Welcome Competing on products Common customer

Welcome

Competing on products?

Common customer service complaints “I entered my account number and the agent still asks me for it. ” “I hate being transferred from one person to another. ” “It is frustrating to sit on hold for minutes on end. ” “Why can’t everybody know my issue? This is the 10 th 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. ” “How come when I go to the web site I get a different answer than when I call into your call centre? ” “I just want to talk to a live person rather than enter 1, 2, or 3 on my touchtone phone. ”

Avoid information silos There 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, Wireless • 24 x 7 • Visual Call Centre • Convenient • Immediate Field Sales Customers • Hands-on • Consultative Resellers • Local • Multivendor Source: Gartner Group

Understanding your customer in the context of CRM Visibility Across All Channels… Geographies Web & Email Products /Services Call Centre CUSTOMERS Customer Information Legacy / Back office Field Sales Best Practices Partner/Agent …Drives Service Delivery Across All Business Units

CRM Model

Scope of CRM today Lead Tracking & Sales Management Customer Service Management Contact Management Campaign Management Customer Database “single view of customer” Workflow & Fulfilment Integration with Product Engines (Transactions) Telemarketing Marketing Encyclopaedia Integrated sales, marketing and service across all channels and all products

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, Mc. Kinsey & Company Understanding your customer is key to retention…. .

Know your customer common business processes Obtain Customer Feedback Initiate Request Phone Customer Email Web Identify Customer Identify Request Technology Route to Best resource Agent skills Agent availability Customer attributes Screen pop Customer History Call Center Agent Capture Customer Details / Update Profile Complete Task Cross-sell / Up-sell Offer

Understanding your customer – o Business strategy & roadmap n n n Customer segmentation Multi-channel strategy Business processes Skills & culture Technology

Student Solution Components • Major Functions • Student Recruiting • Admissions • Financial Aid • Course Management • Enrollment • Student Finance • Academic Records • Academic Progression • Research • Graduation • Institutional Research

Purdue University Fiscal Affairs School of Technology Undergraduate Studies Graduate Studies Admissions Financial Aid Registrar Student Affairs External Business Alliances University Human Resources Academic Affairs Provost School of Agriculture BS Agribusiness Management MS Aquatic Entomology Enrollment Management Purdue North Central Admissions Registrar Purdue Calumet Financial Aid Academic Advising External Recruitment Sources School of Education Admissions Student Affairs Organization Specific Calendars Rules Fee Assessment Reporting

One Trusted Source of Data “What do we know about Carolyn Lee? ” Recruiting/Student Applications Carolyn Lee Self Service Applications Administrative Applications “How do we contact Carolyn Lee? ”

Student Solution Demonstration Apply Hold Prospect Inquiry Student Recruitment John Purdue Prospective Student Online Invoice Postcard Email Invitation Admissions Application Admission Decision Financial Aid Processing Self Service Enrollment Faculty Special Permission John Purdue Admitted Student Financial Aid Disbursement Online Payment Faculty Grading

Cultivate the Entire Relationship Service & Retention Alumni & Life Long Learners Student Services Identify Markets Prospect Generation Student Aid Enrollments Recruiting Cultivate Inquirers Application & Admissions Admission & Enrollment

Oracle CRM Recruitment o Events Planning, Execution & Registration o List Management o Campaign Planning o Communications Management (ad hoc, automated, recurring, event triggered, high volume mass mailing) -- via email, fax, print, web and third party fulfillment houses o 360 Degree View of the Person o 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 o o o Most companies have decided to focus their efforts on multiproduct 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 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 1978: t Airline deregulation in the U. S. 1985: t People Express vs. American Airlines 1992: t 1997: t Edelman Award: RM for AA $1. 4 billion in 3 years t virtually every airline has implemented RM t National Car Rental (vs. GM) Edelman Award: RM for SNCF AA: $1 billion incremental revenues from RM t Marriott Int’l RM: 4. 7% increase in room revenue t 1999: Deregulation Europe: telecom, media, energy … t e-distribution supports dynamic pricing & profiling t 2000 -01: t Dell, Amazon & Coca Cola experiment dynamic pricing 2003: t RM spans wide range of industries …

RM Evolution Health. Care/ Hospitals Telco/ISP Sports Parks Car rental Airlines 1980 Rail Transp. Hotels 1985 1990 Cruise lines Entertainment Freight, Cargo Energy Tour Operators Media 1995 Insurance/ banking 2000 Manufact. Retailers

Revenue Management Strategies & tactics for OPTIMIZING PROFITS based on DYNAMIC PRICE SETTING INVENTORY 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 o Service level based: o o P(denial) =0. 05 E[#denials]=2 Etc. Cost based: assign a cost to each and optimise Overbooking cost (airlines): n n Direct compensation cost Provision cost of hotel/meal Reaccom cost (another flight/airline) Ill-will cost (~ “lifetime customer value”)

Industries Overbooking o Airlines o Hotels o Car rentals o Education o Manufacturing o Media No Overbooking o Restaurants o Movies, shows o Events o Resort hotels o Cruise lines

. . . Decisions Are Not Always “Rational” Tickets; $7. 95 Tickets; $6. 95 $1. 00 Discount for Children & Seniors $1. 00 Extra for Middle Aged People

Price Perception Issues are Complex. . . o. More Acceptable Pricing n n n Product-Based Open Discretionary Discounts and Promotions Rewards o. Less Acceptable Pricing n n n Customer-Based Hidden Imposed Surcharges Penalties

CRM o o o RM “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 o o o “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 o o o o Actual win or loss Number of days played Credit history Length of stay at hotel Individual spending preferences Demographics Psychographic profiles

Theoretical Revenue o 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 o Difficult in table games o Theoretical = (total amount wagered) X (house advantage) Where. . Total amount wagered = estimated average bet x estimated time played o

Future estimates… o o 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 o o o 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”

Re. Investment amount o o o o % of the 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 o o o 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.