&Ogilvy & MatherOgilvy Interactive TeamCustomer Relationship Management (CRM)Vladimir M Jordanov December 2nd, 2000 Oglivy Interactive Beijing Boot-camp 1&Ogilvy & MatherCustomers?Who are these guys?2&Ogilvy & MatherWhat is CRM?q In-depth analysis of customer behavior and attributes.qq Applying of the achieved Applying of the achieved knowledge in the formulation of knowledge in the formulation of marketing campaigns, strategies marketing campaigns, strategies and treatment plans.and treatment plans.qq More than just a set of technologies More than just a set of technologies it is a process. it is a process.3&Ogilvy & MatherWhy CRM?q Company existence quest for profit. q Three ways to increase the profitability of the customer base q Acquire more customers q Optimize the value of the existing customers q Retain the right customers longer q Acquiring new customer cost 5- 10 times more that retaining the existing one q Loyal customers will will buy more and are willing to pay premium prices q 20/80 rule 20% of the customers generate 80% of the revenue4&Ogilvy & MatherWhy CRM? (continued)q Service leaders enjoy the following advantage over their low- service competitors: q They grow twice as fast. q They experience a 6% annual growth vs. a 1% share loss (they take customers away from their competitors). q They can charge 10% more from their products and still take customers away. q They enjoy 12% vs. 1% average return on sales. q Industry statistics show that 68% of customers walk away because of poor customer service.5&Ogilvy & MatherEvolution of CRMqq Mass MarketingMass Marketingqq Target MarketingTarget Marketingqq CRMCRM6&Ogilvy & MatherMass Marketingq Replaced the intimacy of direct sales q One way communication q Wide geographic distribution q Lost is the personal touch with the customer q Mass marketing was enabled trough the technological improvements in TV, radio, printed press7&Ogilvy & MatherTarget Marketingq Direct mail, telemarketing q Receiving customer response q Lack of specific data, average response rate q Islands of information8&Ogilvy & MatherCRMq Next evolutionary step, back to intimacy q Customer loyalty build on: q Understanding of customers wants, needs and values q Interactivity with the customer in the way customer prefer9&Ogilvy & MatherCRM Cycleq AssesslWho are the customers demographics and lifestyle?lWhere do they live?lWhat are they worth? What is their lifetime value potential?lWhat and how do they buy?lHow can they be reached? How have they responded to promotions in the past and trough which channels they prefer to be reached? q Plan q ExecutelExecution and management of the marketing campaigns and customer treatment plans.lData gathering.10&Ogilvy & MatherCRM Critical Success Factorsq Architecture q Data warehouse q Data structure and architecture 80% of the service costqq Analysis, ProfilingAnalysis, Profilingqq Customer InteractionCustomer Interaction qq Sales force automation system.Sales force automation system. qq Call centerCall center qq The InternetThe Internet11&Ogilvy & MatherCRM Componentsq Two basic set of tools q Data collection tools q Analytical and data delivery tools q Data warehouse q Data archeology q Depth and breadth of data q Contact information q Household information q Group information q Customer history q Promotion history q Product purchase/usage history q Transaction rollup q Customer service history q Survey and customer response data q Demographic, psychographics, firmographic and/or credit data q Customer interaction information12&Ogilvy & MatherCRM Components (continued)q Data extraction and cleansing q Data management and storage q Scalability and open technologies13&Ogilvy & MatherCRM Environmentq Applications, Platforms q Vignette, Websphere, Broadvision etc q Communication channels q Traditional direct marketing, Electronic direct marketing, call center q Data mining, customer profile building q Data warehousing q Oracle, SQL, DB2, Sybase etc q Data analysis and profiling q eSpective, Webtrends etc14&Ogilvy & MatherCRM Building Blocks15&Ogilvy & MatherOgilvy and CRMq Focused on CRM q Electronic Data Marketing (EDM) q M Oglivy16&Ogilvy & MatherOgilvy Interactive China and CRMqDoes Ogilvy Interactive manage the relations with its clients? qHow? qHow can we improve? qHow our competition manage the relationship with its customers?17&Ogilvy & MatherThe Technology road ahead 2001q Technology strategy objectives q Technology Strategic key focus q Key technologies and skills q Training Plan q Technology Laboratory q Work with other companies and organizations q Services provided by the Technology group18&Ogilvy & MatherObjectivesq To be a technology center of excellence among the Interactive groups in the region and worldwide. q To excel best practices and technologies in the region and worldwide. q To be on the leading edge of the new technologies. q To be innovative. q Improve, improve