Business and Technology Strategies for More-Profitable Customer Relationships - Vision for CRM

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CRM budgets are less protected. So far, CRM has survived the economic slowdown, but pressure is building. CRM is dangerous. Failure rates are rising, mistakes will be seen by everyone and the impact on the enterprise will be greater. CRM is still a fantasy in most enterprises. CRM done at a department level suboptimizes the customer relationship. CRM can provide a fundamental competitive advantage. Those enterprises that succeed are reaping substantial long-term benefits. CRM should benefit both the supplier and customer. Few initiatives provide any benefit to the customer. CRM is not just about creating a unified view of......

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Nội dung Text: Business and Technology Strategies for More-Profitable Customer Relationships - Vision for CRM

Gartner CRM Vision: Business and Technology Strategies for MoreProfitable Customer Relationships Ed Thompson
Conclusions • CRM budgets are less protected. So far, CRM has survived the economic slowdown, but pressure is building. • CRM is dangerous. Failure rates are rising, mistakes will be seen by everyone and the impact on the enterprise will be greater. • CRM is still a fantasy in most enterprises. CRM done at a department level suboptimizes the customer relationship. • CRM can provide a fundamental competitive advantage. Those enterprises that succeed are reaping substantial long-term benefits. • CRM should benefit both the supplier and customer. Few initiatives provide any benefit to the customer. • CRM is not just about creating a unified view of the customer. The customer would like a unified view of the supplier too. • CRM will evolve beyond customers. The future of CRM will include a greater focus on employees, partners and prospects. These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Key Issues 1. What is the value of CRM to enterprises, and what drivers are continuing to force its acceptance? 2. How will organizations develop and implement a business vision for CRM? 3. What will CRM look like in the future, and how can enterprises position themselves now to be prepared for these changes? These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Has the Slowing Economy/Stock Market Decline Made You Reevaluate Spending in the Last Month? No. of Respondents 225 respondents with average No change yet 60 revenue of $10 billion No change, but monitoring the situation 50 Yes, planning to spend more slowly, more in 40 2H01 once I have a better read Yes, planning to 30 spend less Yes, senior management 20 requested a cutback in spending 10 Yes, doing deals that are smaller than I would have otherwise 0 Jan Feb Mar Apr May Jul Aug These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Which Areas Are Likely to See the Biggest Spending Increase in 2H01? • Microsoft Office upgrade – 29% • Database software – 14% • E-commerce initiatives – 27% • Customer service apps. – 14% • Network equipment – 24% • New custom development – 14% • Security software – 24% • Document mgmt. software – 13% • Windows 2000 server – 22% • Marketing/analytics – 13% • Windows 2000 desktop – 21% • Mainframe hardware – 13% • Wireless initiatives – 21% • Content mgmt. – 11% • Unix servers – 20% • Business intelligence tools – 9% • Storage hardware – 20% • Mainframe software – 7% • PCs – 18% • Storage software – 7% • Net. and app. mgmt. software – 18% • Supply chain mgmt. – 5% • Call center projects – 18% • Sales force automation – 4% • CRM software – 17% • E-mail response software – 4% • Employee portal projects – 17% • Mainframe system mgmt. – 4% • ERP software – 16% • Procurement software – 2% • Web site enhancements – 16% • E-store software for Web site – 1% • Consulting – 16% These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Top 10 Trends: The Siren Call of CRM? Market Trends 1. Increasing Customer Education and Expectations Consumer complaints 2000 = 5x 1995 2. Customer Relationship Complexity Rises R(f) = (Segments) x (Products) x (Channels) x (Partners) 3. Rising Global Internet Adoption More accessible competition and more coordination between partners Executive Trends 4. Intensified CEO Attention on CRM CRM = profit increase = stock price increase = bonus increase? 5. Protected CRM Budget Allocation 6. Formalization of Governance for Customer Relationships CRMO, CCO, customer advocate? CRM Implementation Trends 7. Shift in CRM Application Architectures and Spending DIY --> package; C/S --> Web; best of breed --> suites; per seat -->role-based; $2,500 -->$250 per seat; buy -->ASP + rent 8. Explosion of Customer Data Web, chat, e-mail, instant messaging, expanded contact centers 9. Vendor Churn Leading to a Power Shift 500 --> 50 vendors; best of breed --> ESP and ERP 10. Increasing Numbers of Project Failures 65 percent --> 80+ percent in mid-2003 These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Top 10 Causes of Failure in CRM Today 1. Management has little customer understanding or involvement 2. Rewards and incentives are tied to old, noncustomer objectives 3. Staff culture does not have a relentless focus on the customer 4. Limited or no input from the customers’ perspective 5. Thinking technology is the solution 6. Lack of specifically designed, mutually reinforcing processes 7. Poor-quality customer data and information 8. Little coordination of multiple departmental initiatives and projects 9. Creating the CRM team is left to last and lacks business staff 10. No measures or monitoring of benefits and a lack of testing These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Implementing CRM Is a Fantasy ... for Most in Europe 2000 vs. 2001 2000 2001 3% 7% No implementation 17% Unintegrated 33% departmental 45% 30% projects Integration of more 35% than one project 30% "True" CRM United States – 75 percent implementing, 8 percent “true” These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Not All CRM Strategies Are the Same Less than 1% Complex Extraenterprise (Type A) Infrastructure 5% to 10% Universal CRM View Competitive Enterprise Population Infrastructure Advantage Mix 10% to 30% Closed Revenue Multidepartmental (Type B) Analytics Loop Enhancement 45% to 50% Call Center Efficiency Cost Reduction Departmental SFA 10% to 20% Sub- Dedicated/ departmental Varies Varies Proprietary (Type C) Applications Goals Emphasis These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Guiding Principles for Successful CRM Extend breadth and Leverage and depth of relationships enhance brand equity    Touchpoints  Value Network    Minimize transaction Focus on customer barriers and lower costs value, satisfaction and loyalty   E-CRM     Self-Service These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Gartner Definition of CRM, But … Every Enterprise Should Have Its Own CRM is a business strategy whose outcomes optimize profitability, revenue and customer satisfaction (the why?) by organizing around customer segments, fostering customer-satisfying behaviors and implementing customer-centric processes (the how?). CRM technologies should enable greater customer insight, increased customer access, more-effective customer interactions, and integration throughout all customer channels and back-office enterprise functions (win-win outcomes?) These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Customer Value Propositions Product Superiority Best Product High Touch Best Product and Best at Best Product Time/Cost Enterprise Resource Trade-Off Best High Touch Best Time/Cost Customer Operational Intimacy Efficiency Best Time/Cost Plus High Touch These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Zen and the Art of CRM: Yin and Yang Definition and Organizational Segmentation Structure Customer People: Skills Requirements and Empowerment Internal: Organizational Processes Collaboration Processes Customer Incentives and Expectations Compensation Customer Feedback External: Data Mgmt. and Customer Applications Customer Experience Communications IT Infrastructure Metrics Metrics These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
The Eight Building Blocks of CRM Vision Strategy Organizational Customer Collaboration Experience Processes Metrics CRM Information Technology Perceived pain points: Least pain Some pain Most pain These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Customer Processes and Metrics Customer Process Re-Engineering 1. All customer-facing processes are mapped 2. Key processes are identified with customer input Horizontal 3. Prioritized by impact on customer satisfaction Death Auto Insurance 4. Measured by contribution to customer value Welcoming Claims Hotline 5. Implemented in front and back office Change Address Claims Processing 6. Given a cross-functional “owner” Quote to Cash Inquiry Handling 7. Implemented with partners Winback Claims Tracking 8. Targets sent to customers Campaign to Compensation Problem Resolution 9. Compensation for failure 10. A customer SLA Retail Banking Telecom 11. SLAs vary by “We’re speeding up your processes” Provisioning segment? Interbank Transfers Fault Restoration 12. By……. Available Balance Service Reliability Seven-Day Account Transfer Processing New Service Intro Real-Time Account Balance Salesperson Know-How ATM, Telephone, Branch, TV, Internet Individual? These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Customer/Supplier WinWin Outcomes Unified View of Customer Greater Insight Into Customers Unified View of Supplier Greater Insight for Customers ► Integrating across channels ► Unified view of customer, supplier ► Providing consistency across channels ► Churn likelihood ► Ensuring people resource per channel ► Current profitability ► Planning new channel life cycles ► Lifetime value ► ► Channel preference Consolidating internal and external data ► Life events ► Trading information with partners ► Relationship events ► Sharing information with customers ► External events More-Effective Interactions Greater Customer Access Lower-Cost Interactions Lower-Cost Access ► Unified view of customer, supplier ► Unified view of supplier, customer ► Minimizing customer transfers ► Accessible: Nearby or within reach ► Creating cross-functional roles ► Available, convenient: Open 24x7, self-service ► Retraining employees ► Approachable: Via multiple channels ► Empowering employees and restructuring ► Simple: Easy to use compensation ► Transparent: Within the enterprise and across ► Involving partners the supply chain ► Tracking customer processes ► Trustworthy: Privacy is respected These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Case Studies of Successful Outcomes Dow Chemical consolidated all Harrah’s Entertainment shared customer service and sales data across multiple casinos and information into one corporate hotels to create a unified memory to ensure a consistent personalized loyalty and rewards face to the customer after having system based on customer measured customer interface profitability through greater costs and activities per channel. customer insight. Ford added a Web-based Compaq created a Partner product configurator to simplify Relationship Management the order-entry system and solution to allow channel partners thus aid its fleet sales dealers consistent and greater access to in more-effective interactions information about leads, with fleet buyers and the products, services and user drivers of the vehicles. profiles. These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
The Evolution of CRM: Ajax? Stage Functional Departmental Partial CRM Total CRM Strategy Metrics Departments Systems 24-Month ROI 1X – 3X 2X - 5X 4X - 7X 5X - 10X Business Efficiency Effectiveness Competitive Impact Advantage Marketing Service Finance Sales Support Mrktg Sales Service These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Industry CRM Involvement Current 5 Yr Projected Technology & High-Tech 90% 95% Banking Financial Svcs. 1. More Commodity Telecom Product/Service Retail Utilities 2. More Channels Insurance of Communication Media Petrochemicals 3. More Global Pharma. Competition Automotive Distribution Gartner estimates: “Dot-Coms” Percentage FMCG or CPG organizations Manufacturing that have Business Services implemented Healthcare more than one Government CRM function Construction 5% 10% These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.
Future CRM: It’s Not Just for Customers Anymore Customers Prospects Channels Access: Data Exchange Integrate: Link Systems Your Company Collaborate: Create a CRM Ecosystem Employees Suppliers Implications: – Communities Partners Affiliates Influencers – “E to E” Approach – Part of Several Different CRM Ecosystems – Not Only Will Channels Merge/Morph, But so Will the Argument of Who Owns the Customer These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval.