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Ogilvy Interactive Team
Customer Relationship
Management (CRM)
Vladimir M Jordanov
December 2nd, 2000
Oglivy Interactive Beijing Boot-camp
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Customers?
Who are these guys?
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What is CRM?
In-depth analysis of customer In-depth analysis of customer
behavior and and attributes.
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 treatment plans.
More than just a set of technologies More than just a set of technologies
– it is a process.– it is a process. 3
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Why CRM?
. Company existence – quest for Company existence – quest for
.
. Three ways to increase the Three ways to increase the
profitability of the customer baseprofitability of the customer base
. Acquire more customersAcquire more customers
. Optimize the value of the existing Optimize the value of the existing
customerscustomers
. Retain the right customers longerRetain the right customers longer
. Acquiring new customer cost 5-10 Acquiring new customer cost 5-10
times more that retaining the times more that retaining the
existing oneexisting one
. Loyal customers will will buy Loyal customers will will buy
more and are willing to pay more and are willing to pay
premium pricespremium prices
. 20/80 rule – 20% of the customers 20/80 rule – 20% of the customers
generate 80% of the revenuegenerate 80% of the revenue
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Why CRM? (continued)
Service leaders enjoy the following advantage over their low-Service leaders enjoy the following advantage over their low-
service competitors:service competitors:
They grow twice as fast. They grow twice as fast.
They experience a 6% annual growth vs. a 1% share loss (they take They experience a 6% annual growth vs. a 1% share loss (they take
customers away from their competitors).customers away from their competitors).
They can charge 10% more from their products and still take They can charge 10% more from their products and still take
customers away.
They enjoy 12% vs. 1% average return on enjoy 12% vs. 1% average return on sales.
Industry statistics show that 68% of customers walk away because Industry statistics show that 68% of customers walk away because
of poor customer poor customer service.
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Evolution of CRM
Mass MarketingMass Marketing
Target MarketingTarget Marketing
CRMCRM
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Mass Marketing
Replaced the intimacy of direct salesReplaced the intimacy of direct sales
One way communicationOne way communication
Wide geographic distributionWide geographic distribution
Lost is the personal touch with the customerLost is the personal touch with the customer
Mass marketing was enabled trough the technological Mass marketing was enabled trough the technological
improvements in TV, radio, printed pressimprovements in TV, radio, printed press
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Target Marketing
Direct mail, telemarketingDirect mail, telemarketing
Receiving customer responseReceiving customer response
Lack of specific data, average response rateLack of specific data, average response rate
Islands of informationIslands of information
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CRM
Next evolutionary step, back to intimacyNext evolutionary step, back to intimacy
Customer loyalty build on:Customer loyalty build on:
Understanding of customers wants, needs and valuesUnderstanding of customers wants, needs and values
Interactivity with the customer in the way customer preferInteractivity with the customer in the way customer prefer
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CRM Cycle
AssessAssess
ll Who are the customers – demographics and lifestyle?Who are the customers – demographics and lifestyle?
ll Where do they live?Where do they live?
ll What are they worth? What is their lifetime value What are they worth? What is their lifetime value
potential?potential?
ll What and how do they buy?What and how do they buy?
ll How can they be reached? How have they responded to How can they be reached? How have they responded to
promotions in the past and trough which channels they promotions in the past and trough which channels they
prefer to be reached? prefer to be reached?
PlanPlan
ExecuteExecute
ll Execution and management of the marketing campaigns Execution and management of the marketing campaigns
and customer treatment customer treatment plans.
ll Data gathering.
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CRM Critical Success Factors
ArchitectureArchitecture
Data warehouseData warehouse
Data structure and architecture – 80% of Data structure and architecture – 80% of
the service costthe service cost
Analysis, ProfilingAnalysis, Profiling Customer InteractionCustomer Interaction
Sales force automation force automation system.
Call centerCall center
The InternetThe Internet
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CRM Components
Two basic set of toolsTwo basic set of tools
Data collection toolsData collection tools
Analytical and data delivery toolsAnalytical and data delivery tools
Data warehouseData warehouse
Data archeologyData archeology
Depth and breadth of dataDepth and breadth of data
Contact informationContact information
Household informationHousehold information
Group informationGroup information
Customer historyCustomer history
Promotion historyPromotion history
Product purchase/usage historyProduct purchase/usage history
Transaction rollupTransaction rollup
Customer service historyCustomer service history
Survey and customer response dataSurvey and customer response data
Demographic, psychographics, Demographic, psychographics, firmographic firmographic and/or credit dataand/or credit data
Customer interaction informationCustomer interaction information
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CRM Components (continued)
Data extraction and cleansing Data extraction and cleansing
Data management and storageData management and storage
Scalability and open technologiesScalability and open technologies
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CRM Environment
Applications, PlatformsApplications, Platforms
Vignette, Vignette, WebsphereWebsphere, ,
Broadvision Broadvision etc… etc…
Communication channelsCommunication channels
Traditional direct marketing, Traditional direct marketing,
Electronic direct marketing, Electronic direct marketing,
call centercall center
Data mining, customer profile Data mining, customer profile
building building
Data warehousingData warehousing
Oracle, SQL, DB2, Sybase Oracle, SQL, DB2, Sybase
etc… etc…
Data analysis and profilingData analysis and profiling
eSpectiveeSpective, , Webtrends Webtrends etc…etc… 14
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CRM Building Blocks
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Ogilvy and CRM
Focused on CRM Focused on CRM
Electronic Data Marketing (EDM)Electronic Data Marketing (EDM)
M OglivyM Oglivy
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Ogilvy Interactive China and CRM
Does Ogilvy Interactive manage the relations Does Ogilvy Interactive manage the relations
with its clients?with its clients?
How?How?
How can we improve?How can we improve?
How our competition manage the relationship How our competition manage the relationship
with its customers?with its customers?
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The Technology road ahead 2001
Technology strategy objectivesTechnology strategy objectives
Technology – Strategic key focusTechnology – Strategic key focus
Key technologies and skillsKey technologies and skills
Training PlanTraining Plan
Technology Laboratory Technology Laboratory
Work with other companies and organizationsWork with other companies and organizations
Services provided by the Technology groupServices provided by the Technology group
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Objectives
To To be be a a technology technology center center of of excellence excellence among among the the
Interactive groups in the region and groups in the region and worldwide.
To To excel excel best best practices practices and and technologies technologies in in the the region region
and worldwide.
To be on the leading edge of the new be on the leading edge of the new technologies.
To be be innovative.
Improve, improve, improve Improve, improve, improve
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Technology – Strategic key focus
Currently used technologiesCurrently used technologies
Content Management SystemContent Management System
Active Server Pages and Web Applications Development Active Server Pages and Web Applications Development
Light and Medium Backend Database Development Light and Medium Backend Database Development
Future technologiesFuture technologies
MobileMobile
CRMCRM
ASP ModelASP Model
Consulting technologiesConsulting technologies
Heavy backend database backend database development.
Full scale transaction based e-commerce scale transaction based e-commerce solutions.
ERP and on-line supply chain managementERP and on-line supply chain management 20
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Key Technologies and skills
Operating Operating Systems Systems – – Linux, Linux, Sun Sun
Solaris, Windows NT etc… Solaris, Windows NT etc…
Platforms Platforms and and Web Web Application Application
Servers Servers –– ZopeZope, , Domino, Domino, Netscape, Netscape,
Apache Apache
Database Database – – MS MS SQL, SQL, My My SQL, SQL,
Oracle, DB2Oracle, DB2
Programming Programming –– PerlPerl, , Python, Python, C, C,
Java, Java, Java Java Script, Script, HTML, HTML, DHTML, DHTML,
VBSVBS
Tools Tools & & Utilities Utilities –– WebTrendsWebTrends, ,
WebBenchWebBench
Technologies Technologies – – CMS, CMS, CRM, CRM, E-E-
Commerce, One-To-OneCommerce, One-To-One 21
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Training Plan
The training plan for 2001 will be developed in accordance of The training plan for 2001 will be developed in accordance of
the Technology Strategic Key Focusthe Technology Strategic Key Focus
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Technology Laboratory
New technologiesNew technologies
Skills improvementSkills improvement
Pet projectsPet projects
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Partnership with third parties
Heavy back-end database developmentHeavy back-end database development
CRM, ERP, E commerce CRM, ERP, E commerce
Internship with leading Beijing Universities Internship with leading Beijing Universities
Partnership Partnership with with leading leading technology technology companies companies (such (such as as
Motorola,Motorola, Nokia Nokia, IBM etc.) , IBM etc.)
Partnership Partnership with with leading leading software software companies companies (Vignette,(Vignette,
BroadVisionBroadVision, Oracle etc.), Oracle etc.)
ASP modelASP model
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Services Provided by Tech. Group
Content management solutions design and implementationContent management solutions design and implementation
Front-end programmingFront-end programming
Back-end programmingBack-end programming
Site architecture and integrationSite architecture and integration
Site hosting and administrationSite hosting and administration
Internet technology and strategy consulting Internet technology and strategy consulting
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