Customer Relationship Management What is CRM? Customer

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Customer Relationship Management
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What is CRM?

• Customer Relationship Management
• Methodologies, strategies, software, and other
  web-based capabilities that help an enterprise
  organize and manage customer relationships

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Why CRM?

• How important is customer
• Shorter product lifecycles makes service and
  support more important
• To instill greater customer loyalty

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History

• A next step of ERP
• Companies move from a product-centric view to a
  customer-centric one
• Customer information was stored in many different
  places in a company. Network technologys
  maturation makes CRM possible.

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eCRM vs. CRM

• Fundamentally the same
• eCRM than CRM
• More real-time
• Better interaction with customer
• More ways to track customer behavior trends
• More ways to empower customers
• Exploit the benefits of internet

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Who provides CRM solution?

• Top vendors of CRM software
• Siebel http//www.siebel.com
• Oracle http//www.oracle.com/
• PeopleSoft/Vantive http//www.peoplesoft.com/
• Nortel/Clarify http//www.nortelnetworks.com/
• Onyx http//www.onyx.com/

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CRM Not perfect

• Expensive
• Hard to implement
• Time consuming
• May not work

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Future

• Growth expectation
• More than 20 billion by 2004
• Compound annual growth rate of 29 through 2004
• Trends
• From managing customer data to actually managing
  customer relationships
• customer retention, delivery, ROI, better
  benchmarking and analysis, cutting costs

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A CRM example Royal Bank of Canada
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Background

• Royal Bank of Canada
• Canadas premier financial services group
• 52,000 employees and 10 million clients
• 1400 retail branches, 4500 ATMs
• 87,250 point-of-sale terminals
• Assets of 165 billion and profits of 1 billion

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Why should RB invest in CRM?

• Logistics of servicing every customer across a
  continent are difficult
• Differentiation in the FS industry depends on
  realizing CRM
• Customer needs are varied and complex, and they
  demand a wholly integrated banking experience no
  matter what medium they choose to engage.

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A CRM App for Royal Bank

• One of the first Financial Service Institutions
  to commit to CRM
• First System - Early 1990s implemented client
  segmentation within data warehouse
• 3 distinct client profitability segments

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Problems with original system

• Lack of clear segmentation rules resulted in
  inconsistent strategies.
• Front-line employees made judgment call as to
  which segment a client belonged.
• No opportunities for
• Employee Proactivity
• Performance measurement
• Predictive modeling

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Aligning Business Processes with CRM

• RB embraced CRM as a business strategy in 1997
  and set out to remove internal operational
  barriers
• Repetitive, routine paperwork was moved into
  centralized sites allowing branch employees to
  focus more on sales and service, which consumes
  40-70 of their time

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Aligning Business Structure with CRM

• To further align with CRM, Royal Bank reorganized
  CRM into five customer platforms
• Personal Commercial Banking
• Wealth Management
• Corporate Investment Banking
• Insurance
• Specialized Transactions

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The CRM Solution

• In 1997, Royal Bank began construction of a
  spreadsheet-based sample profitability prototype.
• Within the new system, nine customer segments
  would be identified, with 5 dedicated to
  individual consumers and 4 for commercial
  customers

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New System Capabilities

• The new CRM strategy addresses several CSFs
• Behavioral Based CRM-centric
• Flexibility aggregate segments according to
  user-defined items
• Data Warehouse and rule-based
• Scalable
• Legitimate based on rigorous application of
  GAAP

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The application provider

• The critical CRM application was provided by
  NCRs Value Analyzer
• Uses client behavioral data as the basis of the
  critical client metrics
• Creates a comprehensive view of each customers
  contribution

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The Finished Product

• RB now has a system that stores customer sales
  and service data in terabyte data warehouse.
• Branches and Call-Centers have direct access to
  all needed customer information
• Eventually, Internet capabilities will be
  incorporated