business and technology strategies for more-profitable customer relationships - vision for crm

External use of Gartner copyrighted material must be approved in writing by 1.. External use of Gartner copyrighted material must be approved in writing by • Microsoft Office upgrade – 2

• CRM budgets are less protected So far, CRM has survived the economic

slowdown, but pressure is building.

• CRM is dangerous Failure rates are rising, mistakes will be seen by everyone

and the impact on the enterprise will be greater.

• CRM is still a fantasy in most enterprises CRM done at a department level suboptimizes the customer relationship

• CRM can provide a fundamental competitive advantage Those enterprises

that succeed are reaping substantial long-term benefits

• CRM should benefit both the supplier and customer Few initiatives provide

any benefit to the customer.

• CRM is not just about creating a unified view of the customer The customer

would like a unified view of the supplier too.

• CRM will evolve beyond customers The future of CRM will include a greater

focus on employees, partners and prospects.

Conclusions

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

1 What is the value of CRM to enterprises, and

what drivers are continuing to force its acceptance?

2 How will organizations develop and implement

a business vision for CRM?

3 What will CRM look like in the future, and how

can enterprises position themselves now to be prepared for these changes?

Key Issues

Yes, planning to spend more slowly, more in 2H01 once I have a better read Yes, planning to spend less

Yes, senior management requested a cutback in spending Yes, doing deals that are smaller than I would have otherwise

225 respondents with average revenue of $10 billion

Aug

Has the Slowing Economy/Stock Market Decline Made You Re-evaluate Spending in the Last Month?

No of Respondents

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

• Microsoft Office upgrade – 29%

• Net and app mgmt software – 18%

• Call center projects – 18%

• Customer service apps – 14%

• New custom development – 14%

• Sales force automation – 4%

• E-mail response software – 4%

• Mainframe system mgmt – 4%

• Procurement software – 2%

• E-store software for Web site – 1%

Which Areas Are Likely to See the

Biggest Spending Increase in 2H01?

Market Trends

1 Increasing Customer Education and Expectations Consumer complaints 2000 = 5x 1995

2 Customer Relationship Complexity Rises R(f) = (Segments) x (Products) x (Channels) x (Partners)

3 Rising Global Internet Adoption More accessible competition and more coordination between partners

Executive Trends

4 Intensified CEO Attention on CRM CRM = profit increase = stock price increase = bonus increase?

5 Protected CRM Budget Allocation

6 Formalization of Governance for Customer Relationships CRMO, CCO, customer advocate?

CRM Implementation Trends

7 Shift in CRM Application Architectures and Spending DIY > package; C/S > Web; best of breed > suites; per seat >role-based; $2,500 >$250 per seat; buy >ASP + rent

8 Explosion of Customer Data Web, chat, e-mail, instant messaging, expanded contact centers

9 Vendor Churn Leading to a Power Shift 500 > 50 vendors; best of breed > ESP and ERP

10 Increasing Numbers of Project Failures 65 percent > 80+ percent in mid-2003

Top 10 Trends: The Siren Call of

CRM?

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

Top 10 Causes of Failure in CRM Today

1 Management has little customer understanding or involvement

2 Rewards and incentives are tied to old, noncustomer objectives

3 Staff culture does not have a relentless focus on the customer

4 Limited or no input from the customers’ perspective

5 Thinking technology is the solution

6 Lack of specifically designed, mutually reinforcing processes

7 Poor-quality customer data and information

8 Little coordination of multiple departmental initiatives and projects

9 Creating the CRM team is left to last and lacks business staff

10 No measures or monitoring of benefits and a lack of testing

No implementation

Unintegrated departmental projects

Integration of more than one project

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

Varies Cost Reduction

Revenue Enhancement

Complex Infrastructure

Sub-Multidepartmental (Type B) Enterprise

Extraenterprise (Type A)

Varies Efficiency

Closed Loop Analytics

Universal View

CRM Infrastructure

Competitive Advantage

Not All CRM Strategies

Are the Same

Guiding Principles for

Successful CRM

Extend breadth and

depth of relationships Leverage and enhance brand equity

Touchpoints Value Network

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

CRM is a business strategy whose outcomes optimize

profitability, revenue and customer satisfaction (the why?)

by organizing around customer segments, fostering

customer-satisfying behaviors and implementing

customer-centric processes (the how?)

CRM technologies should enable greater customer

insight, increased customer access, more-effective

customer interactions, and integration throughout all

customer channels and back-office enterprise functions

(win-win outcomes?)

Gartner Definition of CRM, But … Every Enterprise Should Have Its Own

Best Time/Cost

Best Product

at Best Time/Cost

Best Time/Cost Plus High Touch

Operational Efficiency

Customer Intimacy

High Touch and Best Product

Best Product

Enterprise Resource Trade-Off

Product Superiority

Best High Touch

Customer Value Propositions

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

External:

Customer Experience

Internal:

Organizational Collaboration

Organizational Structure

People: Skills and Empowerment

Incentives and Compensation

Data Mgmt and Applications

Zen and the Art of CRM:

Yin and Yang

The Eight Building Blocks of CRM

Perceived pain points: Least pain Some pain Most pain

Strategy

Organizational Collaboration

Customer Experience

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

Customer Process Re-Engineering

1 All customer-facing processes are mapped

2 Key processes are identified with customer input

3 Prioritized by impact on customer satisfaction

4 Measured by contribution to customer value

5 Implemented in front and back office

6 Given a cross-functional “owner”

7 Implemented with partners

8 Targets sent to customers

9 Compensation for failure

10 A customer SLA

11 SLAs vary by segment?

Real-Time Account Balance ATM, Telephone, Branch, TV, Internet

Horizontal

Death Welcoming Change Address Quote to Cash

Winback Campaign to Compensation

Individual?

Customer Processes and Metrics

► Unified view of supplier, customer

► Accessible: Nearby or within reach

► Available, convenient: Open 24x7, self-service

► Approachable: Via multiple channels

► Simple: Easy to use

► Transparent: Within the enterprise and across

the supply chain

► Trustworthy: Privacy is respected

Greater Customer Access Lower-Cost Access

► Unified view of customer, supplier

► Minimizing customer transfers

► Creating cross-functional roles

► Integrating across channels

► Providing consistency across channels

► Ensuring people resource per channel

► Planning new channel life cycles

► Consolidating internal and external data

► Trading information with partners

► Sharing information with customers

Unified View of Customer

Unified View of Supplier

Customer/Supplier

Win-Win Outcomes

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

Dow Chemical consolidated all

customer service and sales

information into one corporate

memory to ensure a consistent

measured customer interface

costs and activities per channel

Compaq created a Partner

Relationship Management solution to allow channel partners consistent and greater access to information about leads,

products, services and user profiles.

Harrah’s Entertainment shared

data across multiple casinos and hotels to create a unified

personalized loyalty and rewards system based on customer

profitability through greater customer insight.

Ford added a Web-based

product configurator to simplify

the order-entry system and

thus aid its fleet sales dealers

with fleet buyers and the

drivers of the vehicles

Case Studies of Successful

Outcomes

24-Month ROI Stage

Business Impact

Finance Sales

Service Support Marketing

Service Sales

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

Industry CRM Involvement

Technology & High-Tech

Banking Financial Svcs.

Telecom Retail Utilities Insurance Media Petrochemicals

Pharma.

Automotive Distribution

“Dot-Coms”

FMCG or CPG Manufacturing Business Services

Healthcare Government Construction

Access: Data Exchange

Integrate: Link Systems

Collaborate: Create a

CRM Ecosystem

Implications:

– Communities

– “E to E” Approach

– Part of Several Different CRM

Ecosystems – Not Only Will Channels Merge/Morph,

But so Will the Argument of Who Owns the Customer

Future CRM: It’s Not Just for

Customers Anymore

These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by

Franchise

4 companies,

10 vendors each = 10,000 permutations

Fro nt

Offi ce

Supply

Cha in

Inf ras tru ctu

1 What is the value of CRM to enterprises, and what drivers are continuing to force its acceptance?

• Recognize that the long-term trends and drivers behind CRM have not changed, despite the slowdown in the U.S., European and other economies

• Protect the budget for CRM investments — it will come under even greater pressure during the next six to nine months

• Examine the past mistakes of others and avoid considering CRM a technology issue.

2 How will organizations develop and implement a business vision for CRM?

• Define both enterprise and customer value propositions before charting a CRM strategy.

• Use the “Eight Building Block” model as a checklist to determine which elements of CRM are currently

lacking and to identify areas of responsibility where no one is in charge

• Focus on customer-centric processes and metrics — these are the areas of the Eight Building Blocks that most enterprises have found to be most problematic areas Implement processes based on customer

benefits; start with customers and then work backward.

• Balance the internal focus with that of the customer experience — appoint an individual who is responsible for the external viewpoint.

3 What will CRM look like in the future, and how can enterprises position themselves now to be

prepared for these changes?

• Aim for “total CRM” with involvement across the whole enterprise, but don’t try to do it all at the same time.

• Benchmark and invest appropriately for the industry in which your enterprise operates, avoid over-extending investment unnecessarily or being left behind.