factor #1
e-Enabling of entire CRM infrastructure (evolve into eCRM)
Extends the purview of Customer Relationship Management

15. CRM Vs eCRM CRM eCRM Scope of Relationships Control of Relationships
Critical Success Factor #1
CRM Vs eCRM
CRM
eCRM
Scope of Relationships
Enterprise
Extended Enterprise
Control of Relationships
Financial Institution
Financial Institution & Customer
Nature of Relationships
Simple, Static
Complex, Dynamic
Central Focus
Company, Employee agents
Customer
Purpose of Solutions
Track customer interactions
Understand & increase customer relationship value

16. Data integration & synchronization
Critical Success Factor #2
Data integration & synchronization
Management of Interactive Customer Data Flows
Real-time or batch modes both for operations & decision support
Customer
Knowledge
Repository
Data Mart
Session & Transaction
History
Mining & Analytics
Business Rules
Business
Management
Input
Contact Info
Preferences
Interaction Flow
Transactions
Workflow Initiation
Service
Customer Profile
Scripts
Targeted Info
Customers
Personalized UI
Enterprise
Intelligence
Marketing
Content
Campaigns/
Customization Rules
Templates/ Scripts
Customer Intelligence
Campaign
Feedback
Collaborative Session

17. Industry-centric Workflow Management
Critical Success Factor #3
Industry-centric Workflow Management
Workflow & Fulfillment templates specific to Financial Industry
Capture the expertise of best marketing & sales people
Enable specification of complex rules for interaction
The idea is to define, instill and reinforce the “best practices” to elevate performance

18. Multi-channel Integration
Critical Success Factor #4
Multi-channel Integration
Call Center
Internet
IVR
Remote Sales
Branch/ store, , Mobile etc.
The point to make is what level of functionality is available in multiple channels

19. Integration of other Applications with CRM
Critical Success Factor #5
Integration of other Applications with CRM
Call Center
CIF
Profiling datastore & personalization engine
Integration of existing Logs & Rules Datastores
management
Data Warehouse/Mart
Marketing Analytics, transactional data, servers etc.
Ability to foster an integration platform to make existing systems take advantage of new dynamic environments

20. Implementation Approach
Typical Implementation Roadmap will be guided by: - Current state - Objectives for eCRM project - Project timelines - Business priorities - User-base within the organization - Back-end integration - Phase-wise implementation

21. eCRM Tool Objectives Objectives for eCRM Project DMAs Data Warehouseg n
Mgmt
Marketing
DMAs
Data
Warehouse
Lead Generation
Fulfillments
DSAs
Sales C o m p l a i n t
Mgmt
Customer
SFA
Opportunity Mgmt
Quote Generation
Order Entry
Tracking
Call
Center
Agents
Workflow Mgmt

22. People Issues: Managing Service Consumers

23. Opening Vignette: The Saga of “Yours Is a Very Bad Hotel”
What began as a customer complaint by two directors of a web design firm from the Pacific Northwest, eventually became one of the most talked about PowerPoint presentation of the new millennium.
The presentation, titled “Yours is a Very Bad hotel”, documents the fearless twosome’s troubles with a major hotelier in Houston.
Link to presentation

24. Customer Management Issues
Managing customer participation
Managing customer waits
Managing uncooperative customers
Introduction to customer relationship management (CRM)

25. Managing Customer Participation
Facilitating co-production (transforming customers into partial employees)
develop customer trust
promote the benefits of self-service
stimulate trial
understand customer habits
pretest new procedures
understand the determinants of consumer behavior
teach customers how to use service innovations
monitor and evaluate performance

26. Principles of Waiting Lines
Managing Customer Waits
Principles of Waiting Lines
Unoccupied time feels longer than occupied time
Preprocess waits feel longer than in-process waits
Anxiety makes the wait seem longer
Uncertain waits are longer than known finite waits

27. Principles of Waiting Lines
Managing Customer Waits
Principles of Waiting Lines
Unexplained waits are longer than explained waits
Unfair waits are longer than equitable waits
The more valuable the service, the longer the customer will wait
Solo waits are longer than group waits

28. Profile # 1 – Egocentric Edgar
Managing Uncooperative Customers
Profile # 1 – Egocentric Edgar
appeal to his ego
demonstrate action
don’t talk policy
rephrase: “for you, I can ….(policy)”
don’t let his ego destroy yours

29. Managing Uncooperative Customers
Profile # 2 – Bad-Mouth Betty
ignore her language
force the issue (hang-up)
use selective agreement (with some statements)

30. Managing Uncooperative Customers
Profile # 3 – Hysterical Harold
let him vent
take it backstage
take responsibility for solving the problem

31. Managing Uncooperative Customers
Profile # 4 – Dictatorial Dick
break up his game (fulfill his request)
stick with your game
be consistent with customers
tell him what you can do for him

32. Managing Uncooperative Customers
Profile # 5 – Freeloading Freda
give it to her
don’t let the 1% dictate action for the 99% who actually have problems

33. Customer Relationship Management
CRM is the process of:
Identifying
Attracting
Differentiating
Retaining customers
CRM allows the firm to focus its efforts disproportionately on its most lucrative clients

34. Customer Relationship Management
Reasons for CRM
The old rule that 80% of a company’s profits come from 20% of its customers.
Customers have done it to themselves by opting for price, choice, and convenience over high quality service.

35. Customer Relationship Management
Reasons for CRM
Labor costs have risen yet competitive pressures have kept prices low.
The end result is that gross margins have been reduced to 5 to 10 percent in many industries.
Markets are increasingly fragmented and promotional costs are on the rise.
Bass Hotels & Resorts reduced mailing costs by 50%, meanwhile response rates have increased by 20%.

36. Customer Relationship Management
CRM OUTCOMES
Coding
Routing
Targeting
Sharing

37. Customer Relationship Management
Coding
Customers are graded based on how profitable their business is. Service staff are instructed to handle customers differently based on their category code.

38. Coding Outcome
A New York customer travels to New Jersey to buy a table from an Ikea store.
After returning home, he discovers that the table is missing necessary brackets and screws.
The store refuses to mail him the missing parts and insists that he must return to the store.
The customer does not own a car. In comparison…

39. Coding Outcome
A “platinum” customer of Starwood Hotels & Resorts Worldwide wants to propose to his girlfriend in India.
Starwood arranges entry into the Taj Mahal after hours so that he can propose in private.
Starwood also provided a horse-driven carriage, flowers, a special meal, and upgraded suite and a reception led by the hotel’s general manager.

40. Coding Outcome
Sears, Roebuck & Co’s most profitable credit card customers get to choose a preferred two-hour time window for repair appointments.
Regular customers are given a four-hour time window

41. Customer Relationship Management
Routing
Call centers route incoming calls based on the customer’s code. Customers in profitable code categories get to speak to live customer service representatives. Less profitable customers are inventoried in automated telephone queues.

42. Routing Outcome
Call this particular electric utility company and depending on your status, you may have to stay on the line for quite awhile.
The top 350 business clients are served by six people.
The next tier, consisting of the next 700 most profitable customers, are handled by six more people.
The next 30,000 customers are served by two customer service representatives.
The final group, consisting of 300,000 customers, are routed to an automated telephone system.

43. Routing Outcome Charles Schwab Corp’s top-rated “Signature” clients
consisting of customers who maintain $100,000 in assets or trade at least 12 times a year
Never wait more than 15 seconds to have their calls personally answered by a customer service representative
Regular customers can wait up to 10 minutes or more

44. Customer Relationship Management
Targeting
Profitable customers have fees waived and are targeted for special promotions. Less profitable customers may never hear of the special deals.

45. Targeting Outcome
Centura Bank Inc. of Raleigh, N.C ranks its two million customers on a profitability scale from 1 to 5.
The most profitable customers are called several times a year for what the bank calls “friendly chats,” and the CEO calls once a year to wish these same customers a “Happy Holiday!”
The retention rate of the most profitable group has increased by 50%.
In comparison, the most unprofitable group has decreased from 27% to 21%.

46. Targeting Outcome
First Bank in Baltimore, Maryland provides its most profitable customers a Web option that its regular customers never see.
The option allows its preferred customer to click a special icon that connects customers with live service agents for phone conversations.

47. Targeting Outcome
First Union codes its credit card customers with colored squares that flash on customer service representatives’ screens.
“Green squares” means the customer is profitable and should be granted fee waivers and given the “white-glove” treatment.

48. Customer Relationship Management
Sharing
The sharing of customer information to other parts of the organization, and the selling of information to other companies. Although the customer may be new to the organization, their purchase history and buying potential are well-known to insiders.

49. Sharing Outcome
A United Airline’s passenger was shocked when a ticketing agent told him: “Wow, somebody doesn’t like you.”
The passenger was involved in an argument with another United employee several months earlier.
The argument became part of the passenger’s permanent record that follows him wherever he flies with United.
The passenger, who is Premier Executive account holder feels that the airline has been less than accommodating following the incident.

50. Sharing Outcome
Continental Airlines has introduced a Customer Information System where every one of Continental’s 43,000 gate, reservation and service employees will have access to the history and value of each customer.
The system suggests specific service recovery remedies and perks such as coupons for delays and automatic upgrades.
The system provides more consistent staff behavior and service delivery.

51. Limitations of CRM
Customers do not like hearing that they are not treated equally
in service operations where service discrimination is common, customer satisfaction is taking a “nosedive” and customer complaints are on the rise.
Privacy issues are also a problem
Vice-President of Continental Airlines proudly boasts…”We even know if they [the customers] put their eyeshades on and go to sleep.”

52. Limitations of CRM
What someone spends today is not a good predictor of what their behavior will be tomorrow.
Life situations and spending habits do change over time.
Customers can be more than 377% more profitable after they are retained 4-5 years.
Service discrimination a form of red-lining
the practice of identifying and avoiding unprofitable types of neighborhoods or types of people.