Customer responses on CSR evidences from vietnamese banking sector

PINAVIETNAM MASTEROFBUSINESSADMINISTRATIONHoChiMinhCity– 2017 UNIVERSITYOFECONOMICSHOCHIMINHCITY... InternationalSchoolo f Bus i n ess ---LeThiThanhTam CUSTOMERRELATIONSHIPMAN AGEMENTCRM

PINAVIETNAM MASTEROFBUSINESSADMINISTRATION

HoChiMinhCity– 2017

UNIVERSITYOFECONOMICSHOCHIMINHCITY

InternationalSchoolo f Bus i n ess

-LeThiThanhTam

CUSTOMERRELATIONSHIPMAN AGEMENT(CRM)ORGANIZATIO NSTRUCTUREATFRIESLANDCAM

PINAVIETNAM

MASTEROFBUSINESSADMINISTRATION

SUPERVISOR:LeThiThanhXuan

HoChiMinhCity– 2017

FORTHEDEGREEOFMASTERofBUSINESSADMINISTRATION

Finalthesistitle:CustomerRelationshipManagement(CRM)OrganizationStructureatFrieslandCampinaVietnam

EXECUTIVESUMMARY Thisthesiso f “CustomerRelationshipManagement(CRM)OrganizationS tructureatFrie slandCampinaVietnam”has

beencomposedandcompletedinfourmainparts:problemcontext,solutionrecommendation,conclusionandsupportingdocuments

ChapterIincludedcompanybackgroundstartingfromindustryoverview,companyhistoryandbusinesssizeaswellasthevision,missionandorganizationstructureofFrieslandCampinaVietnam.Inaddition,inthischapter,thethesishasshowntheissues,problemswhichareconcernsfromstakeholderso f thecompanybasedo n awidevarietyo f in-

depthinterviewandsecondarydataregardingbusinessresultsandperformancetrackingofCRMteam

A problemmesshadbeencreatedtoshowallsymptoms,organizationoutcomesandproblemsasa gene

ralpicture.Specifically,a centralproblemo f ineffectiveCRMorganizationstructurewasselected

tobesolvedasacoreproblemo f companywiththejustificationo f itsexistenceandimportance.Aftervalidatingandselectingthecentralproblemo f organization,threecauseso f centralproblemlistedasdepartmentalstructuredesignwhichisnotinlinewithbusinessstrategy/

model;excessheadcountnumberandoverlappedrolesandresponsibilitiesamongTelesalesteamwereinvestigatedtoverifyanddeterminesoastogiveoutalternativesolutionswhichwerepresentedinchapterII

Inthisthesis,thelong-termsolutionisproposedtodefineappropriatenumbero f headcountsatthechangemomento f businessinthefuture.Inthemeanwhile,therearetwoproposalsforshort-

termtotackleproblemwithCRMpersonnelcostoptimizationandredesigndepartmentalstructuretob einlinewithnewIFTbusinessacquisitionmodel

Thelastpartwasnamedasthesupportingchaptertosupportallinformationandinformationsourcesfortheabovefourchapters.Itcomposedsectionso f in-

depthinterviewtranscripttojustifycentralp roblemandselectedsolution

In-depthinterviewswerewidelyusedatdifferentlevelsfrommanyrelateddepartmentsofFrieslandCampinaVietnamtocollectdataandtodiagnosevariousaspectso f theproblemwiththemethodologyofdesign-orientedandtheory-

informedfroma widevarietyoffieldssuchashumanresources,industry,managementetc

Aftercollectingdataandinformationtoanalyze,itwasbelievedthatpushingsalesperformancehadbeengreatlyaffectedbymanyfactorssuchasnatureo f work,compensationandbenefits,motivation,capabilitiesbuildingetc.However,thisresearchillustratedthatfactorofineffectiveCRMorganizationstructurehadbeenmostlyinfluencedwhichledtotheveryalarmingconsequencessuchasheadcountsinexcess,unclearrolesandresponsibilities,notstretchingenoughKPIsetting,undercompanyb usinessexpectation

Iwouldliketoexpressmydeepestappreciationtomysupervisor,Dr.LeThiThanhXuan,whoalwaysstandsbymeandmotivatesmetocompletethisstudy.Withouthersupport,thismasterthesiscannotbefulfilled.Needlesstosay,herguidancehelpedmeinallthetimeofresearchingandwritingthisthesis.Inadditiontothat,I wanttoshowmysinceregratitudetoProf.TranHaMinhQuan,Prof.NguyenDinhThoandDr.NguyenThiMaiTrang,whoaretheonestosetstrongfoundationformeino rganizationproblemsolvingandd ataanalysissothatI canconductthisstudy

Besidemyadvisors,Iwouldliketothankmybusinesspartnersfordiscussing,sharinginformationandcoordinatingwithmemakethisp rojecthappen

1 COMPANYBACKGROUND 1

1.1 Companybacground 1

1.1.2 Marketshareandkeyplayersinthedairymarket 1

1.1.3 FrieslandCampinaVietnam–Companyh i s t o r y ando rganizationstructure 4

1.2 Backgroundofproblem 6

1.2.1 Symptoms 6

1.2.2 Problemjustification 15

1.3 Identificationofcentralpotentialproblem 26

1.4 Literaturereview 28

2 SOLUTIONRECOMMENDATION 31

2.1 Solutionrecommendation 31

2.2 Proposalimplication 37

2.3 Selectedsolutionandactionplan 39

3.4 Changemanagementandcountermeasures 43

CONCLUSION 45

SUPPORTINGDOCUMENTS 46

REFERENCELIST 69

Figure1 VietnamDairyMarketsharein2015 3

Figure2 Powdermilkkeyplayers 3

Figure3 Drinkingmilkkeyplayers 4

Figure4 OrganizationstructureofFrieslandCampinaVietnam 5

Figure5 ConsumerMarketingIFTstructureofFrieslandCampinaVietnam 7

Figure6 Currentbusin es s modelofIFTteam 8

Figure7 CurrentAcquisitionbusinessmodelofCRMteam 9

Figure 8 The comparisonbetweenpersonnelinvestmentforoneCRMofficerv e r s u s thea v e r a g e revenu eofeachacquirednewcustomer 11

Figure9.Thecomparisonbetweencurrentnumberofdataofficersandidealnumberofdatao f f i c e r s a f t e r deployingdatav alidationautomationmodel 18

Figure10.Expectedv a l i d a t e d dataofCRMteamin2017 19

Figure1 1 Expectedv a l i d a t e d dataofoneDataofficerin2017 20

Figure1 2 Ambitiousautomaticacquisitionbusinessm o d e l ofCRMteam 21

Figure13.Thecomparisonbetweencurrentnumbero f telesalesstaffandKPIs e t t i n g ingettin gn e w users 22

Figure1 4 ExpectedtelesalesstafffordrivingCRMbusinessgoalsin2017 23

Figure15.Initialcause-effectmap 26

Figure16.Finalcause-effectmap 28

Figure17.Estimatedn u m b e r ofdataofficersf r o m OctobertoD e c e m b e r 2017 32

Figure18.ProposalnewworkingprocessforTelesalesstaff 33

Figure19.ProposalnewCRMorganizationstructure 34

Figure20.ProposalnewworkingprocessforA c q u i s i t i o n officer 34

Figure2 1 P r o p o s a l newworkingprocessforR e t e n t i o n officer 35

Figure2 2 Short-termplantooptimizeFTEnumberOctober-D e c e m b e r 2017 35

Figure2 3 Short-termplantooptimizeRetentionFTEnumberfromOctobertoD ec e m b e r 2 0 1 7 36

ofstakeholdersinprojectCRMdepartments t r u c t u r e improvement

42Figure28.Thedetailedplan 43

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l itemsweu s e dayinanddayout.“Fastmoving”impliesthattheitemsarequicktol e a v e the

s h e l v e s andalsotendtobeh i g h involumebutlowincos t items.AccordingtoKantarWorldpanel( 2 0 1 7 )1–oneofthemostprestigious

agenciesinthefieldofMarketR e s e a r c h , bothurbanandruralFMCGmarketpostslightlystrongergrowthrateinVietnamin2016.However,2016wasalsoa toughy e a r forRuralwhichfacedeconomicdifficulties Inthemeanwhile,Dairy,B e v e r a g e s andHomeCarearemostsufferinginRural.I t ispredictedthatbothurban4 cities a n d ruralmarketsw i l l reach

s by2.5percentperannumto2020,especiallyimpactedbyurbanizationandhigherl i v i n g standardinemergingmarkets

Inthemovementofg l o b a l dairymarket,accordingtoD airy inVietnampostedonEuromonitorInternational3,ther i s i n g trendtowardshealthandw e l l n e s s continuedtoimpactpositively theproductionandsupplyofdrinkingmilk

Moreover,manylaunchesofnewproducts,whichcontainvitaminsandnutrition

suchas:c a l c i u m , DHA,immunity ,hasbeenr e l e a s e d inthel o c a l market.Anotherpointcouldbementionedhereisthatduetoincreaseinlocalconsumptionofmilk,therearemoredairycompaniesoperatedinVietnam,b e s i d e ofmanylong-

y e a r dairycompaniessuchas:Vinamilk,FrieslandCampina(knownasDutchL a d y Vietnam)orAbbott…

Hence,itcanbesaidthatthecompetitivenessofVietnamdairymarketismuchhigherandhigherwiththeappearanceofnewkeyplayersandthesignificantinnovationofcurrentcompanies

b Marketshareandk e y playersofdairym a r k e ti n Vietnam

AccordingtotheannualreportofdairyproductofVietnam,itcanbesaidthatVinamilkisthebiggestdairycompanyinVietnam.Vinamilkiscurrentlythelargestf r e s h milkcollector,purchasingmorethan60%off r e s h milkfromfarmersa c r o s s thecountry,whilethesecondlargestfreshmilkcollectorisFrieslandCampinaVietnam.I n addition,Vinamilkhaspurchasednearly82,000tonsoffreshmilkfroml o c a l farmsin2015,accountingforabout20%oftotaldomesticf r e s h milkproduction.Thesetwocompaniesdominatethelocalmarketwith46%and20%ofmarketsharerespectively

Withtheadvantagesofworldwidelarge-scalefarmingofcowherbs,bigproductioncapacityandmoderntechnologies,foreignplayersfirmlycontrolthel o c a l powderedmilkmarketwith53.1%ofmarketsharein2015.Conversely,l o c a l playersdominatethedrinkingmilkmarketwhichisl e d byVinamilkwith45.5%ofmarketsharein2015

In2015,Vinamilkcontinuedtoleadtheyogurtmarketwith73%valueshare,aswellastodominatethecondensedmilkmarket(approximately80%ofthetotalsalev a l u e ) Today,VinamilkandFrieslandCampinaVietnamalsof a c e s uptootherpotentialcompetitorssuchasNestle,Johnsonaswellasnewentrantmilkcompetitorsl i k e THMilk,Loveinfarmmilk,Mocchaumilk…

46%

20%

VinamilkFrieslandCampina VietnamOthers

DuongIm-ExportCompanyandRoyalFrieslandCampinaasthe leading company of

globalexperiences.T h e s e d a y s , almostallproductsareproducedinVietnamandDutch

L a d y isoneofthesixlegendarybrandsofFCV.ThiscompanyisfamousforleadingbrandinVietnamdairymarket,s u c h as:Friso,Yomost,Fristi,Active20+

….Therearetwofactories,oneinBinhDuongandoneinHanamaswellasthreel o c a l warehousesinwhichthereare1,487employeesworking.Productionofmorethan1.5b i l l i o n cartonspery e a r andthisvolumeisgrowingwithana ve ra ge rateof15%peryear.Theyearlya v

e r a g e turnoverinVietnamisUS$350million.FCV’sproductscanbesubdividedintothreecategories: powdermilk,sweetenedcondensedmilkandready-to-drinkdairy(so-

calledliquidmilk)

Aboutcompanystructure,itcanbesummarizedv i a beloworganizationchart.L i k e manyothermultinationalcompanies,F C V dividedintospecialized divisions tooptimizeproductionc a p a b i l i ti e s inallaspects.

Figure#4:OrganizationstructureofFrieslandCampinaVietnam

Alongwiththes t r a t e g i c organizationstructure,F C V alsoe s t a b l i s h e d themechanismofperformanceevaluationforemployeeb a s e d onindividualkeyperformanceindicators(KPI),annualdevelopmentprioritiesandbehaviorimprovementinlinewithcorporateguidelines(AAA–

Alignment,Accountability,Action).Withthismanagementmethod,itisbelievedthateachemployeeofF C V isfullyresponsibleforthejobincharge;especiallyitisc o n s i s t e n t withb

u s i n e s s

objectives.Moreover,buildinga transparentandfairworkingenvironment,performanceevaluationisalsohighlightedastheresultofthismechanism.

i n e s s categoriesofcompany.Theyareliquidmilk(alsocalledReady-to-drink-Milk–

RTDM)andpowdermilk(alsonamedIFT).I n which,accordingtoCommercialFinanceteam’sreport,powdermilk,includingtwomainbrands:Friso–premiumproductandDutchL a d y –mainstreamproduct,isthecategorycreatingtheh i g h e s t valueforb u s i n e s s aswellascontributingaround60%inthetotalnetsalesofFCV.UnderstandingthevalueandtheimportanceofIFTcategory,a s t r a t e g i c organizationcharthasbeenbuiltasfollows

Inthismarketingteam,thereare3teamsincludingBrandteam,MedicalS a l e s andMarketingteamandCRMteamwithdifferentrolesandresponsibilities Howeverallofthemareinthel i n e withcategorys t r a t e g y withkeyf o c u s : i n c r e a s i n g brandawareness, especiallyforFrisovialeveragingthepenetrationrateandmarketshare;l e a d i n g salesvolumesamongotherbrandsofcompanyv i a i n c r e a s i n g thenumberofnewusersandtherepurchasingrateofcurrentconsumers(customerloyalty).Inwhich,brandteamisinchargeofbuildingthes t r a t e g y viaabove-the-

lineactivities(digitalchannels,T V

clips,radio…)andbelow-the-linea c ti v i ti e s (promotionprogramsatpointsofsales,customerworkshops…).Moreover,MedicalandCRMteamsarethetwogroupsde sign ed forIFTonlybecausethetargetconsumersofI T ismomandbabieswhohavea

specificjourneyfrompregnantperiodtothepointoftime.Hence,theb u s i n e s s modelofIFTteamistotallybuiltbasedontheconsumerjourney.

Figure#6:Currentbusinessm o d e l ofIFTteam

Thistargetconsumergroupa l l o c a t e s mainlyatmanyhospitalsnationwide.Duetothisreason,MedicalS a l e s andMarketingteamissetupwiththeaimofincreasingthesalescoverageathospital

1.2.1.2 IntroductionaboutCustomerRelationshipManagement–

CRMteamCRMisthecustomerrelationshipmanagementteamwhichisdedicatedfortaking

careofconsumersofpowdermilkcategorywhichincludestwobrandsofFrieslandCampinaVietnam:F r i s o – premiumbrandandDutchL a d y –

mainstreambrand.Currently,F r i s o isthefocalbrandofIFTcategoryaswellasthecompany.BecauseaccordingtoCommercialFinanceAnalyst,Frisocontributethehighestvalueinsalescontributionwhichcreateshugebusinessimpact

Duetothecharacteristicsofthisproduct,theproductportfolioc o n s i s t s ofmanyproductswhicharerelevanttogrowing-

updevelopmentofpregnantwomanandbaby.Forexample,startingwithpregnancy,pregnantwomanisconvincedtou s e Frisomumtobeprovidedessentialnutrition.Afterdeliveringbaby,breastf e e d i n g isencourageduntilbabyistwoyearsold.Hence,b a s e d onthisreasonandcurrentgovernmentallaw,milkcommercializingforbabiesunder2 yearsoldisprohibited

viamedia,d i g i t a l , promotionandadvertisement.D a i r y companiescalltheperiodofbabiesunder2 yearsoldisdarkproductbecauseofreason.However,tosupportmomswhocannotproducemilkafterdeliveringbabies,F r i s o 1 & F r i s o 2 arestillallowedtopenetrateintothemarketwiththelimitationofbrandactivation.Besides,F r i s o 3,4,5 aregeneratedtoselltobabieswhoareinthehighdemandofmilkforfasttrackofgrowingup.I n short,itcanbesaidthatproductdevelopmentandsalesstrategyaretotallyb a s e d onthelifec y c l e ofconsumers,so-calledconsumerjourney.

Understandingconsumeri n s i g h t , CRMteamofF C V alsobuildstheIFTAcquisitionModelandCustomerLoyaltyinaccordancewiththeconsumerjourney.Thecurrentmodelisi l l u s t r

a t e d viathebelowchart:

Figure#7:CurrentAcquisitionbusinessm o d e l ofCRMteam

IntermsofCRMteam,itcanbesaidthatthisisthes t r a t e g i c teamindrivingb u s i n e s s resultsofIFTcategorybyacquiringnewusersandretainingcustomersv i a telephone.I n 2017,CRMtargettoget600,000newcustomers(higherthan25%vs2016)andimproverepurchasingratefrom10%in2016to30%in2017.To

meetb u s i n e s s requirements,CRMstructurehasbeencategorizedintothreeteams:

 DatateamisinchargeofverifyingtherawdatafrommanysourcesincludinginformationcollectedbyMedicalS a l e s Forceteam,nutritionadvisors,digitalandmediachannels T h i s teammustensuretherawdata,beforetransferringtotelesalesteam,ispreciselyverifiedaboutname,age,thepregnantdateandthedatemomdeliveringb a b i e s …Soitistime -

savingfortelesalesteamtofocusonacquiringnewusersandconvincingcurrentuserstobuypowdermilkproductsmoreandmore

 Telesalesteamisresponsiblefora c c e l e r a ti n g thesalescoverageviatelephone.Basedoncustomerperiodontheconsumerjourney,telesalesofficersmakecalltogetnewusersemerginginthemarketsegmentoru s i n g productsofcompetitors.Moreover,thisteamalsotakesoverthejobofpersuadingcurrentnewusertorepurchaseproductsmoreandmore.Itcanbesaidthattelesalesteamplaycritical rolesinsalesvolumeandvaluecontributionoutofwholeConsumerMarketingIFTteam

 Customers e r v i c e isconsideredasthehotlineteamwhichismainlyresponsibleforaddressingcustomers’concern,questionsregardingtonutritionorproductsviatelephoneanddigitalchannels(Facebook,Instagram,webp a g e , forum…).Moreoverquestionsa

d d r e s s e d bythisteamarenotrelatedtopowdermilkproductonly,butalsoliquidmilk.Therefore,itisrequiredforthisteamtounderstanddeeplyaboutallofproducts,currentmarketingprogramsofcompanytomeetingcustomerrequirementsasfastasp o s s i b l

e

Inshort,IFTConsumerMarketingingeneralandCRMinparticularlyareinvesteda lotinhumanresources,wayofworking,KPImanagementtoensurejobfulfillmentandtransparentrolesandr e s p o n s i b i l i ti e s amongteams

 Symptom 1: Much personnelinvestmentbutlessgainfromCRMofficersFirstly,“ Salesr

evenuecontributionofe a c h CRMo ffi c e r isinthetrendofdecreaseduringthefirsthalfof20 17.Moreoveritdoesn o t balanceinthecomparisonwiththetotalpersonnelinvestmentone

a c h CRMofficer.”–

Mr.Subirsaid.Basedonthebelowchart,itisclearthatforeachCRMofficer,themonthlysalesrevenuecontributionislessthanthea v e r a g e monthlypersonnelinvestmentfromthecompany.AccordingtoF C V Financereport,itiswellnotedthata v e r a g e revenueofeachacquirednewcustomerwasabout8-

9millionsVNDwhereasthetotalpersonnelinvestmentforoneCRMstaffdoingthistaskwasabout14-

15millionsVND.TheevidencesupportingforSubir’sstatementisillustratedviabelowchart:

Figure#8:ThecomparisonbetweenpersonnelinvestmentforoneCRMo ffi c e r versust

heaveragerevenueofeachacquiredn e w customer

 Symptom 2: Inappropriate salesKPIsettingforCRMofficer

Secondly,Subiralsocommentedthat“ WiththeCRMambitionofrecruiting600,000n e w us

ers,e a c h t e l e s a l e s staffinchargeofthistaskhastobesuccessfultog e t 382n e w userse verymonth,e q u i v a l e n t to4,584n e w usersperyear.However,withoutmonthlys a l e s pressure,mostofCRMstaffsfocusonc o m p l e ti n g thisKPIjustaroundendingmonthsofyea rs.Thenumberofnewusersgettingeverymonthisnotgradualmonthbymonth.T h i s c a n l

e a d intosomeofc o n s e q u e n c e s ina c c e l e r a ti n g failureofs a l e s valueandlossofp otentialcustomers.B e c a u s e companyproductsaresoldbasedongrowing-

upstepsofpregnantwomenandb a b i e s ”.AnothercomplaintfromMr.Subir–

FinanceDirectoris

relatedtothesalesnumberofCRMteam,whichisnotpushedtocompletebyevery2 0thofeachmonth.T h i s istotallydifferentwithcurrentprinciplesofperformancemanagementforSa l

es ForceteamwhileCRMteamisalsoconsideredasoneofthemainpartsofS a l e s Force.Acc

ordingtocompanyrequirements,themoresalesnumberiscompletedbefore20thofeachmonth,themoree ffi c i e n t l y financereinvestmentisoptimized.I n short,Mr.Subirisquitedi

sappointedtoconcludethat“Fromfinanceperspectives,I thinks a l e s performanceofCRM

isnoteffective now.It shouldber e i n f o r c e d assoonaspossiblewithmorestretchingmon thlyKPIs.”

 Symptom 3: No monthlysalesince ntive s, nostrictworkingprocessandnothirdparty

withstrongc a p a b i l i ti e s tomanageandserveCRMteam

Tounderstandtheproblem,a discussionwasconductedwithM s ThaiMinhD i e m T u –

IFTBusinessUnitDirectorwhoisinchargeofpowdermilkcategory.Sheconfirmedthat“ T h i

s isalsooneoftheunsolvedproblemsofpowdermilkcategory.I t hasb e e n targetedtor e v i e

w andresolvein2017”.Andthisisa partofproject“CRMcostoptimization”.I n themeanwhil

e,M s T u sharedthat“ ItisclearthatsalarystructureofCRMo ffi c e r wasnote ff e c ti v e inc

omparisonwiththatofa

salesmanwhoworksinthec h a n n e l s : generaltradeandmoderntrade.CRMo ffi c e r ha snomonthlys a l e s i n c e n ti v e s e n ti t l e m e n t T h i s m a y bethereasonswhytherei snostrongworkingmotivationforthemtoc o m p l e t e KPIsregardingrecruitingnewusers everymonth.”And“Aspermysupervision,Ithinkworkingprocessshouldbereviewed.CRMst affvirtuallyfeelsveryrelaxedinworkinghours.”–

s h e commentedaboutworkingspiritofCRMteam.AnotherpointwhichwasalsomentionedhereisthatM s T u thinkswestilldonotutilizethec a p a b i l i ti e s ofthethirdparty–thecompanyisprovidingCRMofficersforFCVinexecutingthisservice.M s T u saidthatN e

s t l e –

oneofmaincompetitorsofF C V ownthethirdpartywhichisverystronginmanagingsalesperformanceoftelesalesstafffordrivingb u s i n e s s g o a l s ofthatcompanyinthissegment.Asresultsofthisinterviewsession,itcanbesaidthattherearethreeproblemswhichshouldbetakenintoconsideration:workingmotivation–

monthlysalesincentivesforCRMteam,workingprocessreviewandthec a p a b i l i ti e s ofthethirdparty

 Symptom 4: No motivationforCRMofficerstopushsalesperformanceAnotherinitialint

erviewwasconductedwithM s BachDuong–

CRMMarketingManagerwhoisinchargeofmanagingCRMteamandbuildingCRMdevelop

ments t r a t e g y tounderstandtheproblemmore.M s Duongsaidthat“ Failureinpushings

a l e s performanceofCRMteamiscertain.I n comparisonwithS a l e s teamofotherchannel s,thereisnomonthlysalesincentivesschemeofthecompanyforCRMo ffi c e r s Somost ofmystaffsonlytrytomeet80%-

100%KPIofmonthtoavoidb e i n g fired.Accordingtomyteamregulation,e m p l o y e e woul dbefi r e d ifhe/shef a l l KPIintwoconsecutivemonths…

Soyouknow,actuallyt h e reisnoreasonforthemtogobeyondexpectation.”Aftersharingher

viewaboutthisproblemofCRMteam,Ms.DuongexpectedH R teamwouldcoordinatewithhertobuildanattractivesaleincentivesschemetoencourageemployeetodomoree ff e c ti

v e l y

andcreateanenergeticworkingatmosphereforherteam.Ingeneral,buildingsalesincentivesschemeforCRMteamiscrucialthingtodointheeyesofCRMMarketingManager.Becauseinherpointofview,monthlysalesincentivesisoneofthemosteffective waystodistinguishbetweenoutstandingstaffandstaffunderperformance.

 Symptom 5: Inappropriate numberofDataofficersinCRMteam

Discussingabouttheseabove-mentionedconcernswithM s TrinhMaiPhuong–

H R DirectorandM s PhamLanAnh– H R BusinessPartnerManager–

Commercial(dedicatedforpowdermilkcategory),bothofthema g r e e d thatthiswasoneofthemostconcernedproblemwewouldhavetoexploreansolveassoonasp o s s i b l e Furthe

rmore,M s MaiPhuongemphasizedthat“CRMRestructureshouldbetakenintoconsiderati

onassoonaspossible,e s p e c i a l l y aboutteamstructure,workingprocessandthenumberof staff.Accordington e w IFTBusinessM o d e l , automaticdatav e r i fi c a ti o n w i l l h e l p tofi l t e r rawdatawithoutinvolvementofp e o p l e T h i s wasalreadye ff e c ti v e from February2017.HoweverthenumberofstaffinDataverification teams ti l l remainsuncha nged.It mustbea problemwhichwealwaysraiseitwithT u ThaiandB a c h Duong.”

Ingeneral,allofrelevantstakeholdersconfirmedthattheeffectivenessinpushingsalesperformanceofCRMteamshouldbetakenintoconsideration.Therearemanyconcernedsymptomsregardingthisproblem:notstretchingenoughworkingprocess,noworkingmotivation–monthlysalesin c e nti ve s , thenumberofCRMs t a ff …

Tounderstandandidentifythecoreproblem,somerelatedliteraturereviewandin-depthinterviewwiththosestakeholdersw ill becarriedoutmuchmore

1.2.2 Problemjustification

1.2.2.1 Commonreasonsleadingtofailureinsalesperformancemanagementi n anorgan ization

AccordingtoGreggGreenberg4,therearesomecommonreasonsleadingto

failureinsalesperformancepushingormanagement.Firstly,salesperformancepushingisoutoftrendofcompanyororganizationbusinessstrategy.I t meansthatstandardworkingprocessandperformancemanagementmechanismisnotinlinewiththecompany’sendinggoalsor

b u s i n e s s strategy.Thiscanleadintotheresultofnotdeliveringtherealbusinessvalueasexpected.Secondly,motivatingsalesperformanceofemployeecanbes t r u g g l e d withunatt

productivity( G i l Cargill)6

Inshort,thee ff e c ti v e n e s s ofsalesperformancemanagementistheconsequenceofcombiningmanyelementsinwhichsalesexecutionplanincludingdepartmentalstructure,standardworkingprocessandKPIsetting/

mechanismmustbeinl i n e withb u s i n e s s strategy;andworkingmotivationv i a compensation

andbenefitframeworkisoneofthestrongesttoolstosupportforthisambitionaswell.Besides,developingsalesc a p a b i l i ti e s ofrelatedstakeholdersisalsooneofcoreelementswhichmustbeintheprioritizedlistofreview.

1.2.2.2 PotentialproblemsleadingtofailuresalesperformancemanagementofCRMtea m

Basedontheinitial informationcollectedandsupportingtheoreticaldocuments

above,anotherin-depthinterviewsessionswithkeystakeholdersincluding:FinanceDirector,FinanceBusinessPartnerofPowderMilkCategory,CRMManager,IFTBusinessUnitDirector,H R Directoran

dH R B P s werecarriedouttoj u s ti f y theproblemandidentifythecentralproblem

Asbeingshowedthepartofsymptomproblem,threemainreasonsleadingtoineffectiveinpushingsalesperformanceofCRMstaffaremainlyaboutnotstretchingenoughworkingp r o c

e s s , noworkingmotivation–

monthlysalesi n c e n ti v e s , thenumberofCRMstaff mentionedrelevanttheoreticaldocuments,therearemainfactorswhichshouldbetakeninconsiderationwhenreviewingtheeffectiveness ofsalesperformancemanagement:

However,accordingtoabove- Salesstrategy/Business ambitionofCRMt e a m

2017b u s i n e s s ambitionofCRMteamisreflectedviathefollowingpoints:

+S u c c e s s f u l l y launchingautomaticdatav e r i fi c a ti o n butnochangeinnumb

erofDatao ffi c e r s whovalidatedatamanually

Asshownabove,CRMData teamiscurrentlyc o l l e c ti n g datafrommanydigitalandmediasources.Withthefi r s t rawdatasource,datao ffi c e r isresponsibleforverifyingdatatoensure:datac o l l e c t e d hasenoughinformationornot(nameofmom,expecteddateofbabydelivery,phonenumberofmom,currentmilkproductu s e d bymom…),datac o l l e c t e d istotallyneworthesamedatastoredinthed a t a b a s e ofcompany,customerisusingcompanyproduct

oru s e d toconsumecompanyproductandus i n g productofcompetitor…

Allofinformationmustbeensuredtov a l i d a t e beforesendingtotelesalesteamsothattelesalesstaffcanfocusoncallingtoconvinceconsumertopurchaseorrepurchasecompanyproduct

In2017,CRMteamtargettoverifyallofdataautomaticallywithoutinvolvementofpeople.TheapplicationofdataverificationautomationwasofficiallylaunchedsinceFebruary2017.UntilSeptember2017,theautomaticvalidationratereached73.5%whereasa numberofD a t a o ffi c e r (84F T E s ) stillstayunchanged

+Increasethenumberofnewconsumersupto600,000usersin2017

Withthistarget,itisexpectedthateachtelesalesstaffget382newuserseverymonth.However,accordingtoCRMreport,itisnotedthat40%telesalesstaffreached80%KPIonlyeachmonth,ther e s t a c h i e v e d around70%KPIofmonth.ThisledintotheresultthatuntilendofSeptember2017,theactualnumberofaccumulatednewusersisonly333,280whereasitshouldbe450,000usersifeverythingisongoodtrack

+Increasetherepurchasingratefrom10%to30%

Before2017,therepurchasingrateisnotconsidered.CRMteamonlyf o c u s e s onrecruitingnewconsumersforbrandFriso–

powdermilkofcompanyinordertoi n c r e a s e themarketshareaswellaspenetrationrate.AnnualrepurchasingrateofF ri s o usersisonly10%.This mustbeaproblemthatrequiresallofrelevantstakeholderstostartinvestigation,including:R&D,Marketing&Sales.Becauseitistoocost-

consumingforcompanyifcurrentconsumersdonotu s e productanymore.Therefore,in

2 0 1 7 , asrequestedbyManagementBoard,repurchasingratemustbeoneofthecompulsoryKPIsofS a l e s ForceteamincludingCRMteam.ForCRMteam,itistargettoincreasethisnumberupto30%in2017.However,theactiontodrivethisb u s i n e s s g o a l

isquiteblurryinsalesstrategyofCRMteam.T a l k i n g aboutthisperspective,M s Duo

ngsaidthat“UntilS e p t e m b e r 2017,therepurchasingrateofCRMiss ti l l

15-16%only.Weares ti l l f a c i n g d i ffi c u l ti e s indeployingRewardMarketingProgram whichisdesignedforincreasingcustomerloyalty.However,duetoc o m p l e x i t y ofi nternalalignmentandbudgetconstraint,thisprogramhasnotb e e n launchedsuccessf ully.Wearetryingtoarrangeworkloadfore a c h t e l e s a l e s staffsothatapartfromge ttingn e w users,theycanc a l l currentuseraftertheyuseFrisoproductonew e e k toc o n

73.5%,thenumberofCRMdataofficersshouldbelessthan84F T E s ThefollowingtableprovidedbyM s Duong–

CRMMarketingManagershowstheprogressofdeployingtheautomationdatavalidationmodel

Automaticva

lidationrate

Currentdatao ffic er numbers

Theide al data officers

Dataverificationteamisresponsibleforvalidatingrawdatawhichiscollectedfroms o u r c

e s : CRMsystem,MedicalS a l e s

Forces,NutritionAdvisorsatbelow-the-l i n e activities andmediaandd i g i t a Forces,NutritionAdvisorsatbelow-the-l channeForces,NutritionAdvisorsatbelow-the-ls(eg.Facebook,Instagram,webp a g e , forum…).EachDatao ffice r mustensuretheprecisionofinformationbeforetransferringittoTelesalesteamtoconductsalescall.Theexpectedrawdataofabove-

Dataofficers,is912,815datai n s t e a d of1,700,000data.

Figure#12:AmbitiousAutomaticAcquisitionbusinessm o d e l ofCRMteamT h i s lea

dsintotheresultthatthenumberofDataofficersw i l l reduce84FTEsto42FTEs.Incomparisonwithcurrentsituation,itisclearthattherehasti l l beennoactiononresourcesreductiontooptimizemanagementc o s t

Inbrief,itcanbeconcludedthatthenumberofheadcountsisthecoreproblemofDataverificationteam.Withmanualorevenautomatica c q u i s i ti o n b u s i n e s s model,itisrequiredlessfull-timestaffthanthecurrentnumber

 Teles ales team

Telesalesteamisresponsiblefora d v i s i n g nutritionandprovidingproductinformationtotargetcustomerswiththeaimofpersuadingthemtopurchaseandrepurchaseFrisoorDutch

L a d y product.Andthenumberoftelesalesstaffisalsoneededtoreview.AccordingtoinformationprovidedbyMs.Duong,thenumberofnewuserswithcurrentnumberoftelesalesstaffandworkingprocessmustbe

muchhigher.I t shouldbe2,182,752i n s t e a d of600,000newusersascurrentKPIs e tti n

newu s e r isa c h i e v e d easilyandstillhasenoughworkingtimetodo.I n 1,360,000v a l i

d a t e d datatransferredfromD a t a teamtoTelesalesteam,thereareabout60%newuserswhohavenotpurchasedF C V productbeforeand40%currentuserswhohavenotrepurchasedF C V productduringoneyear.Withv a l i d a t e d sourceandcurrentworkingprocessofTelesalesteam,itcouldbefiguredoutthat:

NumberofFTEs 57FTEs 30FTEs

+Thereisnoteamdedicated forincreasecurrentcustomerloyalty

Aboutb u s i n e s s strategy,CRMistargetedtoacceleratethepercentageofcurrentuserspurchasingthesecondtinafterthefi r s t ortwoweeksu s i n g F C V products.I t isestimatedthatmomorbabytakesabout1 weektoconsume1 tinofpowdermilk.Withthisambition,FCVexpectsthatCRMcanhelptwobrandsofpowdermilkcategory:Friso–

premiumbrandandDutchLady–

mainstreambrandtoi n c r e a s e penetrationratev i a telephone,mediaandd i g i t a l

c h a n n e l s , aswellasretainingcustomerloyalty.AccordingFinanceDirector,therepeatingpurchaserateofcurrentCRMcustomersisverylow,“foreaseofunderstanding,figureoutthatthereareonly10/100customersbuyingthesecondtinafterthefirst use.”ToverifyinformationprovidedbyFinanceDirector,anotherinterviewwastakenwithMs.BachDuong–

CRMMarketingManager.Shesharedthat“Wearehavingdifficulties inretainingcusto

merloyaltybecauseunderWHOCodeandVietnamEconomicsLaw,we

arenotentitledtocontactmomhavingbabiesunder2yearsoldfors e l l i n g milkproduct s.I t isencouragedtousebreastfeeding.Thetargetconsumerswec a n reachtoincrease repurchasingratearebabiesover2yearsold.Furthermore,wen e e d tor e v i e w thewo rkloadasw e l l asjoballocationwithint e l e s a l e s teamtodesigna teamwhichisd e

d i c a t e d fortakingcareofcurrentusers”.

Inshort,itcanbesaidthatthedepartmentalstructureofCRMteamsquiteineffectiveinfollowingb u s i n e s s strategy(penetrationrate,repeatingpurchaseandautomation);definingthenumberofFTEstodrivingb u s i n e s s target;notdifferentiatingspecificrolesandr

e s p o n s i b i l i ti e s withintelesalesteam(whoisinchargeofrecruitingnewusersandwhoisinchargeoftakingcareofcurrentu s e r s ) Especially,itisclearthatthereare3 thingstelesalesteamneedstotakeintoconsideration.First,thenumberofheadcountstodriveCRMbusinessgoals(includinggettingnewcustomersandi n c r e a s i n g repurchasingrate)isonly87FTEsonly,i n s t e a d of131FTEs.Second,with87FTEs,CRMcanstillgobeyondtheb

u s i n e s s expectation.CRMteamcanreach738,720newusersinsteadof600,000newusersasobjectives e tti n g Moreover,theycanutilizec a p a b i l i ti e s ofthese87FTEstof

u l fi l l targetofincreasingrepurchasingratefrom10%to30%.Thirdly,monthlyandyearlyindividualKPIofeachtelesalesstaffshouldbemuchhigherandc l o s e r toabovenumbertoensureKPIachievementcommitment.Hence,itcanbesaidthatthenumberoftelesalesstaffshouldbereduced;clearrolesandr e s p o n s i b i l i ti e s amongtelesalesteaminwhich

 InappropriateKPISettinga n d MeasurementCurr

ently,eachtelesalesstaffhasthreeKPIs:

+KPI#1:thenumberofoutboundcalls

+KPI#2:thenumberofacquiredcustomers

thenumberofoutboundcalls)

ItisclearthattheKPInumber3isjustthecertainresultfromKPInumber1andnumber2.AndKPI2isabsoluteresultwhileKPI1isrelativenumber

Anotherpointisthat,unlikewithS a l e s teamsinGeneralandTradec h a n n e l s , CRMofficerissetKPIforthewholeyear,notforeverymonthwhereastheb u s i n e s s resultsarereviewedmonthbymonth.ThismightbeunreasonableandthereasonwhysalesperformanceofCRMteamcannotoptimizeatthemaximumlevel.ThisfactorcombiningwithsalarystructurewithoutmonthlysalesincentivesleadtothefactthatCRMisgettingfailureinpushingsalesperformanceofs t a ff

Furthermore,KPIsettingforCRMofficerisquitecomplexandirrelevantwithb u s i n e

s s goals.Specially,thereisnoKPIsrelatedtorepurchasingrateforeachtelesalesstaff.Hence,KPIsettingisnotclosetob u s i n e s s progress,notclearandrelevanttob u s i n

Inshort,thei n i ti a l causeandeffectmapcouldbeupdatedasbelow:

Figure#15:Initialc a u s e - e ff e c t map

1.3 Identificationofcentralpotentialproblem

Asvalidatedabove,theproblemofi n e ff e c ti v e n e s s inpushingsalesperformanceofCRMstaffrootedfrommanyr e a s o n s : departmentalstructure,KPIsettingandmeasurement,rewardschemeandc a p a b i l i ti e s building.Howeverintermsoftheimportanceandpriorityofproblems o l v i n g , itisrequiredtoidentifythecentralpotentialcausetospendtimeoninvestigationandrecommendationforpromptimprovement.Discussingaboutt h i s ,

M s BachDuongsaidthat“Costoptimizationisthek e y o b j e c ti v e s ofCRMteamin2017

anditisexpectedtor e

-d e s i g n salarystructuretoseekforopportunitiesoncostoptimizationan-dmotivatingperfo rmanceofstaffm o r e ”.However,M s T u sharedherpointofv i e w asfollows:

“Personally,I amambitioustosolvetheproblemfromthestrategicsideandsolvetheproblem

fromA toZwhichstartswiththerootcause”.Forselecting thes t r a t e g i c andkeymissio

ninsolvingt h i s problem,thestudysoughtforsomerelevantliteraturereviewtoreinforcethecentralproblem.AccordingtoM&E

studies,Bloisi7h i g h l i g h t stheimportanceofstructureasa meanofgettingpeople

worktowardscommong o a l s thusactingasfacilitatorinpursuitoforganizationalgoals.Besides,Mullins8emphasizesthatstructureaffects bothproductivityandeconomice ffi c i e n c yandalsomoraleandjobs a ti s f a c ti o n ImportantnotionstemmingfromMullinsa s s e

r ti o n isthatgoodstructurew i l l notonlyhavet a n g i b l e

effectsiefi n a n c i a l buti n

-t a n g i b l e a ff e c -t s l i k e mo-tiva-tion-thusimpac-tingorganiza-tionsopera-tionaleffec-tivenessasemployeescarryoutoperations/

tasksoforganization.Tounderstandmoreabouttheorganizationstructureingeneralanddepartmentalstructureinparticularaswellashowadepartmentalstructureise ff e c ti v e , somesourcesofrelatedliteraturereviewwasc o l l e c t e d asfollows