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Customer Relationship
Management (CRM)Scott Hopper
Monica Brooks
Jessica Jetton
Case Studies:
United Parcel Service (UPS)
Royal Bank of Canada (RBC) Financial Group
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Agenda
CRM Background & Industry Information
CRM In Action: Case Studies United Parcel Service (UPS) Royal Bank of Canada (RBC) Financial Group
Lessons Learned
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Presentation Focus
Present overview information onCustomer Relationship Management(CRM) and its impact on the way peopleconduct business
Discuss real-life CRM implementations Discuss Successes
Discuss Areas of Opportunity forImprovement
Discuss industry leading CRM bestpractices
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CRM, or Customer Relationship Management isa company wide business strategy designedto reduce costs and increase profitability by
solidifying customer loyalty.
At its core, CRM is a simple, intuitively appealingconcept: attract new customers, know them
well, give them outstanding service, and
anticipate their wants and needs.
Source:
Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., Realizing Business Benefits Through CRM: Hitting the Right
Target in the Right WayMIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94.
www.destinationcrm.com/articles/, What is CRM?, viewed October 12 th, 2004.
What Is CRM?
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History
Mass Marketing All customers treated as if they had sameneeds and preferences
Target Marketing
Focused on market segments Relationship Marketing
Each customers individual needs aretargeted by building relationships
Source:
Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., Realizing Business Benefits Through CRM: Hitting the Right
Target in the Right WayMIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94.
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What Does CRM Do?
Sales
Up-sell and cross sell products more effectively
Help sales staff close deals faster
Marketing
Simplify marketing and sales processes
Discover new customers
Customer Service
Provide better customer service
Make call centers more efficient
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Why Use CRM?
EnterprisesEnterprises
RevenuesRevenues
CostsCosts
CustomersCustomers
SatisfactionSatisfaction
LoyaltyLoyalty
VolumeVolume
EnterprisesEnterprises
RevenuesRevenues
CostsCosts
RevenuesRevenues
CostsCosts
CustomersCustomers
SatisfactionSatisfaction
LoyaltyLoyalty
VolumeVolume
SatisfactionSatisfaction
LoyaltyLoyalty
VolumeVolume
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Goals
Make it easy for customers to do business
Focus on the end customer
Redesign front office and examine informationflows between the front and back office
Foster customer loyalty by becoming proactivewith customers
Build in measurable checks and balances tocontinuously improve
Source:
Chen, Injazz J., and Popovich, Karen, Understanding customer relationship management (CRM) People, process andtechnology Business Process ManagementJournal, Vol. 9, 5, 2003; ABI/INFORM Global, pages 672-688.
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One survey of more than 1,500 companies byThe Data Warehousing Institute (TDWI) in 2000
found that 91 percent either have or plan to
deploy a CRM solution in the near future.
78 percent of companies said they were using
some form of CRM Bain & Company survey of
708 corporate executives 2002
Source:
Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., Realizing Business Benefits Through CRM: Hitting the Right
Target in the Right WayMIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94.
www2.cio.com/metrics/2003/metric544.html, The Right Tool, viewed November 1st, 2004.
Who Uses CRM?
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Who uses CRM?
Cingular Wireless Improved sales productivity by providing a
comprehensive view of the customer, improvinglead generation, and providing a full-functionalwireless solution to sales force.
Honeywell Improved customer service by increasing after-
market spare parts revenue by 100%, improvingservice request closure rate from 45% to 83%, andimproved customer satisfaction by 38%.
DHL By providing a transparent view of the customer,Siebel will help DHL to achieve an estimated 1%increase in revenue by the end of 2005 Ulrik ToppGlobal Sales Development Director DHL
Source:www.siebel.com, customer case studies, viewed 11/9/04
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CRM Budget Change for 2003
Increase
53%
Decrease
16%
Stay the
Same
31%
Increase
Decrease
Stay the Same
Source:
Aberdeen Group, CRM Spending and Satisfaction Report, February 2003, pages 1 -18.
Companies surveyed by Aberdeen Group
in January 2003
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CRM Market
AMR Research estimates that theCustomer Relationship Management(CRM) market will grow to $10.8B in
2004, a $1B leap from 2003.
Source:
Preslan, Laura, Investment Priorities for CRM in 2004, AMR Research, Thursday, Jan. 8, 2004.
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CRM Market
$10,000$11,000
$12,000
$13,000
$14,000$15,000
$16,000
$17,000
$18,000
US$million
2001 2002 2003 2004 2005 2006
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,
pages 1-57.
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CRM Spending by Region
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
US$millio
n
2001 2002 2003 2004 2005 2006
NorthAmericaEurope
LatinAmericaAsia/PacificRim
MiddleEast/Africa
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,pages 1-57.
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US CRM Spending by Industry
$0
$500
$1,000
$1,500
$2,000
$2,500
US$million
2001 2002 2003 2004 2005 2006
Manufacturing
FinancialServices
Retail andDistribution
BusinessServices
Governmentand Education
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,pages 1-57.
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Reasons for CRMs Increased Popularity
Easier to retain customers than attract new
customers
CRM has become more affordable and thetechnology is more advanced
The definition of CRM is being expanded to
include initiatives like loyalty programs
Source:
www2.cio.com/metrics/2003/metric544.html, The Right Tool, viewed November 1st, 2004.
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CRM Software Leaders
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Top CRM Software Suppliers in 2002
Siebel 21.6%
SAP 12.4%
Oracle 5.7%
PeopleSoft 4.9%
Peregrine Systems 3.0%
Others 52.4%
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,pages 1-57.
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Siebel
Market Cap - $4.86B
Revenue - $1.31B
NASDAQ: SEBL - $9.56 (11-13-04)
5000 employees
Founded: 1993
2.8 million employees at more than 4,000organizations use Siebel products
Siebel Systems is the worlds leading providerof customer relationship management (CRM)
solutions and a leading provider ofapplications for business intelligence andstandards-based integration.
Source:
www.siebel.com, viewed 11/9/04
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Market Cap - $56.32B
Revenue - $9.28B
NYSE: SAP - $45.23 (11-13-04)
30,942 employees
Founded: 1972 mySAP Customer Relationship Management
is the only CRM solution that connects youremployees, partners, processes, andtechnology in a closed-loop customerinteraction cycle.
Source:
www.sap.com, viewed 11/9/04
SAP
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Market Cap 68.67B
Revenue 10.30B
NASDAQ: ORCL 13.39 (11-13-04)
41,658 employees
Founded: 1977
Oracle's integrated CRM applications giveyou information-driven sales, service, andmarketing because they're built on an open,standards-based architecture that
streamlines business processes, improvesdata quality, and allows all your key divisionsto draw from the same source of data.
Source:
www.oracle.com, viewed 11/9/04
Oracle
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Benefits Summary
CRM creates value through three key
levers:
Acquire increase number of profitablecustomers
Develop increase profit from existingcustomers
Retain extend duration of customer
relationship
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Existing Customers #1 Priority
Cheaper to retain customers than to add new
customers
Retain customers mean sales volumesincrease per customer
Up-sell and cross-sell
It costs about five times more to gain a customer than to
keep one. And it is estimated to cost 10 times more to getcustomers back if they are dissatisfied.
Source:
Massnick, Forler, Customer Service Can Kill You...ManagementReview, Mar 1997; 86, 3; ABI/INFORM Global
pages 33-35.
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2.2%
1.6%
1.4% 1.4%1.3%
1.2%
1.0%
0.6%
2.8%
0.0%
1.0%
2.0%
3.0%
4.0%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Percent Response to Credit Card Direct Mail Offers
Source: BAI Global, Inc., Mail Monitor, $Q02, Synovate.
Annual Credit Card Acquisition Mail Volume (in Billions)
Difficult to Acquire New Customers
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Top Management Commitment
Project Teams with representatives from alldepartments
Project Champion
Company data must be shared enterprise-wide
Vision and communication
Keys to Success
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Reasons for Failure
Not understanding the needs of the end user
Considered an IT project rather than abusiness strategy
Accessibility - Not training users to effectivelyuse the solution
Inability to integrate different data sources into a single system
Understanding expectations
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Some 80% of the responding marketing,
customer-service and sales execs at 96companies characterize their organizations CRMefforts as very successful or somewhatsuccessful.
Fifty-five percent of all customer relationshipmanagement (CRM) programs fail, according toStamford, Conn.-based Gartner Inc.
Source:
Yu, Larry, Successful Customer-Relationship ManagementMIT Sloan Management Review, Vol. 42, No. 4, pp18-19.
Melymuka, Kathleen, You Can Avoid CRMs Pitfalls Computerworld, Feb 11, 2002; 36, 7; ABI/INFORM, page 30.
Success and Failure Rate of CRM Projects
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CRM In Action: Case Studies
United Parcel Service (UPS)
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UPS
Worlds Largest PackageDelivery Company
Leading global providerof specializedtransportation andlogistics services
Founded in 1907 inWashington
$33.5 billion in revenuein 2003
357,000 employeesworldwide
Source:
http://www.ups.com/content/us/en/about/history/index.html, viewed 10/28/04
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UPS Products and Services
SonicAir
Next Day Air
2nd Day Air
3 Day Select
Ground Worldwide Express
Worldwide Expedited
Standard to Canada
Source:
http://ups.com/content/us/en/resources/select/index.html , viewed 10/28/04
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UPS IT Environment
Kenneth W Lacy- Senior Vice President and
CIO
$1 billion a year on technology infrastructure
4,700 technology employees
14 mainframes, 6100 servers, 120000 PCs
115 million hits and 9.1 million trackingrequests per business day
Source:
http://ups.com/content/us/en/about/facts/technology.html, viewed 10/28
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UPS Technology Awards
Winters Corp. 2003 Top Ten Grand Prize
Winner
Computerworld100 Best Places to Work in IT,2003
CIO 20/20 Vision Award, 2002
CIO 100 Enterprise Integration Award, 2002
ComputerworldPremier 100 IT Leaders, 2002
Source:
http://.ups.com/pressroom/us/awards/ecommerce
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UPS Financial Performance
Source:
http://finance.yahoo.com/q?s=UPS, viewed 11/3/04/
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UPS TEAMS - Seibel Implementation
Next generation in UPS sales force automation
Total enterprise account management system Provides integrated tools to help the sales
force do the job more effectively andefficiently
Supports opportunity and account
management with increased capabilities forplanning and documenting sales calls
Source:
UPS, Overview of UPS TEAMS, 2004
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Why UPS Changed from Link to Teams
UPS deployed Link in 1999- technology has
improved dramatically since then TEAMS can be used across the entire UPS
sales enterprise Future phases of TEAMS will have increased
flexibility to enable UPS to integrate the core
UPS sales force with the sales forces fromother business units in order to establish onecoordinated sales effort
TEAMS has the flexibility to supportenhancements such as wireless capability
Source:
UPS, Overview of UPS TEAMS, 2004
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UPS Sales Enterprise
UPS Sales Enterprise
Domestic and
InternationalCore UPS Additional Business Units
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Other Sales Business Units
Other Sales Business Units
E-Commerce Supply Chain Solutions UPS Capital
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UPS TEAMS
Interacted with
Michael Carey,Project Manager CRMTechnology, October14,2004
Time and Budget
Challenges
Advantages
Lessons Learned
Ti d B d
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Time and Budget
Project was on time and on budget- not at
liberty to share the specific budget
Beta Test in Central Pennsylvania, Swedenand Austria, May 2004
Project Roll Out: June 15th September 17th,
2004 for US, Sweden and Austria employees
Future releases will cover additional countries
and the rest of the UPS sales force (i.e. E-Commerce, Supply Chain Solutions, UPS
Professional Services, etc.)
Ch ll
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Challenges
Aligning the arrival of new Laptops, new Sales
Applications, new Operating System, newwireless cards, and new training documents
Seibel Application Training
Coordinating the trainers
Gathering the right training resources (e.g. ability tospeak multiple languages, etc.)
Scheduling employees for training classes
Ad t f UPS TEAMS
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Advantages of UPS TEAMS
Home Page
Calendar
Opportunities
Queries Data Synchronization
Team Selling
Ad t f UPS TEAMS
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Advantages of UPS TEAMS
Home Page Quick look atdaily calendar,Slim leads andopportunities
Helps prioritizethe sales personstime and keep thefocus on accountsthat needattention
Source:
UPS, Overview of UPS TEAMS, 2004
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Ad t f UPS TEAMS
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Advantages of UPS TEAMS
Calendar
Automaticallyintegrated withactivities
Immediatelypopulates events such
as adding and/orupdating activities,eliminating dual entry
Source:
UPS, Overview of UPS TEAMS, 2004
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Ad t t UPS TEAMS
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Advantages to UPS TEAMS
Opportunities
Provides flexibility tocreate a singleproduct opportunityor a multi-product(portfolio) opportunity
Provides the ability tolink an opportunity tomore than onemarketing initiative
Source:
UPS, Overview of UPS TEAMS, 2004
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Advantages of UPS TEAMS
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Advantages of UPS TEAMS
Queries
Query Assistantallows for filteringdata quickly andeasily
Provides capabilities
for pre-definedqueries andpersonalized queries
Source:
UPS, Overview of UPS TEAMS, 2004
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Advantages of UPS TEAMS
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Advantages of UPS TEAMS
Data Synchronization
Occurs automatically and instantaneously each timethe sales person accesses the system and isconnected to the LAN
No need to remember to exchange data daily inorder to send changes from the sales persons laptop
and receive up-to-date information from the UPSmainframe
Source:
UPS, Overview of UPS TEAMS, 2004
Advantages of UPS TEAMS
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Advantages of UPS TEAMS
Team Selling
Provides information for all of the salespeople associated with a particularopportunity or account
Enables a cohesive, unified sales effort
and contributes to sales success
Source:
UPS, Overview of UPS TEAMS, 2004
Areas of Improvement
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Areas of Improvement
Duplicate data entry still required on some
screens (i.e. Time & date of activities, etc.) Non-optimal Account Name retrieval
Account search capability is exact match
Insufficient back-end integration
Appropriate databases not synched
UPS TEAMS Successful?
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UPS TEAMS Successful?
Best ProjectManagementPractices
YES NO
Business Solutions DriveTechnology Selection
X
Secure Top ManagementACTIVE Support
X
Involve KnowledgeableUsers
X
Buy-in Outside Expertiseto Transfer Learning X
Implement Incrementally XDont Judge SuccessSolely Based on Time toBudget
X
Customer-Oriented Focus X
Source:
Lacity,M,Management of IT- Enabled Business Projects, 2004
St ndi h G o p CHAOS Repo t
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Standish Group CHAOS Report -IT Projects Classification
Type I: Success: on time, on budget,promised functionality
Type II: Challenged: over-budget, over-time
and or missing functionality
Type III: Failed: Severely impaired projects;cancelled projects
Source:
Lacity,M,Management of ITEnabled Business Projects, 2004
Standish Group CHAOS Report
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Standish Group CHAOS Report IT Projects Classification
UPS TEAMS Project: Type I- Success
On time
On Budget
Promised Functionality
CRM In Action: Case Studies
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CRM In Action: Case Studies
Royal Bank of Canada (RBC)Financial Group
RBC Financial Group
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RBC Financial Group
Largest Canadian financial institution
12 million clients worldwide
700 products
60,000 employees
C$270 billion in assets
1.6 billion spent on IT in 2003
CIO: Marty Lippert
Source:
www.rbc.com/aboutus/fastfacts.html
5 Major Business Lines
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5 Major Business Lines
RBC Banking personal and commercial
banking RBC Insurance insurance
RBC Investments wealth management
RBC Capital Markets corporate and
investment banking
RBC Global Services transactionprocessing
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
RBC Banking
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54% of Net
income 1300 branches
4800 ABMs
1.4 milliononline
customers 300 offices in 30
countries
Greatestopportunity for
improvement
Insurance
8%
Investment
15%
Capital
Markets
17% Global
Services
6%
Banking54%
Banking
Insurance
Investment
Capital Markets
Global Se rvices
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
RBC Banking
Change in the Industry
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Change in the Industry
Pre-1990s 6 largest Banks enjoyed friendly
competition Internet banking
Lowering of domestic protections
Oligopoly ended increased competition
How to stay competitive?
1997 study to determine image perceptions
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
1997 Study
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1997 Study
Major FindingCUSTOMER INTIMACY-MOST important FACTOR to thecustomer.
Definition - trust, reassurance, a feeling that the bank knowsthem, understands their needs, recognizes who they are and
value their business
This finding identified a whole new era for RBC
- A shift to differentiation based on customer needs
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
1997 Study Results
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Importance toClient
Financial Institutions
Proficiency at Delivering
HIGH
LOW HIGH
Mutual benefits
ReciprocityTrust
Reassurance
Comfort
Understanding
Convenient Hours
ATM access1-800 Number
Internet Banking
Short Lines
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
1997 Study Results
Focus on Customer: CRM
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CRM Vision: Bring together in one place a view
of all contacts, transactions, accounts, andinteractions with each customer.
CRM system would provide the following info to
personal bankers (PBs):-Address, age, account balances-Contacts customer has had with company
-Level of service customer qualified for based oncurrent and future profitability
-What products customer was targeted and approvedfor
-How customer responded to direct marketing
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Focus on Customer: CRM
Reorganization Around CRM
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VP of Marketing and Info Management-
Richard McLaughlin-Responsible for CRM infrastructure, infomanagement, alliance banking, internetbanking, and privacy
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Reorganization Around CRM
Customer Segments
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Customer Segments
3 Primary Customer Segments & 9 Total SegmentsA. Key markets:
1. Youth2. Nexus3. Small business4. Farming and lifestyle agriculture
B. Growth markets:5. Building6. Business7. Agriculture
C. Prime markets:
8. Accumulating9. Preserving
Lockie, Anne, RBC Banking: The Customer Experience, powerpoint slides at rbc.com
Product & Segment Management
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Product
Structured to sell aspecific product toeveryone
Multiple people selling
to same customer
Segment
Structured to satisfy allneeds with all products
- Employees concernedwith meeting needs
not selling a specificproduct
CUSTOMERS
SEGMENT
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
PRODUCTSC
B D
A E
CUSTOMER
Product & Segment Management
Timeline: CRM Capabilities
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1997 1998 1999 2000
McLaughlin
hired as VP of
Marketing andInfo
Management
Software
selection to
facilitateCRM
1997 study
creates a
platform forCRM
CRM
software and
practices
continue to be
modified
based on
internal &
external
customerfeedback
Info changes
focus to
profitable/potentially
profitable
customers
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Timeline: CRM Capabilities
CRM: The Results
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CRM: The Results
Satisfying customer needs Important to stay competitive and keep current
customers
Creating efficiencies Not only invest in satisfying customer needs but
also save money while doing it
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Satisfying Customer Needs
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Satisfying Customer Needs
Focus on customer needs: ensures right
products at right time
More efficient use of customer data-Customized marketing
-Levels of service
-Product design and pricing
Increased profitability
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
RBC Financial Group Net Income
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$2,898
$2,435
$2,208$1,725$1,772
1998 1999 2000 2002 2003
Source:
www.rbc.com/investorrelations/ar_03.html
Net Income by Year(in millions)
RBC Financial Group Net Income
Creating Efficiencies
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Creating Efficiencies
Better Customer Identification
Before CRM:
A, B, or C customers
Vague and not beneficial
After CRM:
Customers can both be profitable and havethe potential to be profitable
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
More Efficiencies
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Centrally Generated Sales Leads
Before CRM:
Every branch had a different way ofgenerating sales leads
Low quality, not consistent
After CRM:
Generated centrally
Accessible to everyoneReminder to call and offer products
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard BusinessSchool Case #9-102-043. March 25, 2002.
More Efficiencies
Future Plans for CRM
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utu e a s o C
Preference and Choice:
Use info about customers preferences to designpackages of services at certain points in theirlife
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard BusinessSchool Case #9-102-043. March 25, 2002.
Life Stages and Segments
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Life Stages and Segments
Getting Started Building Accumulating Preserving
Graduation
Saving to
bu a home
Saving for
Retirement
Buying a home
Retirement
Transfer of
Wealth/Succession
Planning Planning
KEY GROWTH PRIME
Source:
Sutherland, Anne, How RBC is taking its CRM strategy to the next level to accelerate profitable revenue growth, presented t o AmericanBankers Association. 2004.
Summary of Lessons Learned
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y
Identify the keystakeholders who touchthe application directlyand/or indirectly at thevery beginning of theproject
Gain buy-in from these keystakeholders that that theirinput and support is criticalto the overall success of
the project More robust Beta Test
Always keep client frontand center-
through process and
implementation
Manage change withcommunication and vision
Integrate CRM intobusiness strategy
Continually reevaluate,test, learn, and improvestrategies
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