Summer Report In Datamatics Global Services On Customer Relationship Management
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Declaration I hereby declare that the Project work entitled, Customer Relationship Management submitted by me for the partial fulfillment of the Post Graduate Diploma Management (PGDM) to XYZ Business, is my own original work and has not been submitted earlier either to XYZ or to any other Institution for the fulfillment of the requirement for any course of study. I also declare that no chapter of this manuscript in whole or in part is lifted and incorporated in this report from any earlier / other work done by me or others.
Place : Date
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Acknowledgement
I express my deep sense of gratitude to my mentor XYZ for her unflinching support and making herself available for discussion and providing me as required facilities whatever, whenever needed throughout duration of my dissertation. Last but not least I would like to sincerely acknowledge the help received from various persons and sources in collecting data’s and information in completing this satisfactory Project.
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Executive Summary
Deep customer relationships represent a continuing stream of income and a critical platform for new growth. They also represent a powerful and defensible barrier to entry. Establishing and strengthening long term relationship with your customers is the key to success. It’s the focus of a well structured and coordinated process of customer relationship management.CRM involves far more than automating processes in sales, marketing and service and then increasing the efficiency of those processes. it involves conducting interaction with customers on a more informed basis and individually tailoring them to customers needs. This project helps to gain a deeper understanding about how CRM can contribute towards improving the way you measure and optimize your relationships with customers.
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Contents •
Company Analysis
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Infrastructure……………………………………………………………………………………………..8 Branch Network ………………………………………………………………………………………….9 Management Team …………………………………………………………………………………..12 Group clients………………………………………………………………………………………………13 Partial list of Clients …………………………………………………………………………………..14 Corporate social responsibility initiatives…………………………………………………..15 Siebal CRM services……………………………………………………………………………………16
Chapter 1 (Conceptual Framework for CRM)
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Key CRM Principles…………………………………………………………………………………….18 CRM Activities……………………………………………………………………………………………21 Emergence Of CRM Practice……………………………………………………………………..22 CRM Formation Process…………………………………………………………………………….24 CRM Programs…………………………………………………………………………………………..26 CRM Implementation Issue……………………………………………………………………….28
Chapter2 (CRM & Related Concepts) KM With Focus on CRM……………………………………………………………………………..31
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Chapter 3 (Technological Tools For CRM)
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Tools…………………………………………………………………………………………………………32 Existing CRM Solutions……………………………………………………………………………..34 CRM Model ……………………………………………………………………………………………..35 e CRM………………………………………………………………………………………………………37 Review & Assessment Of CRM Solutions…………………………………………………37
Chapter 4 (Organizing For CRM) Assessing Needs…………………………………………………………………………………… 40
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Chapter 5 (Status OF CRM In INDIA)
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Survey OF Service Firms……………………………………………………………………………42 Research Objective…………………………………………………………………………………..42 Methodology ………………………………………………………………………………………….. 43 Analysis OF Findings………………………………………………………………………………… 44
Conclusion………………………………………………………………………………………………50
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References ………………………………………………………………………………………………..52
“Listening to customers must become everyone’s business. With most competitors moving ever faster, the race will go to those who listen and respond more intently”. Tom Peters, Thriving on Chaos
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Conceptual Framework for CRM Company profile Datamatics is a global provider of intelligent, value-driven technology and business solutions. These solutions span IT consulting, business process transformation, off-the-shelf technology solutions and customized software services. They leverage our proven expertise in developing technology to drive business efficiency and productivity. Product innovation, IP-creation and technology collaboration form the core of our Company's positioning as a 'one-stop-solution provider'. Datamatics has built up strong teams of Business Analysts, Technology Architects, Delivery Experts, Quality Specialists and Marketing and Presales Professionals. These teams are geared up to provide solutions that are based on technology platforms that deliver competitive advantage to our customers. Our domain and technology experts have integrated Artificial intelligence (AI) into many of the solutions that Datamatics currently markets. For instance, AI has given i-Q©, our path-breaking, intelligent information processing solution, the capability to think like a human being, giving the software intelligence and intuition. Besides AI, i-Q© also conducts tree search and is capable of pattern recognition, automatic learning, displaying confidence level of information located, auto correction, and has Heuristics in hundreds of its components. This success is being replicated across the organization, and solutions with similar features have already been launched during the past year: i-Mask™, i-Cat™, i-Pub™, i-Mark™ and i7
Clinic™. Mobile Serve™ , a web-based application for developing surveys on handheld devices, has been tested and found to be highly-effective. Built on the latest technology, MobileServe™ gives customers the power to conduct surveys using a range of mobile phones and PDA platforms. With customers increasingly demanding solutions to improve operational efficiency, faster goto-market, higher employee productivity and maximized customer satisfaction, Datamatics has focused on developing solutions to meet these market needs. Dartenium™ and e-Payables Manager© are two such solutions. Dartenium™ is a high-productivity automation framework for web testing. Similarly, e-Payables Manager© is a configurable Web-based workflow system specifically configured to cater to various Accounts Payable Functions. It is widely used by our customers including many Fortune 100 companies. Its flexibility has helped many of our customers in their initiatives to bring automation, visibility and agility to their Accounts Payable process. Datamatics Global Services has emerged as a leader in niche areas like embedded engineering and telecommunications, having developed solutions for ticketing, toll and parking applications. Such solutions have components that help manage user profiles better, and systems to maintain inventory and issue tickets, smart cards and discount coupons, and to configure vehicle type, tariff and concessions, etc. We continue to be driven by our vision “To be a World Class Organization Admired for Consistently Delivering Superior Business Value”.
Infrastructure For nearly three decades DFSL has invested in world class infrastructure capable of servicing India’s expanding capital markets. Our offices provide an environment where employees can be at their productive best and ensure the highest service levels. • • • • • •
Located in the heart of Mumbai, India’s financial capital Over 70,000 sq. ft. of state of the art facilities 40,000 sq. ft. of physical document library and retrieval facilities Strong rooms as per RBI guidelines to store negotiable financial instruments & sensitive documents Access controls across all facilities Round the clock security provisions by trained staff
Branch Network To ensure highest quality service and convenience to investors, DFSL has created a national network of branches, Datamatics Investor Service Centers (DISC), in strategic locations across India. Staffed with friendly and helpful personnel, our branches provide various services including: •
Transaction requests 8
• • • •
Service requests Account queries Statement of account generation Complaint lodging and redressal etc.
» Mumbai
» Nagpur
»
»
Jaipur
Bangalore
» Bhopal
» Raipur
» Chennai
» Visakhapatnam
» Rajkot »
Mangalore
» Ahmadabad »
Patna
» Ludhiana » Baroda
» Lucknow
» Chandigarh
» Indore »
Kolkata
» New Delhi » Kochi » Vijaywada
» Hyderabad
Awards and Milestones 1975 The Incorporation of Datamatics. 1983 Pioneered India’s first offshore software factory by setting up a Dedicated Offshore Center for Wang Labs, USA. 1989 First company to establish a satellite link from its software development center in India to AT&T Bell Labs, USA 1992 First Electronic Publishing Company in India. 1995 Chairman, Dr. LS Kanodia, inducted into the Dataquest Hall of Fame... and remains the only software professional to be thus honored. 1997 First in India and second in the world to obtain an ISO 9002 certification in Electronic Publishing.
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1998 First company in the world to guarantee a 99.997% accuracy level in data capture.
1999 Prime Minister of India confers the ESC “Most Innovative Software Product Award� upon Datamatics Technologies.
2000 First Indian Technology Company to acquire controlling stake in a US listed data management company (Saztec International).
2003 First Indian company to scale up a dedicated facility into a Joint Venture in the BPO space via acquisition of CorPay for providing customized outsourcing solutions for payables processing and other Finance & Accounting functions. 2004 First Indian non-voice third party BPO Company to get listed on BSE and NSE. 2006 Selected as Rising Star at 'The Global Outsourcing 100' 2006 Outsourcing World Summit. 2006 Among Top 50 best managed outsourcing vendors by 'The Black Book of Outsourcing'. 2007 Winner of the IMC Ramakrishna Bajaj National Quality Award 2006.
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2007 Ranked Third globally among global document process outsourcing providers by 'The Black Book of Outsourcing'. 2007 Winner of International Asia Pacific Quality Award. Becomes first and only Indian company to win the award in Services category, beating competition from hundreds of companies across the services spectrum in countries such as the US, Japan, Australia, Russia, Canada...
2009 Amalgamation of IT and BPO divisions complete.
Management Team Dr L. S. Kanodia
– Chairman and Founder, Datamatics Group
Rahul L Kanodia
–
Vice Chairman and CEO
Vidur Bhogilal
–
Chief Financial Officer
Sameer L. Kanodia
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Executive Director
Arvind Sirrah
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President, US
Dr. C M Dwivedi
–
President and Global HR Head
Michael Thuleweit
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Managing Director, Datamatics GmbH (Germany / DACH)
Navin Anand
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President, UK / Europe 11
Ramkumar Akella
– Chief Operating Officer
TECHNOLOGY At DFSL we believe that technology is a key enabler to significantly improve service levels and guarantee customer delight. DSFL has nearly three decades of experience in the R&T business and we leverage our experience to develop world class solutions to enhance our business processes. We use contemporary software technology, state of the art infrastructure and periodic BPR (Business Process Re-engineering) activities to make our processes efficient, our employees more productive and continuously improve our service standards.
Software – Overview • • • • • • • • • •
State of the art Transaction Processing and CRM software built on the Microsoft .Net framework Back-end database on the latest Oracle 10g Image based transaction processing to enable anytime, anywhere operations Built in controls and validation to ensure error free transaction processing Parameterized software, enabling customization to meet the unique requirements of different scheme features of AMCs System is capable of catering to high volumes of transactions Complete integration of all transaction modules offers 360 degrees view of the Investor All transactions can be tracked at every stage of processing – from receipt to dispatch of confirmations Flexible software architecture that can be integrated with software systems used by the AMCs and Distributors AMCs and Distributors can get real time data feeds of transactions to keep their systems and database always updated
Data Center
•
•
International Standard Data Center that guarantees o High Availability and Superior Performance – leading to higher productivity and ensure meeting client’s SLAs o Redundancy – to ensure minimum downtime and no loss of data o Security – to protect our client’s critical data and applications o Scalability – to be able to scale up our operations as per the requirements of the client and upgrade to better technology as and when available Physical security o Biometric fingerprint scanners and secured card access o High-security, tamper-proof cabinets with specially keyed locks 12
o
Restricted access to server rooms and 24-hour on-site security staff
Group Clients
The Datamatics Group has partnered with top service providers from around the world to provide our clients an unmatched value proposition.
Partial List of Clients
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Corporate Social Responsibility Initiatives Datamatics Global Services Limited has recognized the underutilized potential of the educated and skilled physically-challenged professionals. Datamatics has provided such individuals an 14
opportunity to contribute to the organization's growth while ensuring that they too benefit through the Knowledge Associates (KA) programmer.
Datamatics has tied up with a non-governmental organization called NASSEOH (National Society for Equal Opportunities for the Physically Handicapped) and Amar Seva Sangam where nearly 60 physically-challenged individuals work as Knowledge Associates in the Outsourcing Management Team. Apart from these, nearly 20 KAs work from home.
Through the KA programmer, Datamatics has provided such individuals the satisfaction of being financially independent, thus improving their status in society. The programmer is tailor-made for individuals who cannot commit themselves to full-time employment or travel any distance to the place of work.
Datamatics has also enabled the NGOs to provide opportunities for the physically-challenged by donating PCs to facilitate their IT set up. Trainers from the organization visit the NGOs and homes of the KAs to conduct training and feedback sessions. In some instances, a mentor coordinator is stationed at the NGO for 3-6 months to co-coordinate training & hardware setup.
Siebel CRM Services Siebel practice at Datamatics is well established and leverages our vast experience across various industry verticals. We offer industry specific Customer Relationship Management (CRM) solutions to our customers and have proved our expertise in several Siebel implementations. Our value added services include:
• • • •
Siebel Testing Siebel Implementation Siebel Customization Siebel Maintenance 15
• • • • • • • • •
Siebel Support Pre-packaged Siebel support Siebel Pre-Implementation Siebel Post-Implementation Siebel Enhancements Business process analysis Implementation of Siebel Customizations / enhancements and upgrade to current Siebel versions Pre-packaged Siebel support and upgrade services
Our Siebel Center of Excellence support model can help organizations by: • • • •
Supporting and enforcing business and IT processes Lowering support costs Preserving knowledge assets Enforcing quality standards
Some of the benefits that we have delivered to customers include: • • •
Improved quality of service to end customers Reduced costs by 40% Increased responsiveness to end customer
Chapter1 Customer Relationship management: an Overview Before we begin to examine the conceptual foundations of CRM, it will be useful to define what CRM is. A narrow perspective of customer relationship management is database marketing emphasizing the promotional aspects of marketing linked to database efforts. Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in which a variety of aftermarketing tactics is used for customer bonding or staying in touch after the sale is made. Shani and Chalasani define relationship marketing as “an integrated effort to identify, maintain, and build up a network with individual’s consumers and to continuously strengthen the network for mutual benefit of both sides, through interactive, individualized and value-added contacts over a period of time”. The core theme of all CRM and relationship marketing perspectives is its focus on co-operative and collaborative relationships between the firm and its customers, and/or other marketing actors. 16
CRM is based on the premise that, by having a better understanding of the customers’ needs and desires we can keep them longer and sell more to them. Growth Strategies International (GSI) performed a statistical analysis of Customer satisfaction data encompassing the findings of over 20,000 customer surveys conducted in 40 countries by Infoquest. The conclusions of the study were: • A Totally Satisfied Customer contributes 2.6 times as much revenue to a company as a Somewhat Satisfied Customer. • A Totally Satisfied Customer contributes 17 times as much revenue as a Somewhat Dissatisfied Customer. • A Totally Dissatisfied customer decreases revenue at a rate equal to 1.8 times what a Totally Satisfied Customer contributes to a business. • By reducing customer defection (by as little as 5%) will result in increase in profits by 25% to 85% depending from industry to industry. An important facet of CRM is “customer selectivity”. As several research studies have shown not all customers are equally profitable (Infact in some cases 80% of the sales come through 20% of the customers). The company must therefore be selective and tailor its program and marketing efforts by segmenting and selecting appropriate customers for individual marketing programs. In some cases, it could even lead to “ outsourcing of some customers” so that a company better utilize its resources on those customers it can serve better and create mutual value.CRM is defined as: Customer Relationship management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.
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Key CRM principles Differentiate Customers: All customers are not equal; recognize and reward best customers disproportionately. Understanding each customer becomes particularly important. And the same customers’ reaction to a cellular company operator may be quite different as compared to a car dealer. Besides for the same product or the service not all customers can be treated alike and CRM needs to differentiate between a high value customer and a low value customer. What CRM needs to understand while differentiating customers is: - Sensitivities, Tastes, Preferences and Personalities - Lifestyle and age - Culture Background and education - Physical and psychological characteristics •
Differentiating Offerings
→ Low value customer requiring high value customer offerings → Low value customer with potential to become high value in near future → High value customer requiring high value service → High value customer requiring low value service
Fig. 1 Customer value – Service Matrix Keeping Existing Customers Grading customers from very satisfied to very disappoint should help the organisation in improving its customer satisfaction levels and scores. As the satisfaction level for each customer improves so shall the customer retention with the organization. 18
•
Maximizing Life time value
Exploit up-selling and cross-selling potential. By identifying life stage and life event trigger points by customer, marketers can maximize share of purchase potential. Thus the single adults shall require a new car stereo and as he grows into a married couple his needs grow into appliances. •
Increase Loyalty Loyal customers are more profitable. Any company will like its mindshare
status to improve from being a suspect to being an advocate. Company has to invest in terms of its product and service offerings to its customers.
Low High Strategic Importance To Your Business Plan
*You have No Choice But To Handle Them Very Carefully. Will Consume Energy
*Cultivate Relationship. Spend Energy. Go Out Of Your Way.
# Think Of Innovative Ways of Getting them On Your Side, But The ‘Cost Of Acquisition’ Must Be Controlled
#Think Of Strategies TO Move Them Away From Competition. Will Consume Disproportionately High Energy.
*Existing Customers
*Focus On Short Term Profitability. Spend Minimum Energy To Meet Your Objectives.
*Very cautious decision needed. Re-examine business Plan & Strategy. Evaluate That Your Loss (i.e. Your competitor’s gain) Doesn’t become nightmare for you.
#Don’t Pursue. Use Opportunity As It Comes. Short Term Acquisition Shouldn’t Affect Long Term Image.
#Needs In-depth strategic review as acquisition alone and dissatisfaction later could be more harmful
Low
Relationship & Profitability Potential (Fig 2. Categorizing Customers) 19
#Potential Customers
High
CRM activities:
The CRM cycle can be briefly described as follows: 1. Learning from customers and prospects, (having in depth knowledge of customer) 2. Creating value for customers and prospects 3. Creating loyalty 4. Acquiring new customers 5. Creating profits 6. Acquiring new customers
Creating Profits
Learning from customers a& prospects
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Acquiring new customers
Fig.3 CRM Activities
1
5 3
Creating value for customers & prospects
4
2
Creating loyal customers
The Emergence of CRM Practice The Past: Looking back at a snapshot history of marketing, we can see the following clear developments and progression over the last four decades: • 1960’s – the era of Mass marketing, when Gibbs SR toothpaste began the first marketing of this kind with its black and white campaign. • 1970’s – saw the beginning of segmentation, direct mail campaigns and early telemarketing (such as publishing) • 1980’s – where Niche marketing made millionaires of those who were best at it. • 1990’s – Relationship Marketing. The explosion of telemarketing and call centres, all set up to develop relationships with customers. The recognition of the true value of retention and the use of Lifetime Value as a business case. In recent years however, several factors have contributed to the rapid development and evolution of CRM. These include: -
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1. The growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technologies that allow producers to directly interact with end-customers. For example, in many industries such as airlines, banks insurance, software or household appliances and even consumables. 2. Advances in information technology, networking and manufacturing technology have helped companies to quickly match competition. As a result product quality and cost are no longer significant competitive advantages. 3. The growth in service economy. Since services are typically produced and delivered at the same institution, it minimizes the role of the middlemen. .
4. Customer expectations are changing almost on a daily basis. Newly Empowered customers who choose how to communicate with the companies across various available channels. Also nowadays consumers expect a high degree of personalization. 5. Emerging real time, interactive channels including e-mail, ATMs and call centre that must be synchronized with customer’s non-electronic activities. The speed of business change, requiring flexibility and rapid adoption to technologies. 6. In the current era of hyper competition, marketers are forced to be more concerned with customer retention and customer loyalty. 7. As several researches have found out retaining customers is less expensive and more sustainable competitive advantage than acquiring new ones.. 8. The globalization of world marketplace makes it necessary to have global account management for the customers. 22
CRM Formation Process In the formation process, three important decision areas relate to defining the purpose (or objectives) of engaging in CRM, selecting parties (or customer partners) for appropriate CRM programs and developing programs (or relational activity schemes) for relationship engagement with the customer.
Purpose Increase Effectiveness Improve Efficiency
Programs Account Management Retention Marketing
Role Specification Planning Process Process Alignment Monitoring Process 23
Relationship Performance Strategic Financial Marketing → Retention → Satisfaction
Communication Employee Motivation
Partners Criteria Process
Employee Training Evolution • Enhancement • Improvement
Fig 5.
CRM Process Framework
CRM Purpose The overall purpose of CRM is to improve marketing productivity and enhance value for parties in involved in the relationship. By seeking and achieving operational goals, such as lower distribution costs, streamlining order processing and inventory management, reducing the burden of excessive customer acquisition cost, and through customer retention economics, firms could achieve greater marketing efficiencies. They can enhance marketing effectiveness by carefully selecting, customers for its various programs, individualizing and personalizing their market offerings to anticipate and serve the emerging needs of individual customer, building customer loyalty and commitment, partnering to enter new markets and develop new products, and redefining the competitive playing field for their company. Thus, stating the objectives and defining the purpose of CRM in a company helps clarify the nature of CRM programs and activities that ought to be performed by the partners. Defining the purpose would also help in identifying suitable relationship partners who have necessary expectations and capabilities to fulfill mutual goals.
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Relational Parties In the Initial phase, a company has to decide which customer type and specific customers or customer groups will be the focus of their CRM activities.
CRM Programs A careful review of literature and observation of corporate practices suggest that there are three types of CRM programs: continuity marketing; one-to-one marketing; and, partnering programs. These take different forms depending on whether they are meant for end-consumers, distributor consumers, or business-to-business customers. . Customer Types
Mass Markets
Distributors
Business
Program Types
to Busine ss
Continuity Marketing
One-to-One Marketing
•
After- Marketing
•
Loyalty Programs
•
Cross-Selling
•
Permission Marketing
•
Personalization
•
Continuos
Markets • Special
Replenishment
Sourcing
•
ECR Programs
Arrangements
•
Customer Business
•
Key Account
Development
•
Global Account
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Partnering/Company-
•
Affinity Partnering
•
Logistics Partnering
Marketing
•
Co-Branding
•
Joint Marketing
•
Strategic Partnership
•
Co-Design
•
Co-Develop
Table 1 presents various types of CRM programs developed for different types of customers
CRM Programs Continuity Marketing Programs Take the shape of membership and loyalty card programs where customers are often rewarded for their member and loyalty relationships with the marketers. The basic premise of continuity marketing programs is to retain customers and increase loyalty through long-term special services that has a potential to increase mutual value through learning about each other. One-to-one Marketing Meeting and satisfying each customer’s need uniquely and individually. In the mass markets individualized information on customers is now possible at low costs due to the rapid development in the information technology and due to availability of scalable data warehouses and data mining products. Partnering Programs
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The third type of CRM programs is partnering relationships between customer and marketers to serve end user needs. In the mass markets, two types of partnering programs are most common: co-branding and affinity partnering. CRM Performance Evaluation Process Without a proper performance metrics to evaluate CRM efforts, it would be hard to make objective decisions regarding continuation, modification, enhancement, or termination of CRM programs. Another global measure used by firms to monitor CRM performance is the measurement of relationship satisfaction. By measuring relationship satisfaction, one could estimate the propensity of either party’s inclination to continue or terminate the relationship. Such propensity could also be indirectly measured by measuring customer loyalty.
CRM Implementation Issues One of the most interesting aspects of CRM development is the multitude of customer interfaces that a company has to manage in today’s context. Until recently, a company’s direct interface with the customers, if any was primarily through sales people or service agents. In today’s environment most companies interface with their customers through a variety of channels including sales people, service personnel, call centres, Internet websites, marketing departments, fulfillment houses, market and business development agents,. For example, a customer who just placed an order on the Internet and subsequently calls the call centre for order verification expects the call centre staff to know the details of his or her order history. Similarly a customer approached by a sales person unaware that she has recently complained about dissatisfactory customer service, is not likely to be treated kindly by the customer. However, the challenge is to develop and integrated CRM platform that collects relevant data input at each customer interface and simultaneously provides knowledge output about the strategy and tactics suitable to win customer loyalty and support. If a call centre personnel cannot identify or differentiate a high value customer and does not know what to up-sell or cross sell to 27
him then it would be a tremendous loss of opportunity for the company. Although most CRM software solutions based on relational databases are helping share customer information, they still do not provide knowledge output to the front line personnel. As shown in Figure.6, CRM
solutions platform needs to be based on interactive technology and processes. It should assist the company in developing and enhancing customer interactions and one-to-one marketing through the help of suitable intelligent agents that help develop front-line relationship with customers.
Internet
Sales Group Knowledge Output Data Input Knowledge Output
Market Development
Data Input Knowledge Output
Data Input
Integrated Marketing Information Platform • Information Content • Relational Databases • Decision Support System • Active Intelligence • Business Rules • Collaborative Communication • User Profiles
Knowledge Output Data Input Knowledge Output Data Input
Knowledge Output
Data Input 28
Call Centre
Customer Operations/ Service
Marketing
Figure 6 . Information Platform for CRM
Since CRM implementation comprises a significant information technology (IT) component, these companies have handed over the responsibility of CRM implementation to information technology departments. They are focussed on simply installing CRM software solutions without a CRM strategy or program in place. The lack of CRM strategy or CRM programs, would leave
the front-line people without any knowledge of what they should be doing with the additional customer information that they now have access to. From a corporate implementation point of view, CRM should not be misunderstood to simply mean a software solutions implementation project.
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Chapter 2: CRM and Related Concepts Knowledge Management (KM) with focus on CRM As Peter Drucker defined “Information is data endowed with relevance and purpose�. To effectively implement a CRM solution it is very important to identify real knowledge about different types of customers (Viz. Most valued customers, Most grow able customers, Below zero customers) from plethora of internal and external data, figures, surveys, etc. A straightway technique is to create a data warehouse, thereafter information which is required to effectively implement principles of CRM, could be mined out of this data warehouse. Marketing, sales after-sales people would be knowledge workers. Front office could be more productive if they could utilize customer knowledge.
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Metrics, ROI, Balance Scorecard method, benchmarking are some of the common technique of KM system evaluation. KM implementation is the key to CRM. It’s a proven fact that 80% of organization revenues come form 20% of its customers; it becomes imperative to design CRM solutions keeping in mind these most valuable customers and to leverage 80% non structured data of about 20% of these most valuable customers. Just as more tangible corporate assets like computer systems have a finite shell life, so too does knowledge, it must be available at the right time to be able to act upon it. Retaining tacit knowledge (derived from experiences, data and documents) means retaining the individual, which is invariably not possible. It is possible to generate explicit knowledge from tacit knowledge, but it’s a complex exercise. The key ingredient of this exchange is face to face sharing of knowledge or virtual environmental tools like Lotus Notes, which can facilitate tacit knowledge exchange. The choice of Customer Knowledge Management (CKM) architecture should have a layered approach. Existing systems should be seamlessly linked with the proposed layer. The choice for CKM system could be Web (Enterprise information portal) or a packaged solution such as Lotus Notes, Microsoft solution.
Chapter 3: Technological Tools for CRM Tools •
Customer database A good customer information system should consist of a regular flow of information, systematic collection of information that is properly evaluated and compared against different points in time, and it has sufficient depth to understand the customer and accurately anticipate their behavioral patterns in future. The customer database helps the company to plan, implement, and monitor customer contact. Customer relationships are increasingly sustained by information systems. Companies are increasingly adding data from a variety of sources to their databases. Customer data strategy should focus on processes to manage customer acquisition, retention, and development. 31
Other Technologies that are used are as follows: •
Electronic Point of Sale(EPOS)
•
Sales Force Automation
•
Customer Service Helpdesk
•
Call Centers
Call Centre helps in automating the operations of inbound and outbound calls generated between company and its customer. These solutions integrate the voice switch of automated telephone systems (e.g. EPABX) with agent host software allowing for automating call routing to agents, auto display of relevant customer data, predictive dialing, self service Interactive Voice Response systems, etc. Systems Integration While CRM solutions are front office automation solutions, ERP is back office automation solution. An ERP helps in automating business functions of production, finance, inventory, order fulfillment and human resource giving an integrated view of business, where as CRM automates the relationship with customer covering contact and opportunity management , marketing and product knowledge, sales force management, sales forecasting, customer order processing and fulfillment, delivery, installation, pre-sale and post-sale services and complaint handling by providing an integrated view of the customer. It is necessary that the two systems integrate with each other and complement information as well as business workflow. Therefore, CRM and ERP are complementary. This integration of CRM with ERP helps companies to provide faster customer service through an enabled network.
Traditional Approach to CRM
Web-Enabled & Integration Approach
– A FRAMEWORK • CRM Customer Contact by − Telephone − Mail − In Person • Personal Selling • After Sales Service • Complaint Handling • Account Management • Customer care • Customer Satisfaction
• Customer Information System • Customer Database • Electronic Point of Sale • Sales Force Automation • Automation of Customer Support • Call Centres • Systems Integration • Lifetime value of a Customer
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Integration with technology (Web & Internet)
The existing CRM Solutions Delivering the ‘360 view’ requires automation to bring together all the data concerning a customer. This implies the organization has to change from: Mass Marketing
Product Focus
Product Focus
Customer Focus
Economies of Scale
Economies of time
1 way communication
Interactive
Response Time
Real Time
Present CRM Alternatives
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Present CRM solutions are offered by host of vendors that are to a great extent not industry specific. While there are some vendors, who have come up with industry specific solutions, the broad model around which the CRM solutions are built remain the same. Adopting a similar or a look a like solution across industries is what causes major strain in servicing a customer. Typical offerings of the current CRM solutions (such as Siebel, Oracle Apps or MySap.com, etc) vary from solution to solution. However typical CRM offerings consist of: Customer Development
Field sales, Tele sales, Internet Sales
Service Centre
Call Centers, Field Service
Sale management and support
Internet Customer Service
Market Analysis
Service Interaction Centre
Internet, Tele marketing
Business Partner Collaboration
Product and brand management
The Customer focused organization: CRM Model The idea here is to develop systems that allow flexibility, work on not completely predefined processes so as to enable front office to be proactive to each customer needs The Mindset impact on CRM A typical data warehouse will have the following components: • While developing a data warehouse one takes into account all the legacy and operation systems. But typically sales teams could be managing leads on an excel worksheet. Sometimes critical DSS input like “Profitability Analysis” itself may reside on a worksheet.
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Data Warehouse
Legacy & Operation Extract & Transfer
Risk Cube
FP&A Cube
Mktg & Campaign Sales CubeMgmt
OLAP Tool
eCRM
What is eCRM? eCRM provides companies with means to conduct interactive, personalized and relevant communications with customer across both electronic and traditional channels. It utilizes a complete view of the customer to make decisions about messaging, offers and channel delivery. It synchronizes communication across otherwise disjoint-customer facing systems. It adheres to permission based practices, respecting individual’s preferences regarding how and whether they wish to communicate with you and it focuses on understanding how the economics of customer relationship affect the business. eCRM Vs CRM
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CRM is essentially a business strategy for acquiring and maintaining the “right” customers over the long term. Within this framework, a number of channels exist for interacting with customers. One of these channels is “electronic” – and has been labeled “e-commerce” or “e-business”. This electronic channel does not replace the sales force, the call Centre, or even the fax. It is simply another extension, albeit a powerful new one, to the customer. The thrust of eCRM is not what the organization is “doing on the web” but how fully the organization ties its on-line channel back to its traditional channels, or customer touch points. Why employ eCRM? Companies need to take firm initiatives on the eCRM frontier to •
Optimize the value of interactive relationship
•
Enable the business to extend its personalized reach
•
Company-ordinate marketing activities across all customer channels.
•
Leverage customer information for more effective emarketing and ebusiness
•
Focus the business on improving customer relationship and earning a greater share of each
customer’s business through consistent measurement, assessment and “actionable” customer strategies.
• Review and Assessment of CRM solutions CRM software applications embody best practices and employs advanced technologies to help organizations achieve these goals. Categories of CRM solutions Any enterprise, which wants to implement CRM solutions, can choose from four categories of solutions −
Integrated applications suite
−
Interfaced applications bundle
−
Interfaced best of breed solutions
−
Best of cluster
Key requirements for CRM solutions 36
Some of the functional and technical requirements for CRM solutions are as listed below: •
Business intelligence and analytical capabilities
•
Unified channels of customer interactions
•
Support for web based functionality
•
Centralized repository for customer information
•
Integrated work flow
•
Integration with ERP applications
Functional Components of CRM solution CRM applications are a convergence of functional components, advanced technologies and channels. Functional components and channels are described below: Sales applications Common applications include calendar and scheduling, contact and account management; compensation; opportunity and pipeline management; sales forecasting; proposal generation and management; pricing; territory assignment and management; and expense reporting. Marketing applications
•
SIEBEL
It continues to out market and out sell the competition. It is one of the few front office suite vendors having vertical specific functions. Its functionality is compelling. It can be integrated with most of the back office solution like SAP and Oracle. The solutions for the verticals described above are discussed below: • For Consumer goods: a Siebel eConsumer goods offers eBusiness solution spanning the entire demand chain from the end consumer, through the retailer and the wholesaler, to the manufacturer. It has robust trade promotions planning functionality allowing users to manage customer promotion plans and the funds to support them, while comprehensive route planning functionality enables integrated account targeting. • For Financial Services: Siebel eFinance enables banking, brokerage, insurance, and capital market organizations to establish and maintain long term profitable relationship with consumers, small businesses, and corporate customers. The organizations can capitalize on 37
information captured during each customer interaction to more effectively cross-sell and upsell additional products and services. • For Healthcare: Siebel eHealthcare gives organizations the ability to streamline and improve sales, member services, medical management, and network management services. By using multiple distribution channels, including the Internet, call Centers, home office staff and independent brokers, Siebel eHealthcare provides organizations with a single view of their customers, thereby ensuring better service and improved quality of care. • For telecom service providers: Siebel E-Communications
helps wireless, cable, and
Internet service providers to target and win the right customers, accelerate service delivery, and provide service across all touchpoints. Siebel eCommunications embodies the industry’s best practices for generating accurate service orders, managing billing inquiries and adjustments, and up-selling and cross-selling additional services
Some of Siebel employeefacing applications are:
Some of Siebel customerfacing applications are:
Some of the additional products available in version 6.0
Siebel Call Center
Siebel eChannel
Siebel eBusiness Connector for SAP R/3 ®
Siebel eMail Response
Siebel eCustomer
Siebel Communications Server
Siebel Field Service
Siebel eMarketing
Siebel Distance Learning
Siebel Marketing
Siebel eSales
Siebel Global Enterprise Support
Siebel Sales
Siebel eService
Siebel Language Extensions
Siebel Service
Siebel Wireless
• Clarify It offers customer service & support and field service suite; however its sales functionality is immature.
• Oracle Oracle is betting everything on its thin, Web Based, centralized computing model. The Internet computing architecture is compelling for connected non-mobile users; Oracle is rebuilding functionality on the new platform and integrates its various acquired products. It offers a broad set of functionality across e-commerce, front office and business intelligence applications.
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•
Vantive : Vantive offers a compelling customer service and support and field service suite.
The rest of its front office functionality makes it suite more of a bundle. The solution is integrated with PeopleSoft at the back office. Table 2 Comparative Assessment of CRM Products for Vertical Specific Requirements
Chapter 4: Organizing for CRM Assessing Need How do you know your business requires CRM? It is very easy for a business to get caught in the latest ‘customer trap’ when it is being driven by the information technology (IT) market. Every business does require CRM; the question is to what level? Trends Many businesses are pushed by the current trend to change their business strategy, especially around CRM. There are basically three trends that effect a business:
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Consumer The customer is an ever-changing image, to be really successful with CRM you must recognize the customer trends that are effecting the business. If a business does not understand a customer profile and the changes that have occurred then it is not possible to provide true customer relationship management.
Products It is the business providing the products that meet the changing customer trends. Products need to be reviewed constantly perhaps enhanced or even removed. Supermarkets are a perfect profile to look at for viewing ‘product trends’, they constantly add and remove products and they constantly view customer buying profiles and set out the pattern of the store to meet the strongest buying trend. This may not always be by using the latest ‘technology’, it could be by just reviewing shells at the end of the day, but the super market is at the minimum watching for the two basic trends in CRM.
Technology Ensure that the business is ready to install the new technologies, is the customer data upto it, or is it time to start again? Do you need to review every technology being used or just one area. Will it assist the business, is it going to grow with the business requirements or is the technology just another ‘trend’? Relationship management should not be an alternative to existing functions/technology; it could be a logical extension to enhance those in existence, though it could radically change some of the operational processes.
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Is your Business ready? Are your customers Ready? What are the costs, monetary, time, people and long-term issues? Does CRM really matter? Whatever the business activity is all companies have to ask themselves is CRM the real factor for their company to succeed. Some customers do not need long-term relationship with their suppliers; therefore only minimal information is required from that customer. That however is still a form of CRM. Other companies have high quality and high value customers that they need to know information about, they need to provide exceptional service, the ‘pedigree’ of CRM. Whatever the business is, if it has customer it has to ask, does customer relationship management matter? What does it man to them in business terms? At what cost? What is the overall loss if not adhered to?
Chapter 5: Status of CRM In India
A Survey of Service Firms
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Successful implementation of CRM requires a strategic approach, which encompasses developing customer centric processes, selecting and implementing technology solutions, employee empowerment, customer information and knowledge generation capabilities to differentiate them, and the ability to learn from best practices.
Research Objectives The current research was aimed at determining the approach being adopted by businesses in India for relationship marketing. The research focused on the following major issues: •
Do managers in service firms believe that their processes are customer centric?
•
Do they select technology on the basis of an understanding of customer needs?
•
Have they empowered their employees to deliver superior services?
•
Do they have a customer knowledge strategy? How well do they manage their customer
relationships?
Methodology The research was exploratory in nature and adopted a two-stage process. During the first stage, 50 managers of service firms operating in India were surveyed through respondent administered questionnaires. These managers belonged to the following three categories: a) Hospitality Industry encompassing hotels and restaurants b) Information technology and Telecom
industry
which
included software firms and telecom providers
Respondent Profile
I.T & Telecom 36%
Hospitality 29%
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Finance 35%
c) Financial Services included commercial banks and mutual funds The survey focused on the quality and the customer centric processes, technology selection, employee empowerment, and customer knowledge strategy to gauge the status of CRM practices in these firms. In the second stage, managers of select firms in each category of services were interviewed to understand the relationship marketing practices adopted by them. These interviews explored the following issues: 1. What are the various CRM initiatives undertaken by the firm? 2. How do they develop these programs? 3. How do they measure the effectiveness of these programs? 4. How successful are these programs in retaining customers?
Analysis of Findings Processes The managers reported a wide divergence with respect to the adoption of quality assurance across the three sectors. The I.T and telecom sector is at the forefront of adopting a formal quality management organization. Most of the players in the hospitality and the finance sector report having some methods in place to ensure quality management initiatives. About 8% of the overall sample have indicated the absence of any quality initiatives in their organizations. At the broad level, most managers believe that they understand most of the interactions between
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70%
62%
60%
50%
48%
50%
52%
35%
40%
35%
30% 15%
20% 10% 0%
0%
4% Some Finance
Most Hospitality
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All I.T & Telecom
Quality Assurance Process 80%
69% 52% 50%
60% 40% 20%
33%38%
27% 14% 12%
4%
0% None
Some Methods
Finance
Hospitality
Formal Organ. I.T & Telecom
customers and their business processes. About 50% of them have indicated that they have a full understanding of all possible interactions between customers and their business processes. Customer-centric marketing emphasizes understanding and satisfying the needs, wants, and resources of individual customers rather than those of mass markets. Therefore it is very important to have an understanding of all linkages between the customers and the business processes which help fulfill the customer needs. Technology Selection Information Technology (I.T) is a major facilitator for CRM implementation. In response to the question on whether they take into consider customers’ needs when selecting and implementing information technology, about 30% of managers have indicated that they have considered
Customer Centric IT 80% 62%
60%
50% 38%
40%
38%
29% 23%
23%
20%
14% 5% 3%
0%
0%
45 Finance
Hospitality
I.T & Telecom
23%
customer needs. Only 14% of managers in financial services do customer validation when selecting technology. While only 23% of the managers in information technology & telecom firms believe that their technology selections are customer centric whereas this was over 50% in the other two sectors. Employee Empowerment When asked whether their employees are empowered to make decisions in favor of the customers, less than a quarter of the managers across the three sectors indicated that every employee is empowered to take actions to ensure the ultimate satisfaction of the customer. Most of them feel that their employees have been empowered to take independent decisions within the guidelines. This aspect of limited empowerment gets reinforced when one looks at the linkage between the employee’s rewards with the customer centric behavior. Over 18% of the respondents across the sectors have reported no linkages or use of ad hoc methods to reward customer centric behavior.
Employee Empowerment
Finance
60% 50%
50%
Hospitality
43%
40% 28%
30%
24% 20%
20% 10% 0%
10%
24% 24%
23%
15%
12%
Stri ctly Rule Bond
I.T & Telecom
28%
Independ ent Decisi ons wi thi n gu ideli nes
Encourage decisions whi ch affect customer satisfaction
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Requ ire eve ry employee to ensu re custome r satisfaction
Facilitation of employees for their role fulfillment through information technology is another aspect of employee empowerment. Information technology helps employees respond to customer queries and provide support in a fast and timely manner. It helps employees respond to customer queries and provide support in a fast and timely manner. It helps them access information, which is normally spread across the organization. Over 54% of I.T and Telecom firms have provided the most effective technology to all employees who interact with customers. Customer Knowledge Strategy Customer knowledge gets built when information is collected systematically over a period of time. This can be done through regular surveys and also during customer interactions. But importantly this information has to be combined with the organization’s experiences with customers to build rich customer profiles, buying behavior, preferences and usage patterns. Over 60% managers in the hospitality industry have indicated that they have a continuous strategy for collecting customer information. In most of the services, opportunities to come in direct contact with their customers are high in comparison to other businesses that have intermediaries and hence have an arms length relationship with their customers. Therefore it is natural for service firms to collect customer information on a regular basis. But information collection is just the first step in generating customer knowledge. This information has to be combined with experiences to develop consumer insights which Strategy for Combining Customer Information w ith Experiences to generate Knowledge
80% 70% 60% 50% 40% 30% 20% 10% 0%
67%
38% 33%
33%
27%
24% 17%
15%
17%
19%
10% 0%
Poor
Is Encouraged Finance
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Process for Select Customers Hospitality
Rigorous Process for each Customer
I.T & Telecom
help them serve their customers better. When it comes to combining customer information with experiences, service firms seem to be economizing. Most of them seem to be doing it for select customers. Hotels do it for their regular guests specially those who have enrolled for their membership schemes. Financial service providers selectively do it for their high net worth individuals who typically use multiple offerings of the service provider. Most service firms rely on periodic surveys to understand their customers’ expectations and also understand and anticipate their behaviors. Over 40% of managers in the financial services have indicated that they work with customers as a team to ensure that their expectations are met or exceeded. It is very important to work with customers to understand their expectations as research has consistently indicated that one of the major reasons for poor service quality is the gap between manager’s perceptions about customers expectations and actual customer expectations (Parasuraman, Zeithmal and Berry 1985). Individualized Marketing Programs
60%
The
54%
40%
33%
30% 10% 0% Finance
of
collecting customer
50%
20%
purpose
28%
33%
information
36% 35% 28%
developing
19%
14%
12%
8%
Hospitality
knowledge is to be able to differentiate
0% Mass Market
and
Perceived Niche
Some for Individuals
I.T & Telecom
All Programs Specific to each customer needs
customers and meet their
specific
requirements. Peppers, Rogers and Dorf (1999) have recommended a four-stage process of Identification, Differentiation, Interaction, and Customization for implementing one to one relationships with customers. Over 50% managers in financial services have indicated that they have critical business information about their relationships with individual customers. This falls to about 40% in the hospitality and IT services. Customer knowledge can be used to initiate customization of the service for customers based on their needs. By tailoring the elements of services marketing mix, firms can customize their offerings to all or select customers.
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A majority of the marketing programs are targeted for smaller segments of the markets. But there is a growing trend towards individualizing these programs. With the emergence of e-commerce, this trend is going to further intensify.
Some of the important findings of the depth interviews with managers of these services are: (a) The relationship initiatives undertaken by firms have been directed towards customer retention. The initiatives were mostly membership /privilege schemes with gradations based on frequency and value of usage / purchase. (b) Most of them also indicated that these schemes were table stakes i.e. they cannot survive in the business without these schemes if everyone else offers them. But the race is always to differentiate on the basis of convenience for customers. (c) The source and reasons for adopting these programs were found to be diverse - frontline initiatives, adaptation of successful programs in parent organizations abroad especially for the multinational firms, or copying competitor’s offerings. Pioneers in the industry like one of the multinational bank, which introduced the concept of relationship manager, adopted the practices of their parent organization. (d) A common finding, across sectors, was the absence of measures for determining the effectiveness of these programs. Managers were convinced that these retention programs had long-term benefits but they were still grappling with metrics which would indicate that the investments were paying off.
(e) In several cases, there was a lack of coordination across functional departments. Although managers admitted that cooperation and coordination were crucial, they accepted that many a times, only marketing and customer service ended up as the 'program champions'. This had impact on the success of the overall program.
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Conclusions Relationship marketing is emerging as a new area of focus for service firms in India. But these are mainly based on some loyalty programs and investments in technology for enhancing the capability of databases. Managers should ensure that while investing in databases, technology, human resources and relationship marketing programs, attempts should also be made to develop milestones, which help them sustain these initiatives. These milestones become benchmarks against which future programs get evaluated. Measurement metrics get developed over a period of time when one starts collecting information about customers, their buying patterns, usage behavior, referrals, etc and start linking them to the marketing programs. Successful firms take a long term strategic view of customer relationship management. It cannot be solely managed through periodic programs. To be successful, firms need to be marketing oriented before initiating relationship-marketing initiatives. A holistic approach which leads firms to develop customer centric process, integrate technology through customer oriented approaches, motivate employees to perform to their full potential through empowerment are prerequisites for firms to successfully utilize their customer knowledge for customized or even one to one marketing.
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Conclusion
In the past, CRM was mostly about the technology, not about the customer. There is a change in the way the organizations do business. At a technology level, CRM is increasingly about conjoined best-of-breed applications delivered via portal technologies. At a business level, it is beginning to invade traditional territories occupied by brand management or customer support. Peel shows companies how to make the shift to the new paradigm.
The CRM vendors look like they have got their act together in terms of coupling their wares to the needs of the business. The market now distinguishes between CRM and eCRM. One would be forgiven for thinking that this differentiation was contrived to allow the vendors to retreat back to pre ecommerce CRM. But the opposite is true. eCRM is the new game and the vendors are being bullish about it. It may well be worth creating a CRM vendor index, as I think that it will be a good indicator of confidence in business in general and technology in particular.
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BIBLIOGRAPHY AND REFERENCES
Websites www.crmassist.com www.crmguru.com www.crmfoundation.com www.crmindia.org www.crmsearch.com www.crmcommunity.com www.CRM-forum.com
Philip Kotler: Marketing Management
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