PART 1. THE SCORECARD RESULTS AND CONCLUSIONS 9

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1 Contents List of figures List of tables List of contributors Foreword Acknowledgements x xii xiv xvi xvii Introduction 1 Neil Woodcock, and Bryan Foss PART 1. THE SCORECARD RESULTS AND CONCLUSIONS 9 1. What is CMAT? Neil Woodcock, Michael Starkey and 11 The scope of a CMAT assessment 11; How a CMAT assessment is carried out 18; The benefits of CMAT assessment Overall analysis Neil Woodcock, Michael Starkey and 21 Customer management performance is disappointing 21; Why the scores have declined 23; Why companies are performing so poorly, despite the investment 23; It s not all doom and gloom Customer management around the world Michael Starkey, 28 Neil Woodcock, and Sarah Boussofiane North America 29; Canada 32; Germany 33; Switzerland 34; Austria 35; United Kingdom 36; Developing Asia Pacific 37; Japan 38; Importance of these findings 40

2 iv Contents 4. Where companies can create and destroy value 41 Neil Woodcock, Michael Starkey Introducing the customer management value chain 41; Focusing on customer value Analysis and planning Neil Woodcock, Michael Starkey 47 Characteristics of the highest-performing companies 48; Examples of best practices Proposition Neil Woodcock, Michael Starkey 58 Characteristics of the highest-performing companies 58; Examples of best practices Customer management activity Neil Woodcock, 67 Michael Starkey Where value is being created (extracted from highestperforming companies) 68; Examples of best practices People and organization Neil Woodcock, Michael Starkey 77 Characteristics of the highest-performing companies 78; Examples of best practices Information and technology Neil Woodcock, 83 Michael Starkey Characteristics of the highest-performing companies 84; Examples of best practices Process management Neil Woodcock, Michael Starkey 87 Characteristics of the highest-performing companies 88; Examples of best practices Measurement Neil Woodcock, Michael Starkey and 94 Characteristics of the highest-performing companies 95; Examples of best practices 95

3 Contents v 12. The customer experience Neil Woodcock, Michael Starkey 99 Characteristics of highest-performing companies 99; Examples of best practices The role of customer information management and usage in best practice customer management 103 Dave Irwin, Clarke Caywood and Iain Henderson Introduction 103; Methodology and findings 106; General findings 107; Information management and usage findings 108; Best practices 110; Conclusions The Dutch insurance industry CMAT study Hans Neerken 121 and Roland Bushoff Introduction 121; General results 122; Direct insurers score best 122; Analysis and planning 123; Proposition 124; People and organization 125; Information and technology 126; Processes 126; Customer management activities 127; Measurement 127; Customer experience 128; Conclusions Trends in customer management Neil Woodcock, 130 Michael Starkey Customer management spend is increasing 130; Trends in customer contact channels and media The business case for customer management Neil Woodcock, 137 Michael Starkey The correlation between customer management and business performance is clear 137; Identifying the main benefits 140; Benefits as a percentage of turnover 141; The size of the investment: the 4:1 rule 142; The organization s maturity and competence in CM management 143; Summary base data used in QCi research Guidelines for successful CRM implementation 150 Neil Woodcock, Michael Starkey CM projects are far more likely to fail than succeed 150; Project implementation tips 151

4 vi Contents PART 2. MEASUREMENT, SYSTEMS AND DATA Return on investment on e-crm Mark Cerasale, 161 and Julie Abbott Introduction 161; e-crm is CRM enabled by Internet technologies 162; Back to basics for an e-crm metric 163; Learning from the mistakes of the past 164; Determining the ROI on e-crm is challenging 164; The change required is greatest on people, organization and processes 164; Publishing information 165; Interaction 166; Transaction 166; Integration 167; e-crm for cost reduction 167; e-crm for increased revenues 168; e-crm for improving cash-flow management 168; e-crm for improvements in the customer experience 169; The costs of e-crm are in technology, process, people and organization 169; Conclusions UK data warehousing and business intelligence implementation: general and retail, Julie Abbott and Tony Dobbs 172 Introduction 172; The current status 172; The research results 174; The case study 174; Conclusions Using advanced data analytics to improve customer management David Selby and Julie Abbott 178 Introduction 178; Treating the customer as an investment 179; Single-entity view 180; Implementing ECA 181; Conclusion Applying IT in customer management Bryan Foss, 193 Thorsten Gorchs, Juergen Uhl, Divya Verma, James Richie Introduction 193; The basics of systems selection 193; Recent changes 194; Implementation 196; Building an integrated IT capability for customer management 198; Future technology trends 212; Conclusions 220

5 Contents vii 22. CRM s Achilles heel: understanding the customer 221 Raymond Pettit Introduction 221; What happened to the CRM vision? 222; Where marketing and research fit in 224; The solutions playing field: what s going on 228; The closed loop breakdown 231; Customer experience management solutions: CRM looks in the mirror 238; Analytical and market research integration 241; e-research and business 243; Cultural and organizational change: a reality in organizations 248; Conclusion and outlook 250 PART 3. THE SECTORAL VIEW Managing public sector customers, 255 Alison Bond, Roger Clarkson, Peter Hayes, Peter Lavers, Clare Traynor, David Williams and Neil Woodcock Introduction 255; The challenge 257; Special issues affecting public sector customer management 258; Inter-sector differences 260; Understanding the customer 261; Translating experience between sectors 262; Delivering best value local customer service to the UK citizen 264; Measuring customer management performance 271; Case study 1: public sector CMAT 271; Case study 2: the cost of customer management 274; Case study 3: service to the elderly CRM strategy and implementation in telecommunications 281 Rob Mattison, Len Tiu Wright, Julie Abbott, Andy Brown, Dave Cox, Mike Faulkner Part 1: context and methodology 281; The vision 283; The forces 285; Part 2: case studies 287; Company W 287; Company X 288; Company Y 289; Company Z 291; Building the CRM strategy 293; Paperless complaint resolution 296; Telecom Italia 300; Overall conclusion Business-to-business CRM Genevieve Findlay, Mark Cerasale 303 Introduction 303; B2B market context 303; Effective account management, possibly global in scale 305; Customers: the final link in the supply chain 308; Measurement and CRM metrics in B2B 310; Conclusions 311

6 viii Contents PART 4. CHANNELS AND MEDIA Multi-channel customer management Matt Hobbs, 315 Mahnaz Khaleeli Changing times, changing channels 315; Definition of multichannel customer management 316; Why multi-channel customer management is important now 317; The benefits 317; The challenges 318; Seven factors driving change 319; Determining channel functionality 321; Customer experience must be the start point 322; Overcoming technology complexity 323; Organizational issues 324; Measurement 325; The economics of multichannel integration 326; Recommendations 326; Checklist Permission-based Teresa Waring and Antoine Martinez 332 Introduction 332; Ethical issues and the Internet 333; Permission-based marketing 334; Research methodology 335; Results 336; Conclusion The data lessons of in CRM Jane McCarthy and Measuring and improving the usability of new media 352 Vanessa Donnelly, Emma Reeves and Lada Gorlenko Introduction 352; Improving usability 353; Why people do not buy from Web sites 354; The solution 354; The benefits 355; What to do about it 355; Case study: putting citizens first, establishing usable e-government 357 PART 5. IMPLEMENTATION AND THE FUTURE Customer and employee loyalty Colin Livingstone and 363 Julie Abbott Happy employees, happy customers, high profits? 366

7 Contents ix 31. Declining UK customer service standards Alison Bond and 372 Methodology 373; Customer service: business fashion or worthwhile investment? 374; Benchmarking best practice customer service 376; UK companies are sitting on a customer service time bomb 378; The effects of poor service 380; Conclusion Governance and executive sponsorship in CRM programmes 384 Peter Floyd and Bryan Foss Introduction 384; Programme governance 386; The historic view of organizations and change 390; The process and style of change 390; The challenge of change 391; The rise of people, or stakeholder, power 392; A range of roles and types of leadership 393; The executive sponsor role: director, scriptwriter and producer 394; Executive sponsorship in the initial phase 394; Achieving commitment via symbolic action : the part-time acting role 395; Conclusions and implications for management Managing customers: challenges for the future 398 and Bryan Foss Branding in an era of CRM 398; Building loyalty and relationships into products 400; CRM: just like the corner shop? 402; A single vision of CRM, a single customer view? 403; Segmentation, not stereotyping 405; Competing for share of wallet 406; Managing branch customers: the local view of CRM 407; Know your bad customer: a new set of requirements 409; Retailing: to R or not to R 410; The magic of customer knowledge: dare we outsource it? 411; Understanding the customer instantly! 413; The new call centre challenge 415; e-marketing and multi-channel marketing: seamless or seamy? 416; Service: the most common contact of all 419; The unifying theme: know where you are and measure what you achieve 421 Index 423