Realising the. potential. of Customer. Relationship. Management
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1 Realising the potential of Customer Relationship Management
2 Realising the potential of Customer Relationship Management Contents Foreword 2 A customer focused strategy 3 The multi-channel approach: the volume channel 4 The multi-channel approach: the value channel 8 The netcentricity opportunity 9 Delivering ROI 10 The benefit of our partnership approach 11 Futures - realising the full value of CRM 13 The key to success 14 x
3 Foreword Delivering a real return on investment from customer relationship management (CRM) has become a strategic issue for all commercial organisations across the private and public sectors. This is particularly important as the world of CRM is changing at such a tremendous pace. Contact centres, the key to unlocking the potential of CRM, are now much more than places where calls are taken. They are multi-media, multi-channel environments, receiving instructions around the clock via text message, voice, online, channel partners and field sales and service staff. At BT, we are leading practitioners of CRM in our own right. Within BT Retail alone we have 21 million customers undertaking 12 million transactions everyday, through 20,000 agents, 16,000 field engineers and 2,500 sales people. Using Siebel-based systems, we are revitalising our call centres to create a network of 31 of the most sophisticated next generation contact centres in Europe. They will deliver improved customer satisfaction, ensuring every customer transaction is simple and complete, regardless of the channel through which it is handled. Having developed our own CRM capability, we are now working in partnership with Siebel Systems to deliver effective solutions to our clients. Together we will ensure that the learning and experience gained during this transformation period can be passed on - either as a bespoke system built to meet a specific need, or as an out of the box package. We sell what we use and we use what we sell, so we have first-hand experience of how best to implement the change process. This is much more than just an IT project, it s about transforming the way a business thinks and behaves. When CRM is working at its best, it will improve customer satisfaction, reduce costs and equip advisors with the tools they need to deliver a great customer experience. Businesses across the country are looking for both the management expertise and technology to help them build and implement the systems to achieve CRM and make it deliver. By working in partnership with us, we hope they will be able to achieve a real return on their investment. Foreword P Danon CEO BT Retail June 2003 x 2
4 A customer-focused strategy BT s business strategy is guided by four core priorities: Improving the customer experience Cutting costs Defending our core business Growing new revenues from businesses such as mobile, broadband and ICT To realise this strategy we are focusing on putting the customer at the heart of our business: reviewing all our processes to ensure that they are driven by the needs of the customer, rather than what suits us, and driving new internal programmes to ensure all our people are completely focused on delivering the best possible customer experience. We recognise the difference between good customer advice and bad customer advice, with a single advisor with poor customer handling skills estimated to cost a business around 300,000 in profits. So we must work tirelessly to equip our advisors with the tools they need to do a good job. During the last two years, new strategic initiatives have been launched to help embed this customer focused strategy in our culture. Our My Customer initiative is focused on ensuring we are customer-focused right across our business. It encompasses role-modelling techniques, in particular demonstrating senior management commitment, as well as helping our front-line employees address the customer issues they face every day. Part of the launch programme was a high-impact Back to the Floor initiative where 500 senior managers worked in customer facing roles and all customer-facing teams were asked to identify three issues to resolve as well as one to escalate. In total, 2,000 customer issues have already been identified as part of the programme with 400 already resolved. We have also reviewed our infrastructure and IT systems. By approaching CRM in a multi-channel context we will improve the customer relationship, enabling customers to talk to us through any channel, be it phone, fax, SMS or online. This also leads to reduced operating costs and accelerate revenue growth, lowering the cost of the customer relationship and, in turn, allowing us to pass some of the savings to our customers. x 3
5 The multi-channel approach: the volume control Serving our volume channel market, interacting with 21 million residential and small business customers, requires one of the largest customer service organisations in Europe. However, in 2001, resources to manage this operation were spread thinly across the company. The 150 contact centres in existence varied in size from 650 to 20 seats with less than optimal use of processes, technology and assets. A close analysis of our operations demonstrated that we needed to replace a myriad of fragmented sales management systems with a single, 360-degree view of the customer. We realised that by understanding more about our customers needs and behaviours, we would improve our ability to market to them more effectively and better service their requirements. The solution - a multi-channel approach - increases reach, capacity and capability. As well as offering this improved customer experience, it also enables a reduction in operating costs, because transactions can be migrated to lower cost channels, and accelerated revenue growth, through better targeting of propositions and lead generation. So we are revamping our consumer call centres to create 31 of the most sophisticated Next Generation Contact Centres in Europe. They are larger, multi-function, multi-media centres in which we have committed an investment of 100 million over two years for enhancement of the sites themselves, training for operators and agents and the Siebel technology which underpins them. Our volume channel contact centres now respond to 850 million inbound customer contacts every day, via phone, , our field staff and our channel partners. The 22,500 seat Siebel deployment is responsible for 12 million transactions every day. the volume channel 4
6 The multi-channel approach: the volume control Engaging our people through collaboration This transformation has meant an enormous change for our people and it would not have been possible without their commitment and involvement. So we have taken a highly collaborative approach to building our new organisation, developing a Functional Operations Review methodology to create solutions and recommendations for which everyone feels a strong degree of ownership. The Functional Operations Review is a structured process to evaluate quality, performance and costeffectiveness in a business, drawing on the detailed knowledge of those internal people who live and breathe their job everyday. It takes inputs from all levels within any given unit being reviewed and involves the representatives of the unit in creating solutions and recommendations for their particular function. At BT, the Functional Operations Review was carried out by 4,000 employees from 14 units across all our contact centre operations. These teams used the methodology to collectively identify the areas of opportunity and best practice within their individual units to help design and build the new business model - a centralised network of contact centres. Extending our capability by remote sourcing With such a large number of transactions undertaken in our volume channel everyday, we have sought new ways to maintain the customer experience whilst ensuring cost effective, sustainable resourcing. With our ability to treat remote sites as local sites, through our technology, bandwidth and network capability, we have opened two new contact centres in New Delhi and Bangalore in partnership with Progeon and HCL, as an extension of our UK network. These new centres, which will become a further two Next Generation Contact Centres, will allow us to retain our competitive edge in the global marketplace and introduce improved customer service processes in key areas. We will also able to re-insource some BT business - bringing work back to BT which it was previously not commercially viable to undertake in the UK. Our key principles that underpin this strategy are set out in our Charter for India and involve commitments on jobs and on BT s work in an international context. We have delivered a Golden Guarantee to our people which means we will not be making compulsory redundancies. In March 2003 we employed 500 people to work within these contact centres and intend to extend this figure up to 2,200 by March the volume channel 5
7 The multi-channel approach: the volume control Setting the standard: customer service Our new volume contact centres, while helping us work more efficiently, are also able to deliver the best possible service to individual customers because, however and wherever they interact with BT, the person they deal with will be able very quickly to see the full relationship context. Through a series of programmes introduced during the first phase of our strategy, customers are beginning to reap the benefits. For example: Customer satisfaction has increased - the Queue Buster pilot we introduced has reduced customer dissatisfaction with time kept aiting from 28 per cent to two per cent. The percentage of customers who consider themselves kept very well informed by BT has increased from 50 per cent to 70 per cent. Call transfers fell from 31 per cent to 4 per cent - dramatically reducing the number of hand offs that customers have to endure. the volume channel 6
8 The multi-channel approach: the volume control Opening new channels to market: BT Local Business BT Local Business, a newly created initiative aimed at extending BT s reach and business growth in the small and medium enterprise (SME) marketplace, is a further example of how CRM can deliver real benefit for both business and customer. BTLB was launched in response to qualitative research, which revealed that many smaller businesses prefer to deal with other SMEs at a local level. It provides them with the comfort of the BT brand, its reputation as a reliable supplier and its existing relationships with customers and influencers, while offering SMEs the local relationship and expertise they want. In fact, many BTLBs are run by ex-bt staff. Each BTLB has its own defined territory, targeting 10,000-14,000 customers per local business, and operates independently, but with the full support of BT. Their target customers are single site businesses and range from a one-person business offering a single product or service to companies with 50 employees. Initially piloted in six territories, the initiative is now running in around 20 areas of the UK. BT Local Business is supported by a 1,200 seat Siebel deployment and central to the whole network is access to the Siebel customer database and the wider support of BT. Via the database, customer enquiries generated from national and local marketing campaigns are channelled to BT Local Business sales people in the field. Then, in real-time, field sales people can make immediate contact with potential customers, make appointments, fix for experts to advise on specialist issues and, consequently, agree deals whilst the issue is still paramount. The Siebel database provides a central hub to really drive business forward for BT Local Businesses across the country. the volume channel 7
9 The multi-channel approach: the value channel Benefiting corporate and government clients BT currently has 26,000 corporate and government customers, our value channel, generating annual revenues of 5 billion. Our customers communicate with BT via a range of channels: through contact centres, managed by 2,200 sales and service professionals, 2,900 field sales and service agents, as well as through 80 channel partners. The web is a particularly important and a growing channel for the corporate market. We have 500 customer users of an integrated web collaboration space and 3,500 corporate-level transactions every day on BT.com. Our approach to working with this sector is centred around our integrated multimedia channel, combining our CRM platform with the expertise of ICT specialists, dedicated account teams, channel partners and web services. With Siebel support, we can deliver one end-to-end marketing process, whilst keeping a single overall view of the customer relationship. Our integrated CRM platform is helping us to forge better customer relationships with corporate and government clients, delivering improvements in customer satisfaction, reducing operating costs and accelerating ICT growth. Importantly, having been through the CRM learning curve ourselves, we are in a unique position to help our clients transform the way they do their business with their own customers. An award winning approach The technology which underpins the transformation is Siebel Converge, one of the most ambitious CRM deployments in Europe. For BT, it was a key enabler in achieving a business transformation strategy aimed at increasing sales and marketing consistency, effectiveness and efficiency, and enhancing customer satisfaction. The approach has demonstrably worked. BT recently won CRM Magazine s Best CRM Project award for large organisations in April 2003, for its approach to CRM using Siebel Converge. The judges highlighted the following key achievements: In total 5,117 people have been trained across all BT s communities 80,000 duplicate sales contacts removed, resulting in improved targeting - the contact data quality increased over a 6 month period from 71% to 97%. Replacement of 2,975 PCs and upgrade of additional 1,099 enhances employee productivity and motivation. Up to 22 data sources merged from internal and external sources User satisfaction internally averages 70% - demonstrating how comfortable employees feel with the transformational approach supported by an integrated CRM platform. The winner was a truly impressive multi-channel project on such a large scale. It had clear management vision backed up by wide ranging metrics that demonstrated true return on investment. Mark Turner, Editor CRM Magazine the value channel 8
10 The netcentricity opportunity Greater use of the web - netcentricity - underpins our entire channel strategy, both in the volume and value channels. Our Next Generation Contact Centre programme has made it easier for customers to do business online with BT, and to substitute people interactions with online transactions. This is now being undertaken across all customer segments, from consumer to business, and allows customers to view bills, track orders, report and track faults, and inspect inventories online. Increasingly, customers across all sectors are likely to conduct their business online. And there is real value in netcentricity. The adjacent chart shows the cost savings that can be made when customers undertake some of our most regular transactions online. So, in partnership with Siebel systems we are rising to the netcentric challenge and improving user journeys, introducing more online propositions and reducing the cost of ownership for BT.com. In 2002/03 our netcentric approach delivered 18.2 million benefits, much higher than the anticipated 14 million and we know that the transition and greater integration of Siebelbased systems will realise even greater benefits in future. By 2004/05 we are aiming for 50% of all order and fault tracking for major corporate clients to be handled online; 53% of all product and service information for smaller businesses to be downloaded online and 17% of all billing and payment transactions by consumers to be handled online. netcenricity 9
11 Delivering ROI Return on investment for CRM projects should be driven by hard measures - clearly measured against targets for cost reduction, cost avoidance and truly incremental revenue. It should fit against real business objectives and go way beyond being just another IT project. There should be a strong focus on benefits management, against a small number of value drivers and measured through a cycle of monitor-analyseaction. The softer benefits, whilst important to the overall transformation process, should be seen as a bonus when examining the return on investment. Through our own transformation at BT we have been focused on delivering ROI. In our mass-market, value channel transformation we are targeting a 150 million cost reduction against an investment of 100 million by 2003/04. In the value channel we are driving towards cumulative benefits of almost 68 million by 2005/06, compared to an investment of 29 million. This is being achieved through increased face-to-face time delivered to clients on complex deals coupled with more effective deployment of desk-based advisors. Better profiling, enabling better targeting and better campaigns has delivered a 28% growth in complex ICT wins as well as deskonly wins of 84 million contract value, of which 18 million is incremental. The benefit of our experience Through our own transformation process, we have realised that achieving real customer satisfaction from a CRM investment is about more than just the deployment of technology. Clients need a vision for their business. BT s vision is to provide a client centric experience in a multi-channel world. This is what drives our own Siebel deployment. We also know that implementing CRM transformation on this scale takes several years and it is crucial to understand the nature of the investment and the likely returns. It is vital to break the overall project down into discrete, easily defined stages month programmes. Meeting the early milestones helps demonstrate early on that the project will be completed with the right return on investment. 10
12 The benefit of our partnership approach We are working with Siebel Systems to help leverage the full power of the Siebel toolset and to overcome together the technical challenges our clients face. We also work closely with other partners in the areas of business change and deployment, and systems integration. We are working with Accenture to help our clients understand the businesses processes required to make change happen in their organisations and to train and coach the staff deployed in their contact centres throughout the country. Our vision is of a joined-up, automated business environment which delivers outstanding customer service at much lower cost and delivers true operational excellence in a 24x7 environment, combining specialist skills from our partners in areas such as capacity management, storage management, performance testing, enabling us to deliver to 12,000 concurrent users and deal with 90 events per second. Complete CRM solutions There are some clients for whom the expense and time implication involved in creating a bespoke CRM system, such as the one we developed for our own usage, is unnecessary and impractical - but there are cost-effective solutions which through our partnership with Siebel Systems, we are able to deliver. BT Contact Central BT Contact Central is a pre-integrated multi-channel platform designed for rapid implementation into contact centres. It brings the benefits of IP based contact centres together with Siebel CRM in a ready-to-go package that can be implemented in a fraction of the time that a conventional CRM programme would take. Essentially it is a new way of looking at call centres - it aims to offer a complete end-to-end solution that integrates e-business software and internet protocol (IP) communications technology at a single stroke. It preintegrates all the components of a multi-media contact centre - telephony, internet protocol, switching, CRM, applications, hardware and software - to handle all forms of customer enquiries, be it voice, web fax WAP or XML. Since Contact Central was launched in November 2001, American Express, Panasonic, MegaBowl, Office World and Caterpillar are just some of the companies that have signed-up. Contact Central has recently been launched to the French market, next will be the Netherlands and Germany in collaboration with Syntegra and global solutions and services provider Getronics. Contact Central s sights are now fixed on further expansion in Europe and then the US and Asia Pacific - the US enjoys a 70 per cent share of the world market which offers a huge growth opportunity. partnership approach 11
13 The benefit of our partnership approach Enabling egovernment BT also provides a range of managed and outsourcing services to provide greater flexibility for customers - often assisting clients with financing and managing the risks associated with complex transformation projects. A recent example of how BT has worked with partners to deliver services to meet specific market needs is Rotherham Metropolitan Borough Council. Here, BT, Siebel and other partners are collaborating to meet the CRM business goals in the Local Government sector. The government s 2005 deadline for all government services to be online provided Rotherham Council with the opportunity to revolutionise the way it works - both in improving access to council services and extend opening hours. So a solution was developed - a partnership of the first kind in the country: Rotherham Brought Together. This resulted in a 40 million investment over 10 years - for a multi-media contact centre in partnership with BT and Siebel. They are now managing all information and communications technology (ICT) functions, procurement, revenues and benefits, human resource administration and payroll. The new systems will enable local citizens to contact their authority using whatever medium they choose - be it by , internet, telephone or text message. The council will benefit by being able to respond flexibly and efficiently to all those types of interaction and deliver a consistently high quality response. Wider benefits include access to council services by digital TV, flexible working solutions for field workers to improve effectiveness and BT investment in staff training to improve efficiency. The council has already saved 1 million through better management of its procurement process. Rotherham will be at the forefront of modern technology, but more importantly, customer delivery. Ged Fitzgerald, CEO, Rotherham Metropolitan Borough Council partnership approach 12
14 Futures - realising the full value of CRM Within your organisation, within reason you can turn anyone into a CRM expert, but to realise the full potential of CRM requires integrating CRM with knowledge management skills and a netcentric approach. CRM delivers customer knowledge in depth. That customer data can be effectively shared through knowledge management techniques, as well as the latest news, product and process information, to ensure both a common and tailored approach. Integration with the web ultimately provides customers with a self-service offering, meaning they help build their own history, giving advisors and the customer alike a shared view of the relationship. Where the three disciplines combine truly helps achieve better informed transactions, giving advisors all the information they need to deliver the customer experience, as well as empowering those same customers to drive their own relationships with the organisation. 13
15 The key to success Research conducted by Gartner shows that, despite the current economic climate, improving customer service quality and management control of customer contacts are ranked ahead of reducing business costs. This shows that the UK market remains focused on customer management rather than cost reduction in relation to its CRM strategy. Chris Boyd, Gartner Consulting. At BT, we recognise that every business and public sector organisation has different needs and it is critical that their chosen solution meets their CRM and overall business objectives. Undoubtedly this is a challenge. But with the support of our partners, BT can create and implement effective multi-channel solutions across a wide range of platforms and infrastructures, for businesses of all sizes. We can help transform other businesses to become customer-centric operations. The added bonus is that our clients only need to have a single point of contact - BT - however they choose to contact us. Insight Exec is a CRM advisory service with over 80,000 members and 10,000 unique visitors per week. For more information about Insight Exec or about implementing CRM strategies in your business contact 14
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