CRM Framework

Terry James 2006

Party

No. Not a beach party. No beer. No dancing. CIF, or customer information file, lists just customers. When a CIF includes all people with all relationships and roles to our firm, then its called an Involved Party database. Involved Party: a generic term meaning party (anyone) who is involved with your company; employees, suppliers, clients,
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How we got here.

Each LOB (line of business) would keep track of its own clients. The LOB would usually use an account number to track its clients. Example: Toronto Hardware

Account number: Client name : Amount spent:etc. 0000150 : Wendys : $50000.00

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LOB Account number

The LOB has a lot of shortcomings.

It does not know anything about customers outside the division. It has no role information.

If an employee buys a product, his data looks like simply another customer, no employee discount or number. If a supplier buys a product, again the CIF likely wont show it.
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CIF files

Common for the CIF file to be copied

different groups for different purposes

perhaps to merge with other CIF files

If you have 2 copies, which is the

authoritative source

The authoritative source is the trusted file you use if it is not clear which is correct Always update the authoritative source first, then copy from it, never update the copied file or you will lose track of changes to many copied files.
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Trusted data

How long does it take for a copied CIF to be different than the original?

Probably a few nanoseconds if you do millions of transactions a day

As soon as your copy is not current, you are working with dirty data

Dirty data is simply poor quality data, lacking in accuracy, consistency, or integrity.
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Analysis Patterns

Martin Fowler wrote Analysis Patterns which are best-of-breed, proven business analysis solutions. For CIF, he provided the Party concept.
Person Organization

Address Phone

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Leading Edge Data Model

INVOLVED PARTY
Person

Organization
Relationships and Roles

Products

Demographics, contacts, security, products, accounting, relationships

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Involved party (IP) model

You can ask what organization a client belongs to, what role he has there, and what relationship he and his organization has with your company. You can reverse questions and ask which customers are in an organization that your have sold products to, and which customers are not in an organization as customers.
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Example

What people have I sold computers to at Honda? What group were they in? Sales, Service? Are there any groups at Honda I have not sold computers to? Can I get an introduction from existing clients? Are any Honda employees members of my Board of Trade team?
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Prospects and Suspects

Prospects are potential clients, but have not bought anything?

Suspects are customer lists you bought from another company

They may have asked for pricing, asked for a demo, but not paid any money yet.

Be careful about dumping poor data into your authoritative customer database.
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Suspects in particular are known for poor data quality in general. The data could be old, out-of-date, captured incorrectly, deliberately wrong (client fraud), etc.

CRM Basics
Customer reaches for service

E-mail

IVR

Web

Branch

Master Party file Multi-channel offering- but ONE customer file!

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One customer file

Many functions but one party file
Accounting

HR

Sales

Operations

Many divisions but ONE party file.

Asia Division

USA division

Many departments but ONE party file

Motorcycles
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Auto dept.

Lawnmowers
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What is a Framework?
Rather than build one element at a time, build a framework within which new elements will fit as you add them. Good framework removes duplication, ensures integration.
Create a framework for future client services without duplicating client code
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Whats in the Framework?

1) Single sign-on
Demographics SSO EAI Data conversion 2) Channel independent middleware (e.g. EAI)

3) Dispatcher route transactions to proper legacy system.

The framework will have infrastructure services to permit a fully integrated CRM solution.
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SSO

What is single sign-on?

It is one logon and password to all your systems Makes it look like you have one company where everyone helps and works together Easier for customers, easier for employees toremember one password and logon Consistent rules, and less expensive if you use one security system
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Why do you want it, what does it provide?

SSO

Where do you place the security?

In the front end device, in the legacy application? Rule is put as much security as reasonable as far away from your central operation as possible. Likely have many levels. Duplicate data with the Party file? Yes, at least the name and contact as a pointer. Smart to keep highly sensitive, encrypted passwords in a very restricted separate file
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What goes in the security directory?

EAI

What is EAI software?

What does it do?

Enterprise Application Integration

EAI permits all your applications to talk to each other and work as a unit Translates data into needed formats Provides correct communication methods and protocols for each application

Where do you get it?

How much does it cost?

Many vendors, IBM, Tibco.

Fairly expensive.

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CRM Level 1

Profitability analysis

How much profit from each client? Staff comments: (eg. deadbeat, high potential) Personal, then business. Fax, email, vacation address, cell phone, Use profitability to segment clients into tiers, top, middle, bottom. Tailor to client needs, no mass mailings to all regardless of need.
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Client comments

Demographics

Segmentation

Personalization

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CRM Level 2

House-holding

Include relationships starting at home, who is the client living with, what are family needs? Expand profile with dealings outside your firm Acquire credit and collections history Know and use your client favorite communication channel (email, phone, face-to-face) Add client organization and role (supplier, competitor, employee, or partner,?)
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Client profile

Channel management

Roles and Relationships

CRM Level 3

Client acquisition

Opportunity

Have client provide referrals Cross-sell, up-sell, add-on, deluxe model Channel optimization move to least costly channel Every client touch-point adds to the profile Not locked into fixed, yearly goals Adjust sale goals by minute as client profile expands Right product, right client, right time, right place
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Channel integration

Dynamics

CRM Level 4

Micro-segmentation

1 client = 1 segment Every client has own strategy for next sale

Predictive modeling

Tracked roles and behavior Use known client patterns to predict client actions
Tailor products to meet client needs based on behavior and predictive analysis
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Product development

Profitability

With improved micro-segmentation, decision making, and dynamics, fine tune the profitability goals, future sales and share of wallet. What is the balance between good company profit and good client profit?

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Delinquent clients

Treat the client appropriately when delinquent.

It could be our poor service not their fiscal irresponsibility Prioritize the level of recovery so we dont spend more recovering the client than they are worth Be proactive in reducing or increasing fees.
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Optimization

Channel Optimization

Move clients to the least costly channel that meets their needs.

Example: Web $0.07, Phone - $0.35 Face - $1.00

Client may not want costly personal sales visits.

Match the value of service to the client value. Be aggressive at moving low value clients to low cost communication channels.
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Sales delivery standards

Client acquisition Product development

Client retention Segmentation

Relationships

IP database

Client service
Profitability analysis

Client management

Client channels

Cross sell

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Metrics

Measure before CRM and after

How many enquiries for a 1000 flyers How many sales? What is you add discount?

Indicates cherry-picker clients

Number, total balance involved?

How many lost clients did you recapture?

How much faster is service per call? How many clients using cheaper channels?
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Client metrics

Score the client on:

Next product most likely to buy Client risk Client profitability Propensity to buy Client potential Client vulnerability

Rank by the product most likely to buy and the expected value of that product. Marketing and campaigns are tailored accordingly
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Metrics

Some quantitative metrics on the sales person

Response rate number of applications divided by number of offers Approval rate approved applications divided by applications Net present value by campaign and account Delinquent number of accounts that are delinquent and the balance involved. Roll rate number delinquent clients divided by number of clients Roll back rate number of clients returning divided by number of clients Channel usage metrics by average channel cost.
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Client Decision Profile

Value Proposition Pricing: Preferred Service: VIP Channel: E-mail Current offer: Movie
channel, no connect fee

Client management Service guideline: Premium Account management: Agent Propensity to buy: Average Client prosperity: Promising

Credit: Excellent

Response offer: basic

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