Case Study

Grey Worldwide: Strategic Repositioning Through CRM

Q1. Analyze the Asian CRM market. What opportunities and threats could grey WW HK/ China leverage to enhance its business model?
Ans1. The Asia-Pacific CRM market has good potential for growth: and AMR research claims it will be worth US$16.8 billion by 2003. China is the most attractive market because of its opportunities and because it has no technology legacy; it is thus easier to implement stateof-the-art technology.

Although Grey is competing with all players in the communications industry, management consultants, and marketing and business consultants, there is no player that has the necessary market knowledge and expertise to successfully implement CRM in Asia. This is partly because executing CRM in Asia is less certain than in North America and Europe, as the region has idiosyncratic economic maturity and fragmented CRM needs.
Grey already has knowledge expertise and it competes aggressively in that space. However, it needs to build its CRM execution and implementation capabilities. The most viable option may be to outsource implementation and to continue focusing on providing outstanding value in strategy and building on knowledge management. This will allow Grey to enhance its business model because it saves execution learning curve costs, and by building CRM implementation expertise it can move into the high-knowledge and highstrategy execution space, a space that has less competitive pressure and higher margins.

Q2 (I). What is your understanding of CRM? Q2 (II). How can Grey WW HK/ China pursue the development of CRM?
ANS2 (I). CRM is being adopted for two reasons: 1. To create a standing of individuality by differentiating themselves 2. To adopt a Complete understanding of the customer, aimed at retaining them. CRM is a disciplined, holistic approach to identifying, attracting and retaining customers; it helps companies become truly customer-centric. CRM builds on the concept that all customers are not created equal; the 80/20 rule of thumb (80 per cent of profit is generated by 20 per cent of customers) can help companies to identify their key customers, and to ensure that relationships with them are optimized. CRM involves three important steps: 1. Identify current and potential customers 2. Differentiate between individual customers 3. Customize marketing mix offerings to meet the needs of individual. These steps form a continuous cyclical interaction, which means CRM does not stop at any stage. The process of identifying, differentiating and customizing continues in order to see whether a company is measuring up to customers expectations and to find out what its customers are doing and not doing.

Ans2 (II). In any industry, competitors have a single goal: to take customers away from the incumbents. Grey is currently facing competition from players not just within its industry, but across different industries management consultants, traditional agencies and pure on-line players that are equally interested in developing a CRM focus. Technology is not only the main change driver, it has become an egalitarian force that places the power of information in the hands of the players large and small, new and old. Grey may exercise a few options: Option 1: Grey can partner with CRM providers. Option 2: Grey can acquire a CRM provider. Option 3: Grey can form its own CRM unit as a consulting branch to help clients decide on and formulate a CRM strategy. Creating a CRM unit is advantageous especially when an agency has a wealth of information it receives from many of its clients who are testing out the CRM waters. The benefit of building an IT or technical department is that a company then has the advantage of having knowledge about different tools and thus the capability to recommend the most appropriate one(s) to each of its clients.

Q3. Compare traditional customer service with CRM. What traditional business assets can Grey WW HK/ China rely on and how it can leverage them to capture e-marketing capabilities?
Traditional CRM
Focus Primary channels Primary asset Applications Company-centric Phone, face-to-face

GRM
Customer-centric Traditional channels plus on-line (web, e-mail, chat) Customer data, knowledge content e-commerce, e-marketing, e-service

People (agents)

Sales force automation, support/help desk Customer data Historical view usage

Personalise, up-sell, cross-sell, proactive selling

Traditional Business Assets to e-Marketing Assets 1. People Knowledge to Knowledge Management Grey strength is its people and expertise). Their experienced and consistent team is a critical corporate asset; knowledge is an asset from which Grey can benefit, and knowledge management can capture that asset. KM is defined as a business model that embraces knowledge as an organisational asset to drive sustainable business advantage. Business Intelligence is another CRM tool that Grey can leverage to discover hidden knowledge in existing data; For traditional advertising firms such as Grey managing corporate knowledge is crucial because it can lead to better client understanding and can provide Grey with continuous learning on how to best serve its clients. 2. Sustaining talent as part of CRM process A major market challenge for Grey is the pressure of keeping key talent, as Grey is losing some of its high-calibre people to clients. Attracting and retaining competent and talented people and tapping into their pool of potential creativity requires recognition from the management that human capital has a human face.

Q4. How can Grey WW HK/ China redefine client value using CRM; what differentiation technique should it employ?
Ans4. Given the waning ability to rely on traditional forms of differentiation for competitive advantage, Grey cannot rely solely on Grey Worldwides brand equity to generate sales and retain existing customers. However, CRM capabilities can use embedded client information and technology to redefine a companys value proposition to its clients in several ways: 1. 2. 3. 4. Client Information Profiling Customers Segmenting Customers Building Lifetime Value Customers.

Q5. How can Grey WW HK/ China integrate its back-end and front-end processes to enable a customer-oriented CRM process based on its existing business strengths?
Integrated CRM, knowledge management and business intelligence tools Front-end operations means working to create satisfying experiences at all customer touch points, while back-end operations involve application integration (for example, integrating incoming e-mail and telephone inquiries from a single client so that the customer service representatives understand the big picture when trying to assist that client). Although integrating a CRM system is one of the most difficult and crucial tasks, a firms integrated front-end and back-end provide all focus on the client; hence, value is delivered, satisfaction is increased, and at this point a competitive edge is realised. Integrated CRM, KM and BI tools can provide Grey WW-HK/China with a comprehensive and cohesive view of its customers (refer to Next Slide. Unlike the un-integrated service channel, data collected from each channel in an integrated CRM is analysed for data gaps, and if needed, missing data is purchased from a third party provider. The result is a complete set of data on the customer. The data is then mined using the RFMP (recency, frequency, monetary and profitability) model; the final product is an overall purchasing profile of each customer. The BI tools are used next to create a more in-depth understanding of the existing data, which can be utilised to personalise CRM practices.

Integrated Service Channel

Q6. Build a customer process blueprint that Grey WW HK/ China can employ to maximize the utility of its existing customer base.
1. 2. 3. 4. 5. 6. 7. 8. Target the right customers: Own the customers total experience Streamline business processes Provide a 360-degree view of the customer relationship Let customers help themselves Help customers do their jobs Deliver personalised service: Foster community

This is a three-stage process: 1. The first process involves Grey enabling the client-employee interaction process through its strategy products. 2. Grey employees assess client needs through its two proprietary strategy tools, Brand Futures+ and GRM Charter. The employees are the leading client-end interactors, acting as a critical repository of information-gathering. Employees accumulate the necessary client feedback. 3. The Grey client and employee interaction process can be blueprinted for client-tocustomer interactions. The key is leveraging the process through technology, as illustrated in Next SLide

Grey Blueprint for the Customer Focus Process

Q7. Build a framework for Grey WW HK/ China to assess its CRM strategy. Based on this assessment, how should Grey WW HK/ China position itself in Asias CRM market?

Q8. Suggest criteria that Grey WW HK/ China should use to measure its CRM performance, given its business model.