Customer Relationship

Management (CRM)
Scott Hopper
Monica Brooks
Jessica Jetton
Case Studies:
United Parcel Service (UPS)
Royal Bank of Canada (RBC) Financial Group
Agenda
CRM Background & Industry Information

CRM In Action: Case Studies
United Parcel Service (UPS)
Royal Bank of Canada (RBC) Financial Group

Lessons Learned

Presentation Focus
Present overview information on
Customer Relationship Management
(CRM) and its impact on the way people
conduct business
Discuss real-life CRM implementations
Discuss Successes
Discuss Areas of Opportunity for
Improvement
Discuss industry leading CRM best
practices
CRM, or Customer Relationship Management is
a company wide business strategy designed
to reduce costs and increase profitability by
solidifying customer loyalty.
At its core, CRM is a simple, intuitively appealing
concept: attract new customers, know them
well, give them outstanding service, and
anticipate their wants and needs.
Source:
Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., Realizing Business Benefits Through CRM: Hitting the Right
Target in the Right Way MIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94.
www.destinationcrm.com/articles/, What is CRM?, viewed October 12
th
, 2004.
What Is CRM?
History
Mass Marketing
All customers treated as if they had same
needs and preferences
Target Marketing
Focused on market segments
Relationship Marketing
Each customers individual needs are
targeted by building relationships
Source:
Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., Realizing Business Benefits Through CRM: Hitting the Right
Target in the Right Way MIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94.
What Does CRM Do?
Sales
Up-sell and cross sell products more effectively
Help sales staff close deals faster
Marketing
Simplify marketing and sales processes
Discover new customers
Customer Service
Provide better customer service
Make call centers more efficient


Why Use CRM?
Enterprises Enterprises
Revenues Revenues
Costs Costs
Customers Customers
Satisfaction Satisfaction
Loyalty Loyalty
Volume Volume
Enterprises Enterprises
Revenues Revenues
Costs Costs
Revenues Revenues
Costs Costs
Customers Customers
Satisfaction Satisfaction
Loyalty Loyalty
Volume Volume
Satisfaction Satisfaction
Loyalty Loyalty
Volume Volume
Goals
Make it easy for customers to do business
Focus on the end customer
Redesign front office and examine information
flows between the front and back office
Foster customer loyalty by becoming proactive
with customers
Build in measurable checks and balances to
continuously improve
Source:
Chen, Injazz J., and Popovich, Karen, Understanding customer relationship management (CRM) People, process and
technology Business Process Management Journal, Vol. 9, 5, 2003; ABI/INFORM Global, pages 672-688.
One survey of more than 1,500 companies by
The Data Warehousing Institute (TDWI) in 2000
found that 91 percent either have or plan to
deploy a CRM solution in the near future.
78 percent of companies said they were using
some form of CRM Bain & Company survey of
708 corporate executives 2002
Source:
Goodhue, Dale L., Wixom, Barbara H., and Watson, Hugh., Realizing Business Benefits Through CRM: Hitting the Right
Target in the Right Way MIS Quarterly Executive Vol. 1, 2, 2002, pp.79-94.
www2.cio.com/metrics/2003/metric544.html, The Right Tool, viewed November 1st, 2004.
Who Uses CRM?
Who uses CRM?
Cingular Wireless
Improved sales productivity by providing a
comprehensive view of the customer, improving
lead generation, and providing a full-functional
wireless solution to sales force.
Honeywell
Improved customer service by increasing after-
market spare parts revenue by 100%, improving
service request closure rate from 45% to 83%, and
improved customer satisfaction by 38%.
DHL
By providing a transparent view of the customer,
Siebel will help DHL to achieve an estimated 1%
increase in revenue by the end of 2005 Ulrik Topp
Global Sales Development Director DHL

Source:
www.siebel.com, customer case studies, viewed 11/9/04
CRM Budget Change for 2003
Increase
53%
Decrease
16%
Stay the
Same
31%
Increase
Decrease
Stay the Same
Source:
Aberdeen Group, CRM Spending and Satisfaction Report, February 2003, pages 1-18.
Companies surveyed by Aberdeen Group
in January 2003
CRM Market
AMR Research estimates that the
Customer Relationship Management
(CRM) market will grow to $10.8B in
2004, a $1B leap from 2003.
Source:
Preslan, Laura, Investment Priorities for CRM in 2004, AMR Research, Thursday, Jan. 8, 2004.
CRM Market
$10,000
$11,000
$12,000
$13,000
$14,000
$15,000
$16,000
$17,000
$18,000
U
S
$

m
i
l
l
i
o
n
2001 2002 2003 2004 2005 2006
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,
pages 1-57.
CRM Spending by Region
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
U
S
$

m
i
l
l
i
o
n
2001 2002 2003 2004 2005 2006
North
America
Europe
Latin
America
Asia/Pacific
Rim
Middle
East/Africa
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,
pages 1-57.
US CRM Spending by Industry
$0
$500
$1,000
$1,500
$2,000
$2,500
U
S
$

m
i
l
l
i
o
n
2001 2002 2003 2004 2005 2006
Manufacturing
Financial
Services
Retail and
Distribution
Business
Services
Government
and Education
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,
pages 1-57.
Reasons for CRMs Increased Popularity
Easier to retain customers than attract new
customers
CRM has become more affordable and the
technology is more advanced
The definition of CRM is being expanded to
include initiatives like loyalty programs
Source:
www2.cio.com/metrics/2003/metric544.html, The Right Tool, viewed November 1st, 2004.
CRM Software Leaders
Top CRM Software Suppliers in 2002
Siebel 21.6%
SAP 12.4%
Oracle 5.7%
PeopleSoft 4.9%
Peregrine Systems 3.0%
Others 52.4%
Source:
Aberdeen Group, Worldwide CRM Spending, Market Analysis Service, June 2003,
pages 1-57.
Siebel
Market Cap - $4.86B
Revenue - $1.31B
NASDAQ: SEBL - $9.56 (11-13-04)
5000 employees
Founded: 1993
2.8 million employees at more than 4,000
organizations use Siebel products
Siebel Systems is the worlds leading provider
of customer relationship management (CRM)
solutions and a leading provider of
applications for business intelligence and
standards-based integration.

Source:
www.siebel.com, viewed 11/9/04
Market Cap - $56.32B
Revenue - $9.28B
NYSE: SAP - $45.23 (11-13-04)
30,942 employees
Founded: 1972
mySAP Customer Relationship Management
is the only CRM solution that connects your
employees, partners, processes, and
technology in a closed-loop customer
interaction cycle.

Source:
www.sap.com, viewed 11/9/04
SAP
Market Cap 68.67B
Revenue 10.30B
NASDAQ: ORCL 13.39 (11-13-04)
41,658 employees
Founded: 1977
Oracle's integrated CRM applications give
you information-driven sales, service, and
marketing because they're built on an open,
standards-based architecture that
streamlines business processes, improves
data quality, and allows all your key divisions
to draw from the same source of data.
Source:
www.oracle.com, viewed 11/9/04
Oracle
Benefits Summary
CRM creates value through three key
levers:
Acquire increase number of profitable
customers
Develop increase profit from existing
customers
Retain extend duration of customer
relationship
Existing Customers #1 Priority
Cheaper to retain customers than to add new
customers
Retain customers mean sales volumes
increase per customer
Up-sell and cross-sell
It costs about five times more to gain a customer than to
keep one. And it is estimated to cost 10 times more to get
customers back if they are dissatisfied.
Source:
Massnick, Forler, Customer Service Can Kill You... Management Review, Mar 1997; 86, 3; ABI/INFORM Global
pages 33-35.
2.2%
1.6%
1.4% 1.4%
1.3%
1.2%
1.0%
0.6%
2.8%
0.0%
1.0%
2.0%
3.0%
4.0%
1992 1993 1994 1995 1996 1997 1998 1999 2000
Percent Response to Credit Card Direct Mail Offers
Source: BAI Global, Inc., Mail Monitor, $Q02, Synovate.
Annual Credit Card Acquisition Mail Volume (in Billions)
Difficult to Acquire New Customers
Top Management Commitment
Project Teams with representatives from all
departments
Project Champion
Company data must be shared enterprise-wide
Vision and communication
Keys to Success
Reasons for Failure
Not understanding the needs of the end user
Considered an IT project rather than a
business strategy
Accessibility - Not training users to effectively
use the solution
Inability to integrate different data sources in
to a single system
Understanding expectations

Some 80% of the responding marketing,
customer-service and sales execs at 96
companies characterize their organizations CRM
efforts as very successful or somewhat
successful.

Fifty-five percent of all customer relationship
management (CRM) programs fail, according to
Stamford, Conn.-based Gartner Inc.
Source:
Yu, Larry, Successful Customer-Relationship Management MIT Sloan Management Review, Vol. 42, No. 4, pp18-19.
Melymuka, Kathleen, You Can Avoid CRMs Pitfalls Computerworld, Feb 11, 2002; 36, 7; ABI/INFORM, page 30.
Success and Failure Rate of CRM Projects
CRM In Action: Case Studies
United Parcel Service (UPS)
UPS
Worlds Largest Package
Delivery Company
Leading global provider
of specialized
transportation and
logistics services
Founded in 1907 in
Washington
$33.5 billion in revenue
in 2003
357,000 employees
worldwide


Source:
http://www.ups.com/content/us/en/about/history/index.html, viewed 10/28/04
UPS Products and Services
SonicAir
Next Day Air
2
nd
Day Air
3 Day Select
Ground
Worldwide Express
Worldwide Expedited
Standard to Canada

Source:
http://ups.com/content/us/en/resources/select/index.html , viewed 10/28/04
UPS IT Environment
Kenneth W Lacy- Senior Vice President and
CIO
$1 billion a year on technology infrastructure
4,700 technology employees
14 mainframes, 6100 servers, 120000 PCs
115 million hits and 9.1 million tracking
requests per business day



Source:
http://ups.com/content/us/en/about/facts/technology.html, viewed 10/28
UPS Technology Awards
Winters Corp. 2003 Top Ten Grand Prize
Winner
Computerworld 100 Best Places to Work in IT,
2003
CIO 20/20 Vision Award, 2002
CIO 100 Enterprise Integration Award, 2002
Computerworld Premier 100 IT Leaders, 2002
Source:
http://.ups.com/pressroom/us/awards/ecommerce
UPS Financial Performance
Source:
http://finance.yahoo.com/q?s=UPS, viewed 11/3/04/
UPS TEAMS - Seibel Implementation
Next generation in UPS sales force automation
Total enterprise account management system
Provides integrated tools to help the sales
force do the job more effectively and
efficiently
Supports opportunity and account
management with increased capabilities for
planning and documenting sales calls
Source:
UPS, Overview of UPS TEAMS, 2004
Why UPS Changed from Link to Teams
UPS deployed Link in 1999- technology has
improved dramatically since then
TEAMS can be used across the entire UPS
sales enterprise
Future phases of TEAMS will have increased
flexibility to enable UPS to integrate the core
UPS sales force with the sales forces from
other business units in order to establish one
coordinated sales effort
TEAMS has the flexibility to support
enhancements such as wireless capability


Source:
UPS, Overview of UPS TEAMS, 2004
UPS Sales Enterprise
UPS Sales Enterprise
Domestic and
International
Core UPS Additional Business Units
Other Sales Business Units
Other Sales Business Units
E-Commerce Supply Chain Solutions UPS Capital
UPS TEAMS
Interacted with
Michael Carey,
Project Manager CRM
Technology, October
14,2004

Time and Budget

Challenges

Advantages

Lessons Learned

Time and Budget
Project was on time and on budget- not at
liberty to share the specific budget
Beta Test in Central Pennsylvania, Sweden
and Austria, May 2004
Project Roll Out: June 15
th
September 17
th
,
2004 for US, Sweden and Austria employees
Future releases will cover additional countries
and the rest of the UPS sales force (i.e. E-
Commerce, Supply Chain Solutions, UPS
Professional Services, etc.)


Challenges
Aligning the arrival of new Laptops, new Sales
Applications, new Operating System, new
wireless cards, and new training documents

Seibel Application Training
Coordinating the trainers
Gathering the right training resources (e.g. ability to
speak multiple languages, etc.)
Scheduling employees for training classes

Advantages of UPS TEAMS

Home Page
Calendar
Opportunities
Queries
Data Synchronization
Team Selling
Advantages of UPS TEAMS
Home Page
Quick look at
daily calendar,
Slim leads and
opportunities
Helps prioritize
the sales persons
time and keep the
focus on accounts
that need
attention
Source:
UPS, Overview of UPS TEAMS, 2004
Advantages of UPS TEAMS
Calendar
Automatically
integrated with
activities
Immediately
populates events such
as adding and/or
updating activities,
eliminating dual entry

Source:
UPS, Overview of UPS TEAMS, 2004
Advantages to UPS TEAMS
Opportunities
Provides flexibility to
create a single
product opportunity
or a multi-product
(portfolio) opportunity
Provides the ability to
link an opportunity to
more than one
marketing initiative
Source:
UPS, Overview of UPS TEAMS, 2004
Advantages of UPS TEAMS
Queries
Query Assistant
allows for filtering
data quickly and
easily
Provides capabilities
for pre-defined
queries and
personalized queries
Source:
UPS, Overview of UPS TEAMS, 2004
Advantages of UPS TEAMS
Data Synchronization
Occurs automatically and instantaneously each time
the sales person accesses the system and is
connected to the LAN
No need to remember to exchange data daily in
order to send changes from the sales persons laptop
and receive up-to-date information from the UPS
mainframe
Source:
UPS, Overview of UPS TEAMS, 2004
Advantages of UPS TEAMS
Team Selling
Provides information for all of the sales
people associated with a particular
opportunity or account
Enables a cohesive, unified sales effort
and contributes to sales success
Source:
UPS, Overview of UPS TEAMS, 2004
Areas of Improvement
Duplicate data entry still required on some
screens (i.e. Time & date of activities, etc.)
Non-optimal Account Name retrieval
Account search capability is exact match
Insufficient back-end integration
Appropriate databases not synched
UPS TEAMS Successful?
Best Project
Management
Practices
YES NO
Business Solutions Drive
Technology Selection
X
Secure Top Management
ACTIVE Support
X
Involve Knowledgeable
Users
X
Buy-in Outside Expertise
to Transfer Learning
X
Implement Incrementally
X
Dont Judge Success
Solely Based on Time to
Budget
X
Customer-Oriented Focus
X
Source:
Lacity,M, Management of IT- Enabled Business Projects, 2004
Standish Group CHAOS Report -
IT Projects Classification
Type I: Success: on time, on budget,
promised functionality

Type II: Challenged: over-budget, over-time
and or missing functionality

Type III: Failed: Severely impaired projects;
cancelled projects
Source:
Lacity,M, Management of IT Enabled Business Projects, 2004
Standish Group CHAOS Report
IT Projects Classification
UPS TEAMS Project: Type I- Success

On time
On Budget
Promised Functionality



CRM In Action: Case Studies
Royal Bank of Canada (RBC)
Financial Group
RBC Financial Group
Largest Canadian financial institution
12 million clients worldwide
700 products
60,000 employees
C$270 billion in assets
1.6 billion spent on IT in 2003
CIO: Marty Lippert
Source:
www.rbc.com/aboutus/fastfacts.html
5 Major Business Lines
RBC Banking personal and commercial
banking
RBC Insurance insurance
RBC Investments wealth management
RBC Capital Markets corporate and
investment banking
RBC Global Services transaction
processing
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
54% of Net
income
1300 branches
4800 ABMs
1.4 million
online
customers
300 offices in 30
countries
Greatest
opportunity for
improvement
Insurance
8%
Investment
15%
Capital
Markets
17%
Global
Services
6%
Banking
54%
Banki ng
Insurance
Investment
Capi tal Markets
Gl obal Servi ces
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
RBC Banking
Change in the Industry
Pre-1990s 6 largest Banks enjoyed friendly
competition
Internet banking
Lowering of domestic protections
Oligopoly ended increased competition
How to stay competitive?
1997 study to determine image perceptions

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
1997 Study
Major Finding
CUSTOMER INTIMACY -MOST important FACTOR to the
customer.
Definition - trust, reassurance, a feeling that the bank knows
them, understands their needs, recognizes who they are and
value their business

This finding identified a whole new era for RBC
- A shift to differentiation based on customer needs
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.









Importance to
Client








Financial Institutions
Proficiency at Delivering
HIGH
LOW HIGH
Mutual benefits
Reciprocity
Trust
Reassurance
Comfort
Understanding



Convenient Hours
ATM access
1-800 Number
Internet Banking
Short Lines

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.



1997 Study Results
CRM Vision: Bring together in one place a view
of all contacts, transactions, accounts, and
interactions with each customer.

CRM system would provide the following info to
personal bankers (PBs):
-Address, age, account balances
-Contacts customer has had with company
-Level of service customer qualified for based on
current and future profitability
-What products customer was targeted and approved
for
-How customer responded to direct marketing


Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Focus on Customer: CRM
VP of Marketing and Info Management-
Richard McLaughlin
-Responsible for CRM infrastructure, info
management, alliance banking, internet
banking, and privacy

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Reorganization Around CRM
Customer Segments
3 Primary Customer Segments & 9 Total Segments
A. Key markets:
1. Youth
2. Nexus
3. Small business
4. Farming and lifestyle agriculture
B. Growth markets:
5. Building
6. Business
7. Agriculture
C. Prime markets:
8. Accumulating
9. Preserving
Lockie, Anne, RBC Banking: The Customer Experience, powerpoint slides at rbc.com
Product
Structured to sell a
specific product to
everyone
Multiple people selling
to same customer
Segment
Structured to satisfy all
needs with all products
- Employees concerned
with meeting needs
not selling a specific
product


CUSTOMERS

SEGMENT
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.

PRODUCTS


C
B D
A

E




CUSTOMER
Product & Segment Management
1997 1998 1999 2000
McLaughlin
hired as VP of
Marketing and
Info
Management



Software
selection to
facilitate
CRM



1997 study
creates a
platform for
CRM



CRM
software and
practices
continue to be
modified
based on
internal &
external
customer
feedback
Info changes
focus to
profitable/
potentially
profitable
customers



Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Timeline: CRM Capabilities
CRM: The Results
Satisfying customer needs
Important to stay competitive and keep current
customers
Creating efficiencies
Not only invest in satisfying customer needs but
also save money while doing it



Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Satisfying Customer Needs
Focus on customer needs: ensures right
products at right time
More efficient use of customer data
-Customized marketing
-Levels of service
-Product design and pricing
Increased profitability


Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
$2,898
$2,435
$2,208
$1,725
$1,772
1998 1999 2000 2002 2003
Source:
www.rbc.com/investorrelations/ar_03.html
Net Income by Year
(in millions)

RBC Financial Group Net Income
Creating Efficiencies
Better Customer Identification
Before CRM:
A, B, or C customers
Vague and not beneficial

After CRM:
Customers can both be profitable and have
the potential to be profitable

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Centrally Generated Sales Leads
Before CRM:
Every branch had a different way of
generating sales leads
Low quality, not consistent

After CRM:
Generated centrally
Accessible to everyone
Reminder to call and offer products
Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
More Efficiencies
Future Plans for CRM
Preference and Choice:
Use info about customers preferences to design
packages of services at certain points in their
life

Source:
Brem, Lisa, and Narayanan V.G., Customer Profitability and Customer Relationship Management at RBC Financial Group, Harvard Business
School Case #9-102-043. March 25, 2002.
Life Stages and Segments


Getting Started Building Accumulating Preserving
Graduation
Saving to
buy a home
Saving for
Retirement
Buying a home
Retirement
Transfer of
Wealth/Succession
Planning Planning
KEY GROWTH PRIME
Source:
Sutherland, Anne, How RBC is taking its CRM strategy to the next level to accelerate profitable revenue growth, presented to American
Bankers Association. 2004.
Summary of Lessons Learned
Identify the key
stakeholders who touch
the application directly
and/or indirectly at the
very beginning of the
project
Gain buy-in from these key
stakeholders that that their
input and support is critical
to the overall success of
the project
More robust Beta Test

Always keep client front
and center-
through process and
implementation
Manage change with
communication and vision
Integrate CRM into
business strategy
Continually reevaluate,
test, learn, and improve
strategies