Build Collaborative Relationships that Deliver Value

February 13, 2003

Atlanta, Georgia, USA

Bob ThompsonCEO, CustomerThink Corporation

Founder, CRMGuru.com

Competing for Scarce Customers

Supply

Demand

Time

ScarceProducts

ScarceCustomers

“Be distinct or be extinct”

Tom Peters

“ It’s incredibly arrogant for a company to believe it can deliver the same sort of product that its rivals do and actually do better for very long. That’s especially true today, when the flow of information and capital is incredibly fast.”

Michael Porter Fast Company

ProductLeadership

OperationalExcellence

CustomerIntimacy

CRM

Great Relationships = Differentiation

Loyalty Leaders Grow Faster, Spend Less

Average LoyaltyLeader

100%85%

0

50

100

150

200

250%

Costs

Average LoyaltyLeader

100%

220%

0

50

100

150

200

250%

Growth

Source: Reichheld

CRM is Not New…Or is It?

"The true business of every company is to make and keep

customers.” -- Peter Drucker

“CRM = being so obsessed with your customer’s satisfaction that

you change the way you do business.” -- Dr. Jon Anton

CRM Confusion!

• 360-degree view of the customer

• Improving quality of customer interaction

• New software tools and technologies

• Getting right data to right employee

• Shift from product to customer orientation

• Buzzword and management fad!

Source: META Group/IMT Strategies

“CRM means creating mutual wins with customers and all company

stakeholders.” -- Bob Thompson

“CRM is 90% half mental”Yogi Berra, CRM Consultant

Customers Define a Great Relationship

“Service and value just for me”

“Personal”

“Responsive and proactive”

“Win/Win”

“Asks questions”

“A good deal for the money”

“Quality, consistent performance over time”

“Expertise”

“A history of working together”

“Easy to do business with”

Source: CRMGuru.com

The New 4 Ps

Relationship Drivers• Passion• People• Process• Performance

“ Marketing Mix”

Product

Place

Promotion

Price

CRMGuru Study: CRM Works!

Payback Period

Benefits(Percent of Projects)

• Increase customer satisfaction (51%)

• Increase customer acquisition rate (50%)

• Increase share-of-customer (48%)

• Decrease customer defection rate (37%)

• Decrease front office staffing costs (33%)

Investment • 33% -- less than $50,000• 24% -- $50,000 to $250,000• 28% -- $250,000 to $2.5 Million• 15% -- over $2.5 Million

Source: CRMGuru.com

Key Drivers of Success• Customer-centric strategy: using customer

satisfaction and attrition data, getting customers involved in planning

• Front line training and support: explaining value of CRM, providing training for new skills required

• Organizational change: workflow design, changing roles and responsibilities

• Metrics: goals measured statistically (80% don’t)

Source: CRMGuru.com study “The Blueprint for CRM Success”

Three-Year “Overnight” Success

• Objectives: Serve channel partners better, sell more, spend less

• Solution: Allegis eBusiness (PRM)– Saved $375,000 in communication costs– Increased revenue $1 million with better lead management– Improved partner and employee satisfaction

• Lessons Learned:– Understand your users, deliver clear value to them– Plan carefully, build a team, phase the implementation– Establish baseline metrics and measurement process– Communicate, communicate, communicate!

Source: Lexmark

Are You Listening?

“ If you’re constantly getting feedback from your customers …and you’re willing to listen, you can make the most of the opportunities implicit in those needs.”

Michael Dell, in Direct From Dell

“ Businesses survive or decline based on their employees’ ability to listen. Hire the smartest, best people you can get, orient them to customer satisfaction at the expense of all else, then get out of their way and let them work.”

Doug Allred, SVP Customer Advocacy for Cisco Systems

Selling Through Complex Channels

Customers

Selling ChannelsDealersMarketplaces OEMsRetailers EtailersReseller

EnterpriseEnable Commerce

With sellingpartners

Visibilityof customer

activity

Influenceover customer

experience

Collaborationwith partner

business processes

CRM Technology Evolution

CRM Maturity

Po

ten

tial

Co

mp

etit

ive

Ad

van

tag

e

Low High

Automate

Streamline internal sales and service processes.

More of the same, done faster and cheaper.

SFA, Call Center

Single Channel

Collaborate

Engage customers and partners for win/win/win

Enable many-to-many relationship networks

C-Biz Solutions

CollaborativeNetwork

Innovate

Design different, more effective processes

Use new channels and customer touch points

eCRM, PRM

Multi- Channel

High

“ The Internet as a sales channel represents only a fraction of its potential to

business. The real potential lies in its ability to transform

relationships with the traditional supplier-vendor-

customer chain.”

Michael Dell

Seller Buyer

CRM

SCM

CollaborativeBusiness

Win/WinPhilosophy

EnablingSystems= +

Collaboration

Collaborative Business: Mutual Benefits

Now: Point-To-Point Relationships

Supplier Partner CustomerManufacturer

CRM PRM CRM

Relationship Management: “Sell-Side” Focus on Lifetime Value, Customer Experience, Revenue/Profit Growth

SCMSCM SCM

Supplier Management: “Buy-Side” Focus on Cost, Cycle Time, Responsiveness

Web Services: Enabling xRM Systems

• A New Breed of Web Application– Self-contained, self-describing, modular

applications– Can be published, located, and invoked across

the Web– Performs functions -- simple to complicated

processes– Other applications can discover and invoke

Web Services: Enabling xRM Systems• The Potential

– Low-cost integration within, and between, enterprises

– Enabling process integration between trading partners

– Improving performance of collaborative networks

Future: Optimized Value Network

Suppliers Customer

Manufacturer

Partners

Collaborative Relationships: Focus on Mutual Value, Profit, Efficiency, Integrated Processes

GlobalCompetition

Power Shift to Customers

InternetAdoption

Internet StandardsWeb Services

Types of Collaborative Systems

• People to Systems – CRM/PRM

Portals

• People to People – Groupware

• System to System – E2E CRM

Evolution to Collaborative NetworksAutomation

Focus

Multi-SystemCRM

Collaborative Commerce

N-Tier ChannelManagement

Work TeamCollaboration

IntegratedPortals

eCRM

CustomerRelationshipManagement

Sell-SideeBusiness

PRM

Enterprise Channels

Sell-SideCollaborative

eBusiness

Relationship Networks

Complex Support Process

Collaboration at Your Service

• World’s largest provider of mobile Internet software; Openwave

customers serve more than half of all mobile subscribers worldwide

• Challenge: Developer base growing rapidly (100,000+) and

support volumes increasing 50% per month

• Solution: ePeople Teamwork

– 70% reduction in average time to resolution

– Multiple support providers can work together

– Handle developer growth without increase in staff

Business Processes Integration

Vendor PartnerProcessConnector

Status

Leads

Vendor PartnerProcessConnector

Status

Opportunities

Collaborative Commerce Workflow

Vendor Partner

4. Status

2. Order

Customer

1. Research 3. Confirm

Collaborative CommerceThe Challenge

Create Three Winners• Customers: ability to buy

products on-line• Partners: Leverage

existing relationships• Enterprise: Enhance the

Maytag brand

Source: Comergent

Consumers

Retailers

MaytagCommerce

System

Group CollaborationNearly 80% of corporate

knowledge is unstructured Information. Gartner Group

Shared Workspace

Customers

PartnersEmployees

Suppliers

“ There is only one boss: the customer.

And he can fire everybody in the

company, from the chairman on down, by simply spending his money somewhere

else.”Sam Walton

Wal-Mart Founder

Basic Beliefs1. Respect for the Individual

2. Service to Our Customers

3. Strive for Excellence