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Customer Relation Management

Customer Relation Management. Margaret Since-Hymas Sarye Lange Jodi Krause John Curtright Chris Hoffmeister. What Is CRM?. A strategy used to understand a customer. A process to gather and sort information. Allows for better analysis of what a customer needs in order to be satisfied.

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Customer Relation Management

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  1. Customer Relation Management Margaret Since-Hymas Sarye Lange Jodi Krause John Curtright Chris Hoffmeister

  2. What Is CRM? • A strategy used to understand a customer. • A process to gather and sort information. • Allows for better analysis of what a customer needs in order to be satisfied. • Attempts to makes all information available about a customer to all aspects within a company. • “CRM is a paradigm shift in terms of what you are focusing on.”

  3. CRM

  4. History of CRM • Beginning unknown- concept has existed since trade began • Resulted from increase in customer base and individualization • A way to process mass amounts of customer information

  5. Size of Spending • The median annual CRM budget runs over $1 million with an implementation time of four years. • 26% of united states businesses expect to be spending $500,000 or more on CRM projects over the next two years. MIT Sloan Management Review, Larry Yu. Cambridge:Summer 2001. Vol 42 Iss 4 pg 18, www.Jupiter.com.. "What We're Buying" www.cio.com viewev 10-12-03

  6. Size of Spending • In a 2001 survey, spending levels on CRM are forecasted to rise from $9.7 billion in 2001 to $16.5 billion in 2006. • Other research shows that spending could be as great as $30.6 billion by 2005. MIT Sloan Management Review, Larry Yu. Cambridge:Summer 2001. Vol 42 Iss 4 pg 18, www.Jupiter.com.. "What We're Buying" www.cio.com viewev 10-12-03 “Watch out for CRM Hidden Costs” by A. Mello as seen on October 20, 2003 at http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2818263,00.html

  7. Spending by Region • North America: grew 5% in 2002 • Europe: fell 22% in 2002 • Asia: fell 15% in 2002 Gartner group- • Predicts that market will fall 8% in 2003 • Predicts market will grow 5% annually from 2003-2007 www.4gartner.com Viewed November 2, 2003

  8. Market Leaders • Popular among most major industries. • Forecasted leaders (most CRM technology spending): • Financial service companies-$5.4 billion in 2006. • Retail-$3.2 billion in 2006. • Telecommunications $2.9 billion in 2006.

  9. Benefits of CRM • Customer loyalty/increase in market share • Increase in sales and profits • Greater frequency of sales, repeated business/reordering, larger sales, higher customer count and new customers • Marketing and promotion savings “Report On Customer Relationship Management.” www.lexisnexis.com March 2003, Viewed October 18, 2003.

  10. Benefits Cont. • Fewer complaints, more complaints resolved • Customers remaining with the organization • Positive customer response • Differentiation • Improved employee morale and productivity “Report On Customer Relationship Management.” www.lexisnexis.com March 2003, Viewed October 18, 2003.

  11. Benefits Cont. • Improved employees relationships • Fewer employee grievances, less absenteeism and less tardiness • Less employee turnover “Report On Customer Relationship Management.” www.lexisnexis.com March 2003, Viewed October 18, 2003.

  12. CRM Yields • “It costs 6-7 times more to acquire a new customer than to retain an existing one.” Harvard Business Review

  13. Just How Much Information Is Held in CRM Packages? • “Online customer service contacts will grow from 870 million in 2001 to 4.7 billion in 2006” • This is a predicted jump of 3.83 billion contacts in a mere 5 years! (Keep in mind the multiple channels of information for each customer.) www.4gartner.com Viewed November 2, 2003

  14. How Does Information Enter an Organization? Many organizations have various ways to gather customer information: • Telephone • Fax • Web • Other • Personal contact

  15. What Must Be Done With All the Information? • Sort information for relevance • All relevant information must be included when implementing CRM • Any irrelevant information must be excluded when implementing CRM in order to reduce costs and time efforts

  16. What Information is Relevant? • Customer information must sorted through and organized. The question must be asked of what information is valuable and what is useless. • Useful information: • Responses to surveys/campaigns. • Purchase dates. • Shipping dates. • Demographic data. • Web sales data.

  17. Types of Customer Information

  18. What Is a Main Goal of CRM? • To understand customers for “profitable cross-channel customer relationships.” • To attempt to improve customer relations to increase customer retention. • To Gain insight into customer behavior and answer what is valuable to them. “Report On Customer Relationship Management.” www.lexisnexis.com March 2003, Viewed October 18, 2003.

  19. Questions to Ask to Improve Customer Relationships? • About What do customers care most & what do they want in the future? • What will happen if we only provide “mediocre” service? • How do we value customer relationships? • How can we improve our customer retention and satisfaction? • What will the future bring to customer service? “Report On Customer Relationship Management.” www.lexisnexis.com March 2003, Viewed October 18, 2003.

  20. Implementation • Must be more than a financial investment • Keys to successful implementation: • Do it incrementally • Scalable architecture • Be prepared technologically • Have adequate manpower for the amount of incoming data

  21. Industry Leaders • Siebel-voted the “CRM Platform 2003” by Network Word Italy • Industry specific, leading sales application suit • Packaged

  22. CRM Applications • Reporting-compilation, who is best customer and what are they buying. • O&F- finalization step, assist in creating contracts, invoices, etc.

  23. CRM Applications Cont. • Sales-allows salespersons access to company database and resources • Marketing-allows centralization of focus on current marketing techniques and markets • Customer service-management of different customer touch points • Document management-way to keep and maintain records in a way that can be access quickly

  24. VendorsSpecialized Vendors • Firstwave- first company to offer totally web-based CRM solution-packaged or ASP • TechExcel- only CRM solution designed for software and product development companies (packaged) • Knowledge concepts- Firmworks, accounting software specific

  25. CRM: NOT Primarily Technological • 54% of CRM spending levels is attributable to technology components. • Quote from Judith Kincaid, author of Customer Relationship Management: Getting it Right!” “CRM is not just buying a piece of software to automate some of your current processes and then plugging it in . If it were that easy, more companies would have had CRM success already.” “CRM is no silver bullet. CRM program success is achieved by completing small, focused projects that add up to a big victory over the long run.” “Report On Customer Relationship Management.” www.lexisnexis.com March 2003, Viewed October 18, 2003.

  26. Reasons for Failure • A recent survey from business intelligence quotes success rates for CRM implementation as around 10%. • Reasons: • Lack of communication between users. • Incomplete picture. • Inability to adapt to newer technology. • Managements limited understanding, poor planning or lack of skills. • Company politics, inertia and budget constraints.

  27. CRM case study: Empire Blue Cross and Blue Shield of New York

  28. Company Background • Founded: 1935 • Headquarters: New York • Employees: 6,500, plus 1,800 independent brokers • Customers: 29,000 corporate customers, representing 4.8 million individual customers • Revenues (2001): $4.3 billion

  29. Company Background • Serves the 28 eastern and southeastern counties of New York State and 10 contiguous counties in New Jersey and Connecticut • Empire is the largest health insurance provider in New York

  30. Before 2000 • Paper-based sales process • Customer had no contact with Empire and vice versa • Broker could not generate quote or process paperwork • Empire could not verify information with customer

  31. Application Process before 2000

  32. Application Process Problems • Paper-based: long (about 27 days) • Delay–filled sales process • Often difficult to make changes to plans • Outdated enrollment forms when plans were revised • Brokers were dependent on Empire relations staff, who were available during business hours only.

  33. “We had 33 redundancy audit checks-where we go over information to make sure it’s correct. We had created this nightmare.” -Steven Bell, Vice President of E-Business Operations, Empire Blue Cross and Blue Shield

  34. Implementation of CRM • In 1999 a team sat down and tracked the process • Cut the essential steps from 80 to 40 • Off the shelf CRM product not enough • Integration with current legacy mainframes • Outsourcing: Firepond of Waltham, Mass • Close cooperation with in-house IT department

  35. Empire’s Broker Services Application • Live in October of 2000 • Includes quote engine and proposal configurator • Password protected • Broker can go online to create custom proposals, pull information together about plan options, and print information specific to the customer’s specifications

  36. Broker can enroll new accounts • Agents can maintain customer information online • 24 hr access • Process now only took 2-3 days

  37. Updates since 2000 • New service was developed in-house • Additional sites were added: “Blue Tools” • Employers can now enroll employees • Individual members can now access and update personal data, check claims status and request ID cards • Brokers can now service their accounts online • Physicians can now check patient eligibility, submit claims, and check co-payments and deductibles online

  38. Application Process after 2000

  39. Conclusion • CRM is a tool to focus on your customers’ needs. • Empire Blue Cross and Blue Shield uses CRM technology to facilitate the sales process of health insurance coverage. • With this technology, Empire makes it easier for brokers, employers, individual members and physicians to come together in a 24 hr, easy to use environment.

  40. CRM in Sports Seattle Mariners

  41. Seattle Mariners • Established in 1977 • Defeated New York Yankees in 1995 Playoffs • Started to increase fan support • Opened Safeco Field • Record-tying 116 wins in 2001 • 2002 Sales (mil.) $167.0 • Most profitable team in the Major League • Highest attendance in the American League (3.4million) "Onyx Helps Build Fan and Sponser Loyalty for the Seattle Mariners"

  42. Successful Problems? • Increase in fan support highlighted inadequacies in their IT technology • As sales increased the lack of integrated systems hurt customer service • 13 Disconnected databases • Most Alarming: An excel spreadsheet outlining season ticket holders was maintained by the secretary of the CEO. • Decision to implement a CRM system took place in 2000 "Mike Rogoway, Knowledge Base"

  43. Larry Witherspoon • Vice President of Technology • Responsible for food and ticketing • Responsible for implementation of a CRM system • Currently enrolled in the MBA program at the University of Washington "Mike Rogoway, Knowledge Base"

  44. Onyx to the Rescue • Larry Witherspoon: Mariners Vice President of IT services • Selected Onyx Employee and Customer Portal for CRM system • Systems were implemented in 12 weeks, just in time for the 2001 season • Project was implemented in house by Witherspoon and 4 other people "John Hogan, www.crm.com"

  45. Main Goal • Frances Traisman manager of customer communications and senior account executive said “Our main goal with the Onyx system is customer retention, because it is much easier to keep a current season ticket holder or a 15-game ticket holder than to go out and find a new one.” "Onyx Helps Build Fan and Sponser Loyalty for the Seattle Mariners"

  46. Additional Comments by Traisman • Traisman continued “This is a business based on passion more than anything. If the fans feel disconnected from us and if they don’t feel we care about them, they’re not going to stay fans, and that affects the bottom line.” "Onyx Helps Build Fan and Sponser Loyalty for the Seattle Mariners"

  47. CRM Functions • Automate customer service and support activities • Manage season-ticket holder, suite, and sponsorship sales • Target new and existing customers and sponsors • Perform market analysis and organize tailored marketing promotions to specific customer segments • Integrate ballpark operations into Onyx to provide 360-degree information for total customer satisfaction "Onyx Helps Build Fan and Sponser Loyalty for the Seattle Mariners"

  48. Applications of CRM Functions • Incident records serve as complaint forms (i.e. broken seats) • Automated birthday announcements for season ticket holders • Review concession stand locations and plan future locations • Tracking based on Compass Club Members card "Onyx Helps Build Fan and Sponser Loyalty for the Seattle Mariners"

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