IMiM 2 Internationul Musters in Management AcqdemicYeur2006/ 2007 Exums Session April2007

CustomerAnalysisand Management ChristopheGillet

ESc LTLLE / lMlLI/ lntroduclonlo cRIv - Jân06

1- Backqround (oftencalledSOZYPro)is by far THE leading We âre in 1993. SOZYprofessional professionals. As theydescribe & industrial material for business supplierof audio-visual products available on based on the best technologies the best they'supply themselves, the marketplace'. Theirportfolioof productsis impressive,coveringvirtuallyany needin audio-visual: audiosystems,recorders,monitors, editingtools,routers/switchers, cameras,camcorders, projectors,videoconference tools,industrialcameras,medicalimagerysystems,encoders, TV automation systems,... Theseare soldto a widerange libraries, automated decoders, (TVs& Radios),Post of customersthat they havesegmentedin 6 groups;Broadcasters programmes), (Companies Medical, Security,Corporate creating Producers& Producers are & Industrial' segment.Products andthe moregeneric'Business Communicâtion, propose (for Broadcast segments example, they customer customisedfor eachof these cameras,securitycamerâs,medicalimagerycameras,scientificcameras, cameras,etc ...) videoconference SOZYPro has buildoverlhe yearsa reputationof qualityand technologyinnovation are and grabbeda 60-70% marketsharein its industrysector,where5 manufacturers place issue is not to find that the main position is so dominant on the market activè.Their 'Money lvlaking customers,nor securefinancialobjectives,but to makesurethat the properly lubricated. Machine'is Buttheworldis changing.Wearein 1998.OverthatlastSyears,thecomputer industryhas beenmovingfast. Veryfast. lt's nowclearthat mostof SOZY'Sproprietary and dedicatedsystemsare beingreplaced,stepby step,by cheaper,more technologies convenientand openPC basedplatforms.SOZYis losingsomesignifiqanlmarketsthat the groMh in audio-visual wherepreviouslyits exclusivehuntingterritory-Fortunately, by additional demandis so bigthal lossesin marketsharearemorethancompensated remainsunbeatableButthisis areaswhereSOZYtechnology salesin a few 'secured' andthe he numberof competit;rs,iFèirtevét--ôfjniôùation tnËï"..i-nai qualified sustainable' is as'not qualitvoftheirofferinqs are booming.Thissituation ' shiftingfrom a'product& technology'toa 'solution& Moie concerriing-,ilÈf6È-èrsstâft is is.growing. Theirbuyingtehaviour of expectqtion service'mindset.Theirlerr'el gïth" were werewettKnown.apprtcàt-rotrs àirT"i"" o"it, itffi""hnotogres way was the secure So, choosing SOZY of supplier. was a handful anâ tnere 3tâÈiatu-, really No one can But now,computer,telecofihdetdiôlis-ual industriesare converging he willget' havea clearviewânymoreof whathe needs,whathe willneed,whatbenefits service, risk issue. Value' lessand lessthe is becoming whatthe risksare. Technology are nowthemainconcerns. Froman financialviewpoint,mostcustomersnowâim d cuttingcostg s€9!I11l9turn fv' makesurethatthetoolwill100%fit theirneeds.Inotherwords,'l0yèars on investment, technicalstafF)Now'any decisionmalers werethe tecfrGcGhgrn-lée'FE àqo.16è-ôÈW users,financialpeople'departmental b;ying deciéioilÉtôli-esalàÈèl[6up-iÈôile: of choiceare moving workersunions Criteria heads.oftenthe CEO,and sometimes talkingto whowasexclusively brochure sortof speaking Theqoodold SOZYsalesman, basedon 'megahertz','decibels','bandwidth'and tech;ical-ùs-èrs-mZÈtràl06language to thevaluechain- notonlytalking to contribute persecond',is nowrequested 'megabits

o e!E&p1rç-C!Ie!@ela!eqqBa.!s!.

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ESCLILLE/ lMlM/ Introduclion to CRI\r- Jân6

valuebuthelpingcreatingit. The issueis summarised by the marketing department under 'What question you your fhe formof a to the salesteam: do do for customersthat they wouldagreeto pay for!' A sort of revolutionlA nightmarel F'';_- - - ; -

In orderto copewith this situationSOZYmanagementhas decidedto launch5 strategicinitiatives: (addvalue,facilitate theirlife,intimacy, ...) - Refocuson Customers ('do Excellence more with less') Operational (the'lBMexample') - Develop& sellservicesin parallelloproducts (improve Promote Innovation offerings) (virtual Processes teams,culturalchange,lT tools,...) - Speed-Up 2- The CRMseed is planted Boardmeetings,traditionally a placefor directorsto rest and readtheiremailswhile colleaguespresentboringPowerPointpresentations - designedby thelrsecretariesand past (performance the indicators,successstories,trends, focusedalmoslexclusivelyon to brainstormilll solving/ futu ...)- arequicklyshifting Any idea is welcome.Anfbènch-marking informationis-herished. The lT Director, Derry,and the BusinessInnovationDirector,Chris,are giventhe taskto buildand propose plans. lt shouldnot be that difficult:mail boxesare full of mailersfrom dotcomstalking aboute-commerce,121 marketing,data mining,loyaltystrategy,customerintimacy& a acronyms suchas CRM,ASP,andso on. lt'sjusta matterof findinga bunchof confusing probablyinvesta bit in computingtechnologiesl And in forest isn't it? way this it becameclearthat the Aftera monthof surveys,talks,desk research,conferences, ercewjqiqst a miragedesignedby lT suppliersto justifythe use of conceptof companres were ânos theircomp investingin e-commercewith the strongbeliefthat the onlyobjectivewas to sell on-line,to And because avoiddistribution channels(theywerecallingthis:'disintermediation'). job, projectswere is never easy these huge e-commerce of new technology an integration finallydeliveringno morethan 'weh brochures' 'Valuefor Customer'becameDerryand thatcouldbringnewvalueto the Chrismotto:whatcanwe do, usingnewtechnologies customer?lf newvalueis createdfor customers,valuefor SozY wouldbecomea consequence. 5 mainConceptswere retainedby the teamas the foundâtionof SOZY'Snewstrategy: Stopthinkingthatsellingon-lineis the panacea ('Thisis notaboute-commercel')

Transfer anytaskthatcanbedoneby a to a computer computer ('Focus people on hiqhvaluetasksl')

>>>Embedrealaddedvalueto the customer ('Thisis aboutValue!')

>>>Embedrealaddedvalueto the Company ('Thisis aboutefficiency - $,Ê,€!')

>>> Differentiatecustomers,customise, marketing& sales Stopundifferentiated differentmessagesto differentdecision âpproach.Optimise ('Domorewithless,improveefficiency!') makers,... ('Seqment, Tarqet& Focus!') >>> intimacy, make Capture,retain,usecustomer Buildon our Customer protltof it Knowledge ('Knowledge ('What'sin yourbraincannotbe usedby management & database!') others!')

Cillet@Chaleau-Bâllav.com O Chnslopl,c

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ESCLILLE/ llt4lM/ lnùoduclion LoCRM- Jan06

'MagicLoops' Consider thatsalesis notjustan eventbut >>>lmplement . interactmore> knowmore> adaptmore> a cycle ('Stopthe groceryapproach!') SatiSfV more > ... backtosrs.r-crose ùe loo! . sell > learn > improve > satisfy > ... r""t ro

This approachwas presentedby Derryand Chrisas an innovativestrategyto the board, withoutindeedinsistingtoo muchon theirsourcesof inspiation('121matueting/ PeppersRogers', 'Rethinkingthe SalesForce/ NeilRakham', 'Leadingthe Revolution/ Gary Hamel', 'CompetitiveStrategy/ MichaelPodef, 'New Rulesfor the New Wotld/ Eddie Obeng') 3- From theory to practice Havinggot the greenlightfrom the board,Derryand Chris,an interestingmix of pragmatismand creativity,agreedthat a goodstartingpointshouldbe to splitthe projectin two. Derrywouldstudythe projectfrom ân lI perspective(whichtoolswerealready existinginsidein the company,whichdatawereavailable,whatwerethe featuresof these proposed ...). Chriswouldfocuson theway by severalsuppliers, solutions magic'CRl\4' to usethe tools,the way to createvâlueto the customersand to the company.Both tasksto expertsin theirteams. allocatedinvestigation Reportsstartedto pile up on theirdesks... Reportfrom Marketinq(excerpts) wouldbe relevantin orderto ... You'veaskedus to definewhattypeof segmentation and our efficiency. In ofderto answer with customers/partners improveour relationship this question,we âssumedthat we wouldbe ableto captureinforlnalian€bqgljg1glg9, abouitheirbehaviours,abouttheir needs,in orderto servethem better. Wed-ôh'tlêllêVé usingcotfùièrs but if you say it ... afterall, you are the experts! thâf]hÈ-î'po--ssibfdFy Èieaseconsiderthe followingbackgroundinformation: bul alsopartners, whichincludes notonlycustomers, . We livewithina globalcommunity journalists, ourownstaff,... All of themhaveto be takenintoaccountin a distributors, seriousCRMstrategy,sinceall of them havea stakeholderroleto play in our marketing approach.And for eachof themwe considerdifferentlevelof accessto information. pricelistto our (Rememberlastyearwhenwe sent by mistakeour dealers/distributors mâincustomers?)

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are basically our community members roles,background, on theirprofiles, : Depending requestingfrom us 3 typesof information: technologywhite . a) Technologyinformation(brochures,specs& characteristics, papers,etc ...) b) Strategyinformation(reports,surveys,pressreleases,industrydata,research, events,...) trends,visiondocuments, c) SalesInformation(prices,promotions,catalogues, by marketratherthanby product.We don't . We have,2yearsago,decidedto reorganise see any reasonsto modifythis approach.We wouldevenlike,if your lT stuffpermits,to improveour efficiencyby customisingour messagesto our 6 differentsegments. '''

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'--''----a recentsurveyhas shownthat we have You will probablybe interestedto k-hoYfiFât weaknesses,expressedby customersas follows: seriouscommunication o ChristophcGillet(achaleau-Bailav.com

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ESCLILLE/ lMlM/ Introduclion to Cml - ..|' E

"Wecan neverfind the info we want..." "Yourprice listsand product info are always outdated" "l don't understandtechnology,lwant strategicinfo, case studiesand customers testimonialin orderto takemy decision..." 'Why don'tyou put your databaseson the web? I couldget whatI wantimmediately without losingmy time caltingyou guys" "Whydidn't you tell me that there was a promotion last week? l've lost the oppoftunity. Why do you treat me like that?" "l would like to know how other customersin my domain use your prcducts" "l haveno timeto loosechasingyou on thephone ..." "My workinghours are different from yours. ln my industry we work at night. Iwant to get info from you when I need it, wouldit be in the middle of the night "t'm fed up by your Productbrochuresfull of technicalstuff. I cannotunderstand benefits,solutions,case studies.Not that. lwant Retumon lnvestmentsimulations, technology" "t'm fed up with your solutionand financialstuff. I'm an engineerand l'm looking for the usermanualof the DSR 1o0NP" "l'm a joumalist and if you would like me to wite about you guys, you should seriouslyavoidto sendme all thistechnologyand salesinformation.That'snot what l'm about!"

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{'(r( ),Ulrd couldhandle3 segmentation That'swhy we wouldrecommendcreatinga webtocilthat Âl

dimensions: 1) AccessLevel/ Confidentiality a. DirectCustomers(buyingfrom us directly) (buyingthroughdealers) Customers b. Indirect c. Dealers& Distributors d. Journalists e. Partners f. InternalStaff ...ênddecided tofocusonlyon5 types) 2) IndividualProfiles(wegavethemnicknames a. Techie(wantsTechnologyinfo) b. Opportunist(wântSalesinfo) c. Journalist(wantStrategicinfo) info) (wantSalesANDStrategic d. Purchasers e. User-Buyer(wantSalesand Technologyinfo) 3) Market/ Industry a. Broadcast b. Production/Post-Production c. Medical d. Security e. CorporateCommunications & Industrial f. Business to createvaluefor all areendless... lf we cando this,the opportunities

O ChristooheCillet@Chaieau-Bal;ey.corn

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ESCLILLË/ l[4llV/ lntroduclion to CRM-Jan m

Reportfrom lT Deoartment(excerpts) ... Youve askedus to analysewhichtools& databaseswere alreadyavailablein the company.whichspecificCRMsoftwareare currentlyavailableon the marketplace,which kindof application andfeaturesare currently usedby colleagues in similarindustries, and whatwouldbe our recommendations in casewe proceedimplementing a CRMtool. ln orderto makesurethat our viewpointis understandable by all,we useda 'non-lT' language. We'vediscoveredthat a numberof dataaboutcustomers(at leastthe onesinteracting withus, i.e.:Directcustomers and Dealers/Distributors) arealreâdyavailable in our directly (the prices, financedatabase one usedfor invoicing, i.e.: discounts schemes, addresses, w-È-âfhâsTèên-bought and when,...). We caneasilytodaygel access,if this is usefulin a way or another,to all pastinteractionsand extractsomestatistics.On the top of this,we that is sleeping discoveredin the marketingdepartmenta massiveamountof information but in PCsandarchives usermanuals, sparepârtshandlers, ôlcaldrawings, Similarly, alltechnical information, in an electronic formbutnotusedthatway. lt seemsthat etc ... arealreadyavailable prefers papers to exchangetons of by mailand couriers. everyone we noticedthat theywere By the way, havingdiscussedwith the salesdepartment, with customerson a man-to-manbasis,by phone. In fact,they handlingall interactions preferto havetheircustomerscallingthem 10 timesa day for priceinformationratherthan makinga pricelist availâbleon the web. Theysay theywanttheircustomersto be 'captive'. We mayexpeclsomeform of resistancethere. so far is a toolthat could Whatwe missin our infrastructure with customers interaction a) allowcustomised b) interfacewith our existingdatabases c) manageblocksof informationto be thenpackagedand distributedaccordingto criteria certainsegmentation The goodnewsis that now,technologyallowsany ofthe above,plusmore. Thereare on the marketplaceandtheonlyproblemwe'llhaveis choice. severalsuppliers for our marketingguysseemsto be the ïtre find of featuresthat couldbe interesting following: - storingindividualdatafor each customer(by askingcustomersto register/ declare preferences and/orby observinghis behaviour) (wecallit in ourjargon'dynamic webpagesfor eachcustomer building customised pages').lt meanspractically that2 users,askingfor thesameinfoat the sametime, may wellget answerspresentedin two differentwaysdependingon theirprofiles) eachdocument,by a set of parameters,like each pieceof information, - identifying marketsegment,typeof information, etc ... so that we are levelof confidentiality, sureto presentit the rightway,to the rightperson.

@ Clristoole [email protected]

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ESCLILLÊ/ Ml[,l/ lntfoduclion lo Cèv - -Âr :E

Reportfrom SalesDeoârtment(excerpts) ... You'veaskedus what couldbe the benefitsof puttingin plâcea CRMtool for our andconsultation withoursales andfor ourcompany.Afterdeepdiscussion customers staffand channelpartnels,we'd liketo reportthe followingcomments. in thefollowing areas: We see(sofar)opportunities sales: a) Increase - Crossselling - On-LineDromotions packages renting,etc ...) andservices(leasing, offinancial - Easytreatment ('Youboughta projector oneyearago- it'stimeto thinkabout reminders - Automated the lâmp- clickhereto buy') changing b) Decreaseworkload finderson-line - Pricelistsandproducts (to help choosing a product) - Helpagentson-line - E-commercefor spareparts,accessones,... etc ... Web ordering, Checkavailability, - Do lt Yourself: c) lmproveefficiencY of end-of-lifestock - On-lineDromotion graded products of Auctions / all digital& paperfree= lowcost - Promotewebcommunications - Lesscostlyphonecalls,face to face meetings, d) AddValuefor Customers sales - 24 houts tTdaya week availabilityfor trânsactional journey - Easier/ Quickercuslomer Tricks, UserManuals, Accessories, - Help:Configuration, for me customised the right time - The rightinfoat - Loyaltyschemes VVehoweverhavesomeseriousconcernsin the followingdomainsthât we wouldliketo discusswithyou moredeeplybeforeany decisionis taken: - Howto evolvelhe roleof our existingsalesforce? - Shallwe keepcontrolof our customers? a formof channelby implementing - Arewe aboutto killour distribution disintermediation? project, whichneedsa stepby stepimplementation - Thisis a hugeand destabilising reactions.Howarewe goingto planthis? in orderto avoidemotional countries, multiplelanguages, howshallwehandlemultiple - We are Europeans, contracts? multiples distribution schemes, discount multiple _ thinkingaboutsomeformof we'dliketo recommend ii*e areto mouein thatdirection, to our customersand dealersto usethe web. Theyare not yet familiar incentive/reward trainingour ownstaffwillbe a needa bitof 'push'.Similarly, withthetoolandwillprobably must. periodwillhaveto be putin place,duringwhichthe old to saythata transition Needless the new'webbased'mechanism. willhaveto runin parallelwith 'face-to-face' mechanism

Balla),.com OChdstopheGill€r@Chateau

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I

I

ESCLILLE/ ll,4llt4 / Introduclion to CRI', Jan06

Messaoef'qn the CEO(excerDts) ... I'd likero stressthat the CRMstrategywe are currentlyinvestigating is not aimingat replacirEour salesstaffby PCs,nor replacingour distributorsby web sites,nor impleme.rting e-commercefor the sakeof usingInternet. Technology is simplyavailable nowto enablemoreserviceandvalueto customers while improvingcorporateefflciency.This is the way forward.We canlake the leadin this difection andgetsomebenefits of it, or waitandwalchotherseatingus alive.lsuppose in that the horsecab drivers 1890had the sameemotionalreactionwhenthevsawthe first cars Thisapproach willmeana dramatic shiftin mindsets, a sortof culturalchange.Because informationbecomemoreand moretransparent,becausethe role of sâlespeoplewill haveto evolve,becausetherewill be no morewaysto justifytasksthat are not adding valueto thechain Let me sharewith you the 3 mainlessonsl've learnedfrom my own investigations in the CRMd o m a in: - Firstly,a goodCRI\4strategyis a strategythat involvesall functionsin the company: butalsoaftersales,finance,Humanresources, notonlysalesandmarketing etc ... with customersare at the sourceof the entirestory. All - Secondly,interactions interactions: by phone,by web, by faceto face,by videoconference. circles': the the secretof successlaysintothe conceptof 'loops'or 'virtuous - Thirdly, moreyou interact,the moreyou learn,the moreyou improve,the morevalueyou .... offer,lhe moreyouengageinteractions,

INA 2 PAGENOTE: PLEASE SUMMARISE NECESSARY? WHYIS A NEWSTRATEGY WHATHASTO CHANGE? HOWTO CHANGE?

o Chrjsto!heGillet[rChaleau-Ballav.com

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