CRM System in VODAFONE

Under guidance of Dr Chabbi Sinha Chavan

SECTION 2BAnand Tuteja-40

Ankuj Chaudhury-42Sunil Albal-61

Nandita Katiyar- 54Raswinder Singh-31

Rupal Nimbhorkar-33Shoumen Choudhury-58

I. Introduction – Vodafonea. Company Profileb. Vodafone in Indiac. Market Shares in India

II. Gartner’s Eight Building Blocksa. CRM Visionb. CRM Strategyc. Valued Customer Experiencesd. Collaborative Effortse. CRM Processf. CRM Informationg. CRM Technologyh. CRM Metrics

AGENDA

III. Benefits to Vodafone from CRM

IV. Issues Faced in CRM Implementation

a. Programb. Peoplec. Processesd. Technology

V. Consumer Research

VI. Best CRM Practices in the Industry

I. INTRODUCTION

Name VODAFONE comes from “Voice”, “Data” & “Phone”

Largest telecom company in the world (turnover)

2nd largest telecom company in the world (subscriber base) after China Mobile

Public limited company

Operations in 31 countries & partner networks in another 40 countries

Listed on NYSE

Founded : 1983 as RACAL TELECOM, Demerged from Racal Electronics (parent

company) in 1991 and named VODAFONE

HQ : Newbury, England

Revenues : US $ 69 bn (2008)

Profits : US $ 6.75 bn (2008)

Employees : ~ 79,000 Source :

WIKINVEST

COMPANY PROFILE

2005 : Acquired a 10 % stake in Bharti Airtel

2007 : Acquired a controlling 67 % stake in Hutchinson Essar for US $ 11.1 bn.

Sold back 5.6% of its Airtel stake back to the Mittals & retained 4.4%

In September, Hutch was rebranded to Vodafone in India.

Source : WIKINVEST

Vodafone UKVodafone EssarVodafone AustraliaVodafone IrelandVodafone New ZealandVodafone EgyptVodafone Italy

Vodafone SpainVodafone PortugalVodafone TurkeyVodafone GermanyVodafone NetherlandsVodafone HungaryVodafone Sweden

Important Subsidiaries :

VODAFONE IN INDIA

Airtel 24%

Vodafone18%

BSNL / MTNL13%

Tata 9%

Idea11%

Aircel5%

Reliance19%

Others1%

MARKET SHARE IN INDIA

Source : TRAI Report JUN’09

VODAFONE’S OFFERINGS

Enterprise Central

Telecom Management

Global Device Portfolio

Managed Mobility Services

Mobile Money Transfer

Vodafone Live

Vodafone Mobile Connect

Vodafone Connect to

Friends

Vodafone Passport

Vodafone Freedom Packs

Vodafone At Home

Vodafone Media Systems

Source : vodafone.com

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1st Block CRM Vision

2nd Block CRM Strategy

3rd Block

Valued Custome

r Experien

ce

4th BlockCollabora

tive Efforts

5th Block CRM Process

6th BlockCRM

Information

7th BlockCRM

Technology

8th Block CRM Metrics

II. GARTNER’S MODEL

Snapshot

(i) CRM VISION

CUSTOMERS FOR LIFE !

To earn our customers' loyalty, we will anticipate their needs and act to create superior value in their eyes.

We want to be known for Cons i s tency

Re l i ab i l i t y

F lex ib i l i t y

Respons iveness

I nnova t i ve Se rv i ces

We will make this happen in an enriching environment of trust, cooperation and mutual respect.

VODAFONE’S CRM PHILOSOPHY

Involving Customers as Co-innovators

(ii) CRM STRATEGY

5 POINT STRATEGY FOR

CRM IMPLEMENTATION

BROAD CRM OBJECTIVES

EnrichingService

Experience

VODAFONE’S CUSTOMER STRATEGY IN INDIA

(iii) VALUED CUSTOMER EXPERIENCE

Vodafone has taken advantage of strong presence of Hutch Essar in Metros.

It has LEADERSHIP IN CONTRACT SEGMENT.

It has STRONG CUSTOMER FOCUS

Mass market PREPAID FOCUS : e.g. low value 10/- sachet recharge.

Innovative Value Added Services :

Easy e-recharge

E-recharge using SMS

Premium SMS

Ringback Tones

International Voice & Data Roaming

Vodafone plans to bring ULTRA LOW COST handsets to India.

Introduced VODAFONE LIVE! In India.

Introduced BALANCE TRANSFER for the first time.

Introduced UNIQUE OFFERS FOR MULTINATIONAL CORPORATE ACCOUNTS.

Introduced SINGLE BILLING SYSTEM in 2007.

Comprehensive approach across call centers, retail, internet & automated systems.

Industry leading PROCESS IMPROVEMENT based on extensive customer research.

(iv) COLLABORATIVE EFFORTSThe program was built on 4 major pillars :

Strategy

I T

Culture

ProcessCOLLABORATIVE EFFORTS

Senior Managers of Vodafone personally supervised the FEEDBACK COLLECTION from customers which they used to prioritize customer related issues, and reinforced the CRM vision of “ANTICIPATING NEEDS & THEREBY CREATING SUPERIOR VALUE”.

INDUS TOWERS are operating at 95,000 sites !Network Expansion : 2,600 sites per month !Vodafone is committed to its objective of providing low cost services to its customers. For this it is expanding network aggressively to reduce its total cost of network ownership.

Vodafone’s ability to chart out an average life cycle allows it to market different services. It prospects aggressively through advertizing.

2nd stage combines provisioning and verification. Vodafone activates a customers account and makes a first rating of the customer based on the application.

Vodafone’s well planned welcome process includes a call informing clients of the Vodafone help line & various value added services. At the end of this stage their first

bill is generated.

(v) CRM PROCESS

The first collection marks the start of up-selling and cross selling. Analytical module steps in, CRM has to make every attempt count since clients can only be approached

only a fixed number of times.

This stage may see a client wishing to leave. To keep churn down , Vodafone uses retention policies and loyalty processes to bring clients back to the fold. Many clients

are won back.

(vi) CRM INFORMATION

Custom analytics provide meaningful insight for personalized customer communications & interactions. Now, VODAFONE can:

Identify customers’ value segments

Understand customer needs and preferences

Create targeted marketing & sales campaigns for specific customer segments

Monitor customer responses

Apply experience to future campaigns

Steer customers’ buying behavior

(vii) CRM TECHNOLOGY

ProfileAffiliates

Credit ProfileOrg. Structure

SRs

Sales PipelineCustomer PipelineQuantity Pipeline

Loss AnalysisConversion Ratio

Applications

ProfilePersonal Profile

Credit ProfileSRs

PricingPrice Components

Taxes

(vi) CRM METRICS1. Cases closed same day.

2. Number of cases handled by agent.

3. Number of service calls.

4. Average time for resolution.

5. Average number of service calls per day.

6. Percentage of service renewals.

7. Customer satisfaction level. (CLTV)

8. Complaint time-to-resolution.

9. Average number of service requests by type.

10. Percentage compliance with service-level agreement (SLA).

11. Revenue coming from Commercial Partners.

12. Complaints handling (e-mail/letter).

13. Brand image.

14. Customer Categorization.

Year 0 Year 1 Year 2 Year 3 Year 4

Number of Customers 100 90 80 72 60

Revenue / Customer 1,200 1,320 1,440 1,500

Variable Cost / Customer 840 864 900 912

Margin / Customer 360 456 540 588

Acquisition Cost / Customer 100 - - - -

TOTAL PROFIT -10,000 32,400 36,480 36,480 35,280

Present Value -10,000 29,455 30,150 27,410 24,100

CALCULATING CUSTOMER LIFETIME VALUE

CLV = ∑

Where m = margin for time t

i = discounting rate for time t

If margins and retention rate stay constant over time then :

mrt

(1+i)t

∞

t=1

CLV =

Where is the margin multiple.

m r ( 1 + i – r )

r ( 1 + i – r )

10% 12% 14% 16%

60% 1.2 1.5 1.11 1.07

70% 1.75 1.67 1.59 1.52

80% 2.67 2.5 2.35 2.22

90% 4.5 4.09 3.75 3.46

Discount Rate

Margin Multiple :

Retention Rate

800 – 2000 /- for 10 consecutive months

> 2000 /- for 10 consecutive months

200 – 800 /- for 10 consecutive months

< 200 /- for 10 consecutive months

CUSTOMER CATEGORIZATION

III. BENEFITS ACHIEVED

The main and overall result is that the new CRM solution has helped Vodafone to REDUCE ANNUAL CUSTOMER CHURN BY ~ 7 %. ASIAN E-BUSINESS MARKET WATCH

CRM solution has helped Vodafone employees to synchronize & coordinate all customer interactions across multiple channels, including telephone, e-mail, face to face, post & fax.

The CRM solution has also enabled employees to improve customer service, increaseproductivity and maximize revenues.

The workflow automation capabilities of the CRM solution have enabled the company to manage each and every one of these calls efficiently and professionally. Sales agents are now automatically connected to customers and prospects based on product & service expertise, named account, availability and geography. They can also check the status of a calling subscribers’ request or inform him/her of the status of the request.

Call scripting and profiling further improved agent productivity. A workflow-based user interface presents the appropriate questions and information as needed, guiding agents through a sequence of steps based on customers’ individual requirements.

IV. ISSUES FACED

PROGRAM•Difficult to change existing technical and organizational structures

PEOPLE•Need to work harder to create processes and re-engineer systems around new implementation.•Training for all related employees.

PROCESS•Integration of services across all 23 circles.•Maintaining existing service levels at the time of transition.

TECHNOLOGY•Integration of independent systems.•Porting data from each system which went into terabytes.•Design proper work flow automation.•Facilitating and enabling knowledge sharing.

Monitoring how customers interact using various modules of CRM.

Visibility of business transactions across India.

Monitor Service Level Agreements.

Maintenance and modification of CRM system.

Inconsistent data flow sometimes.

Change Management.

Aligning CRM to Vodafone’s vision and growth objectives.

Finding the right CRM managers in India.

ISSUES FACED POST IMPLEMENTATION

V. CONSUMER RESEARCH

20 Vodafone customers were surveyed. Response format chosen : 5 point likert scaleRESULTS : 50% rated promptness of service at 5. Satisfaction levels were rated 5 by 65%. No. of calls before problem is sorted

1 to 2 calls by 60%> 2 calls by 20% (area of concern)

20% people complained that they were charged for services they had not subscribed.

Team Work Simplicity Effective

Communication

Staff Empowerment

Process Automation

Defining & Mapping Data Requirements

Proper Data Collection

Data Standardization

Integrated Customer Strategy

Customer Engagement

Programs

Continuous Monitoring

Developing Successful

Metrics

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VI. BEST CRM PRACTICES

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