CRM architecture for enterprise relationship marketing in the new millenium

1、CRM architecture for enterprise relationship marketing in the new milleniumCRM architecturefor enterpriserelationship marketing in thenew milleniumtechnical white paper by rose janjicekhp executive overview . . . . . . . . . . . . . . . . . . . . . . . . .3introduction . . . . . . . . . . . . . . .

2、. . . . . . . . . . . . . . . . .4evolution of CRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4what is advanced customer relationship management? . . . . . . . .6principles for building strong customer relationships . .11hps customer relationship model . . . . . . . . . . . . .

3、 . . . . . . . .11basic CRM is step number 1 . . . . . . . . . . . . . . . . . . . . . . . .12principles based CRM value chain . . . . . . . . . . . . . . . . . . . .13CRM architecture for an effective customer experience .915CRM reference model for the telecom industry . . . . . . .17critical succe

4、ss factors . . . . . . . . . . . . . . . . . . . . . . . .21conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .222executive overviewThe paradigm shift from business focus to a customer focus has result-crm ed in Customer Relationship Management (CRM) being on the corpo-archi

5、tecturerate agendas across all major industries, and most visibly in consumer-based businesses. Forester and Gartner predict that business will?spend $11B by 2002. What is driving this level of investment? Howdid we get here? Where should we focus our expenditures andresources to get the most out of

6、 CRM initiatives, and not fall victim tothe latest technology spending “fad”? technicalElectronic business has grown at an exponential rate such that the lat-white paperest forecast is that by 2003, the amount of commerce conducted overthe web will top $3 trillium (Gartner Group). Merchants can get

7、tomarket faster with new products and services, expand revenue chan-nels, extend reach globally, improve customer service, enhance cus-tomer loyalty and reduce cost. Many definitions of CRM exist andtherefore HP has taken the many definitions of CRM and definedEnterprise CRM to be a business strateg

8、y that involves focusing knowledge businessprocesses, and organizational structures around customersand prospects enterprise-wide.As the customer relationship becomes more electronic in nature cus-tomers want innovative, clever and convenient ways of doing business.Industries are experiencing the ch

9、allenge of ATM machines not remem-bering that the preferred language is English or that a telephoneswitch has no concept of customer. Therefore a second paradigm shifttowards effective and electronic Customer Interaction, which provides the ability to have a personalized dialogue/conver-sation with

10、each individual customer seamlessly across chan-nels/touchpoints and over time has evolved. Based on this definition, Hewlett Packard has developedan industry-based Reference Model accompanied with a principles-based Functional Architecture for CRM and Customer Interaction. These are the topics that

11、 this paper will discuss.? Source: Forrester, Jan. 99 and Gartner Group, Dec. 983introduction crm evolution of CRM architectureSignificant changes in the last fifty years have occurred through time,target market, and the value proposition as various customer and prod-uct marketing approaches have ev

12、olvedpetition has forced changes along marketing dimensionsRDeeleatechnicalptieornswhite paperh ipCRMCommunication atKey Decision PointTargetTailoringMarketingTimetahSingle/TailoredWMassMarketingValue PropositionRWhoeNlaotMassIndividualionshiTargetpFigure 1: Customer and Product Marketing Dimensions

13、mass marketing (1 to many interaction)Fifty years ago, Mass Marketing replaced the intimacy of door-to-door sales forces. This business strategy was measured by marketshare and relied on pushing product and creating brand recognitionamong the masses. Various channels such as T.V., radio, newspaper,a

14、nd magazines served as enablers to communicate to large popula-tions simultaneously with the identical sales and marketing message.Although successful initially, this marketing approach lost impact withrespect to client loyalty and trust, since the industry wanted excel-lence in operations, and not

15、excellence in serving the customer. Theclient loyalty + client retention resulted in smaller share of wallet anda decrease in revenue.target marketing (1 to target group interaction)In the early 80s, a revolutionary approach to telemarketing, directmail, and electronic mail permitted easier selectio

16、n of target clientswith the capability of receiving a direct response. Database marketing4Whenapplications sifted through mass populations and potential clients. Thisstill resulted in multiple channels generating their own unique market-ing potential client lists. This business strategy was also mea

17、sured byintroductionmarket share(daily product sales) and not the lifetime value of relation-ship. Target marketing has improved results over mass marketing; butnow consumers mailboxes are clogged and the ability to create tar-geted outbound messages was diluted by the industrys tendency toover-comm

18、unicate. The final result for Target Marketing is that it isexpensive, ineffective, and irritating to the customer. In addition, mar-keting to the averages resulted in average marketing results. customer relationship marketing (1 to 1 interaction)In the 90s, studies have shown that “it is 6 time mor

19、e expensive togain a new customer than to retain an existing one”. Statistics likethese have pushed the industry want to become more knowledgeableand intimate with customers. Business drivers were determined to quali-fy and justify development initiatives such as : ?Increasing the loyalty of profita

20、ble customer?Improving cost efficiency and effectiveness of marketing campaigns?Cross selling opportunities?Reducing customer attrition/churn?Tailoring prices, offers, or product components to specifc types ofcustomers?Provision of single point of contact with a customer5?Peppers & Rogersin thei

21、r book have the following methodology forrelationship marketingintroductionRelationship MarketingPeppers & Rogers MethodologyIdentifyDifferentiatecustomer, individuallyby value then needs& addressablyValuablecustomerCustomizeInteractproduct/service/info(and remember)Figure 2: Relationship Ma

22、rketingThe first stage is to identify the client and understand client behaviourwith attributes in order to understand their needs, habits, and desires.The knowledge obtained in this stage is “fed” into marketing cam-paigns, treatment plans, and business strategies. The second stage is to start mana

23、ging the customer relationship by firstperforming direct customer interaction and then continually integratingall relevant interaction or dialogue that occurs across passive andactive network of client channels or “touchpoints”. In order to dynami-cally maintain the client life cycle, the relevant c

24、lient dialogue must becaptured and customized for the best possible future action. Ultimately,the vision is to build a “one-to-one Enterprise” such that the most valu-able customer is treated differently by providing customized productsand services.what is enterprise customer relationship management

25、 (CRM)?The Customer Relationship Management life cycle process shown in theleft box highlights the fact that we need to know your customer andenable the various customer-centric processes of acquiring, identifying,nurturing, securing, and retaining clients in order to enable a companyto increase rev

26、enue by preserving customer loyalty and retention.? Don Peppers & Martha Rogers, The One to One Future-Building Relationships One Customer at a Time,Doubleday Dell Publishing Group. Inc, 19976Basic CRM establishes a foundation for customer informationintroductionFunctionalityTechnologyAcquireCli

27、entAnallyttiic ProcessssiingCampaiignCutestomerRetainManagemtentValtiluationIdentifyftInformai tion AccessClientClientCutstomerfInformattiionCussttomerBehaviiorallDattaRiiskModelilingAnalWasrehouselysiisSecureNutureProffiililingandSegmenttattiionClientClientSttitstatistiicsAccountt DattaDemand Depos

28、iittExtternal tl DataSaviingssBrkerageDemographiisocsReetiettirementCrediitt BureauMotrtgageProspect istt ListsConssumeer LoanPrfeferencesCrediit CardIsInsuranceCustomerExtractConditionIntegrateEnhanceHouseholdInformationTranssactistions 1998 Hewlett-Packard Company, All rights reserved. Reproduce o

29、nly with written permission.Channell UsageInformationTransacti ttion Data Figure 3: Basic CRMThe information box at the bottom effectively highlights the extractionfrom the core transaction data, account data, and external data. Andthen the various steps required to build the customer information sy

30、stem. The functionality box highlights the five key aspects of studying the cus-tomer relationship through target marketing and campaign manage-ment as one box. Behaviour modeling, profiling and segmentation,customer risk analysis, and customer valuation all surrounding the cus-tomer environment. Va

31、rious technologies are utilized for implementa-tion of CRM functionality such as Data Mining, Analytic processing,Query & Reporting, Statistics, and Information Access, which all sur-round the core content-base: Data warehouse. There are a variety of definitions that exist in the marketplace:?So

32、me say CRM is supply chain management process such that allprocesses related to customer and supplier relationships are inte-grated.?Some say CRM is having the ability to improve the effectivenessand efficiency of enterprise marketing automation or direct market-ing campaigns and lead generation?Som

33、e say CRM is implementing customer service automation sothat customer service representatives have access to detailed cus-tomer profiles and content scripts for customer service provision7DDDaaatttaaa MMMiiinnniiinnngggQuuueeerrryyy aaannnddd RRReeepppooorrrtttiiinnnggg?Some say CRM is sales force a

34、utomation that assists sales peopleto better manage their sales forecasts, customers, opportunities andcontact roductionIn fact, Hewlett Packard has seen that CRM actually represents anenterprise business strategy that involves focusing knowledge, businessprocesses and organizational

35、structures around customers andprospect for the whole organization. Surrounding this business strategyis an information technology infrastructure consisting of data warehous-es, decision engines and integrated middleware for touchpoints/chan-nels in order to better understand customer behaviour and

36、respond ina timely and relevant manner. CRM Business StrategyechTnonloogityaInmfrrastru BusinessCustomers/ProcessBusiness ProspectsProcessOrganizationStructureKnowledgeFigure 4: CRM Business StrategyDuring the last 10 years, a major shift from a mass market culture ofstandardized products and option

37、s to a dynamic market culture wheremany products and options can be customized to satisfy specific needsand preferences of an individual has occurred. Todays consumerscan no longer be treated as a “homogenous collection of revenue gen-?erating units”, but rather as individuals whose specific wants a

38、ndneeds determine unique behaviour (buying patterns, channel usuage,etc.). As the customer relationship becomes more electronic in nature;customer loyalty has been impacted; since the personal service has ? Peppers and Rogers8Infoerutcslowly diminished. In John Naisbatts new book: “High Tech High?To

39、uch”, he describes our society as being in a “TechnologicallyIntoxicated Zone”, such that high-touch, high-tech time and high-techintroductionsimplicity are part of our daily routines. Therefore, today industries have to maintain consumers interests byproviding them with innovative, clever and conve

40、nient ways of doingbusiness. For example:?Telcos offering incentives to switch to their products and services,personalized product notices via email?Manufacturing connecting systems that track purchase agreementsand order processing for high valued customers?Financial services offering personalized

41、financial services such aspersonalized product notices via email, mortgage, investment andloan account solutions based on usage patterns, mutual fund auto-matic options notification service based on customer profile.The rapid convergence of CRM and e-commerce has changed theface of enterprise custom

42、er relationship management and marketing,enabling customer to virtually purchase any item and obtain servicescontinuously throughout a day. It has been estimated that U.S. compa-nies will realize benefits of profit improvement ($360billion to $480bil-lion) from e-commerce cost-side benefits. (Giga,

43、July 26, 1999).tenets of customersTwo tenets of “customer” actually exist. The first is that a customerfocused company needs to have a single, unified 6view of each cus-tomer. Conversely, customers need to have unified view of businessregardless of the business unit or channel with which they are wo

44、rking.This bi-directional view is critical for true relationship marketing. Regardless of touchpoints or channels (customer support centers, directmail, telesales, direct sales, e-commerce, Web), clients want recentcontacts (including complaints) or interaction to be known and reason-able personal r

45、ecommendations to be made. ? High Tech High Touch book9As a result, the need for this bidirectional view has also promoted aparadigm shift towards effective and relevant customer interaction,which provides the introductionability to have a personalized dialogue/conversation witheach individual custo

46、mer seamlessly across channels/touch-points and over time with the following attributes of ?engage customers in a constant conversation?customize conversations to the individual?coordinate all conversions centrally?deliver conversations on any channel (preference of thecustomer)The ability to suppor

47、t customer interactions consistently across channelsor touchpoints is the prerequisite to sustaining the customer experience,customer loyalty and profitable customer relationship 10principles for building strong customer relationshipscrm How do you acquire, strengthen, and retain strong customer rel

48、ation-architectureships in the era of electronic delivery channels? Principle 1: By knowing more about the customer value and anticipat-ing relationship needs better than when the customer was involved ina high-touch relationship.Principle 2: Consolidate and make available all customer interactionte

49、chnicalinformation from all channels/touchpointswhite paperPrinciple 3: Develop a customer centric infrastructure that can consis-tently support the customized treatment of each customer.Principle 4: Assign dedicated people, process and technologyresources to achieve profitable resultshps customer r

50、elationship model Hewlett-Packard has developed a Customer Relationship Model basedon experiences attained from CRM project engagements globally. TheModel shows that the customer relationship is strengthened by Relation-ship Building tactics, which are continuously measured through time. The end res

51、ult is a strong customer relationship, which lead to accept-able customer loyalty, profitability and retention. Success criteria suchas share of wallet, profitability and cross-sell rations are also appliedas part of the continous measurement to ensure that Business Caserequirements have been achiev

52、ed. 11HPs Customer Relationship Modelprinciples Constantfor buildingChangestrongRelationship Building/Retention Tactics? Relationship Pricingrelationships? Life-Event Based MarketingStrenth? Cross-Selling? Relationship Marketingof? Mass CustomizationRetainCustomer? Target Segment Marketing? Aftermar

53、ketingRelationshipStrengthenAcquireContinuous Measurement? Lifetime Value, Prospective Value, Current ValueTarget Customer? Fully Costed, Risk-Adjusted Profitability AnalysisSelection Criteria? Life-Event? Consumer Behavior, Predictive Modeling, Receptivity? Vulnerability Analysis, Attrition Modelin

54、g? Customer Segments, Micro Segments, HouseholdingFigure 5: HPs Customer Relationship Modelbasic CRM is step number 1Basic CRM involves the construction of data marts and data warehous-es as the core components to support the sales and marketing decisionmaking process. The data warehouse is the tech

55、nology centrepiecethat acts as a repository for all customer-centric data required for thedecision making process in CRM. Marketing models such as CustomerSegmentation, Life Time Value, Campaign analysis, and Profitabilityanalysis are fed as information to the Customer data warehouse. Inaddition, ex

56、ternal data such as Demographic, Mailing lists, CreditBureau are also fed into the data warehouse. Some current efforts arefailing to achieve desired CRM results due to ?Misalignment between IT and Business?Many claim to address CRM but no single vendor can address theentire complex value chain?Very

57、 challenging to bridge the informational and operational linkageThe principle raison detre for this architecture is to move informationfrom a basic CRM infrastructure to a knowledge base so that both sup-plier and client can act on this information. This enables various indus-tries to transform them

58、selves into a customer-oriented business by lever-12Continuous Measurementaging information as a strategic asset. For example, call center agentsprcan look to CRM to supply them with information on the customersinciples for buildingcalling them with their purchases, transaction history and complaint

59、stronghistory. Alternatively, a sales force can have customer contact andrelationshipsdemographic information as part of their sales force automation.BasicCRM acts a foundation to move quickly to Step2 CRM, whichprovides integrated contact history, customer profile, channel integra-tion, etc. In addition, decisioning technology develops knowledge frominformation used to determine the best recommended actions for a cus-tomer regardless of to