New York University Customer Relationship Marketing Executive Summary ?INDIVIDUAL / Reading Insights. Individual Assignment #09 Connected CRM – Chapter 9 O

New York University Customer Relationship Marketing Executive Summary ?INDIVIDUAL / Reading Insights. Individual Assignment #09 Connected CRM – Chapter 9 Organization and Leadership.Read and prepare to discuss it, summarize your reading insights in 1 page based on the 3 points detailed below1.Executive Summary of the Reading:? ? 3.How would you apply those concepts to your Group Project (CRM Assessment and Loyalty Program of Sephora)? 3GFFIRS
01/22/2014
14:9:6
Page ii
3GFFIRS
01/22/2014
14:9:6
Page i
C O N N E C T E D
CRM
TM
3GFFIRS
01/22/2014
14:9:6
Page ii
3GFFIRS
01/22/2014
14:9:6
Page iii
CONNECTED
CRM
TM
IMPLEMENTING
A
DATA-DRIVEN,
CUSTOMER-CENTRIC
BUSINESS STRATEGY
DAVID S. WILLIAMS
3GFFIRS
01/22/2014
14:9:6
Page iv
Cover image: © iStockphoto.com / mikdam
Cover design: Wiley
Copyright © 2014 by Merkle, Inc. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in
any form or by any means, electronic, mechanical, photocopying, recording, scanning, or
otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright
Act, without either the prior written permission of the Publisher, or authorization through
payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood
Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the web at www
.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions
Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011,
fax (201) 748-6008, or online at www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best
efforts in preparing this book, they make no representations or warranties with respect to the
accuracy or completeness of the contents of this book and speci?cally disclaim any implied
warranties of merchantability or ?tness for a particular purpose. No warranty may be created or
extended by sales representatives or written sales materials. The advice and strategies contained
herein may not be suitable for your situation. You should consult with a professional where
appropriate. Neither the publisher nor the author shall be liable for damages arising herefrom.
For general information about our other products and services, please contact our Customer
Care Department within the United States at (800) 762-2974, outside the United States at
(317) 572-3993 or fax (317) 572-4002.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some
material included with standard print versions of this book may not be included in e-books or in
print-on-demand. If this book refers to media such as a CD or DVD that is not included in the
version you purchased, you may download this material at http://booksupport.wiley.com. For
more information about Wiley products, visit www.wiley.com.
Library of Congress Cataloging-in-Publication Data:
Williams, David, 1963Connected CRM: implementing a data-driven, customer-centric business strategy/David Williams.
pages cm
ISBN 978-1-118-83580-7 (cloth); ISBN 978-1-118-86312-1 (ebk);
ISBN 978-1-118-86319-0 (ebk)
1. Customer relations—Management. 2. Relationship marketing. 3. Strategic
planning. I. Title.
HF5415.5.W5823 2014
658.8 012—dc23
2013044784
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1
3GFTOC
01/09/2014
14:23:55
Page v
Contents
Preface vii
Acknowledgments xi
PART ONE CONNECTED CRM
(cCRM) 1
Chapter 1
History: There’s Never Been a Better Time
to Be a Marketer 3
Chapter 2
Macro-Trends: A Perfect Storm of Big
Data, Digital, and Direct Consumer
Engagement 15
Chapter 3
Industry Perspective: Business Model
Matters 27
v
3GFTOC
01/09/2014
vi
Contents
14:23:56
Page vi
Chapter 4
Connected CRM: Building Customer
Strategy as a Business Strategy 61
Chapter 5
Customer Strategy: Creating Your
Competitive Advantage 71
Chapter 6
Experience Delivery: Finding the Sweet
Spot for Expert Customer Integration 107
Chapter 7
Financial Management: You Can’t
Optimize What You Can’t Measure 133
PART TWO cCRM OPERATING
MODEL 155
Chapter 8
Infrastructure and Process: Dismantling
the Silos That Hinder 157
Chapter 9
Organization and Leadership: Permission
Is Not Sponsorship 183
PART THREE WHAT’S NEXT? 203
Chapter 10 Making It Happen: Realizing Your
Customer-Centric Transformation 205
Notes 223
About the Author 227
About Merkle 229
Index 231
3GFPREF
01/09/2014
13:24:27
Page vii
Preface
There is only one valid de?nition of business purpose:
to create a customer.
—Peter Drucker
It’s been 60 years since the proli?c Peter Drucker declared,
“Because the purpose of business is to create a customer, the
business enterprise has two—and only two—basic functions:
marketing and innovation. Marketing and innovation produce
results; all the rest are costs. Marketing is the distinguishing,
unique function of the business.”
After all this time and boundless technological progress,
Drucker’s fundamental truth still holds, maybe even more so
today. Simply put, I believe when companies embrace an
approach based on “customer strategy as a business strategy,”
they can create sustainable competitive advantage.
I’ve spent more than two decades entrenched in the customer
relationship marketing (CRM) business. And although CRM
has always been centered on the objective of improving relationships with customers, it has evolved from CRM 1.0, which was
vii
3GFPREF
viii
01/09/2014
13:24:27
Page viii
Preface
heavily focused on the software and technology required to
manage customer relationships, to the present-day CRM 2.0,
which is more about the experience. Today’s focus is more about
creating a direct dialog with our customers, maximizing their
lifetime value, ?nding new customers who behave like our best
ones, and ultimately maximizing return on marketing spend and
shareholder value. So what quali?es me to write a book about it?
Well, I think it’s safe to say that marketing executives aren’t
like ?re?ghters and rock stars. Little kids don’t grow up aspiring
to become CRM gurus, and I’m no exception. But as it happened, I did aspire to be an entrepreneur. Instead of doodling on
my notebooks in school, I was constantly sketching product
designs, business plans, and organizational structures. In fact,
from the time I was eight years old, I knew my purpose in life was
to be a business owner. It didn’t really matter what kind of
business; in fact, my ?rst proprietorship was a landscaping
company that I started in college. When I was 22, I went to
work as a broker for a Philadelphia-based investment bank, with
the ulterior motive of ?nding a way to acquire a business that
had a potential for greatness.
At the time, I had a client who was looking to sell his small
data processing company, called Merkle Computer Systems, Inc.
Having been unsuccessful at convincing him to let me represent
him in the sale, I began to consider the possibility of buying it
myself. With the help of an investment from another client, I
began the process of acquiring Merkle in a leveraged buyout.
Before I knew it, at the age of 25, I was the CEO of a $3 million
company, operating in an industry about which I knew virtually
nothing. As Merkle’s twenty-fourth employee, I underwent the
usual onboarding procedure, with sink-or-swim training on the
company, industry, and business process. What had I gotten
myself into?
By the early 1990s—as data collection and management
methods improved and analytics became more sophisticated,
working together to inform marketing programs with targeting
3GFPREF
01/09/2014
13:24:27
Page ix
Preface
strategies that made response rates soar—the direct and database marketing industry began to explode. I was hooked. I could
see the boundless opportunity before me, and I could visualize
Merkle’s potential to stand the test of time. Toward that end, my
unwavering objective has been to assemble a world-class team
with a common commitment to building a great company and
becoming a market leader. Staying at the forefront of innovation, we evolved from data processing to database marketing to
customer relationship marketing, developing solutions that help
the best brands in the world build competitive advantage.
Ours was one of the ?rst marketing services companies in the
industry to introduce analytics as a core service offering, attracting iconic brands such as MCI, Procter & Gamble (P&G),
Marriott Vacation Club, British Telecom, GEICO, Capital
One, and Dell, to name a few, who effectively launched Merkle
as a brand. Many are still clients today. And with consistent
20-plus percent compound annual growth, our company has
become a $350 million enterprise, placing it among the ranks of
top global CRM agencies.
In my career, I have witnessed the ongoing evolution of data,
analytics, and technology. As these disciplines have gained
momentum in their ability to improve marketing performance,
they have made an irrefutable impact on enterprise as a whole.
It’s true that a highly targeted, accountable, and measurable
approach enables personalized customer experiences that today
make true customer centricity a reality. These optimized experiences solidify relationships, encourage loyalty, and cultivate
advocacy.
Consumer expectations and buying behaviors are evolving,
and it’s not just about the media and channels they use to interact
with brands or about how tech savvy they are. It’s also about a
loosening of the reins with which they control their information.
Today, there are generations of consumers who have grown up
in the digital age. They never knew a life without the free ?ow of
information and therefore don’t feel as threatened by it. These
ix
3GFPREF
x
01/09/2014
13:24:27
Page x
Preface
and other dynamics are making it possible for marketers to
access vast new streams of reliable customer data. Companies
that use this data and master CRM as an organizational competency will thrive. To do this, brands must put the customer at
the center of their business strategy. What marketers have been
talking about in theory for more than a decade is now a reality.
We now have the power to communicate with individual precision to the right person with the right message at the right time
through the right touchpoint.
I think it’s safe to say as marketers we all have an appreciation
for the value a customer-centric approach brings to the success—
indeed, the survival—of our businesses. In fact, I would venture
to declare, to that point, that most readers of this book will
say, “You had me at hello.” So I’ve written Connected
CRM: Implementing a Data-Driven, Customer-Centric Business
Strategy to go beyond the what and why, with the intention of
helping businesses delve into the how. How to gain vital executive
sponsorship, develop overarching customer strategies, de?ne
measurement platforms, execute campaigns, and make the necessary operational preparations that will bring a customer-centric
business strategy to life—in other words, how to monetize your
customer strategy.
3GBACK
01/09/2014
12:37:51
Page xi
Acknowledgments
For several years now, I’ve wanted to write a book about the role
that big data, digital, and technology play in driving customer
centricity. A great deal of patience and the help of the best team
in the business have proved over time what I’ve always known in
my gut to be true: Building customer strategy as a business
strategy is instrumental in fueling sustainable competitive advantage for companies. For 25 years, I have worked with colleagues
whose passion for world-class customer relationship marketing
(CRM) runs as deep as mine. I could realistically list a few
thousand contributors who have come and gone throughout the
history of Merkle’s CRM evolution, in?uencing the philosophies
that our company is built upon. And although the indirect
contributors are too numerous to mention by name, a handful
of individuals have lent their time, talent, and unequaled
xi
3GBACK
xii
01/09/2014
12:37:51
Page xii
Acknowledgments
expertise speci?cally to the creation of this text, and to them I’d
like to extend my appreciation.
To my venerable team of executive partners who work side
by side with me each day, with the single-minded goal of
building a great company, molding the foundation upon which
Connected CRM (cCRM) is built, and guiding our team
through its evolution: Thank you to Craig Dempster, Steve
LaValle, John Lee, and Will Bordelon for your roles in framing
this book and helping me set the vision for its message. To
Jeaneen Andrews-Feldman, thank you for your tireless leadership in this effort, building the strategy for the book and seeing
it through from inception to completion.
For digging deep into your experience archives to contribute
the colorful stories that illustrate the power of cCRM, thank you
to Brian Crockett, Ed Forman, Patrick Hounsell, Matthew
Mobley, Scott Nuernberger, Marc Ruggiano, Leah Van Zelm,
Peter Vandre, Kevin Walsh, Mark Weninger, and Bob Wood.
A special thanks to Sherri Aycoth, without whom this project
wouldn’t have left the ground. Starting with our ?rst concept
meeting and through many iterations along the way, the
momentum we built gave me the con?dence and discipline
to make this book happen. For your countless hours of contribution, for being my sounding board, for organizing my
thoughts and helping bring my vision to life, you have my
gratitude.
In addition, to my esteemed colleagues within Merkle; I have
had the honor of working alongside hundreds of world-class
brands over the years, constantly seeking ways to optimize
engagement with customers and make marketing communication more effective, more ef?cient, and more relevant. I would
like to acknowledge these valued clients and partners, whose
successes, failures, and experiences in between have been the
lessons that helped shape the foundation for today’s brand of
data-driven, technology-led CRM. And speci?cally to the clients
who allowed us to mention them in this book, thank you for
3GBACK
01/09/2014
12:37:51
Page xiii
Acknowledgments
sharing your stories that helped us illustrate the cCRM
phenomenon.
And ?nally, thank you to my family, who patiently dodged my
erratic schedule while I was juggling this book with my ongoing
duties as chairman and CEO of a growing corporation. The
sacri?ce is not lost on me, and I am grateful for your support
through my every lofty goal or impulsive whim.
xiii
3GBACK
01/09/2014
12:37:51
Page xiv
3GC01
01/13/2014
8:33:37
Page 1
PART
One
CONNECTED CRM
(cCRM)
3GC01
01/13/2014
8:33:37
Page 2
3GC01
01/13/2014
8:33:37
Page 3
Chapter 1
History
There’s Never Been a Better Time to
Be a Marketer
Thinking back over my 25 years of leading a marketing services
organization, I can’t remember a better time to be a marketer.
How did we get to this place of unprecedented opportunity?
Today’s leaders have always talked about some form of one-toone marketing, target marketing, database marketing, direct
marketing, customer-centric marketing, or customer relationship marketing (CRM). Whatever you call it, we’ve always
known the importance of using customer data to create and
manage lasting relationships. However, execution-wise, much to
our chagrin, we were limited in our ability to make it real. We
lacked the capabilities to utilize the massive quantity and diversity of available data in order to cultivate individual relationships across disparate customer segments, multiple channels and
media, and divergent organizational silos. But now, marketers
can achieve mastery over customer engagement and create
lasting competitive differentiation for their organizations.
In the past quarter-century, those in the ?eld of marketing
have made tremendous progress in using analytics and
3
3GC01
01/13/2014
4
8:33:37
Page 4
CONNECTED CRM (cCRM)
information to create effective media targeting strategies and
maximize media reach and ef?ciency. The use of data has had a
meaningful impact on marketing and, in fact, led to the extension of the entire subindustry of direct marketing. From 1990 to
2010, that industry experienced immense growth, primarily as a
result of the highly targetable nature of the discipline and the
impact of advanced analytics, which have become the foundation of today’s CRM. Historically, CRM has largely been about
creating relevant messaging, effective targeting strategies, ef?ciency of marketing spend, and so forth. It was more about
?nding speci?c application vendors that could drive great results
for more narrowly de?ned media and targeting objectives, such
as boosting campaign response rates, improving call center
ef?ciencies, and increasing sales conversions on the website.
We became incredibly skilled at developing very sophisticated
modeling techniques, which dramatically improved results. And
the direct marketing industry exploded.
But the most important component of a truly customercentric strategy remained elusive: the connections among all
the working parts. We couldn’t effectively bring together the
comprehensive customer and prospect data from all the various
media and channels—their characteristics and preferences,
their expectations and demands, their purchase motivations
and behaviors.
Even as access to more diverse sources of data from numerous
online and of?ine customer touchpoints began to increase, we
lacked the technology and expertise to process it in aggregate
and gain insights from its bounty. The high-level models we were
building were only as predictive as the data that fed them. Our
analytics didn’t incorporate the rich, powerful, and diverse data
that today allows us to build the exceedingly complex models
that drive more meaningful results. Where analytical pro?ciency
traditionally drove results more narrowly centered around
media and channels, it now encompasses the entire customer
experience.
3GC01
01/13/2014
8:33:37
Page 5
History
My prediction is that if we put that same analytic strength into
the broader viewpoint of building customer strategy as a business strategy, we will see a similar explosive impact on industry
growth. When I say “customer strategy as a business strategy,” I
am talking about building the entire approach to business
strategy based on the needs, behaviors, and lifetime value of
customers across the gamut of the relationship, from marketing
and sales to service and billing. A whole new breed of business
model has emerged based on this concept.
A pioneer in building a world-class brand around a customercentric business strategy, Capital One really got it right early on.
From a media-based perspective, the ?nancial giant took an
unprecedented approach to building its business around direct
mail and loyalty. Starting off as a small credit card spin-off of
Signet Bank in the mid-1990s, the startup has become one of the
most powerful players in a market full of deep-rooted giants. Its
“What’s in Your Wallet?” campaign and corresponding rewards
program uses an information-based strategy that revolves
around the customer and incorporates analytics, technology,
and a deep, vast proprietary database. As a classic channel
example, think of Amazon, which built an empire by creating
a world-class consumer experience and used information to
create competitive advantage. The e-retailer came out of the
gate with the ability to observe, analyze, and understand purchase behavior to expose customers to the most relevant content
and make meaningful recommendations at every interaction.
This placed it leaps and bounds ahead of less customer-centric
competitors right at the outset.
At the risk of stating the obvious, it’s true that data capture is
at the heart of CRM. To target at an individual level, you must
have some way to connect each data point to the individual. In
the early years of customer-centric marketing, all we had were
names and addresses of customers and prospects. Our objective
was to collect as many names and addresses as possible so that
we could mail printed p…
Purchase answer to see full
attachment