Rules of Rules of EngagementEngagement

December 18, 2001

Tools and Technologies for Managing the Customer Relationship

AgendaAgenda

1. Overview What does CRM mean? Why is it a corporate priority?

2. Guiding Principles What are the main principles of CRM?

3. Core Requirements What are the business requirements of a CRM solution?

4. Solution Components What are the main components of a CRM architecture?

5. Tools of the Trade What are the various categories of tools?

6. Trends and Trepidation How is CRM technology likely to evolve?

OverviewOverview

“What is CRM?”

“We ignore the entire discipline

of CRM.”

Customer DisserviceCustomer Disservice

They have turned a simple order into a month long ordeal.

All these people had to do was ship my order and apply a $20.00 coupon. Not only was my $20.00 coupon not applied … Not only was my credit card billed for the full amount of $45.48 …Not only was my first order rejected … Not only did I find this DVD at Future Shop for $5.00 less minus shipping …Not only was my order over 2 weeks arriving and your cue times for support over 20 minutes,

BUT the DVD was defective!

This is not the end of my problem with chapters. After a total of 4 calls to customer service and 6 or 7 emails, I managed to have 14.90 credited back and then 9.80 recharged to my card. All together my experience with chapters online has been one of disgust.

They have turned a simple order into a month long ordeal.

All these people had to do was ship my order and apply a $20.00 coupon. Not only was my $20.00 coupon not applied … Not only was my credit card billed for the full amount of $45.48 …Not only was my first order rejected … Not only did I find this DVD at Future Shop for $5.00 less minus shipping …Not only was my order over 2 weeks arriving and your cue times for support over 20 minutes,

BUT the DVD was defective!

This is not the end of my problem with chapters. After a total of 4 calls to customer service and 6 or 7 emails, I managed to have 14.90 credited back and then 9.80 recharged to my card. All together my experience with chapters online has been one of disgust.

SEGMENTSEGMENT INDIVIDUALINDIVIDUAL

CRMCRMCRM

DbmDbmDbm

eCRMeCRMeCRM

DMDMDM

SEGMENTSEGMENT INDIVIDUALINDIVIDUALSEGMENTSEGMENT INDIVIDUALINDIVIDUAL

CRMCRMCRM

DbmDbmDbm

eCRMeCRMeCRM

DMDMDM

OLD MODELOLD MODEL INTRUSIVE INTRUSIVE …

heavy reliance on print and broadcast media

INFERENTIAL…INFERENTIAL… generic messaging based on “best guess”

INCONSISTENT … INCONSISTENT … no memory of past customer interactions

NEW MODELNEW MODEL

COLLABORATIVE…COLLABORATIVE… customers given a greater voice through interactive channels

CONSENSUAL CONSENSUAL … customers shape terms of relationship

CONSISTENT … CONSISTENT … customers treated with the respect due them.

A New Marketing ModelA New Marketing Model

No Pain No GainNo Pain No Gain

CONSTRAINTSCONSTRAINTS Cost and pain of Cost and pain of

integrationintegration

Lean marketing Lean marketing staffsstaffs

Complexity of Complexity of managing managing interactions interactions across multiple across multiple channelschannels

Lack of Lack of infrastructureinfrastructure

Cultural barriersCultural barriers

No experience No experience basebase

Recognition of Recognition of customers at all customers at all touchpointstouchpoints

Consistent Consistent application of application of treatment rulestreatment rules

Personalization Personalization of interactionsof interactions

Instantaneous Instantaneous response to response to eventsevents

Reciprocal Reciprocal exchange of exchange of informationinformation

DRIVERSDRIVERS

Guiding Guiding PrinciplesPrinciples

The Value EquationThe Value Equation

Establish trust

Exchange learning

Anticipate needs

Recognize preferences

Improve satisfaction

Buy more Buy more productsproducts

Buy more Buy more oftenoften

Buy more Buy more easilyeasily

Buy at a Buy at a higher higher marginmargin

Buy over a Buy over a longer periodlonger period

CultivateCultivaterelationships...relationships...

... Enhance ... Enhance profitabilityprofitability

VALUEVALUE

InteractionInteraction ProductProduct DeliveryDelivery ServiceService

The Value Chain The Value Chain

Value PropositionValue Proposition

What value is What value is provided in provided in interactions interactions

with with customers?customers?

What value is What value is provided in provided in

product product features?features?

How easy is it How easy is it to obtain to obtain

products and products and information?information?

How How responsive is responsive is

customer customer service?service?

PersonalizedPersonalized ConsistentConsistent CurrentCurrent

CourteousCourteous ProactiveProactive EmpatheticEmpathetic

UbiquitousUbiquitous ConvenientConvenient FastFast

FunctionalFunctional FlexibleFlexible CustomizableCustomizable

Dynamic SegmentationDynamic Segmentation

VULNERABLEVULNERABLE ADVOCATESADVOCATES

UP AND COMINGUP AND COMING

LOYALISTSLOYALISTSDORMANTDORMANT

NEWBIESNEWBIES

VA

LU

EV

AL

UE

INTENSITYINTENSITY

Virtuous Virtuous CycleCycle

InformationInformation AnalysisAnalysis

PlanningPlanningInteractionInteraction

Develop Develop Customer Customer

BaseBase

Define Define Customer Customer SegmentsSegments

Develop Develop Investment Investment

StrategyStrategy

Track and Track and Measure Measure ResultsResults

Solicit Solicit FeedbackFeedback

EngageEngageCustomerCustomer

Create Create Business Business

RulesRulesDevelop Develop

Management Management PlanPlan

Core Core RequirementsRequirements

Customer Value Management Customer Value Management S

EG

ME

NT

SS

EG

ME

NT

S

Campaign ManagementCampaign Management

PRINTPRINTBROADCASTBROADCAST DIRECT MAILDIRECT MAIL PHONEPHONEE-MAILE-MAILWEBWEB

MASSMASS DIRECTDIRECTCHANNELSCHANNELS

INVESTMENT INVESTMENT STRATEGYSTRATEGY

How much should you How much should you invest in the relationship?invest in the relationship?

CONTACT CONTACT STRATEGYSTRATEGY

How often do you contact How often do you contact customers?customers?

CHANNEL CHANNEL STRATEGYSTRATEGY

What is the appropriate What is the appropriate channel mix?channel mix?

MOST POTENTIAL

MODERATEVALUE

MOST VALUABLE

LEAST VALUABLE

VALUE QUADRANTSVALUE QUADRANTS

MOST POTENTIAL

MODERATEVALUE

MOST VALUABLE

LEAST VALUABLE

VALUE QUADRANTSVALUE QUADRANTS

BEHAVIOURBEHAVIOUR

LIFECYCLELIFECYCLE

LIFESTAGELIFESTAGE

RULES

If…If…

then…then…

SEGMENTSEGMENT

EVENTEVENT

ACTIONACTION

TRENDTREND

OFFEROFFER MESSAGEMESSAGE

RESPONSERESPONSE

CHANNELCHANNEL

else…else…

STATUSSTATUS

REWARDREWARD

Treatment RulesTreatment Rules

LISTLIST LIBRARYLIBRARY

SPLITSPLIT LISTLIST

DEFINE DEFINE OUTPUT MEDIAOUTPUT MEDIA

SAVE AS SAVE AS NEW LISTSNEW LISTS

SPECIFYSPECIFYDESTINATIONDESTINATION

PRODUCE PRODUCE FILE(S)FILE(S)

SORTSORT RECORDSRECORDS

ASSIGN ASSIGN CELL CODESCELL CODES

CAMPAIGN CAMPAIGN DEFINITION DEFINITION

LOGLOG

SELECTSELECT LIST(S)LIST(S)

TESTTESTOFFEROFFER

CONTROLCONTROLOFFEROFFER

SUB-GROUPSUB-GROUP

SUB-GROUPSUB-GROUP

DESCRIBE DESCRIBE OFFERSOFFERS

SPECIFYSPECIFY OUTPUT FIELDSOUTPUT FIELDS

SPLITSPLITINTO INTO

OFFER CELLSOFFER CELLS

• Nth Selection• Percentage• Absolute Count

• Even Split• Absolute Count

Campaign ManagementCampaign Management

Event TriggersEvent Triggers

EVENTEVENTTRIGGERTRIGGER

ACTIONACTION

DECISIONDECISION

WAITWAITEVENTEVENT

YesYes NoNo

ReceiveReceive e-mail e-mail (POP3)(POP3)

CheckCheckdatabasedatabase

High valueHigh value customer?customer?

Re-route e-mail to Re-route e-mail to Priority ServicePriority Service

Create new database Create new database record with e-mail record with e-mail address and textaddress and text

Send e-mail to Send e-mail to Contact CentreContact Centre

Send e-mail Send e-mail requesting requesting registrationregistration

YES

YES

NO

NO

WebWeb RegistrantRegistrant

ContestContestEntryEntry

RSVPRSVPResponseResponse

New?

1-8001-800 CallerCaller

E-Mail?

YES NO

YES NO

>3 Dosage?

YES NO

EVENTEVENTEVENTEVENT

MAIL STREAM

E-MAIL

Profile Current?

Heavy User?

YES

Survey

NO

E-alert

On-line?

YES NO

Invitation to Create

On-Line Profile

Heavy User?

YES

Survey

No Action

Prescribed PathsPrescribed Paths

• FAQs• Knowledge Base• Online chat• Personal portal

• FAQs• Knowledge Base• Online chat• Personal portal

Profile dbProfile dbProfile dbProfile db

Enroll

Subscribe

ContentContentRepositoryRepository

ContentContentRepositoryRepository

DynamicContent Delivery

View-BasedNavigation

RulesRulesEngineEngine

RulesRulesEngineEngine

E-zines

CRMCRMToolsTools

CRMCRMToolsTools

Survey Deployment

PersonalizedE-mail

• E-mail filtering• E-mail routing• Autoresponse• Rule creation• List creation• Response tracking

Online Relationship BuildingOnline Relationship Building

Dynamic Content VersioningDynamic Content Versioning

Objective is to dynamically align content with defined customer groups and subscriber opt-in preferences.

Variable Substitutions Name, email, etc.

Section Substitutions Content variations (e.g.

subject, product, etc.)Template Design variations (e.g.

different newsletters)

CUSTOMER DATABASE

CUSTOMER SEGMENT

SUBSRIBER LIST

PERMISSION GROUP

Channel ManagementChannel Management

RICH E-MAILRICH E-MAIL

HIGH-SPEED HIGH-SPEED VARIABLE VARIABLE IMAGINGIMAGING

WEB SITE WEB SITE PAGE VIEWSPAGE VIEWS

CO

NS

UM

ER

CO

NS

UM

ER

PE

RS

ON

AL

IZE

D

PE

RS

ON

AL

IZE

D

CO

NT

EN

TC

ON

TE

NT

DatabaseDatabase StrategyStrategy

RULESRULES

ANALYSISANALYSIS

RESEARCHRESEARCH

Program Program ConceptsConcepts

Interactions & TransactionsInteractions & Transactions

A CRM FrameworkA CRM Framework

UNDERSTAND

DEVELOP

INTERACT

MANAGE

EvaluateEvaluate

CustomizeCustomize

CalibrateCalibrate

PersonalizePersonalize

AggregateAggregate

ValuateValuate

ModelModel

SegmentSegment

RespondRespond

AnticipateAnticipate

ReactReact

RecognizeRecognize

ReinforceReinforce

PromotePromote

InformInform

RewardReward

• GroupsGroups• ProfilesProfiles• MetricsMetrics

• GroupsGroups• ProfilesProfiles• MetricsMetrics

• RulesRules• TriggersTriggers• CampaignsCampaigns

• RulesRules• TriggersTriggers• CampaignsCampaigns• ContactsContacts

• IssuesIssues• ComplaintsComplaints

• ContactsContacts• IssuesIssues• ComplaintsComplaints

• ResponsesResponses• FeedbackFeedback• TransactionsTransactions

• ResponsesResponses• FeedbackFeedback• TransactionsTransactions

Solution Solution ComponentsComponents

• Batch update• Client/server• Monthly cycle

times• Open systems• Relational

databases• Campaign

management• Segment focus

• Real-time update• N-tier

architecture• Daily cycle times• Web-based• Customer

management• Customer focus

1980s1980s1980s1980s

1990s1990s1990s1990sTODAYTODAYTODAYTODAY

• Batch update• Mainframe

dependent• Quarterly cycle

times• Proprietary

databases• Inverted file

structure• Direct mail

management• List focus

The Information EvolutionThe Information Evolution

Functional ClusteringFunctional Clustering

DescriptiveDescriptive AnalysisAnalysis

SUMMARIZESUMMARIZE

COMPARECOMPARE

RANKRANK

FORECASTFORECAST

MEASUREMEASURE

InteractionInteraction ManagementManagement

RESPONDRESPOND

SELLSELL

SERVICESERVICE

SOLVESOLVE

INFORMINFORM

CustomerCustomer ManagementManagement

PROMOTEPROMOTE

EDUCATEEDUCATE

REWARDREWARD

SURVEYSURVEY

PredictivePredictive AnalysisAnalysis

ESTIMATEESTIMATE

INFERINFER

TRANSFORMTRANSFORM

DEDUCEDEDUCE

GROUPGROUP

CUSTOMER INTERACTIONSCUSTOMER INTERACTIONSACTIVITY PLANNINGACTIVITY PLANNING

Current EcosystemCurrent Ecosystem

Extract / Transform / LoadExtract / Transform / Load

MetadataMetadata

EnterpriseEnterprise WarehouseWarehouse

EnterpriseEnterprise WarehouseWarehouse

CAMPAIGNCAMPAIGNMANAGEMENTMANAGEMENT

Campaign creationCampaign creation List creationList creation Event schedulingEvent scheduling Task schedulingTask scheduling

EMAILEMAILMARKETINGMARKETING

Content CreationContent Creation PersonalizationPersonalization Merge/send engineMerge/send engine Response trackingResponse tracking Survey DeploymentSurvey Deployment

ORDER ORDER HISTORYHISTORY

CUSTOMERCUSTOMERPROFILEPROFILE

CONTACT CONTACT HISTORYHISTORY

PROMOTIONPROMOTIONHISTORYHISTORY

QUERY &QUERY & REPORTING REPORTING

TOOLTOOL

ROLAPROLAPTOOLTOOL

DATA MININGDATA MININGTOOLSTOOLS

MAPPINGMAPPINGTOOLTOOL

FRONTFRONT

OFFICEOFFICE

CRMCRM

WebWeb

SFASFA

BACK OFFICEBACK OFFICE

OrdersOrders DistributionDistributionInventory Inventory General LedgerGeneral Ledger

Used to create lists of customers for Used to create lists of customers for promotional campaigns delivered through promotional campaigns delivered through multiple channels.multiple channels.

CAMPAIGN

MANAGEMENT

Used to analyze customer behavioural Used to analyze customer behavioural transactions as well as clickstream data.transactions as well as clickstream data.

CUSTOMER

ANALYTICS

Used to tailor Web content to like-minded visitors based on explicit rules or inferences.

SITE

PERSONALIZATION

Used to interpret, respond to and route e-mail communications from customers.

INTERACTION

MANAGEMENT

Used to support customer-facing functions such as contact management, sales and support.

SALES &

SERVICE

Solution SpectrumSolution Spectrum

Defining AttributesDefining Attributes

“Drag-and-drop” interfaces and component architectures compress development times and allow users to build applications without IT intervention.

Embedded data mining functionality enables smoother integration of scoring models.

Complex treatment rules can be graphically depicted using global logic that controls contact timing and intensity.

Campaigns can span multiple channels and be executed in real-time through job scheduling and event triggers.

““Always On” Always On” modelmodel

Workflow Workflow RulesRules

““On the Fly” On the Fly” ScoringScoring

Component Component ApplicationsApplications

Tools of the Tools of the TradeTrade

Campaign ManagementCampaign Management Supports the setup and execution

of contact programs over multiple channels. Campaign Definition – Set up

standalone, continuous or wave campaigns with associated costs.

Campaign Scheduling – Specify start dates and event triggers.

List Creation – Define target lists and save stored values or selection criteria in a library.

List Scoring – Perform “on the fly” predictive scoring of eligible records.

List Splitting – Split lists into multiple cells using random and Nth selection. Assign keycodes.

Contact Rules – Specify promotional intensity rules governing message frequency and contact intervals.

DEFINE CAMPAIGNDEFINE CAMPAIGN

DEFINE LISTSDEFINE LISTS

REFINE LISTSREFINE LISTS

SPLIT LISTSSPLIT LISTS

SAVE LISTSSAVE LISTS

CREATE OUTPUT FILECREATE OUTPUT FILE

ASSIGN PROMO CODEASSIGN PROMO CODE

OBTAIN FAST COUNTSOBTAIN FAST COUNTS

Opt-In E-Mail CampaignsOpt-In E-Mail Campaigns Supports the setup, execution

and tracking of e-mail campaigns. List Creation – Select opt-in groups

based on targeting criteria. Content Management – Import and

merge e-mail content. Personalization – Customize

messaging with variable text substitutions based on individual characteristics and preferences.

Broadcast Execution – Distribute export files amongst multiple SMTP servers.

Automated Redirection – Track click-throughs to harvest customer data prior to routing.

Event Tracking – Monitor messages sent, bounced and opened as well as unsubscribes.

BUILD CAMPAIGNBUILD CAMPAIGN

SELECT TARGET SELECT TARGET GROUPSGROUPS

SELECT MESSAGE SELECT MESSAGE TEMPLATETEMPLATE

DEFINE CONDITIONAL DEFINE CONDITIONAL EVENTSEVENTS

CUSTOMIZE TEXTCUSTOMIZE TEXT

EXPORT TO SMTP EXPORT TO SMTP SERVERSERVER

TRACK RESPONSESTRACK RESPONSES

Inbound E-Mail ManagementInbound E-Mail Management

Supports efficient handling of large volumes of inbound e-mail.

Message Categorization - Analyzes message content to determine subject.

Auto Respond – Sends automatic acknowledgement to customer with unique case tracking reference number.

Routing – Directs e-mail to appropriate agent based on content.

Ticket Escalation – Escalates message based on time in queue or other factors.

Message Templates – Suggests appropriate responses based on message category and content.

F I L T E RF I L T E R

C A T E G O R I Z EC A T E G O R I Z E

A U T O R E P L YA U T O R E P L Y

R O U T ER O U T E

R E S P O N DR E S P O N D

Contact ManagementContact Management Supports integrated call centre

management activity. Screen Pops – Inbound calls are

routed to agents with pre-populated customer information screens.

Consolidated View – All prior interaction and incident history is available for viewing .

Contextual Treatment – Agents are guided by prompts driven by treatment rules.

Incident Management – Service and support calls are tracked in an incident queue.

Co-Browsing – Web pages can be pushed out to callers for simultaneous browsing.

Text Chat – Agents can interact in real-time with Web visitors in a chat session.

VIEW INTERACTION VIEW INTERACTION HISTORYHISTORY

CREATE SUPPORT CREATE SUPPORT INCIDENTINCIDENT

SEARCH SEARCH KNOWLEDGE BASEKNOWLEDGE BASE

RESOLVE INCIDENTRESOLVE INCIDENT

CLOSE INCIDENTCLOSE INCIDENT

SEND NOTIFICATION SEND NOTIFICATION EE--MAILMAIL

PBXPBX

CTICTI

CDBCDB

Web PersonalizationWeb Personalization Supports the dynamic delivery of

targeted content and offers to individualize the Web experience. Service Portal – Provides

customers with a profile page to register preferences and obtain relevant product and account information.

Offer Optimization – In response to a real-time interaction, selects and presents the optimal offer based on probability of acceptance.

Collaborative Filtering – Recommends appropriate products based on preference patterns of similar customers.

Scenario-Driven Rules –Targets content based on pre-defined business rules derived from user profiles or behavioural data.

PREDICTIVE PREDICTIVE ALGORITHMALGORITHM

SELECT OFFERSELECT OFFER

EVENTEVENT ACTIONACTION TIMETIME

SELECT CONTENTSELECT CONTENT

If If then then elseelse

PRESENTPRESENT

Data MiningData Mining Supports the analysis of

customer transactional data to help explain or predict behaviour. Classification – Classifies records

into discrete groups . Estimation – Estimates a

continuous value. Prediction – Calculates a

probability score based on a set of input variables.

Affinity Analysis – Finds the most common associations between items.

Clustering – Segments records into distinct subgroups or clusters.

Decision Trees – Displays the variables that best explain the behaviour in the form of a decision tree.

D E S C R IB ED E S C R IB E P R E D IC TP R E D IC T

A F F IN IT IE SA F F IN IT IE S

C L U S T E R SC L U S T E R S

A C T IO N SA C T IO N S

V A L U E SV A L U E SS E Q U E N C E SS E Q U E N C E S

D IS T R IB U T IO N SD IS T R IB U T IO N S

Web Traffic AnalysisWeb Traffic Analysis Supports the analysis of log

file data to measure Web site performance. Site Activity – Tracks

number of visits, most requested pages, activity by time of day, errors and abandonments, length of visit, top entry pages, navigation paths, referring URLs.

Merchandising Analysis – Tracks products selected and removed from shopping carts.

Lead Generation – Tracks leads generated from registered visitors.

Banner Ad Analysis – Tracks clickthroughs to banner ads on third party sites.

PAGE VIEWSPAGE VIEWS

HITSHITS

SESSIONSSESSIONS

VISITORSVISITORS

REQUESTSREQUESTS

REFERRERSREFERRERS

ACTIVITYACTIVITY

TRAJECTORYTRAJECTORY

LEADSLEADS

access_logaccess_log refererreferer_log_log error_logerror_log

Trends and Trends and TrepidationTrepidation

The Major PlayersThe Major Players

INTERACTION MANAGEMENTINTERACTION MANAGEMENT

RELATIONSHIP INTELLIGENCERELATIONSHIP INTELLIGENCE

DIALOGUEDIALOGUEMANAGEMENTMANAGEMENT

CONTEXTUALCONTEXTUALSELLINGSELLING

CONTACTCONTACTMANAGEMENTMANAGEMENT

CHANNELCHANNELMANAGEMENTMANAGEMENT

Bridging the GapBridging the Gap

Real-Time InteractionReal-Time Interaction

DECISIONDECISIONENGINEENGINE

ERP SYSTEM

ERP ERP SYSTEMSYSTEM

E-COMMERCESYSTEM

EE--COMMERCECOMMERCESYSTEMSYSTEM

LEGACYSYSTEMS

LEGACYSYSTEMSLEGACY

SYSTEMS

LEGACYLEGACYSYSTEMSSYSTEMS

ERP SYSTEM

ERP ERP SYSTEMSYSTEM

E-COMMERCESYSTEM

EE--COMMERCECOMMERCESYSTEMSYSTEM

LEGACYSYSTEMS

LEGACYSYSTEMSLEGACY

SYSTEMS

LEGACYLEGACYSYSTEMSSYSTEMS

ANALYTICAL ANALYTICAL

SERVERSERVER

CDBCDBCDB

PROFILEPROFILE

DATABASEDATABASE

LOG

FILES

LOGLOG

FILESFILES

PROMOTION

HISTORY

PROMOTIONPROMOTION

HISTORYHISTORY

INTERACTION

HISTORY

INTERACTIONINTERACTION

HISTORYHISTORY

THIRD PARTY

DATA

THIRD PARTYTHIRD PARTY

DATADATA

LOG

FILES

LOGLOG

FILESFILES

PROMOTION

HISTORY

PROMOTIONPROMOTION

HISTORYHISTORY

INTERACTION

HISTORY

INTERACTIONINTERACTION

HISTORYHISTORY

THIRD PARTY

DATA

THIRD PARTYTHIRD PARTY

DATADATA

CUSTOMER TOUCHPOINTSCUSTOMER TOUCHPOINTSCUSTOMER TOUCHPOINTSCUSTOMER TOUCHPOINTS

TREATMENTTREATMENTEVENTEVENT

RulesRules

EstimationsEstimations

PreferencesPreferences

DemographicsDemographics

CRM TrendsCRM Trends Expanding Domains

Vendors will continue to seek the strategic high ground of CRM in an effort to control all interaction channels. Best-of-breed solutions will be displaced by modular suites. Niche vendors will continue to be absorbed by larger competitors. SMEs will opt for ASP solutions.

Common Treatment Rules Organizations will strive to develop common enterprise workflow

methods and treatment rules that are consistent across interaction channels and tools.

Collaboration Push Conventional market research methods will merge with transactional

analysis to invite a reciprocal exchange with customers, bringing them into the product development process.

Consensual Dialogue To overcome market attention deficit (MAD), all communications will

need to be permission-based offering highly personalized content driven by explicit preferences and behaviour-derived rules.

??Questions?Questions?

STEPHEN SHAW

416-695-4286

stephen.shaw@sympatico.ca