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Customer Relationship Management

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Customer Relationship Management Managing the Change in HEPCO – PowerPoint PPT presentation

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Title: Customer Relationship Management


1
Customer Relationship Management
  • Managing the Change in HEPCO

2
Agenda
  • Background of CRM initiative in HEPCO
  • Projects defined
  • Managing the change in HEPCO
  • How YOU should manage the change in HEPCO
  • The future

3
360º View of the Customer
4
The Importance of CRM
  • 80/20 rule
  • CRM value formula

20 of the customers contribute 80 of the revenue
Retention gt Reputation gt Attraction
5
3 Types of CRM Technology
Operational CRM Roles and workplaces implementing
best-business-practices
Analytical CRM Underlying business warehouse and
knowledge management
Collaborative CRM Collaboration across all
channels (mobile, phone, Internet)
6
3 Types of CRM Technologies
  • Operational CRM
  • Customer-facing applications that integrate the
    front, back and mobile offices, including
    sales-force automation, enterprise marketing
    automation, and customer service and support
  • Analytical CRM
  • Applications that analyze customer data generated
    by operational tools for the purpose of business
    performance management
  • Collaborative/Communicational/Interactive CRM
  • Collaborative services that facilitate
    interactions between customers and businesses
  • Help to establish the lifetime value of customers
    beyond the transaction by creating a partnering
    relationship

7
Operational CRM Touching the customer
Customers
Customers
Customer Touch-points
Web access
Usage
Fax
Call Center
Direct Sales
E-mail
Refined Business Actions
8
Analytical CRM Understanding the Customer
Refined Business Actions
Analysis
Integrated Database
Information
Business systems
Provisioning
Sales
Accounts payable/recbles
Call Center
Billing
9
3 Types of CRM Technology
Operational CRM Roles and workplaces implementing
best-business-practices
Analytical CRM Underlying business warehouse and
knowledge management
Collaborative CRM Collaboration across all
channels (mobile, phone, Internet)
10
2. Analytical CRM
  • Data gathered within operational CRM are analyzed
    to segment customers or to identify cross- and
    up-selling potential
  • Data collection and analysis is viewed as a
    continuing and iterative process
  • Ideally, business decisions are refined over
    time, based on feedback from earlier analysis and
    decisions

11
Analytical CRM Example
12
3 Types of CRM Technology
Operational CRM Roles and workplaces implementing
best-business-practices
Analytical CRM Underlying business warehouse and
knowledge management
Collaborative CRM Collaboration across all
channels (mobile, phone, Internet)
13
Re-configure organization Re-engineer the work
processes
Whats the problem?
Wheres the problem?
Whats the Solution?
How to Implement the Solution.
CRM Implementation How Manage the Change
14
Problems with work Organizations
Many of our current processes result from a
series of ad-hoc decisions made by
functional units, with little attention to
effectiveness across the entire process.
Many processes have never even been
measured. T. Davenport and J.
Short Sloan Management Review
Summer 1990
15
Functional Organizations
  • Provides comfort zone
  • Creates checks balances
  • Streamlines authority
  • Prevents flexibility creativity
  • Lack of balance, source of bottlenecks
  • Highly overhead
  • Long lead-time

16
Function Vs. Process-based Organization
Customer
Manufacturing
RD
Sales
17
Re-configure organization Re-engineer the work
processes
Whats the problem?
Wheres the problem?
Whats the Solution?
How to Implement the Solution.
CRM Implementation How Manage the Change
18
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19
Re-configure organization Re-engineer the work
processes
Whats the problem?
Wheres the problem?
Whats the Solution?
How to Implement the Solution.
CRM Implementation How Manage the Change
20
The answer is BPR
  • Increase Profitability
  • Increase Quality
  • Increase Customer Satisfaction
  • Improve Productivity
  • Increase Flexibility
  • Decrease Expenses
  • Increase Market Share
  • Increase speed to market

21
BPR for CRM
BPR is the fundamental rethinking and
radical redesign of business processes to achieve
drastic improvements in critical measurements of
performance (such as time, cost, and quality).
A business process is a collection of tasks that
together create value for a customer.
Hammer and Champy, 1993
22
Re-configure organization Re-engineer the work
processes
Whats the problem?
Wheres the problem?
Whats the Solution?
How to Implement the Solution.
CRM Implementation How Manage the Change
23
BPR Starts from Strategy, and then
People
Processes
Technology
BPR for CRM involves rethinking and redesigning
business processes to create value to Customers.
24
Re-configure organization Re-engineer the work
processes
Whats the problem?
Wheres the problem?
Whats the Solution?
How to Implement the Solution.
CRM Implementation How Manage the Change
25
Managing the Change in CRM
  • Organizational design and transformation can
    make the difference between success and failure
    in CRM.

26
  • There is nothing more difficult to take in hand,
    more perilous to conduct, or more uncertain in
    its success than to take the lead in the
    introduction of a new order of things.

Jean-Jacques Rousseau
27
(No Transcript)
28
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29
HEPCO CRM PROJECTS
30
Projects Defined
  • Product-Service Knowledge Management
  • Key Customer Management
  • An integrated Customer Database

1. What am I offering that my competitors are
not? (the value element) 2. How can I
build better relationships with my most
profitable customers? (the service element) 3.
How can I use IT to help? (the technology element)
31
And before we start, a questionnaire! (my
homework!)
The Customers Who are they? What do they
want? Why do they want it? Why should they buy
from us? Why should we supply them?
32
The Three Aspects of Marketing
Company
Staff
2
3
1
Competitor
Customer
1 External Marketing 2 Internal Marketing 3 The
Moments of Truth
Product
33
Are there different kinds of Customers?
34
A Portfolio of Customers
Many
One Off Exchanges
No Opportunity or no desire
for continuing relationship
Little scope for mutual Added Value
Low switching costs
Always-a-Share if offer is good enough
Number of Customers
Relationships
Commitment and trust from both partners
Real opportunities for win-win
High switching costs
Lost for good if relationship fails
Loyalist trading
Few
Low
High
Customer Importance
35
A Portfolio of Customers
Transactional
Collaboration




Profit today
Profit tomorrow


Short term horizon


Long term horizon


Low investment


High investment

Contractual trust


Goodwill trust

36
TRANSACTION vs. RELATIONSHIP
TRANSACTION RELATIONSHIP
OBJECTIVE Profitability of individual Profitabili
ty stream over the transaction life of the
relationship STRATEGY Volume of new
business Penetration of existing
customers Credit emphasis Cross selling
(credit, non-credit, deposit) MARKETING
Product driven Market driven Credit
emphasis Product knowledge FUNCTION Sales Ma
nagement of internal and Go it Alone external
relations
37
Rule 1 The Customer is always right
Rule 2 If the customer is ever wrong,
re-read Rule 1
Provision must equal expectation
38
THE POSITION OF THE HEPCO In the market
Prob (Sale) (Uncontrollable Factors,
Controllable Factors)
The Competition The Customers
Product/Service
Who? What Strategies? What Changes?
Who? What Segments? What Changes?
Price Promotion Place Personal Selling People
Organisation
39
Product Attributes
Core Tangible Augmented
40
THE POSITION OF YOUR CUSTOMER
Prob (P ) A P
i j ij
For each segment, identify Importance of the
attributes (A ) All the suppliers scores (P )
j
ij
41
Understanding how the Product is Bought
(From the buyers perspective, not yours!)
1 What are the attributes? 2 How important are
they? 3 How do I score? 4 How do my
competitors score?
42
The Value Exchange Process
DELIVERY OF VALUES
COMMUNICATING VALUES
EXCHANGE PROCESS
ORGANISATION
CUSTOMER
CREATING VALUES
UNDERSTANDING CUSTOMER VALUES
43
THE MARKETING CYCLE
Distribution of product/service Provision of
exchange opportunity
DELIVER
Communication of values and product/service
benefits
COMMUNICATE
EXCHANGE PROCESS
BUSINESS
CUSTOMER
UNDERSTAND VALUES
CREATE
Development and maintenance of
product/service given customer perceived
values
Knowledge of customer and market
characteristics
44
Product Attributes Importance and Performance
Hi import
Keep it up
Work harder
Lo perf
Hi perf
Overkill
Low priority
Lo import
45
Different Marketing Models
The Mass Marketing (Coke) The Continuous
Innovator (Sony) Trust-based Marketing (Scottish
Widows) Customer Loyalty Marketing (Harley
Davidson) Low Cost Marketing (Go, Easyjet) The
Over-serviced Market (Singapore Airlines,
Daewoo) The Total Solution (3M, Eli Lilly) Good
Citizen Marketing (Body Shop, Ben
Jerry) _______________________ (HEPCO)
46
DEFINITION OF QUALITY
THE CUSTOMERS JUDGEMENT NOT YOURS BOTH THE
PRODUCT AND THE ASSOCIATED SERVICES NOT
ABSOLUTE, BUT RELATIVE TO COMPETITORS DOES NOT
INCLUDE PRICE
RELATIVE QUALITY TENDS TO BOOST RATES OF RETURN
47
  • Product Positions Along the Price Performance
    Curve

High
Lesser
Premium
Value
Good
Average value on
Relative
price performance
Average
Price
curve
Commodity
Greater
Economy
Low
Value
Low
High
Relative Product Quality
pn208
48
Projects Defined
  • Product-Service Knowledge Management
  • Key Customer Management
  • An integrated Customer Database

1. What am I offering that my competitors are
not? (the value element) 2. How can I
build better relationships with my most
profitable customers? (the service element) 3.
How can I use IT to help? (the technology element)
49
Managing the Change
50
The Life Cycle of Change Initiatives
Potential (unrealized)
51
Sigmoidal growth in nature
  • Accelerating for a time,
  • Then gradually slowing down.
  • The way nature generates and controls growth.
  • Interplay between reinforcing growth processes
    and limiting processes.

52
Signs of Limiting Processes
FAILURE JUSTIFIES FAILURE DEFENDING CURRENT
PERFORMANCE THEY ALWAYS THINK THE PRESENT
POSITION IS THE BEST. .THEY BLAME PROBLEMS TO
THE ENVIRONMENT MANAGEMENT BLAMES
PERSONELL. THEY INFLUENCE OTHERS USING NEGATIVE
PSYCHOLOGY TRIGGERS MIRAGE VERSUS REALITY
  • SELF-BALANCE
  • CHANGE RESISTENCE
  • SELF SATISFYING
  • NEGATIVE/WOUNDED NETWORK
  • PASSIVE ACCEPTANCE AND ACTIVE UNDERMINING

53
Strategy development and Change
External Triggers Internal Triggers
Strategy Development and Change
Freeze Stage The process Identification
The Melting Crisis OD Techniques
Unfrozen Stage
Change, Movement
Flexibility Crisis
Required Shape Refreeze
Management Intervention Developing A Shape
Reforming Crisis Refining the Shape
Stage 2
54
Succeeding CRM Implementation in HEPCO
55
Successful CRM change and the force that drives it
  • Change needs to be managed in order to derive
    maximum benefit from new opportunities and to
    avoid reactive situations.

56
Successful CRM change and the force that drives it
  • Provide a good management style with an
    atmosphere of -
  • openness
  • good communications
  • clear vision
  • leadership
  • training
  • To minimize fear and suspicion -
  • Consultation
  • Communications
  • Transparency
  • Informality
  • They are important as staff resent the sense
    that changes are imposed on them and that they
    are powerless - they need to be involved.

57
Managing the Change in CRM
  • Engage staff early
  • Working with the staff affected to understand the
    behavioral changes required and to model new
    working practices would contribute significantly
    to pulling the levers of cultural change
  • Provide training in the operation of the new
    systems to integrate with a programme to embed
    appropriate behaviors
  • Problems
  • Front-end team dont know
  • What is happening
  • Why the programme is needed to help the company
    move forward or what it will mean for them
    individually
  • From their perspective, it looks like a
    technology project rather than a customer service
    programme designed to make customer interactions
    more effective and profitable
  • Solution
  • Engage all staff early to ensure questions and
    uncertainties could be addressed over a longer
    period and would also have liberated the latent
    creativity of many of the front-end staff
  • Ownership and attitude
  • Problems
  • Staff have no sense of ownership in the programme
  • They might have valuable experiences to bring to
    bear, yet feels disenfranchised from the process
    and fears seeing the same mistakes being made
    again
  • Front line staff wonder whats in it for them
  • Solution
  • Define a clear employee value proposition to
    engage them a long the way and for future
    direction of the business

58
Managing the Change in CRM
  • Problem
  • The CRM programme might risks in devoting all its
    effort onto front line customer contact staff and
    operations and yet this raises significant
    implications for the scale of back office
    operations, the work they carry out and their
    relationships with front line staff and the
    customer
  • Solution
  • From an organizational perspective, CRM
    programmes need to consider
  • The end-to-end implications for roles, processes
    and behavior
  • Manage all affected staff towards a renewed
    understanding of their role in delivering a
    customer experience that results in improved
    value creation
  • Problem
  • Benefits of CRM have been expressed purely in
    terms of technology-driven performance
    improvement through streamlined processes and a
    notional figure for revenue creation
  • Solution
  • Think more broadly
  • For example -
  • The benefit of reducing call centre attrition and
    unplanned absence leading to reduced numbers of
    new staff who are not fully efficient on the
    systems
  • The ability of schedule management in order to
    maximize customer contact time
  • Problems
  • New processes require on-line access for field
    sales agents to core systems during the customer
    interaction
  • More functionality is added to the website,
    customers too will have systems support queries
  • Solutions
  • The need to support technology in a different and
    customer-centric way must be considered
  • Wider organizational and behavioral implications
    of a technology-focused CRM programme should be
    thought through in detail as part of envisioning
    the new environment

59
Managing the Change in CRM
  • Problems
  • CRM programme is being run from an IT perspective
    as a result there is a strong sense that the
    programme is about a technology upgrade rather
    than heralding a fundatmental change in the
    quality of customer interaction leading to a
    deeper yet more flexible relationship
  • Many CRM programmes miss the opportunity to
    realign the whole organization and its behavior
    towards the customer, even though shareholder
    value is primarily driven through identifying and
    satisfying customer needs effectively and
    efficiently
  • Perceived CRM failures often have more to do with
    failing to take a holistic view of a programme
    and its deliverables rather than shortcomings in
    the technology per se
  • Solution
  • Leaders from the Board Room to the front line
    have a powerful role to play here in modeling new
    behaviors
  • Winners are those enterprises that focus on the
    customer experience in a holistic way
  • CRM needs to be thought of as a way of doing
    business, rather than as a project to implement
    specific technologies
  • Businesses need to ensure that their
    organizational design, the skills and
    competencies of their people and the mindset or
    culture in which they operate are optimized to
    leverage the latent capability of the technology
  • Leaders need constantly to be aware of those
    aspects of organizational structure or behavior
    that inhibit the ability of the business to
    respond rapidly to changing customer needs, and
    act to remove them
  • Independently of the specific CRM technologies
    employed, operational effectiveness in delivering
    superior customer experience is heavily dependant
    on people in terms of

60
The Future of Change in HEPCO
61
Strategic competencies
The changing environment
Competitive outcomes
Organization-led changes
Externally driven changes
Content competencies
Change management competencies
Learning competencies
62
Strategic Management
Environmental awareness
Analysis of Competition
Strategic awareness Current levels
of success Changing circumstance and
opportunities
Strategic leadership Values and
culture Management Styles
Monitoring and evaluating performance
Competitive advantage Competitive strategies
Implementing existing strategies Managing the
change process Controlling organization
Ideas for strategic change Analyzing
and choosing new strategies
Structural issues
Corporate strategies
63
Success, Failure andCompetency
64
Learning Model
Knowledge Belief system
Results
Action
Reflection
Insight
65
Learning ModelObstacles
Knowledge Belief system
Results
Action
Reflection
Insight
Implicit (Tacit) Knowledge
66
Group Learning Model
Knowledge Belief system
Results
Action
Reflection
Insight
Dissemination
Explicit Knowledge
67
Group Learning ModelObstacles
Knowledge Belief system
Results
Action
Reflection
Insight
Dissemination
Explicit Knowledge
68
HEPCOKnowledge Workers
  • Prerequisites for Knowledge Workers
  • Information Systems-e.g.
  • Information acquisition
  • Information processing
  • Information dissemination
  • HRD factors
  • Commitment
  • Motivation
  • Skills development
  • Challenge

69
Thank you
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