Welcome
Competing on products?
Common customer service complaints
“I hate being transferred from one person to another.”“I hate being transferred from one person to another.”
“It is frustrating to sit on hold for minutes on end.”“It is frustrating to sit on hold for minutes on end.”
“Why can’t everybody know my issue? This is the 10th time I have call about the same problem. Don’t they value my business?”
“Why can’t everybody know my issue? This is the 10th time I have call about the same problem. Don’t they value my business?”
“I might not get a timely answer if I email. I’d rather call.”“I might not get a timely answer if I email. I’d rather call.”
“How come when I go to the web site I get a different answer than when I call into your call centre?”
“How come when I go to the web site I get a different answer than when I call into your call centre?”
“I entered my account number and the agent still asks me for it.”“I entered my account number and the agent still asks me for it.”
“I just want to talk to a live person rather than enter 1, 2, or 3 on my touchtone phone.”
“I just want to talk to a live person rather than enter 1, 2, or 3 on my touchtone phone.”
Avoid information silosThere is often a lack of integration between channels. Sales and Customer Service Agents had little visibility into the Web channel, and Web sites sometimes had little
correlation with what was available
Web, Email, WirelessWeb, Email, Wireless • • 24x724x7 • • VisualVisual
Call CentreCall Centre • • ConvenientConvenient • • ImmediateImmediate
Field SalesField Sales • • Hands-onHands-on • • ConsultativeConsultative
ResellersResellers • • LocalLocal • • MultivendorMultivendor
Source: Gartner Group
CustomersCustomers
Understanding your customer in the context of CRM
CustomerCustomerInformationInformation
CUSTOMERS
ProductsProducts/Services/Services
GeographiesGeographies
Legacy / Legacy / Back officeBack office
Best Best PracticesPractices
Web & EmailWeb & Email
Call CentreCall Centre
Field SalesField Sales
Partner/AgentPartner/Agent
…Drives Service Delivery Across All Business Units
Visibility Across All Channels…
CRM Model
Scope of CRM today
Integrated sales, marketing and service across all channels and all products
Customer Database“single viewof customer”
Lead Tracking &Sales Management
ContactManagement
CampaignManagement
MarketingEncyclopaedia
CustomerService
Management
Integration withProduct Engines(Transactions)
TelemarketingWorkflow &Fulfilment
Economics of customer retention
“Winning back a lost customer can cost up to 50-100 times as much as keeping a current one satisfied.”
Rob Yanker, Partner, McKinsey & Company
Understanding your customer is key to retention…..
Know your customer common business processes
Identify CustomerIdentify Customer Identify RequestIdentify Request
Cross-sell /Up-sell Offer
Cross-sell /Up-sell Offer
Capture Customer Details / Update Profile
Capture Customer Details / Update Profile
Obtain Customer Feedback
Obtain Customer Feedback
Complete TaskComplete Task
Call Center Agent
Customer
Initiate RequestInitiate Request
Phone
Web
Technology
Route to Best resource
Route to Best resource
Agent skills
Agent availability
Customer attributes
Screen pop Customer History
Screen pop Customer History
Understanding your customer –
Business strategy & roadmap
Customer segmentation Multi-channel strategy Business processes Skills & culture Technology
• Major Functions
• Student Recruiting
• Admissions
• Financial Aid
• Course Management
• Enrollment
• Student Finance
• Academic Records
• Academic Progression
• Research
• Graduation
• Institutional Research
Student Solution Components
School ofSchool ofEducationEducation
Purdue UniversityPurdue UniversityPurdue UniversityPurdue University
Academic AffairsAcademic AffairsProvostProvost
UniversityUniversityFiscal AffairsFiscal Affairs
UniversityUniversityHuman ResourcesHuman Resources
PurduePurdueNorth CentralNorth Central
Purdue CalumetPurdue Calumet
AdmissionsAdmissionsStudent AffairsStudent Affairs
School of School of TechnologyTechnology
School of School of AgricultureAgriculture
EnrollmentEnrollmentManagementManagement
AdmissionsAdmissions
RegistrarRegistrar
Financial AidFinancial Aid
Academic Academic AdvisingAdvising
UndergraduateUndergraduateStudiesStudies
GraduateGraduateStudiesStudies
BS AgribusinessBS AgribusinessManagementManagement
MS Aquatic MS Aquatic Entomology Entomology
AdmissionsAdmissionsFinancial AidFinancial Aid
RegistrarRegistrarStudent AffairsStudent Affairs
ExternalExternalRecruitment Recruitment
SourcesSources
ExternalExternalBusiness Business AlliancesAlliances
Organization SpecificCalendars
RulesFee Assessment
Reporting
“What do we know aboutCarolyn Lee?”
“How do we contactCarolyn Lee?”
Recruiting/Student Applications
Self Service Applications
Administrative Applications
Carolyn Lee
One Trusted Source of Data
Student Solution Demonstration
Student Recruitment
AdmissionsApplication
John Purdue
Prospective Student
Admission Decision
Postcard
Email Invitation
Financial AidProcessing
John PurdueAdmitted Student
Self ServiceEnrollment
OnlineInvoice
Online Payment
Financial AidDisbursement
Faculty Grading
FacultySpecial Permission
Prospect Inquiry Apply Hold
Student
Alumni & LifeLong Learners
Cultivate the Entire Relationship
StudentServices
StudentAid
Enrollments
Application& Admissions
CultivateInquirers
ProspectGeneration
IdentifyMarkets Recruiting
Admission &Enrollment
Service & Retention
Oracle CRM Recruitment
Events Planning, Execution & Registration List Management Campaign Planning Communications Management (ad hoc,
automated, recurring, event triggered, high volume mass mailing) -- via email, fax, print, web and third party fulfillment houses
360 Degree View of the Person Single Database – One Platform
Implementing CRM
Is it a strategic pain point?Where does it hurt?What specific processes are annoying
customers? Examine the customer relationship cycle;
usually a few small problems that undermine performance.
Do we need perfect real time data?Is it worth spending money on real time
data if we do not need it?
A CRM solution: strategic benefits
Most companies have decided to focus their efforts on multi-product relationships with profitable customer segments. Many are developing relationship strategies to identify, attract, grow and retain profitable customer segments - and hence will be targeting your most profitable customers.
Choose service levels by customer segment and channel. CRM will help enable different parts of the organisation to understand and communicate the “value” of each customer and hence the treatment strategy.
Enable a sales led organisation & culture to be implemented. The CRM solutions include sophisticated sales tools and sales management information to assist sales people
Streamlined administrative processes. CRM is likely to reduce levels of central support, manual administration, error correction and time taken to serve a customer. Save money..
Avoid costly “data clean-up” and re-work programmes. By improving the quality and consistency of information recorded and used there will be far less need to invest in these type of activities.
RM coming of age
Airline deregulation in the U.S. People Express vs. American Airlines
Edelman Award: RM for AA $1.4 billion in 3 years virtually every airline has implemented RM National Car Rental (vs. GM)
Edelman Award: RM for SNCF AA: $1 billion incremental revenues from RM Marriott Int’l RM: 4.7% increase in room revenue
Deregulation Europe: telecom, media, energy … e-distribution supports dynamic pricing & profiling
Dell, Amazon & Coca Cola experiment dynamic pricing
RM spans wide range of industries …
1985:
1978:
1992:
2000-01:
1997:
1999:
2003:
RM Evolution
1980
AirlinesAirlines
1985
RailTransp.
RailTransp.
1990
HotelsHotels
Car rentalCar rental
2000
MediaMedia
EnergyEnergy
Cruise linesCruise lines
Telco/ISPTelco/ISP
1995
Tour Operators
Tour Operators
Freight,Cargo
Freight,Cargo
SportsParksSportsParks
EntertainmentEntertainment
HealthCare/Hospitals
HealthCare/Hospitals
Insurance/banking
Insurance/banking
Manufact.Manufact.
RetailersRetailers
Revenue Management
Strategies & tactics for OPTIMIZING PROFITS
based on
DYNAMIC PRICE INVENTORY SETTING CONTROL
under real-time, disaggregate updating of
DEMAND FORECASTS
The RM Challenge
Arrivals of high paying customers…Closer to departure!
Arrivals of low paying customers…Earlier!
Overbooking metrics
Service level based: P(denial) =0.05 E[#denials]=2 Etc.
Cost based: assign a cost to each and optimiseOverbooking cost (airlines): Direct compensation cost Provision cost of hotel/meal Reaccom cost (another flight/airline) Ill-will cost (~ “lifetime customer value”)
Industries
Overbooking Airlines Hotels Car rentals Education Manufacturing Media
No Overbooking Restaurants Movies, shows Events Resort hotels Cruise lines
...Decisions Are Not Always “Rational”
Tickets; $7.95
$1.00 Discount for Children &
Seniors
Tickets; $7.95
$1.00 Discount for Children &
Seniors
Tickets; $6.95
$1.00 Extrafor Middle Aged
People
Tickets; $6.95
$1.00 Extrafor Middle Aged
People
Price Perception Issues are Complex...
More Acceptable Pricing Product-Based Open Discretionary Discounts and
Promotions Rewards
Less Acceptable Pricing Customer-Based Hidden Imposed Surcharges Penalties
CRM “Attract & retain
customers” maximize profit from
each customer Segment by customer
LTV Price/availability= fct. of
forecasted customer LTV to the organization
Ignores capacity issues and opportunity costs (displacement)
Wealth of data
RM “generate revenue” maximize profit from
available assets Segment by customer
WTP Price/availability = fct.
of forecasted demand & available supply
Ignores customer value issues and long term revenues
Quantifiable value
Maximize long-term profits
CRM & RM
Variables to track
Actual win or loss Number of days played Credit history Length of stay at hotel Individual spending preferences Demographics Psychographic profiles
Theoretical Revenue
Theoretical = (total amount wagered) X(house advantage)
100$ hand x 10 hours x 100 Hands/hour x .01 (house adv. 49/51) = $1,000
Can you track every single person???
Not always Difficult in table games Theoretical =
(total amount wagered) X(house advantage)
Where..Total amount wagered = estimated
average bet x estimated time played
Future estimates…
ADT = Average Daily Theoretical Revenue
Assumes that this level is constant Multiply by estimated # of days of
future trip to gain value Combined with CRM data on
consumption of food and beverage, entertainment, pshychographics, etc
Rooms, a scarce resource
Heads in beds: make money on gaming
Comp. Rooms: traditionally a fixed number of rooms given to big gamblers
Used averages to cost out, did not dynamically look at “opportunity cost”
ReInvestment amount
% of the ADT ADT $1,000 Reinvestment amount = 30% = $300 Total value of the room, F&B,
Entertainment, etc. must be less than the Room 200, F&B 100, Ent. 80..more than
ADT x reinvest. Ergo…try and sell room.. Sophisticated applications use dynamic
pricing to asses opportunity costs..
Requirements
RM – Yield management like the airlines..
Player tracking systems..Use cards like Harras, to register all activity and psychographic profiles
POS resturants, theaters, spas, retail stores, entertainment, etc…
CRM integrates all of the above!! Statistical analysis and optimization
applications.