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Title: CUSTOMER RELATIONSHIP MANAGEMENT (CRM)

1
CUSTOMER RELATIONSHIPMANAGEMENT (CRM)

Holly Pund
Jamia Seifert
Nakia Sharp
Olga Skiridova

CRM is the process of predicting customer
behavior and selecting actions to influence that
behavior to benefit the company usually
leveraging on information technology and
database-related tools.

Koh Hian Chye Chan Kin Leong Gerry, Data
mining and customer relationship marketing in the
banking industry. Singapore Management Review,
Vol. 24, Issue 2, 2002, pp. 1-27.
3
Benefits of CRM

Provide better customer service
Make call centers more efficient
Cross sell products more effectively
Help sales staff close deals faster
Simplify marketing and sales processes
Discover new customers
Increase customer revenues
It costs 10 times more to get a new customer
than it does to keep an existing one. Moreover,
evidence suggests that companies focused on their
customers are achieving higher growth rates than
competitors who aren't.

What is CRM? Ehttp//www.cio.com/research/crm/ed
it/crmabc.html. Keeping Customers is Smart and
Profitable http//www.businessweeek.com/adsection
s/care/relationship/crm_keeping.htm. Viewed April
12, 2003 Chettayar, Krishna Using customer
information effectively. Financial Executive,
Morristown, Vol. 18, May 2002, pp.42-43.
4
5 Elements Required to Implement CRM

Strategy
Channel Marketing
Branding Advertising
Pricing
Segmentation
Technology
Process
Organization

Brown, Stanley A. Customer Relationship
Management A Strategic Imperative in the World
of e-Business. Toronto, New York John Wiley
Sons, 2000.
5
Defining Needs of CRM

Define customer strategy
Create a channel and product strategy
Understand the importance of an integrated
infrastructure strategy
The key is for the CRM effort to move beyond
sales, marketing, customer services and assisting
customers to include operations and the "Office
of the CEO" or strategic planning. It's critical,
for example, to integrate sales-force automation
with demand planning efforts that then feed
supply-chain systems.
- Larry Yu

Brown, Stanley A. Customer Relationship
Management A Strategic Imperative in the World
of e-Business. Toronto, New York John Wiley
Sons, 2000. Yu, Larry. Successful
customer-relationship management. MIT Sloan
Management Review, Cambridge, Vol. 42, Issue 4,
2001, pp.18-19.
6
Corporate Structure Before CRM
What is CRM? A White Paper by TBC Reasearch. IT
Toollbox http//crm.ittoolbox.com/browse.asp?cCRM
PeerPublishingrhttp3A2F2Fwww2Esabresys2Ecom
2Fpdf2FWhat5Fis5FCRM2Epdf. Viewed April 18,
2003
7
Corporate Structure After CRM
What is CRM? A White Paper by TBC Reasearch. IT
Toollbox http//crm.ittoolbox.com/browse.asp?cCRM
PeerPublishingrhttp3A2F2Fwww2Esabresys2Ecom
2Fpdf2FWhat5Fis5FCRM2Epdf. Viewed April 18,
2003
8

Founded in 1993
2002 Revenue Over 1.6B
Industry-specific best practices, CRM
applications, and business processes

Founded in 1998
2002 Revenue Over 2.3B
Customer care and billing software and services
that add value to the relationships between
clients and customers

Siebel web page. http//www.siebel.com/about/index
.shtm. Convergys web page.http//www.convergys.co
m/company_overview.html Viewed April 22, 2003
9

Founded in 1977
2001 Revenue Over 10.8B
Internet-enabled enterprise software
New software license sales were down 23 in 2002
Oracle is the first software company to develop
and deploy 100 percent Internet-enabled
enterprise software across its entire product
line database, server, enterprise business
applications, and application development and
decision support tools.
- Oracle 2001 Annual Report

Oracle Annual Report, http//www.oracle.com/corpor
ate/annual_report/2001/index.html?intro.html.
Viewed April 22, 2003. Seewald, Nancy D'Amico,
Esther. CRM and SCM vendors post mixed results.
Chemical Week, New York, New York, October 2002,
Vol. 164, Issue 43, pp. 23-24.
10
So What is the Cost of CRM?

Despite dropping by 5.4 in 2002, the CRM market
is expected to expand from a projected 42.8
billion in 2002 to 73.8 billion by 2007.
-Forrester Research
CRM is expected to grow more than 20 billion by
2004
-AMR Research

Siebel web page, http//www.siebel.com/about/index
.shtm. Veiwed April 22, 2003 CRM Overview
http//www.ittoolbox.com/help/crmoverview.asp.
Viewed March 20, 2003 Customer Relationship
Management http//advisor.aol.com/what_you_can_d
o_online/goals/main.adp?articlecrm. Viewed April
12, 2003Anonymous, CRM bounces back. Chicago,
Illinois Marketing Management, Vol. 11, Issue 5,
Sept/Oct 2002, p. 4. Patron, Mark, If database
marketing was so good, why is CRM so bad?Journal
of Database Marketing, London, Vol. 10, Issue 2,
December 2002, pp. 102-104.
11
So What is the Cost of CRM?

Spending on CRM applications and services, which
totaled 23 billion in 2000, are projected to
grow at a compound annual growth rate of 27 and
exceed 75 billion in 2005.
CRM services revenue will increase 15 in 2002.
The market is forecast to nearly double and reach
47B by 2006.
Worldwide, organizations spent nearly 25 billion
on CRM software in 2002 Of that total, only 3.7
billion, or about 15, was spent on packaged CRM
applications.
-Gartner Group

Almquist, Eric Carla, Heaton. Making CRM make
money. Marketing Management, Vol. 11, Issue 3,
May/Jun 2002, Chicago Illinois, pp. 16-21.
Anonymous, CRM bounces back. Chicago, Illinois
Marketing Management, Vol. 11, Issue 5, Sept/Oct
2002, p. 4.
12
CRM Success Failure Rates

45 of the CRM projects are successes that are
producing definite paybacks
35 are likely to fail
20 are generating some ROI but not in a timely
fashion

Panker, Jon, Research finds CRM failure rate
lower than widely reported News Editor12 Dec
2002, SearchCRM.com http//searchcrm.techtarget.co
m/originalContent/0,289142,sid11_gci868891,00.html
. Viewed April 22, 2003
13
(No Transcript)
14
Overview

Travelocity.com was launched in 1996 as part of
Sabre Holdings On April 11, 2002, Travelocity
became a wholly owned company of Sabre Holdings.
For 2002
Travelocitys revenue was 308 million, an
increase of 2.2 percent compared to 302 million
for 2001
Travelocitys gross bookings reached 3.5
billion, an increase of 11.8 percent compared to
3.1 billion for 2001
Since Travelocity is no longer a publicly traded
company, information concerning ITs budget was
not available

http//www.sabre.com/, viewed March 23 2003
15
Overview

Worlds leading travel internet site providing
consumers with reservation and information
access
700 airlines
55,000 hotels
50 car rental companies
6,500 cruise and vacation packages
Over 35 million members
1,000 customer service representatives
Web site in 7 languages across 4 continents

TDWI conference keynote speakers Caroline Smith,
Director of Data Warehousing at Travelocity.com
Chris Warwick, Director of Relationship Marketing
at Travelocity.com February 20th, 2003,
interviewed in person by Jamia Seifert
16
Travelocitys Business Objective

Develop long-term profitable relationships by
providing exceptional service and highly relevant
Travel offerings
Increase customer conversion
Increase customer retention
Increase revenue per member

Develop a single view of the customer
The most important focus of the CRM project
Travelocity chose Teradata, a division of NCR, to
assist with the CRM initiative
To achieve this vision requires having a single
view of the customer - from when they begin
looking to when they take their trip, and
afterward. This requires segmenting customers by
type (business, leisure, college, bereavement,
etc.)
- Mamie Millard, Senior VP of
Technology at Travelocity

http//www.sabre.com/, viewed March 23 2003
18
Travelocitys CRM Conversion

Six months conversion The maximum recommended
time
Three people dedicated
Mapped a middle or metadata layer into their data
warehouse for the CRM equation
Common problem of underestimated the amount of
time required to cleanse the data during transfer
Duplicate records
The big OOPS!

Williams C.C. Just the Ticket Travelocity.com
books Teradata for virtually instant
answers.http//www.teradatamagazine.com/articles/
archive/2Q_2001/just_the_ticket.htm, July 5th,
2001. Viewed March 23, 2003 Woodcock, Neil
Starkey, Michael. I wouldn't start from here'
Finding a way in CRM projects. Journal of
Database Marketing, London, Vol. 9, Issue 1,
2001, pp.61-74.
19
Seven Steps to Implementation

Important
Selection of a specific business process that can
be measured
The use of a system that did not require a
re-build along the way
Step 1 Created a team
Consisted of members from Travelocity and
Teradata
Travelocity (from Marketing IT)
Data warehouse developers
Marketing Director
Marketing Analysis
Marketing Managers
Teradata
Data Modeler
CRM Developer
Project Manager

The private sectors CRM-ROI formula can work in
agencies too.http//www.gcn.com/research_results/
crmgmt4.html Friday March 28, 2003. Viewed March
23, 2003
20
Seven Steps to Implementation

Step 2 Prepared the data warehouse
Created new logical and physical data model
(customer centric)
Focused on data quality
Added demographic data
Step 3 Identified unique members
Customers with multiple accounts are now
identified as one unique customer

Step 4 Developed Customer Segments
Travelocity Member Groups
New Members
Active Lookers
Short-time Inactive Members
1st Time Booker
2 Booker
Best Customers
Long Term Inactive Members

Step 5 Activated Channels
Aggregated data from all customer touch-points
Web interactions
Inbound email
Call center interactions
Offline bookings
Activated customer touch-points to drive service
levels and generate sales
Targeted offers on the web site
Outbound targeted email
Cross sell/upsell opportunities at customer
service

Step 6 Implemented CRM Tool
Utilized Teradatas CRM solution for campaign
management
New member conversion
Post booking cross sell
Pre-trip Bon Voyage message
Frequent looker
Toll-free reservation line message
Step 7 Analyze Campaigns
Analysis and reporting processes are in place to
measure campaign performance

CRM campaigns will be added incrementally, then
measured for effectiveness
Key drivers are
Customer segment needs
Merchandising plan
Revenue management requirements
Presently creating a position in Marketing
Manage CRM initiatives
Link the IT and Marketing groups

Let each area focus on their expertise
Data Warehouse group and Marketing partnered on
major projects
Selection of Teradata
Selection of Cognos tools for DB management
CRM initialization
The project budget and timeline was not available

500,000 automated communications sent monthly
New member welcome/conversion series
Post booking cross sell
Bon voyage pre-trip
20,000,000 targeted promotional emails sent
monthly
8,000,000 personalized newsletters sent weekly
Travelocitys ROI for the CRM project
The CRM efforts contribute a minimum of 2
million per month to Travelocitys revenues

Build the foundation first, then add the bells
and whistles
Set scope of project and stick to it
Dedicate resources to the project
Set internal expectations and provide frequent
updates
CRM projects take more time than initially
anticipated

CRM is never finished
Focus on data quality first
Determine agreement on service levels between
different groups
Talk to other companies utilizing CRM

Corporate Buy-in
Travelocitys CRM had significant senior
management support, a factor agency IT and
business managers also know to be critical to any
e-commerce effort.
- Caroline Smith, Director of Business
Intelligence - Travelocity
A robust data warehouse
Obtain the single view of the customer

Flexible and scalable CRM tools
Define event and wait for it to occur
Event triggers a reaction
Record event in data warehouse
Employ good communication channels
Ongoing analysis and improvement
Establish control groups
Continuously monitor campaign performance
Maintain contact history
Develop and apply data modeling to improve
customer targeting

Constantly implementing new features and
functionality into the Web site
New sources of data
Web site traffic keeps increasing
Creates greater volumes of data

TDWI determent Travelocitys CRM initiatives as
innovative and unique because
Travelocity is able to perform analyses and
execute automated, personalized marketing
campaigns.
Before their CRM initiative, customer
information was available to only a few end users
and that information was scattered. Now, all
information for all travel categoriesair, car,
hotel, and cruiseis in one location and is
available to anyone with a need to view the
information.
- TDWI recognition statement

Best Practices and Leadership in Data
Warehousing Award Winners 2002. January
2003 http//www.dw-institute.com/research/display.
asp?id6511. Viewed March 23, 2003
33
(No Transcript)
34

Oracle Company Background
Founded 26 years ago by Larry Ellison, Bob
Miner, and Ed Oates
First software company to develop and deploy
100 internet able enterprise software
The World leader in supplier software for
information management
The World second largest independent software
company
Producer of the Worlds greatest database-Oracle
9i

http//www.oracle.com/corporate. Viewed February
2, 2003
35

Oracle Company Profile
Headquarters Location Redford Shores,
California
Employees 40,000
Revenues for 2001 10.8 billion

http//www.oracle.com/corporate. Viewed February
2, 2003
36

Oracle Company Areas of CRM
Marketing
Sales
Service
Contracts

http//www.oracle.com/applications/customermgmt/in
dex.html?theme.html. Viewed February 5, 2003
37

Oracle Marketing Solutions
Problem Company makes marketing decisions by
instinct rather than by solid facts from data.
Solution Oracle offers Oracle Marketing. A
system that automates the entire marketing
function and process.
Products
Oracle Marketing
Oracle Trade Management

http//www.oracle.com/applications/customermgmt/in
dex.html?theme.html. Viewed February 8, 2003
38

Oracle Sales Solutions
Problem Ill preparation of a companys sales
staff leading to its inability to hit sales
targets, reduce costs, and reduce sales cycles.
Solution Oracle provides the company with an
automated business process for all sales and
customer interactions.
Products
Telesales Sales Online
Sales Offline Incentive Compensation
iStore Quoting
Configuration iPayment

http//www.oracle.com/applications/customermgmt/in
dex.html?theme.html. Viewed February 23, 2003
39

Oracle Service Solutions
Problem A companys inefficiency due to gaps in
communication between service, field service and
maintenance.
Solution Oracles automated and centralized
process of tracking requests and dispatching.
Products
iSupport
Mobile Field Service
Advanced Scheduler
Field Service
Wireless Option for Service
Depot Repair

http//www.oracle.com/applications/customermgmt/in
dex.html?theme.html. Viewed February 23, 2003
40

Oracle Contract Solutions
Problem A companys use of manual contracts
leads to omissions of important information which
later results in a loss of revenue.
Solution Oracles complete automation of
multiple style contracts
Products
Service Contracts
Project Contracts
Lease Management

http//www.oracle.com/applications/customermgmt/in
dex.html?theme.html. Viewed March 13, 2003
41

The Oracle Strategy of Implementing CRM
Oracles focus of implementing CRM to their
existing customers database
Single database instance
Suite of integrated applications
Software configuration, not customization

http//www.oracle.com/applications/customermgmt/in
dex.html?theme.html. Viewed March 13, 2003
42
Oracle Case Studies
Case Study 1 McData Corporation
43
McData Corporation
McDATA Corporation was founded in 1982. McDATA
(Nasdaq MCDT/MCDTA) is a global leader in open
storage networking solutions and provides high
performance enterprise directors and Storage Area
Networks (SANs). The company manufactures and
markets high-performance switching solutions
Fibre Channel for open systems environments and
ESCON for IBM data centers.
http//www.mcdata.com/about/profile/index.html.
Viewed March 5, 203
44

Company Profile
Headquarters Location Broomfield, CO
Industry High technology
Annual income 101 million to 500 million
Employees 501 to 1999
CRM Outsourcing Company Oracle

http//www.oracle.com/customers/profiles/PROFILE34
41.HTML.. Viewed March 5, 2003
45
Oracle Products Services

Discrete Manufacturing
eMail Center
Incentive Compensation
Mobile Field Service
iLearning

TeleService
Sales Online
Depot Repair
Oracle Support
iSupplier Portal

http//www.oracle.com/customers/profiles/PROFILE34
41.HTML. Viewed March 5, 2003
46
Project Goals for CRM

Implement a scaleable solution to support growth
Create a 360 degree view of the customer
Streamline processes
Lower total cost of ownership

http//www.oracle.com/customers/profiles/PROFILE34
41.HTML. Viewed March 5, 2003Crafton, Thomas W.
Do you really know your customers? Strategic
Finance, Vol. 84, Issue 4, October 2002, pp.
55-57.
47

Outcome from CRM Implementation
Avoided 5 million in cost in one year and saved
1 million
Reduced days of sales outstanding from 80 days
to 50 days
Reduced quarterly close days from 21 days to 4
days
Inventory was reduced from 68 million to 43
million
Product quality was improved by 22
On-time shipments were increased from 79 to 97
Time necessary to create reports reduced by 95

http//www.oracle.com/customers/profiles/PROFILE34
41.HTML. Viewed March 5, 2003
48
Oracle Case Study
Case Study 2 Gevity HR
49
Gevity HR

As the nation's leading provider of outsourced HR
solutions, Gevity HR helps businesses
Find the right people
Manage the paperwork
Develop and manage your people
Protect your business
Retain your best employees
Gevity HR services are provided through specific
offerings, such as recruiting assistance,
training, benefits administration, payroll
processing and related paperwork management, and
legal compliance.

www.gevityhr.com. Viewed March 10, 2003
50
Customer Profile Headquarters Location
Bradenton, FL Industry Professional
Services Annual Income More than 1.001
Billion Employees 501 to 1999
http//www.oracle.com/customers/profiles/PROFILE33
89.HTML. Viewed March 10, 2003
51
Oracle Products Services

Scripting
Oracle9iAS Portal
HR Intelligence
Self Service HR
Human Resources

Financials
Training Administration
Oracle Consulting Services

http//www.oracle.com/customers/profiles/PROFILE33
89.HTML. Viewed March 10, 2003
52

Project Goals for CRM
Create core service transactions related to HR
and payroll administration
Implement Oracle TeleService and CTI
applications

http//www.oracle.com/customers/profiles/PROFILE33
89.HTML. Viewed March 10, 2003
53

Outcome from CRM Implementation
Reduced total work time for transactions by 27
Doubled payroll staff productivity in 18 months,
which resulted in 3 million savings in personnel
cost
No new clients terminated for service related
reasons in first half of 2001
Integrated 24 hour access to customer data in 41
field offices

http//www.oracle.com/customers/profiles/PROFILE33
89.HTML. Viewed March 10, 2003
54
Best Practices for CRM
55

A New CRM System Alone Will Not Bring Improvements

New Technology Old Organization Expensive Old Organization
One thing that doesnt work is going out and
buying a single package to solve all your CRM
problems. Without a business case, without
business buy-in, without executive sponsorship
the package will not solve the problem. The
problem is not the technology its the culture
change.There is no silver bullet. Liz Shahnam
Roche, Meta Group Vice President, interviewed by
CRMDaily.com, December 22, 2002
Andersen, Henrik, and Per Jacobsen. Implementing
CRM 20 Steps to Success. In Stanley Brown, ed.
Customer Relationship Management A Strategic
Imperative in the World of E-Business, 269.
Toronto, New York John Wiley Sons,
2000.Raymond, Ed. Sorting Out CRM Best
Practices. http//www.crmdaily.com/perl/story/203
04.html, viewed April 15, 2003.
56
Development of Customer Centric Business Strategy

Object to find win-win opportunities with
customers
Plan around customer wants, not company goals
Focus on listening to customers, rather than
forcing them to listen to you
Avoid promotional marketing communication stick
to informed and informational dialog with
customers

important focus of the CRM project - to
develop a single view of the customer
Lee, Dick. Four Steps to Success with CRM.
http//www.crmguru.com/content/features/lee02.html
, viewed April 15, 2003.
57
4 Ps of CRM Success

Planning
People
Process
Platform

Gerson, Richard. Secrets of CRM Success.
http//www.crmguru.com/content/features/gerson/200
1_02_08.html, viewed April 15, 2003.
58
Planning

1 - - Develop a comprehensive plan for your CRM
efforts lay out what you want your program to
accomplish (how you want to capture and use the
data)

Gerson, Richard. Secrets of CRM Success.
http//www.crmguru.com/content/features/gerson/200
1_02_08.html, viewed April 15, 2003.
59
Planning Example

Planned CRM Activity to capture consequently
three types of customer data from a corporate
website

Type of Data
customers e-mail address and name
customers physical address and phone numbers
customers purchase preferences
Usage of the Data
To capture 80 of the visitors to the site
To turn 90 of those first-time visitors into customers
To capture purchase preferences to personalize their future visits to send hard copy direct mail to influence future repeat purchases
Look towards a software solution that will allow you to perform this activity
choice of Teradata
Gerson, Richard. Secrets of CRM Success.
http//www.crmguru.com/content/features/gerson/200
1_02_08.html, viewed April 15, 2003.
60
Planning

2 - - Carefully select the initial (pilot)
implementation areas within the organization that
will bring the greatest benefits and quick wins

Andersen, Henrik, and Per Jacobsen. Implementing
CRM 20 Steps to Success. In Stanley Brown, ed.
Customer Relationship Management A Strategic
Imperative in the World of E-Business. 268-283.
Toronto, New York John Wiley Sons, 2000.
61
People

Get employees and partners involved and on-board
with your CRM effort generate a new company
culture!
Restructure employee compensation to reinforce
CRM priorities
e.g. tie employee incentives to customer-oriented
indicators (customer retention and satisfaction)

Gerson, Richard. Secrets of CRM Success.
http//www.crmguru.com/content/features/gerson/200
1_02_08.htmlgt, viewed April 15, 2003.Sims, David.
Principles Make the Best Practices.
lthttp//www.crmguru.com/content/features/gerson/20
01_02_08.htmlgt viewed April 15, 2003.
62
People

Establish two training protocols
1 - Communication the culture-change and
associated soft skills
2 - Technical training

Gerson, Richard. Secrets of CRM Success.
lthttp//www.crmguru.com/content/features/gerson/20
01_02_08.htmlgt, viewed April 15, 2003.
63
People

Best CRM Practices Proportion for Training and
Infrastructure Budgets
- acquisition of software and hardware
- training and change management

1
3-15
Ramesan, Kevin. CRM Application Users are Key to
Project Success. lthttp//www.technologyevaluation
.com/Research/ResearchHighlights/Crm/2003/01.htmlgt
, viewed January 27, 2003
64
Process

Re-engineering of work processes involves
1 - change of departmental roles and
responsibilities
2 - adoption of new work processes creation
of a service map, including
How a customer contacts the company
How you will capture the information
How you will process the information
Methodology of repeated contact with a customer
Consolidation of info from all customer
touch-points

Gerson, Richard. Secrets of CRM Success.
lthttp//www.crmguru.com/content/features/gerson/20
01_02_08.htmlgt, viewed April 15, 2003.
65
You have Set your CRM program goals Involved
your people Charted the processNow you are
ready for technology!
66
Platform

CRM software comes in all shapes, sizes and
functions it should support, but not drive new
work processes
Span of Focal Points
Identify your focal point and compare it to the
focal point of every software you are considering

Marketing Automation
Sales Automation
Call Center Sales
Call Center Service
Field Service
Lee, Dick. Four Steps to Success with CRM.
http//www.crmguru.com/content/features/lee02.html
, viewed April 15, 2003.
67
Implementation Perspective of CRM Success

3 inter-related activities of successful
implementation

Leadership (10)
Program Management (10)
Change Management (10)
In brackets percentage relative to each sections
contribution to overall success of the project
Petersen, Glen. CRM Best Practices The Framework
For An Industry Renaissance. GSP Associates,
Inc, 2002.
68
Implementation Perspective of CRM Success
Leadership
Find a sponsor in top management they have
influence to find necessary sources and
accelerate decision-making process
Hansotia, Behram, Gearing up for CRM
Antecedents to successful implementation.
Journal of Database Marketing, London, December
2002, Vol. 10, Issue 2.
69
Implementation Perspective of CRM Success
Program Management
The effort must be well-coordinated and follow a
defined schedule with checkpoints
70
Implementation Perspective of CRM Success
Change Management
A change in culture and practice must shadow your
CRM initiative communication and training play
an integral role in the implementation process
Mullin, Rick, CRM Show us the payback.
Chemical Week, New York, New York, October, 2001,
Vol. 163, Issue 40, pp.28-29.
71
Summary of Best Practices