CRM thru the Customer Experience Model

Presented by:

Ian Scatliff

As proposed by the project

sponsor. As specified in the project request. As designed by the senior

analyst.

As produced by the

programmers. As installed at the user's site. What the user wanted.

CRM thru the Customer Experience Model

Ian ScatliffOctober 2005

About myself - Ian Scatliff

• Protegra principal consultant– Account management & project delivery– Protegra shareholder

• Leading focus on wealth management market– Protegra Wealth Management team– Worked with clients in Canada, US, Japan and

Europe• Experience in:

– Business process improvement initiatives– Designing software build processes– Building and integrating software

• Previously held roles with:– Rescom, wealth mgt product company– SHL Systemhouse– GPA Technologies (international development arm

for LPL Financial Services)

Introducing Protegra

• Passionate, creative professionals that provide business and technology solutions

• 50+ consultants with average experience of 14 years

• Protegra Wealth Management services– Solutions that target growth and efficiencies

• Successes in this regard includes:– LPL Financial Services of San Diego– European-based Moventum– Canadian-based Assante Wealth Management (CI

Funds), IQON Financial, Wellington West Capital, Credit Union Central of Manitoba

• 8 years in business• Never a quarterly loss and no debts• Employee owned

Protegra offerings

• Protegra Wealth Management– Business Process Consulting– Solution Architecture– Solution Design & Development

• Solution Centre– Virtual IT

• “A la carte” outsourcing

Topic

• How CRM can be enhanced through Customer Experience Management (CEM)

• Discussion goals:– Provide landscape overview– Provide awareness of issues and

potential approaches

Market Forces Leading Clients to CEM

• 50% churn of customer base every 5 years• Cost of new customer acquisition is much

larger than retention• No clear understanding of “wallet share” and

customer profiles• Competition is driving the need to reduce

costs and improve customer experience• Consumers are savvier• Multiple channels to reach the customer, with

no clear measurements or integration between silos

• Small percentage of customer base contributes to profitability

• Brand impact of bad customer experience

What is CRM?

• Forrester defines CRM to be the set of processes and supporting technologies used to acquire, retain, and enhance customer relationships

What is CRM?

• CustomerThink Corp defines CRM as a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy, and culture.

What is CRM?

• Enables a corporation to:– Acquire, maintain, enhance customer

relationships

• Not just a software solution• Desired outcomes must be

determined• Clear processes, measures and goals• Requires IT enablement

What is CEM?

• Walker Information defines CEM as applying technology and the storage of customer information to improve the customer's service experiences with the company

• Jeff Marr defines CEM as applying customer perceptions, technology and the storage of customer information to improve customers' service experiences and their ultimate loyalty to the company

What is CEM?

• A “win-win” for your company and the customer

• In general terms:– CRM is about collecting purchase and

profile data for the purposes of marketing or cross-selling

– CEM is about improving the service experience of the customer

What is CEM?

• Define measures from your customer’s perspective– How to gather data? Ask your

customer!

• Close the loop through customer feedback

• Measure a customer’s experience

Examples of data and simple solutions

• Gathering wait times, or perception of wait times, at a bank branch at lunch– If too long, increase staffing over lunch

hour

• Old hotel, elevator example

The benefits of CEM / CRM

• By understanding your customer experience:– Increase loyalty– Improve experience– Retain customers (reduce acquisition costs)– Increase market share

• By understanding your customer relationship:– Increase profitability of current relationships– Acquire new customers– Reduce customer interaction costs (targeting)– Leverage offerings across channels– Increase market share

The benefits of CEM / CRM

• You define!• Measure what is important to you• Plan for what you can afford to

implement

Top CRM Challenges (Forrester)

0 5 10 15 20 25 30 35%

Aligning business strategy

Managing change

Single customer view

Executive commitment

Enterprise integration

Technology complexity

CEM Best Practices

• Integrated– Customer perceptions, service activities,

purchase behavior are consolidated

• Data spans all touch points– Phone center, email, the web site or a visit to

the branch office

• Data spans all stages– Prospect, new customer, recent purchase, loyal

customer

• Loyalty-linked– Analyze what transactions impact loyalty the

most; good or bad

CEM Best Practices

• Frequency-managed– Beware over-surveying of individual customer

contacts• Diagnostic and performance-measurable

– Short surveys track operational performance but also diagnose how to make it better

• Accessible– Info available in real time– Available for use by sales, operations, help

desk, etc…• Continuous Improvement

– Info is being used to make improvements by sales, operations, help desk, etc…

– Have accountability (and responsibility), to management for doing so

Training, user adoption, and

change management

Forrester’s CRM Success Factors

Strategy &Governance

Data6. Define data requirements and quality management approaches

7. Strive for high user involvement9. Place high priority on usability

Technology8. Work towards a common platform9. Limit customization10. Actively manage the vendor relationship

Process

Strategy andgovernance

Data

1. Build strong executive sponsorship2. Have the business lead CRM, with support from IT3. Put in the right governance structure

4. Define processes first, then apply technology5. Follow a realistic pace for roll-out

6. Define data requirements and quality management approaches

7. Strive for high user involvement8. Place a high priority on usability

Technology9. Work towards a common platform10. Actively manage the vendor relationship

Proposed Workplan

• Reviewed market forces, success factors, best practices and challenges

• The following slides describe an approach that’s worked for our clients

Implementation Approach

• Best approach is to begin with a strategy assessment

• Understand drivers, gaps, and barriers

• Come up with options to position for future

Strategy Planning:desired business

outcomes

Current State Analysis:

gaps, barriers and enhancers

Solution Architecture Recommendation:

eliminate gaps, position for future

Strategy Planning

• Begin with the end in mind• Start with desired business

outcomes• Strategy often covers these key

areas:– Infrastructure– Organization & Governance– Applications & Service Levels– Business Strategy– Process– Finance

Strategy Planning:desired business

outcomes

Current State Analysis:

gaps, barriers and enhancers

Solution Architecture Recommendation:

eliminate gaps, position for future

Strategy Planning

• Senior executive support is key• CEM / CRM must work toward

corporate goals, not departmental– Define the business drivers

• Balance needs of all departments– Careful not to focus on one measure

at all costs

• Identify all requirements

Strategy Planning:desired business

outcomes

Current State Analysis:

gaps, barriers and enhancers

Solution Architecture Recommendation:

eliminate gaps, position for future

Performance map

• A performance relationship map identifies– Desired outcomes– Gaps between what is and what should

be– Current barriers to this change

Performance Relationship Map

Performer Group:

Operational ResultsBusiness Outcomes

People PerformanceWork Outomes

SHOULD(Objectives,

Desired State)

SHOULD(Best Practices,

Performance Model)

IS(Current State,

Measured Outcomes)

IS(Current Performance,Observed Activities)

Factors Affecting Performance(Enhancers and Barriers – Force Fields)

Root Causes

External to the organization Internal to the organization

Template Map from Partners in Change, Inc.

Causal Link

Causal Link

Opportunity:ABC Opportunity ACME Department

§ Obtain 360-degree view of customer financial profile. Consolidated and comprehensive picture (defined)

§ Maintained/Increased market share (target)

§ Products per client to Y (target)§ Increase client profitability to Y%§ Client loyalty/share-of-wallet to Y%§ Client retention rate increased to Y%§ ...

§ Understands client needs fully§ Anticipate§ Ask the right questions right§ Know all the products we sell§ Craft customized/personalized value

proposition§ Track and monitor client situation§ Prepare for client call§ Manage opportunities§ Collaborate with entire team

§ Obtain 360-degree view of customer financial profile (defined)

§ Maintained/Increased market share (target)

§ Products per client to Y (target)§ Increase client profitability to Y%§ Client loyalty/share-of-wallet to Y%§ ...

§ React to client needs when requested§ Unsure of all the questions to ask, and how

to ask them effectively§ Know some of the products we sell§ One-size-fits-all value proposition§ Do not track and monitor client situation§ Unprepared when client shows up at the

counter§ Minimal preparation for outside for client call§ Individual isolated efforts

§ Competition is capturing market share§ Clients are becoming more discriminating,

with higher full-service expectations§ Regulations complicate the selling process§ Larger banks provide better training and tools

to their workforce§ Competitive pressures are eroding profit

margins§ Internet banking is providing some very solid

alternatives§ ...

§ No system/method to provide readily available consolidated picture of client profile

§ Workforce not trained to sell comprehensive value proposition

§ Most of workforce are not sales people§ No method to manage client relationships§ Limited teamwork – no incentives, no

examples§ Cumbersome referral process§ Organizational boundaries difficult to cross§ ...

OperationalGap

(Variance)

PerformanceGap

(Variance)

Current state analysis

• Current State Assessment• Establish an enterprise

understanding of current Business and IT state

• Customer interaction assessment• Focus on CRM drivers• Further iterate the performance

map

Strategy Planning:desired business

outcomes

Current State Analysis:

gaps, barriers and enhancers

Solution Architecture Recommendation:

eliminate gaps, position for future

Solution Architecture Recommendation

• Initiatives to eliminate gaps and position for desired outcomes

• Business cases defined for initiatives

• Position business for future

Strategy Planning:desired business

outcomes

Current State Analysis:

gaps, barriers and enhancers

Solution Architecture Recommendation:

eliminate gaps, position for future

Case study

• Background:– Client decided to improve customer offering

• Challenge:– Old technology– IT/Business unaware of all systems/processes

• The Results:– Strategy planning initiative undertaken– 100+ IT applications discovered– 4 product line processes, reduced to 1– Enterprise vision delivered in phases– First phase successfully completed with

desired outcomes• Hit their projected ROI

Technology Application

• Broad overview of CRM/CEM• Strategy work plan reviewed• Following slides describe a flexible

approach to the solution

Realizing the solution architecture

• All-or-none vs. phased approach• An approach we’ve used successfully

leverages assets– Asset identification– Asset packaging using Services-Oriented

Architecture (SOA)• Benefits of our approach:

– Leverage industry CRM packages– Minimizes data replication– Lowers cost of initial implementation– Lowers cost of future phases– Solution tailored to your requirements

• In less time than custom build– Increases quality of solution

The “Dashboard”

• A system users homepage– Advisor or operational staff

• Services are tailored to you• Different users see different services• Display information required to

maximize measures and hit goals

Summary

• CRM can be enhanced through CEM• The top CRM / CEM implementation challenge

is business strategy alignment• Protegra recommends a strategy assessment

to identify:– Desired outcomes– Issues, Gaps, Barriers– Recommended initiatives to meet targets

• Protegra’s approach can leverage CRM assets to build a tailored CEM solution (or other)

Contact Information

Ian.Scatliff@protegra.comwww.protegra.com

Referenced Work

• Julie Phillips Baker, “Measurement Should Be From the Customer's Point of View”, Quaero, Aug, 2005

• William Band, “Best Practices For CRM Deployment: Lessons From 22 Global Companies (Part 1 of 3)”, Forrester, June 22, 2005

• Niall Budds, “You Can't Gauge Your Business Success Without Effective Measurement”, Quaero, Aug, 2005

• Jeff Marr, “Should the Focus Be on Customers Experience or Loyalty?”, Creating Loyalty, May, 2005

• Bob Thompson, “What is CRM?”, CustomerThink Corp, April, 2002

Presentation Title:

CRM thru the Customer Experience Model Presented By:

Ian Scatliff