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Evolution of CRM
1960's Direct mail marketing
Early 1980's Database marketing
Late 1980's One to one marketing
Early 1990's Loyalty Marketing
Late 1990's Relationship Marketing
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The Emergence of a Customer Relationship Strategy
More competitors
Shorter product life cycles
The explosion of new technologies and new distribution channels.
The keys to build an effective customer strategy includes
Identifying unique characteristics of each customer within the organizations
customer segment profile.
Modelling the current and potential value of each segment.
Creative pro-active strategies and operational plans, or business rules, which will
support the desired experience for the customer, starting with the highest value
customers.
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Study published in Harvard Business Review by Reicheld
& Sasser concluded:
Some companies can boost profits by almost 100% by retaining just 5% more of
their customers.The Graph below depicts how investment in customer relationships can improve
customer profitability over time. Increased purchases and referrals make significant
contributions in total profitability.
Bad customer service carries a very high opportunity cost. In a study conducted by
Ventura, Bob Tyrell, the chairman of the Henley Centre examined the cost of bad
customer service using models of profitability.
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The study concluded:
In a typical medium-sized company, bad customer service can result in
lost revenues of 1.8 billion pounds over 5 years and millions in lost
profits.
Reducing customer service problems by one percentage point can
increase profits by millions over 5 years.
Eliminating all customer service problems could double profit growth
over a 5-year period. There is undoubtedly a strong relationship between
improved customer service, greater profitability, and an increasing share
price.
The telecommunications industry is the most focused on relationship-
based
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Swift work exclusively in relationship-based strategies.
In terms of bottom line impact, PIMS Strategic Planning Institute has
measured the financial ramifications of service delivery on sales growth,
market share, return on equity and return on sales.
The PIMS study shows how vital effective Customer Relationship
Management is to financial success. The outcome can be tremendous and is
not limited to the incremental expenditures made by individual customers.
According to industry research, a satisfied customer, on average, will spread
the good word to three or four people, however, dissatisfied customers, on
average, will tell seven to ten people.
There is a natural balance, which needs to be considered when
organizations explore customer relationship and loyalty initiatives. Frequently
a small group of customers have a far higher value to the organization.
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Product differentiation is disappearing.
Technological innovations can be quickly copied.
Service differentiation act as a competitive advantage.
Industry analysts have reported that 70% of repeat
purchases are made out of indifference, Not out of loyalty.
Building loyalty begins by understanding that it is a
behavioral issue, the combination of positive past
experiences with product and services.
A customers relationship with a company affects product
attitudes and influences future purchasing decisions.
Why is there so much customer turnover anyway?
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Swift Matrix
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Relationship and Product strategies
Customer Loyalty.
Customer A was satisfied with the product purchased, but dissatisfied with his
relationship with the company (VULNERABLE) to switching.
Customer B is the type of customer every company desires: (LOYAL) very satisfied
with the product and the relationship with the company.
Customer C is the type of customer that nobody wants the misfortune of coming across
- a (SABOTEUR) to the organization. A bad experience with the product coupled to abad relationship with the company, will guarantee that he/she will never buy from the
company again.
Customer D was not satisfied with the product, but is (HOPEFUL) that the next
purchase will be satisfactory. A good relationship creates a reservoir of good will upon
which the customer is willing to give the company or product another chance.
The Swift Matrix
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The Swift Matrix provides a framework for better understanding the problem of the
customers turnover and direction, and about where to look for opportunities toimprove.
The key is to focus on the customers relationship with the company. Although customers
C and D both had poor product experiences, customer Ds willingness to continue a
relationship with the company dramatically differs from the behavior of the saboteur.
As well as the quantitative benefits, there is an increasing recognition of the qualitative
benefits of building relationship equity.
Customers who have positive attitudes can become part of your sales force by referring
others and by providing references.
Relationship equity also plays a significant role in customer forgiveness.
It may be overwhelming for a company with thousands, even millions of customers to
realistically implement a customer relationship building initiative across their entire
customer base.
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The concept of value is defined differently across companies, butin general there are some common dimensions.
Long-term value (Net present value of lifelong purchases)
Sphere of influence (Ability to generate positive word-of-mouth or
referrals.)
Growth potential
Profitability
History
Life events
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Identifying customers value
Company deploy revenues to nurture,
cultivate and grow CRM
Helps in understanding the
complete analysis of a customer.
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Customer E is high value but disloyal and represents a group that
deserves the greatest amount of attention. The company is at risk
of losing profitable, influential customers.
Customer F is what makes companies thrive. High value and
loyal, these customers are truly golden. Companies must pay thegreatest attention to this group as a way of expressing
appreciation for their ongoing business and recognizing their
importance.
Customer G, low value and disloyal, does not represent a group
with much long-term potential. If they choose to switch the
economic loss is minimal.
Customer H, low value but loyal, can be over-serviced.
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To enhance customer relationship strategy is 4 fundamental steps:
1. Identifying unique characteristics of each customer within a given customer
segment.
2. Modeling the current and potential value of each segment.
3. Starting with the highest value segment, creating pro-active strategies and
operational plans or business rules which will be followed.
4. Redesigning the organization, process, technology and reward systems
necessary for implementing the relationship strategies.
Modelling customer value is a critical piece of information for knowing whichcustomers deserve the greatest amount of attention.
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Technology Changing the way Business Works
Work Comes to People
OfficeHome Transportation
Hotel Airport
Today
WAN/
Internet
People Went to Work
Yesterday
Architect the network to allow the work to go to the people
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Todays Business Expectation
Establish an architecture that supports
Any person to work fromAny Place and get access to
Any information regardless of application via
Any Device that the person may possess,
24*7*365
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Emerging Trends in CRM
E-CRM : The key to meeting todays customers expectations isElectronic Customer Relationship Management (eCRM) an
approach that integrates all of your customer information and
makes it available for each customer contact, so you can provide
the kind of consistent and effective personalized service
customers want.
Contact Touch points are e-mail, instant messaging,
voice-over Internet, Web chat, voice mail or live help
desks, e-CRM provides a solution that brings them alltogether for each and every customer contact.
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The mCRM market is still at a nascent stage in India.
CRM applications are fast catching up on the mobile side,complementing front-end software on laptops/PCs.
Indian companies need to gear up for such solutions to gain a
competitive edge and push their marketing, sales force and CRM tothe phone.
The country witnessed a 54% y-o-y growth in subscriber base,
adding over 100 million new users. With the mobile penetration
level having exceeded 25%, considerable growth potential still
remains.
According to Frost & Sullivan, the enterprise mobility market in
India is worth about Rs 354 crore growing at 30-40% over the past
three years.
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Girish Trivedi, Deputy Director, ICT Practice, Frost & Sullivan South Asia &Middle East, said-
Some of the key drivers for this growth are the increasing competition to
address customer demand, the need to offer better accessibility to sales
representatives and most importantly mobile phones becoming computers.
"The advantages of mobility are universal be they for an SMB or a large
enterprise. However, mobility deployment in SMBs is much easier to control
given the lower number of users in the system"
- Thomas Abraham
MD Sage Software India Pvt Ltd.
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mCRM offerings
Oracle Mobile Sales Assistant
This product is a part of the Oracle CRM On Demand family of products and isavailable for both the BlackBerry and iPhone platforms. In contrast tobrowser-based mobile CRM solutions on the market today, Oracle MobileSales Assistant is a rich (Java) client application that also supports offline
usage.
Salesforce Mobile (from Salesforce.com)
A new addition to the Salesforce CRM family, the solution enables
organizations to deploy applications on wireless devices, including the AppleiPhone, RIM Blackberry, Palm Treo, and various Windows Mobile models.The application requires no cradling or synchronizing of mobile devices.Data is exchanged automatically over the air. No server software is requiredon the part of companies that use it.
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mCRM offerings
Microsoft Dynamics CRM Mobile Express
Mobile Express is an online-only Web-based mobile access solution that
supports any phone with a browser and Internet access and is available to
customers at no cost. Microsoft Dynamics CRM Mobile Express provides
online access to CRM using any Web-enabled mobile device.
Sage mobile CRM
Sage offers Mobile CRM with SalesLogix. This can work as a 'disconnected
client' on a Blackberry or Pocket PC device and is suited for salespersons 'on
the move' with limited Internet access. The other option is an 'always
connected' scenario for those seeking online updates and downloads.
CDC Mobile CRM Solution
This Mobile CRM solution brings your service team, technicians, field sales
staff, delivery team, partners and a host of other field personnel into the
umbrella of the enterprise CRM solution.
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WorldwideBPO Market Place
Card
Services
Billing
Insurance
CRM
HR
Payments
F&A
Credit
Services
Supply
ChainContent
Mgmt
35%
22%
16
7%
6%
6%
4%2%
1%1%
2008 BPO Market - $188 Billion 2005 - 2008 Growth ($M)
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
0 8 10 12 14 16 18
MarketSize
2005 2008 % CAGR
Insurance Services
Content ManagementServicesCredit Services
PaymentServices
Supply ManagementServices
Billing and ClearingServices
Card ProcessingServices
HR Services
Finance & AccountingServices
CRM Services
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Worldwide BPO Market Place
Mexico
5%
Ireland
5% C & EE
4%
China
2%
Others
5%
India
37%
Canada
27%
Philippines
15%
India remains a destination of choice for BPOservices, especially back-office and KPO services;
In 2008, size of Indian BPO Market =
$10.9B; estimated to employ 700,000
Canada as a near-shore destination continues to
diminish as its currency has strengthened and
higher adoption of offshore locations Philippines continues to grow as a preferred
destination due to better cultural alignment with
North America. Today it is the #1 destination for
voice based services
Eastern Europe is emerging rapidly especially as
an alternative to service Europe
KPO and judgment based work continues to grow
rapidly but requires domain expertise.
Investment in platforms continue to accelerate.
The number of Indian KPO professionals is set to
leap from 75,000 in 2006 to 250,000 employees by
2010
2007 BPO Delivery Destination
Vertical-
Specific
18%
F&A
22%
Other
Horizontal
Services
4%
KPO
8%
HR
Management
3%
ProcurementServices
1%
Customer
Support44%
Indian BPO Services 2007-08
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