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Customer Relationship Management the mobile telco case

Customer Relationship Management the mobile telco case. AAM Management Information Consulting Ltd. Csaba Lengyel International Business development Director. 11 May 2005, Sofia. AAM Consulting. Founded in 1994 AAM Technologies – our technology arm, 2001

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Customer Relationship Management the mobile telco case

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  1. Customer Relationship Management the mobile telco case AAM Management Information Consulting Ltd.Csaba Lengyel International Business development Director 11 May 2005, Sofia

  2. AAM Consulting • Founded in 1994 • AAM Technologies – our technology arm, 2001 • 2nd largest Consulting firm in Hungary, 2003 • International BU, 2004 • Headcount 120+30 • Net revenue 5,5 million euro • Clients: Telco, Financial services, Utilities, Public Administration • Services: Management and IT Consulting

  3. What is CRM? – in the real life…

  4. What is CRM? – and in the future…

  5. Agenda for today • CRM definition • How does it all work? • What Capabilities are required? • IT support • CRM Business Case • A mobile telco case

  6. „The true business of every company is to make and keep customers.” Peter Drucker

  7. What is CRM? – the „dark side” • All started with „all promising” technology investments: • Call Center • Sales Automation Software • Internet based customer service • Campaign management solutions • Integrated CRM solutions • Than the disillusionment came • 70% of Big CRM investments were not justified by either cost-cutting or revenue increase (late ’90-ies data) • In 2002 $13 billion has been spent on CRM related technology „The CRM „spirit” is willing, but the cash backing is still weak” „Customer privacy concerns require improvement in marketing capabilities.” „As the channel mix grows, enterprises will become more accountable for the ways in which they reach out for the customers” Gartner predictions

  8. What is CRM? – the „challenge” still ahead • Key questions still persist: • Do you know which customers are the most profitable? • Which customers are satisfied, …and which not so much? • Do you know, what they would need (Who? What? How?) • How your customer service processes compare in speed, cost and value to your competitor? • How the executive leadership is supportive and your culture is customer oriented? • Does your technology support your aspirations?

  9. Increasing competition Deregulation Common market Low cost competitors Need for „real-time” response Decreased customer loyalty or a threat of that Revenue uncertainties More customers Lower prices, dropping revenue per user Increasing marketing and sales costs More products and services Shortening cycle times Multiple channels (e-Commerce, Internet, Contact Center, etc.) Why? – The „real CRM levers”

  10. CRM – is a Paradigm shift Our objective is to sell as many products to our Buyer as as possible. We want to obtain the highest possible profit margin on each Buyer through maximizing his satisfaction by providing him with the most appropriate products and services given his needs and buyer capacity. Our objective is to sell our product to as many Buyers as possible. We want to sell these products on the highest possible price and produce, service them on the lowest possible cost.

  11. CRM Objective Increase profitability over the Customer Lifecycle! • Knowing who are your most profitable customers • Increasing revenue & profitability through cross-selling, up-selling • Prolonging the lifecycle of the customers by reducing churn • Increase efficiency of customer interactions through • differentiated (segment based) servicing • targeted sales offers • Integrated channel management

  12. Acquisition What criteria determine who will be our most profitable customers? How can we acquire this customer in the most efficient way?” $ $ $ Cross/Upsell Retention $ $ $ How can we increase the profitability of this customer?” $ $ T i m e How can we keep this customer for as long as possible?” $ $ $ $ $ $ T i m e How can we increase the satisfactionand optimise the cost of servicing this customer through efficient and „personalized” care?” Servicing Customer Lifecycle What we need to know?

  13. Customer Lifecycle How we can increase profitability? Eventbased sales opportunities Time Customer Relationship profitability Actions which build relationship warmth • No fault service • “Have a nice day” • Targeted sales

  14. Evolution of Mobile market A „general” view: Stage 1: „Starting up” Stage 2: „Growing” Stage 3: „Maturing” „Customers” agenda: • Network quality • Coverage • Phone sets / appliances • Products & Services • Pricing • Brand • Customer Service • Customer insights • Tailored offers • Smooth servicing • Globalisation Business issues: How to get a sustainable advantage? • Network development investments • Phone subsidies • Rapid growth • Revenue stream risks • Accent on customer service • New services / tariffs • Continuous growth • Competition (copying services/tariffs)

  15. 2. On the CRM interaction screen the high churn probabiliy of this customer is visible. 3. Based on the “Retention offerings”, the most suitable proposal is made to the customer. What is CRM? – in the real life… Example 1: Identifying Churnprobability and make a relevant offer! 1. A Regular customer calls Call Center and asks for the detailed invoice to be resent again.

  16. 3. The agent registers the reaction of the customer in the CRM solution. What is CRM? – in the real life… Example 2: Support Cross selling with targeted relevant offer! 1. A Customer comes to a shop to buy a new headset. After the sales the agent registers the interaction in the CRM solution. 2. Since the sales resulted a positive mood, the agent proposes a new MMS tariff plan to the customer based on the three targeted offers available in the CRM solution.

  17. 1. A prepaid customer calls Call Center and asks why an ordered service is not available for free, although he recharges regularly with a high amount. 2. Since the churn lamp shows high churn and the customer has a high value, the CSR offers the migration to post-paid (because the requested service is free for post-paid) 3. Since further processing required (in back office) the CSR registers the request and assigns it to the relevant user group. What is CRM? – in the real life… Example 3: Support prepaid-postpaid migration, retention with workflows

  18. 1. A Customer calls Call Center, who has been targeted with the recent SMS campaign. 3. The CSR can use this information to find out the response of the customer. The preferred way of contact of the customer can be registered. 2. A Flash window appears for the CSR, notifying her/him about the campaign. What is CRM? – in the real life… Example 4: Unified channels

  19. Direct decision support through ALL channels Data and tools of strategic analysis Action delivery applications Data mining and analysing tools (OLAP) Direct actions to build customers Customer Contact applications Ensure data to ALL CRM applications Value added components Middleware (EAI) Supporting elements Access to reliable and coherent data DWH Background support systems(Billing, etc) How technology may help? IT Components of the CRM architecture :

  20. For the Company: Increase profitability Retain most valuable customers Entering new markets, get new customers Stop market losses Leave unprofitable markets Effective marketing through market segmentation Product and service development based on customer needs High level customer service Shortening sales cycles Get more knowledge about customers For the Customers: Products, services and processes tailor made to their (individual) needs Multi-channel sales and Customer Service Segment dependent communication, sales and service CRM Benefits

  21. Acquisition Cross/ Upsell Servicing Retention Acquisition costs Churn ARPU ServicingCosts Concrete CRM Targets (Levers) Building a Business Case for CRM • Benefits… • Tasks… • Process & Organisational development: • Modify existing customer facing processes • Develop new processes • Update / develop new organizational forms • Develop KPI’s and performance measurement procedures • IT developments: • Building a unified customer database (data model, data cleansing, migration, populating) • Implementing new CRM application(s) • Implementing EAI • Updating / changing existing systems

  22. CRM Programme - Timeline Overview Phase 0 Phase 1 Phase 2 Customersegmentation& cust. value calculation CRM business actions Customer segment strategies & Account planning Sales Force Automation Automation of 85%of the Corporate Sales Process Automation of 100% of the Sales Process Mobility - Use of Mobile Devices Use of Analytic Results Approval Process of Corporate Sales Opportunities Automation Central Customer Database realisation - Operational CRMCore System implementation Conceptioning CRM IT architecturerealisation Middleware software implementation Implementation of Campaign Management & Analytical Tool New Loyalty Prog. realisation Contact Centre & CRM Core System Integration Contact Centre implementation 2005 2003 2004 Legend Completed In progress Planned

  23. CRM Programme achievements Operational CRM Analytical CRM Customer value Campaign execution Data Warehouse Terminal service Support system Churn (pre- and postpaid) Central customer database Document Management & registry Customer need (corporate and consumer) Sales Proposal process support Billing Systems (pre-and postpaid) Customer self-care solutions (web, wap) • Legend • completed • still in progress • out of project scope New Loyalty Programme support Contact Center core Call Center IVR Interactive CRM

  24. CRM Programme Results • Increasing revenue by effective retention and cross-selling activities • Churn rate by starting CRM activities has decreased by more than 50% in the targeted segments • Despite the aggressive price competition the market share is unchangeddue to the CRM Strategy, even the number of customers is still increasing

  25. Lessons Learnt – To Focus On • Business Journey - a clear business direction that shows how the business will become customer centric • Customer Strategies - that plans the customer journey from initial prospect to high value customer and enables all customer facing functions to know what is required of them to achieve this goal • Organisation Design – purpose built to deliver the customer strategies and provides the cultural framework for transitioning the business • Information Architecture - that underpins the execution of the customer strategy, providing the right data, processes and treatments at each customer touch point • Performance Measures - that recognise and reward the new behaviours required for the company to become customer centric

  26. Lessons Learnt –To Avoid • Low company leadership commitment • Misaimed scope of the project • Internal focus of the business, often product centric • Functional organisation design • Unchanging command and control culture • Inadequate customer data (also inconsistency of customer data between applications) • Emphasis on IT as a solution for CRM

  27. Questions?

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