ch04 Implementing CRM Strategy
ch04 Implementing CRM Strategy
ch04 Implementing CRM Strategy
Management
A Databased Approach
V. Kumar
Werner J. Reinartz
V. Kumar
Werner J. Reinartz
• CRM Applications
• CRM Costs
• CRM Implementation
Web based
Customer Contacts
Sales Person • Direct mail • Telesales
Interface/ Contacts • Email • Coupons • Kiosks
Touch points • Websites
Customer Service
Marketing Functions Functions
CRM Sales • Campaign Management
Management
• Helpdesk
• Segmentation
Applications Functions • Personalization and
• Customer
Care
Customization
CRM Applications
• Marketing function
– Multi-channel campaign management, opportunity management, web-
based encyclopedia, market segmentation, and lead generations /
enhancement / tracking
– Personalization
– Content management
CRM Applications (contd.)
– What is the cost of training the company’s staff to use the CRM system?
– What is the timeframe for implementation and what will happen to the
current system processes during that time?
• IT Costs
• People Costs
• Process Costs
IT Costs
• People costs
• Process costs
– Market segmentation process, selling process and campaign
management process
Stages of ROI Estimation
Content
Questions to raise
• Is the goal sufficient?
Content
Generate ideas of how to reach target through internal bottom-up
participation, external views, consultants, benchmarks, etc
Questions to raise
• What factors have to change and by how much?
• Does it work from a technical perspective?
• Are the proposed benefits clear?
• Will customers and/or staff accept these measures?
Building Consensus and Commitment
Content
Have executives and line staff agree on proposed ROI goals
and ensure commitment on both sides
Questions to raise
Implementation Projects
Objectives:
of CRM
– Maximize profitability
Component Description
• Major activities:
• Customer data transformation- data warehousing, data integration
• Customer knowledge discovery-data analysis, prediction based on
results
Analytical CRM
• Issues
– Availability of information
CRM Practices at Capital One
• Segmentation Strategy
– Targeting all types of risk profiles, offering different prices and products
– Customer database distinguishes high-risk ‘revolvers’ and low-risk
‘transactors’
• Retention Strategy
– Help retain customers when introductory rate expires or risk of ‘dormancy’
exists
• Collections
– Payment assistance, recoveries and fraud
• Sales
– Sales system (SALSA) enables targeting cross-sell offers to specific
customers
– Uses accumulated data on customers to suggest how to react to specific
customer requests
• Information Technology
– Interaction with company in terms of prospect pool management and
solicitation, account acquisition, account servicing and call-center
technologies, core systems
• Human Resources
SERVICE
VIEW
MIS
Data warehouse
Use of Data
Online decision of
Customer data Segmentation associate
•Static customer data Expected NPV = Expected Rank order of what to Offer/
•Products
• sold For all sales activities • Value per product
$2,500
1924.5
$2,000
1412.5
$1,500
1048.4
769.5
$1,000
590
436.9
$500
$0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
1996 1997 1998 1999 2000 2001 2002
Annual
Growth 63% 40% 33% 39% 29% 36% 41%
Rate
Capital One: Summary
• 2001 - Capital One was named 3rd ‘Best Place to Work in the UK’ by The
Sunday Times. Capital One named in Forbes 400 list -Best Big
Minicases : Challenges in Implementing
CRM
• CRM in FMCG Industry: Henkel (Dial)
• The key elements of CRM are touch points and CRM applications that
span sales, marketing and service functions