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ROI for a CRM initiative at GST
Pesented by-
Jappreet Singh
Kanika Razdan
Lalit khanna
MeetingRobert Davis – Teradata official
Mark Johnson - GST’s CFO
Erica Kolks – vice president of marketing
Greater Southern Telephone Established in 1903
Located in southeastern united states
Region’s 3rd largest incumbent local exchange carrier.
13 millions customers in 11 states,28000 employees and sales exceeding US$ 6 billion
Service menu included data and voice transmission capabilities, such as broadband data services and internet access, delivered over a digital network
TeradataTeradata , a division of NCR CorporationNCR was found in 1884John H.Patterson purchased National Manufacturing Company and
Renamed it as National Cash Register CompanySome of the products of were ranging from mechanical cash
registers ,advanced POS and data warehousing solutions as well as worldwide leaders in sales and shipments of ATMs
1974,name was officially changed to NCR corporation2002,annual revenues were US $6 billion and approximately 32,000
employees1991,AT&T acquired NCR for US$ 7.4 billion 1991,NCR purchased Teradata Corporation1997,NCR became independent company again, which lead to restructuring
of AT&T into 3 distinct companies:AT&T,Lucent Technologies, and NCR
CRMCRM should be viewed first and the foremost as the
organizational strategy to understand and influence
customer behavior through continues communication to
improve customer acquisition, customer retention and
customer profitability.
Right customer with the right offer, at the right time using
right channel.
CRM Need’sIn 2002 the market for CRM solution was estimated
to be $3.6 billion.
Compound annual growth rate of 37% from IDC and AMR data.
Customer service and support solutions provide real time customer understanding via inbound interaction
CRM SolutionCRM solution can be divided into two parts-
Operational CRMAnalytic CRM
Operational CRMOperational CRM solution focus on collecting and
managing customer interactions through the various touch points a firm uses for sale, service and support.
These touch points include-WebRetail outletsATM’sCall centerDirect mail
Analytical CRMIt helps companies gain greater knowledge of their
customer through the analysis and modeling of detailed data.
Analytical CRM provides a clear customer insight enabling the organization strengthen its relation with the customers and enhance to profitability.
Telecommunication IndustryFew terms in this industry-:
Take rate
Churn
Lift
CRM strategy for GSTA single Integrated view of the customer.
With help of the wide data marts provided by Teradata GST was able to have a integrated view of its customers.
With EDW they could access customer quickly but lacked the analytic view. And with the Teradata CRM solution could be a big answer to question.
Power of AnalyticsOperational CRM is typically only effective when
combined with robust analysis and planning tools.
Analytic tools enables managers to understand-Who the customer isRecognize patternsTrends in customer behaviorThen craft communication tailor to individual
customer needs.
Business Discovery ProposalStatement of Work(SOW)
SOW between Teradata and GST-
The process the teradata would follow when developing a specific solution
The would help GST in defining metrics for the ROI.
Findings Values
How many customers are considered relevant for proposed CRM program
13000000
What is annual growth target for relevant customer base 5%
How frequently GST run acquisition campaigns monthly
On average what it costs GST to contact 1 customer $5
Historically, what is the current average campaign take rate for acquisition campaigns by GST customers
3%
Currently, what is the average monthly revenue per GST customer for the relevant customer base
$42
What does Teradata propose as the anticipated increase in average monthly revenue per customer
20%
What is GST average incremental gross margin percentage on the goods and services offered through the campaign
40%
What is the approximate tax rate for the analysis 38%
What is GST appropriate required return for analysis 16%
What Teradata suggested as the anticipated lift in the acquisition campaign take rate
5%
Findings cont..For the growth of wireless accounts by 5%,company
would run monthly campaigns to acquire new customers
Focused on increasing mobile childrenEmphasis were laid to lower churn rate Teradata was given the contract .Teradata laid great emphasis on CRMTarget campaignsV.A.S
CRM Implementation Cost
Hardware- $ 1,500,000Software- $2,500,000Professional services- $1,000,000
Annual maintenance would be 12% of the list price for hardware and 18% of the list price for the software.
Key issuesProviding additional benefits like network capacity, fraud
detection, improved retention.
Developing the profile of an ideal new customer utilizing current customer data was highly risky.
Appropriate time for the analysis.
ConclusionGST as a big fish in the telecom industry must go
with this CRM solution which has been provided by Teradata.
Customers are the main focus in this industry and if going with best CRM solution in the market will increases the customer retention and more customer acquisition.
Thank you