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

Ed Thompson Gartner CRM Vision: Business and Technology Strategies for More- Profitable Customer Relationships These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. • 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 Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. 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 These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. 0 10 20 30 40 50 60 Jan Feb Mar Apr May Jul No change yet No change, but monitoring the situation 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 Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. • Microsoft Office upgrade – 29% • E-commerce initiatives – 27% • Network equipment – 24% • Security software – 24% • Windows 2000 server – 22% • Windows 2000 desktop – 21% • Wireless initiatives – 21% • Unix servers – 20% • Storage hardware – 20% • PCs – 18% • Net. and app. mgmt. software – 18% • Call center projects – 18% • CRM software – 17% • Employee portal projects – 17% • ERP software – 16% • Web site enhancements – 16% • Consulting – 16% • Database software – 14% • Customer service apps. – 14% • New custom development – 14% • Document mgmt. software – 13% • Marketing/analytics – 13% • Mainframe hardware – 13% • Content mgmt. – 11% • Business intelligence tools – 9% • Mainframe software – 7% • Storage software – 7% • Supply chain mgmt. – 5% • 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? These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. 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 Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. 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 These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. No implementation Unintegrated departmental projects Integration of more than one project "True" CRM 2000 2001 7% 3% 45% 35% 17% 30% 33% 30% United States – 75 percent implementing, 8 percent “true” Implementing CRM Is a Fantasy for Most in Europe 2000 vs. 2001 These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. Applications Emphasis Goals Population Mix Dedicated/ Proprietary Call Center SFA Varies Cost Reduction Revenue Enhancement Complex Infrastructure 10% to 20% 45% to 50% 10% to 30% 5% to 10% Less than 1% Sub- departmental (Type C) Departmental 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 These slides are for internal use only. External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations. Please e-mail your usage request to quote.requests@gartner.com for approval. Guiding Principles for Successful CRM Extend breadth and depth of relationships Leverage and enhance brand equity Touchpoints Value Network        Focus on customer value, satisfaction and loyalty Minimize transaction barriers and lower costs       E-CRM Self-Service [...]... Definition of CRM, But … Every Enterprise Should Have Its Own 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. .. 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 •... services and user profiles These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations Please e-mail your usage request to quote.requests@gartner.com for approval The Evolution of CRM: Ajax? Stage Functional Departmental Partial CRM Total CRM 4X - 7X 5X - 10X Strategy Metrics Departments Systems 24-Month ROI 1X – 3X 2X - 5X Business. .. e-mail your usage request to quote.requests@gartner.com for approval Customer Processes and Metrics Customer Process Re-Engineering 1 All customer- facing processes are mapped 2 Key processes are identified with customer input Horizontal 3 Prioritized by impact on customer satisfaction Death Auto Insurance 4 Measured by contribution to customer value Welcoming Claims Hotline 5 Implemented in front and. .. 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 in more-effective interactions with fleet buyers and the drivers of the vehicles Compaq created a Partner Relationship Management solution to allow channel partners consistent and greater access to information... interactions, and integration throughout all customer channels and back-office enterprise functions (win-win outcomes?) These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations Please e-mail your usage request to quote.requests@gartner.com for approval Customer Value Propositions Product Superiority Best Product High Touch and. .. Relations Please e-mail your usage request to quote.requests@gartner.com for approval Case Studies of Successful Outcomes Dow Chemical consolidated all customer service and sales information into one corporate memory to ensure a consistent face to the customer after having measured customer interface costs and activities per channel Harrah’s Entertainment shared data across multiple casinos and hotels to... Organizational Structure Definition and Segmentation Customer Requirements Internal: Organizational Collaboration Processes Customer Expectations People: Skills and Empowerment Processes Incentives and Compensation Customer Feedback Customer Communications Metrics External: Customer Experience Data Mgmt and Applications IT Infrastructure Metrics These slides are for internal use only External use of Gartner... be approved in writing by Gartner Vendor Relations Please e-mail your usage request to quote.requests@gartner.com for approval The Eight Building Blocks of CRM Vision Strategy Customer Experience Organizational Collaboration Processes Metrics CRM Information Perceived pain points: Least pain Technology Some pain Most pain These slides are for internal use only External use of Gartner copyrighted material... These slides are for internal use only External use of Gartner copyrighted material must be approved in writing by Gartner Vendor Relations Please e-mail your usage request to quote.requests@gartner.com for approval Recommendations 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, . Ed Thompson Gartner CRM Vision: Business and Technology Strategies for More- Profitable Customer Relationships These slides are for internal use only. External use of Gartner. 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. 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 >