Evolution of CRM

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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.

Study published in Harvard Business Review by Reicheld & Sasser concluded: Amity Business School
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 relationshipbased

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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.

Why is there so much customer turnover anyway?

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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.

Swift Matrix
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The 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 a bad 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.

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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 to improve. 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, but in 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 the greatest 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.

To enhance customer relationship strategy is 4 fundamental steps:

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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 which customers deserve the greatest amount of attention.

Technology Changing the way Business Works

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Yesterday People Went to Work

Home

Today Work Comes to People

Transportation Office

WAN/ Internet Hotel Airport

Architect the network to allow the work to go to the people

Todays Business Expectation

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Establish an architecture that supports

Any person to work from

Any Place and get access to

Any information regardless of application via

Any Device that the person may possess,

24*7*365

Emerging Trends in CRM

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E-CRM : The key to meeting todays customers expectations is Electronic 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 all together 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 to the 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, saidSome 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.

mCRM offerings
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Oracle Mobile Sales Assistant

This product is a part of the Oracle CRM On Demand family of products and is available for both the BlackBerry and iPhone platforms. In contrast to browser-based mobile CRM solutions on the market today, Oracle Mobile Sales 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 Apple iPhone, 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 required on the part of companies that use it.

mCRM offerings
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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.

Worldwide BPO Market Place

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2008 BPO Market - $188 Billion 2005 - 2008 Growth ($M)

Credit Payments Billing

4%

Supply Chain

Content Mgmt
70,000

Services

1% 1% 2%

CRM Services

CRM
35%

60,000 50,000

Insurance
6%

6%
Finance & Accounting Services Supply Management Services HR Services 20,000 Card Processing Services 10,000 Credit Services 0 Payment Services Insurance Services Content Management Services Billing and Clearing Services

Card Services
7%

Market Size
22%

40,000 30,000

HR

16 %

F&A

10

12

14

16

18

2005 2008 % CAGR

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Worldwide BPO Market Place

2007 BPO Delivery Destination

Canada 27%

India 37%

Philippines 15% Ireland 5% China 2% Others 5%

Mexico 5%

C & EE 4%

Indian BPO Services 2007-08

KPO 8% Procurement Services 1% Other Horizontal Services 4% VerticalSpecific 18%

HR Management 3%

F&A 22% Customer Support 44%

India remains a destination of choice for BPO services, 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