The Eight Building Blocks of Crm a Framework for Successful Crm

8/12/2019 The Eight Building Blocks of Crm a Framework for Successful Crm

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The Eight Building Blocks ofCRM: A Framework forSuccess

John Radcliffe

These materials can be reproduced only with Gartners official approval. Such approvals may be requestedvia e-mail -- [email protected].


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CRM Attitudes: ChallengesMay 2002

g Reduced expectations due to the number of CRM

failures

0CRM now has a bad name in some organizations

g They hesitate to spend money because of:

0 Doubts about the economy

0 Inadequate understanding of CRM

0The lack of agreed measures of success

0 The difficulty of successful implementation

gAn emphasis on cost-reduction and short-term gain.0Companies are focusing on survival.


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CRM Attitudes: OpportunitiesMay 2002

g Users continue to express belief in the value of CRM

and remain committed to it

g They know they need it and they know it will cost

money.

g They also have realized that CRM is more thanthrowing money at software.

0Attitudes and processes have to change.

g Increased realism is leading to a renewed focus on

strategic thinking.

0The issues are complicated


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1. CRM Vision

2. CRM Strategy2. CRM Strategy

8. CRM Metrics8. CRM Metrics

7. CRM Technology7. CRM Technology

6. CRM Information

5. CRM Processes5. CRM Processes

3. Valued Customer

Experience

4. Organizational

Collaboration

4. Organizational

Collaboration

The Eight Building Blocks of CRM


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Customer Experience

The vision is the what and why ; the strategy is the how.

DifferentiatingBrand ValuesDifferentiatingBrand Values

Core ValueProposition

The CRM visionrequires a leaderto define CRM,set objectives

and draw a

pictureof what the

enterprise wants

to be to targetcustomers.

Creating the CRM Vision


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How do we develop thecustomers loyalty and value

to us by developing our valueto the customer?

How do we

acquire

valuablecustomers

who will value

us?

How can we

retain or win

backcustomers of

value?

How do we create

awareness of what we offer

to potential customers of

value?

How do we do

this efficiently?

MarketingSales Service

Develop

Retain Acquire

Target

Customer

Life Cycle

Enquire

WelcomeManage

Problems

Win Back

A CRM Strategy: Developing theCustomer Asset Base


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How is a CRM Strategy Developed ?

1. Audit the current market position and

customer position

2. Segment both consumers and customersand identify target segments

3. Set customer objectives (i.e., acquisition,

development and retention) and market

objectives by target segment

4. Outline the strategy to create the CVP and

desired customer experience by target

segment

5. Define metrics for monitoring the execution

of the strategy and evolving it

6. Specify the capabilities and infrastructurerequired (e.g., people, IT and data)

Where Are We

Now...?

Where Do WeWant To Be..?

How Do We Get

There.?


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Design the Customer Experience

What picture of desired future experience would

you want to give your customers ?

Describe it in a story Fill in the details later

You must design the customer experience, otherwise

the customers will design it for you - Tom Peters


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Evolving Toward aCustomer-Centric Organization

Organize byCustomer Segments

Organized by Functionand Product

g Do Not Change the Structure Too Quickly

g Trial in One Division First: Prove It

g Start in the Front Office: But Go Beyond It

g Involve the Business Partners

CustomerSegments

Divisions

Products HybridReality

C t P


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Balance Transfer

The Customer Life Cycle: TADR

The Impact of Back-end Processes on CRM

Horizontal Customer-Centric Processes

Vertical Industry Customer-Centric Processes

Marketing, Sales, Customer Service

Efficiency vs. Effectiveness

Design

Billing

Order Processing

Invoicing

Change Address

UnderwritingDeliveryTracking

Quote to Cash Campaign toCompensation

DeathWelcoming

Winback

Customer ProcessRe-Engineering Fundamentals

Inquiry Handling Call Avoidance

Process change must accompany any technology implementationProcess change could have a greater effect/be an alternative place to start

Optimized processes are an opportunity for competitive differentiation

C t I f ti


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Data Fragmentation and

Consistency Challenges

Data Quality Challenges

? ?

John

Smith

Mr J.

Smith

Data Quality Operationaland Analytical

Data Ownership Stewardship

?

Challenges in creating and

applying customer insight

Customer Profitability

Lifetime Value

Propensity to Churn

Challenges in enabling consistent,

integrated customer Interactions

SingleSingleCustomerCustomerView ?View ?

Customer InformationIs the Lifeblood of CRM


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Sourcing Your CRM Applications

Positioning

Repre-sentativeVendors

Integrated

CRM andERP Suite

IntegratedEnterprise-

level

applicationsuite

Intentia,Navision,Oracle,

PeopleSoft,SAP

CRM Suite

Most-functionalCRM suite

E.piphany,Onyx,

Pivotal,

Siebel

CRMFramework

Freedom tocontrol ownarchitecture

anddifferentiateprocesses

Chordiant,Graham,

Pegasystems

CRM Bestof Breed

Bestfunctionality

for your

department

Avaya,NCR,

Selectron,

Unica

Build ItYourself

Freedom tocontrol ownarchitecture.

Suites tooexpensive and

don't fit.

SoftwareInfrastructure

vendors (BEA,

IBM, Microsoft,Oracle,Sun)and ESPs

ProcessesIntegrated

CRM & ERPprocesses.

IntegratedCRM

processes.

Re-expressyour own

processes.

LimitedProcess

integration.

Re-expressown processes

at app. level

Data Model

Imposeddata model

covering

CRM andERP

Imposeddata

model

coveringCRM

Designedto fit

existing

datamodel(s)

Mixtureimposed/ fitto existing

data model.

Builds onexisting

data model(s)

I t ti O ti l A l ti l


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CustomerInteraction

Inbound/Outbound

MultichannelMultichannel

Multifunction

Customer Interaction ManagementCustomer Interaction Management

Operational Systems

Enterprise Nervous System

PartnerSystems

ERP SCM X

Outbound

MultichannelMultichannel

Campaign ManagementCampaign Management

MarketAnalysis

PredictiveAnalysis

HistoricAnalysis

CustomerInsight

Integrating Operational, Analyticaland Partner Systems

Analytical SystemsExternalData

Data

Mart

DataMart

ETLData

Cleansing

DataWarehouse

GuidedInbound

Interactions

Event-Triggered

Responses

A Hierarch of CRM


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Infrastructure Input

Operational and Process

Customer

Strategic

Corporate

Stakeholder Focus

Employees Efficiency

ManagementEffectiveness

ExecutivesFeedback

on strategy

ShareholdersBottom-line

results

Level

A Hierarchy of CRMPerformance Metrics


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Recommendations

g Vision: Define CRM, get a leader, answer why?, setthe core value proposition.

g Strategy: Develop the customer base as an asset,Answer how?, set objectives.

g Customer Experience: Design, then constantly refine

based on customer feedback.

g Organizational Collaboration: Change organizationalstructures, incentives, skills and the enterprise culture

to deliver the customer experience.

g Processes: Re-engineer to meet customers' expectations,provide competitive differentiation and contribute to the

customer experience.


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Recommendations (contd)

g Information: Treat customer information as an assetand a "blood supply," focus on tighter integration betweenoperational and analytical systems.

g Technology: Outline your CRM architecture first, considerCRM as one big integration exercise, assess the best styleof CRM application for your enterprise.

g Metrics: Set CRM metrics at multiple levels. Consider thisthe most difficult block: Without performance management,a CRM strategy will fail.


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The Eight Building Blocks of CRM

1. CRM Vision: Leadership, Market Position, Value Proposition

2. CRM Strategy: Objectives, Segments, Effective Interaction2. CRM Strategy: Objectives, Segments, Effective Interaction

8. CRM Metrics: Value, Retention, Satisfaction, Loyalty,Cost to Serve8. CRM Metrics: Value, Retention, Satisfaction, Loyalty,Cost to Serve

7. CRM Technology:Applications, Architecture, Infrastructure7. CRM Technology:Applications, Architecture, Infrastructure

6. CRM Information: Data, Analysis, One View Across Channels

5. CRM Processes: Customer Life Cycle, Knowledge Management5. CRM Processes: Customer Life Cycle, Knowledge Management

3. Valued Customer Experience

Understand Requirements

Monitor Expectations

Satisfaction vs.Competition

Collaboration and Feedback

Culture and Structure

Customer Understanding

People: Skills,Competencies

Incentives and Compensation

Employee Communications

Partners and Suppliers

Culture and Structure

Customer Understanding

People: Skills,Competencies

Incentives and Compensation

Employee Communications

Partners and Suppliers

4. Organizational Collaboration4. Organizational Collaboration


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The Eight Building Blocks ofCRM: A Framework forSuccess

John Radcliffe

These materials can be reproduced only with Gartners official approval. Such approvals may be requestedvia e-mail -- [email protected].

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The Eight Building Blocks of Crm a Framework for Successful Crm