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Ogilvy Interactive TeamOgilvy Interactive Team

Customer Relationship Customer Relationship Management (CRM)Management (CRM)

Vladimir M JordanovDecember 2nd, 2000Oglivy Interactive Beijing Boot-camp

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Customers?Customers?

Who are these guys?Who are these guys?

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What is CRM?What is CRM? In-depth analysis of customer In-depth analysis of customer

behavior and attributes.behavior and attributes.

Applying of the achieved Applying of the achieved knowledge in the formulation of knowledge in the formulation of marketing campaigns, strategies marketing campaigns, strategies and treatment plans.and treatment plans.

More than just a set of technologies More than just a set of technologies – it is a process.– it is a process.

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Why CRM?Why CRM?

Company existence – quest for Company existence – quest for profit.profit.

Three ways to increase the Three ways to increase the profitability of the customer baseprofitability of the customer base

Acquire more customersAcquire more customers Optimize the value of the existing Optimize the value of the existing

customerscustomers Retain the right customers longerRetain the right customers longer

Acquiring new customer cost 5-10 Acquiring new customer cost 5-10 times more that retaining the times more that retaining the existing oneexisting one

Loyal customers will will buy Loyal customers will will buy more and are willing to pay more and are willing to pay premium pricespremium prices

20/80 rule – 20% of the customers 20/80 rule – 20% of the customers generate 80% of the revenuegenerate 80% of the revenue

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Why CRM? (continued)Why CRM? (continued)

Service leaders enjoy the following advantage over their low-Service leaders enjoy the following advantage over their low-service competitors:service competitors:

They grow twice as fast.They grow twice as fast. They experience a 6% annual growth vs. a 1% share loss (they take They experience a 6% annual growth vs. a 1% share loss (they take

customers away from their competitors).customers away from their competitors). They can charge 10% more from their products and still take They can charge 10% more from their products and still take

customers away.customers away. They enjoy 12% vs. 1% average return on sales.They enjoy 12% vs. 1% average return on sales. Industry statistics show that 68% of customers walk away because Industry statistics show that 68% of customers walk away because

of poor customer service.of poor customer service.

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Evolution of CRMEvolution of CRM

Mass MarketingMass Marketing

Target MarketingTarget Marketing

CRMCRM

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Mass MarketingMass Marketing

Replaced the intimacy of direct salesReplaced the intimacy of direct sales One way communicationOne way communication Wide geographic distributionWide geographic distribution Lost is the personal touch with the customerLost is the personal touch with the customer Mass marketing was enabled trough the technological Mass marketing was enabled trough the technological

improvements in TV, radio, printed pressimprovements in TV, radio, printed press

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Target MarketingTarget Marketing

Direct mail, telemarketingDirect mail, telemarketing Receiving customer responseReceiving customer response Lack of specific data, average response rateLack of specific data, average response rate Islands of informationIslands of information

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CRMCRM

Next evolutionary step, back to intimacyNext evolutionary step, back to intimacy Customer loyalty build on:Customer loyalty build on:

Understanding of customers wants, needs and valuesUnderstanding of customers wants, needs and values Interactivity with the customer in the way customer preferInteractivity with the customer in the way customer prefer

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CRM CycleCRM Cycle

AssessAssess Who are the customers – demographics and lifestyle?Who are the customers – demographics and lifestyle? Where do they live?Where do they live? What are they worth? What is their lifetime value What are they worth? What is their lifetime value

potential?potential? What and how do they buy?What and how do they buy? How can they be reached? How have they responded to How can they be reached? How have they responded to

promotions in the past and trough which channels they promotions in the past and trough which channels they prefer to be reached? prefer to be reached?

PlanPlan ExecuteExecute

Execution and management of the marketing campaigns Execution and management of the marketing campaigns and customer treatment plans.and customer treatment plans.

Data gathering.Data gathering.

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CRM Critical Success FactorsCRM Critical Success Factors ArchitectureArchitecture

Data warehouseData warehouse Data structure and architecture – 80% of the service costData structure and architecture – 80% of the service cost

Analysis, ProfilingAnalysis, Profiling Customer InteractionCustomer Interaction Sales force automation system.Sales force automation system. Call centerCall center The InternetThe Internet

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CRM ComponentsCRM Components

Two basic set of toolsTwo basic set of tools Data collection toolsData collection tools Analytical and data delivery toolsAnalytical and data delivery tools

Data warehouseData warehouse Data archeologyData archeology Depth and breadth of dataDepth and breadth of data

Contact informationContact information Household informationHousehold information Group informationGroup information Customer historyCustomer history Promotion historyPromotion history Product purchase/usage historyProduct purchase/usage history Transaction rollupTransaction rollup Customer service historyCustomer service history Survey and customer response dataSurvey and customer response data Demographic, psychographics, firmographic and/or credit dataDemographic, psychographics, firmographic and/or credit data Customer interaction informationCustomer interaction information

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CRM Components (continued)CRM Components (continued)

Data extraction and cleansing Data extraction and cleansing Data management and storageData management and storage Scalability and open technologiesScalability and open technologies

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CRM EnvironmentCRM Environment

Applications, PlatformsApplications, Platforms Vignette, Websphere, Vignette, Websphere,

Broadvision etc… Broadvision etc… Communication channelsCommunication channels

Traditional direct marketing, Traditional direct marketing, Electronic direct marketing, Electronic direct marketing, call centercall center

Data mining, customer profile Data mining, customer profile building building

Data warehousingData warehousing Oracle, SQL, DB2, Sybase Oracle, SQL, DB2, Sybase

etc… etc… Data analysis and profilingData analysis and profiling

eSpective, Webtrends etc…eSpective, Webtrends etc…

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CRM Building BlocksCRM Building Blocks

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Ogilvy and CRMOgilvy and CRM

Focused on CRM Focused on CRM Electronic Data Marketing (EDM)Electronic Data Marketing (EDM) M OglivyM Oglivy

T e l e m a r k e t i n gC a l l C e n t r e

W A P / S M S

W e b s i t e

C h a t

E - m a i l

F A X

D i r e c t M a i l

I n t e r n a l S y s t e m s

C R MC R M

C R M D a t a b a s e

C a m p a i g n M a n a g e m e n t

C o m m u n i c a t io n s H i s t o r y

C o m m e r c e

L o y a l t y

C l i e n t

S a l e s F o r c e

D e l i v e r y

R e p o r t s

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Ogilvy Interactive China and CRMOgilvy Interactive China and CRM

Does Ogilvy Interactive manage the relations Does Ogilvy Interactive manage the relations with its clients?with its clients?

How?How? How can we improve?How can we improve? How our competition manage the relationship How our competition manage the relationship

with its customers?with its customers?

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The Technology road ahead 2001The Technology road ahead 2001

Technology strategy objectivesTechnology strategy objectives Technology – Strategic key focusTechnology – Strategic key focus Key technologies and skillsKey technologies and skills Training PlanTraining Plan Technology Laboratory Technology Laboratory Work with other companies and organizationsWork with other companies and organizations Services provided by the Technology groupServices provided by the Technology group

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ObjectivesObjectives

To be a technology center of excellence among the To be a technology center of excellence among the Interactive groups in the region and worldwide.Interactive groups in the region and worldwide.

To excel best practices and technologies in the region To excel best practices and technologies in the region and worldwide.and worldwide.

To be on the leading edge of the new technologies.To be on the leading edge of the new technologies. To be innovative.To be innovative. Improve, improve, improve Improve, improve, improve

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Technology – Strategic key focusTechnology – Strategic key focus

Currently used technologiesCurrently used technologies Content Management SystemContent Management System Active Server Pages and Web Applications Development Active Server Pages and Web Applications Development

Light and Medium Backend Database Development Light and Medium Backend Database Development

Future technologiesFuture technologies MobileMobile CRMCRM ASP ModelASP Model

Consulting technologiesConsulting technologies Heavy backend database development.Heavy backend database development. Full scale transaction based e-commerce solutions.Full scale transaction based e-commerce solutions.

ERP and on-line supply chain managementERP and on-line supply chain management

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Key Technologies and skillsKey Technologies and skills Operating Systems – Linux, Sun Operating Systems – Linux, Sun

Solaris, Windows NT etc… Solaris, Windows NT etc… Platforms and Web Application Platforms and Web Application

Servers – Zope, Domino, Netscape, Servers – Zope, Domino, Netscape, Apache Apache

Database – MS SQL, My SQL, Database – MS SQL, My SQL, Oracle, DB2Oracle, DB2

Programming – Perl, Python, C, Programming – Perl, Python, C, Java, Java Script, HTML, DHTML, Java, Java Script, HTML, DHTML, VBSVBS

Tools & Utilities – WebTrends, Tools & Utilities – WebTrends, WebBenchWebBench

Technologies – CMS, CRM, E-Technologies – CMS, CRM, E-Commerce, One-To-OneCommerce, One-To-One

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Training PlanTraining Plan

The training plan for 2001 will be developed in accordance of The training plan for 2001 will be developed in accordance of the Technology Strategic Key Focusthe Technology Strategic Key Focus

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Technology LaboratoryTechnology Laboratory

New technologiesNew technologies Skills improvementSkills improvement Pet projectsPet projects

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Partnership with third partiesPartnership with third parties

Heavy back-end database developmentHeavy back-end database development CRM, ERP, E commerce CRM, ERP, E commerce Internship with leading Beijing Universities Internship with leading Beijing Universities Partnership with leading technology companies (such as Partnership with leading technology companies (such as

Motorola, Nokia, IBM etc.) Motorola, Nokia, IBM etc.) Partnership with leading software companies (Vignette, Partnership with leading software companies (Vignette,

BroadVisionBroadVision, Oracle etc.), Oracle etc.) ASP modelASP model

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Services Provided by Tech. GroupServices Provided by Tech. Group

Content management solutions design and implementationContent management solutions design and implementation Front-end programmingFront-end programming Back-end programmingBack-end programming Site architecture and integrationSite architecture and integration Site hosting and administrationSite hosting and administration Internet technology and strategy consulting Internet technology and strategy consulting

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