CUSTOMER

RELATIONSHIP MANAGEMENT
ASSESSMENT REPORT
TABLE OF CONTENTS

01 Customer Relationship Management

Assessment Report

03 Introduction: Background and Overview (1/3) 23 Customer Loyalty Capability Maturity Model
07 Introduction: Objective and Approach 24 Appendix A: Customer Loyalty Model
08 Customer Loyalty Capability Maturity Model 25 Appendix B: Best-Practice Considerations
Defined (1/2) (1/2)
10 Current-State Assessment 27 Appendix C: Sample Methodologies/Concepts
to Adopt (1/2)
12 Supporting Details (1/6)
28 Appendix D: Sample CRM Policy
19 Summary of Strategic Plans (1/3)
22 Future-State Assessment

2
INTRODUCTION: BACKGROUND AND OVERVIEW (1/3)

1
(Company) has 500+ member credit unions (CUs) for which they provide various services, including credit, debit and bill pay. These
relationships are managed by account executives (AE) and member services representatives (MSR) located at company’s two regional
service centers. The AE’s role is to enhance the overall relationship at key member CU’s executive levels by visiting the member CUs
(outbound interaction). While MSRs are back-office support personnel that interact with the member CUs daily (inbound interaction).

2
(Company) has identified the management of risks associated with customer relationship management as one of the key elements of
(Company)’s strategy. A key segment of the company’s strategic plan is to maintain an appropriate level of client satisfaction. The company
uses a number of different mechanisms to determine if it is meeting member CUs’ expectations, including visits/calls with member CUs and
customer satisfaction surveys. The company uses the feedback received to develop strategic plans, implement activities to continually
improve service levels and, in some cases, determine incentive compensation for company personnel.

3
INTRODUCTION: BACKGROUND AND OVERVIEW (2/3)
• (Company) conducts customer satisfaction surveys as its primary method for measuring member CU satisfaction and places significant management
focus on the results. Historically, annual surveys were distributed via hardcopy to member CU CEOs and primary contacts of all of the company’s
member CUs. In (Insert Year), (Company) was restructured; offices were consolidated into the two regional service centers – east and west. During the
consolidation, member CUs indicated that they believed service levels dropped and customer satisfaction surveys from this period reflected lower
scores. For both fiscal year (FY) (Insert Year) and FY (Insert Year), the company received a score of 4.02 for the annual CEO survey (the lowest score
in 10 years). Since then, the company-initiated changes to the process of gathering customer satisfaction data in order to have more information to
support initiatives related to customer satisfaction. To do this, (Company) has changed the way surveys are distributed, including:
− Converting the hard copy surveys into web-based forms and distributing the “Tell-Us” survey (currently done semiannually) to operational contacts
within the member CUs (Response rates for the Tell-Us surveys are approximately 50%.)
− Expanding the annual survey to include three member CU contacts – the CEO, marketing department and credit/debit department (survey questions
vary between the three points of contact) (The response rates from the FY (Insert Year) annual member CU survey was approximately X%.)
− Issuing surveys subsequent to project implementations (i.e., new member CU conversions) and deconversions
− Developing strategic goals focused on efforts that will increase the member satisfaction score to 4.10 or higher out of 5.0

4
INTRODUCTION: BACKGROUND AND OVERVIEW (3/3)
• (Company) utilizes an external firm, (Insert Name),
to assist with the survey process, including
assistance with development of survey questions.
(Insert Name) is also responsible for the analysis
and presentation of results to company management
(e.g., providing verbatim comments to MD&S) via a
report deliverable.
During analysis of deconverted accounts, (Insert Name) determined that there
was no correlation between a deconverted member CU and their customer
satisfaction scores. In order to develop more effective means of predicting and
managing deconversions, (Company) has implemented programs focused on
building and retaining member CU relationships. One program, implemented
during FY (Insert Year), is the (Name of Program). This program provides
member CU CEOs with peer-to-peer contact to help reduce attrition for
(Company). The program has both internal participants, which are the directors,
executive directors and chief officers of (Company), as well as external
participants who are members of [Company]) board of directors. The top 97
member CUs (measured by fees paid to (Company), excluding those member
CUs on the board of directors, were selected to participate in the launch of the
program.
5
• From (Insert Date) through (Insert Date), 21
member CUs (combined 50,000 total cardholder
accounts) deconverted from (Company). From FY
(Insert Year) through FY (Insert Year), (Company)’s
deconversions have ranged between 22 and 26
member CUs per year. (Company)’s strategic plan
focuses on organic growth of their traditional lines of
business and improvement to the product
development process with the intent of building its
member CU base, as well as retaining existing
member CUs. A goal for (Insert Year) is to reduce
voluntary member attrition by X% or more.
Another program implemented in FY (Insert Year) is the (Insert
Program). The goals of this program are to assist member CUs with
expanding their consumer credit card account portfolio (line of
business analysis) and to retain member CUs. Using information
obtained from the member CU as well as (Company)’s (Insert Name)
department, (Company) provides participants in this program with the
member CU’s profit and loss statement, metrics such as total revenue
and return on assets percentage for a 12-month period, as well as the
results for each card product the member CU has with (Company)
(classic, gold and platinum). This allows the member CU to develop a
better understanding of the dynamics of their portfolio’s performance.
INTRODUCTION: OBJECTIVE AND APPROACH
Objective

The objective of the Customer relationship risk management assessment was to evaluate the activities, processes and standards that
the company employs to monitor and maintain an appropriate level of customer satisfaction among member CUs.

Approach
Our approach for this review included the following activities:
• Interview key company personnel to understand the process by which the company monitors customer satisfaction, including newly
converted, existing and deconverted member CUs. These personnel included.
– Company Personnel
(Insert Name): Executive Director of (Insert Company) (Insert Name): Director of Processing Services
(Insert Name): Director of East Region Service Center (Insert Name): Budget Business Analyst
(Insert Name): Strategic Projects Administrator (Insert Name): Director of (Insert)
(Insert Name): Manager of Product Control File (Insert Name): Account Executive (East)
(Insert Name): Director of Business Analysis (Insert Name): Member Service Representative (West)
(Insert Name): Account Executive (West)
(Insert Name): Member Service Representative (East
(Insert Name): Director of Public Relations
(Insert Name): Director of Project Implementations
• Benchmarking
(Insert Name):and evaluating
Director current
of West procedures
Region against best practices
Service Center
• Identifying and evaluating key performance indicators used during the customer satisfaction measurement process
• Identifying risks that may occur throughout the process and identifying and evaluating the design effectiveness of existing
management controls to mitigate key risks

6
 CUSTOMER LOYALTY CAPABILITY MATURITY MODEL (1/2)
Defined
Company management and internal audit utilized a customer loyalty capability maturity model (CMM) to assess the company’s customer relationship
management (CRM) infrastructure and processes. The customer loyalty CMM is based on the Protiviti Customer Loyalty Model (Refer to Appendix A for
the customer loyalty model). The customer loyalty CMM considers the maturity of CRM elements and is a variation of the capability maturity model
created by Carnegie Melon.

Attributes of the Customer Loyalty Capability Maturity Continuum:

Strategies & Policies Processes & Controls People Management Reports Methodologies Systems & Data

• Strategies and policies • In order to avoid or
provide key company
stakeholders with a
common understanding
of the company’s risk
appetite, risk tolerances
and expected standards
of conduct.
• Key tasks are assigned • In order for
accept risk, uniform to people with the
process and requisite knowledge,
procedures relating to skill and expertise.
risk taking activities
• Roles and
must be developed,
responsibilities of risk
implemented and
taking versus risk
monitored
monitoring must be
continuously.
defined and delineated.
• Properly developed • Information systems
management to make models can help should support
informed decisions, identify and quantify methodologies and
reports should be risks, support the reporting, provide
prepared with analysis of risk/reward relevant, accurate and
appropriate frequency, trade-offs and portfolio timely information, meet
be easy to use and diversification and the company’s business
capture succinctly, and evaluate the cost requirements and be
highlight key effectiveness of risk flexible for future
information for mitigation alternatives enhancements, scalability
decision-making. and allocation of and integration with other
capital to absorb subsystems.
potential losses.

7
CUSTOMER LOYALTY CAPABILITY MATURITY MODEL (2/2)
Defined
Risk Management Capabilities

Member CU satisfaction is sustained through maximizing the value of well-defined processes and strategies and proactively addressing
Optimizing issues, wants and needs. Company strategies and objectives are achieved through proper customer relationship planning and analysis.
The company sees its CRM strategies as a market advantage.

Processes and guidelines are well defined, communicated, monitored, measured and generally aligned to business and client satisfaction
Managed strategies. High-quality information is available in real time and communicated to management. There is a “chain of accountability”. Member
CUs recognize (Company)’s efforts often.
Process Maturity

Procedures, guidelines and standards are documented and expectations for customer relationship management strategies are clearly
Defined
defined. Standard reporting is used to monitor performance.

The need to improve customer relationship management is becoming more evident. Processes generally exist but are not documented or
Repeatable are followed inconsistently. The reliance on people continues. The need for good data and information is becoming evident. Some formal
reporting exists to monitor performance.

Defined processes, strategies, methodologies, standards, systems or policies are not in place. (Company) does not build plans and actions
Initial based on any segmentation strategies. (Company) services their member CUs based on “noise” factors instead of catering to preferred
customer groups.

8
CUSTOMER LOYALTY CAPABILITY MATURITY MODEL
Current-State Assessment

Strategies & Processes & Management Systems

People Methodologies
Realization of Policies Controls Reports & Data
Value
Proposition
Process Maturity

Risk of Failure

9
CURRENT-STATE ASSESSMENT
Supporting Details (1/6)
The following information was obtained during the course of our review. The maturity capability rating noted for each customer relationship
management element can be traced to the following details.
Customer Relationship Management Customer Relationship Management
Element Considerations for Improvement
Activities Observations
Strategies and • Company has a three-year strategic plan • None. (Company) has a specific focus on the • N/A
Policies (FY – FY) with goals and strategies development of strategic plans that
specifically addressing customer incorporate CRM elements.
relationship management.
• (Company) holds strategic planning
sessions throughout the year to develop its
annual strategies. The resulting deliverable
from these sessions indicated that the
annual strategies are well aligned with the
company’s three-year strategic plan.
• While not yet finalized, (Company)’s FY
(Insert Year) strategic plan addresses
issues pertaining to customer relationship
management.

Processes & • Surveys are conducted to measure
Controls customer satisfaction as well as the
performance of (Company) personnel. The
Tell-Us survey is conducted semiannually,
and the member-owner survey is
conducted annually. Additionally, surveys
were recently implemented to address
conversions, project implementations
(nonconversions) and deconversions.
• The responsibilities of the participants in the
survey development process, (Company) and
(Insert Name), are not well-defined and lack
consistency. Internal audit identified
conflicting information about the level of
involvement of (Company) personnel in
developing questions. In addition, a formal
contractual relationship does not exist
between (Company) and (Insert Name).
• (Company) might consider developing a
written document that clearly identifies the
roles and responsibilities of the parties
involved in the development, execution and
analysis of surveys distributed to member
CUs.

10
CURRENT-STATE ASSESSMENT
Supporting Details (2/6)
Customer Relationship Management
Element
Activities
Processes and • (Company) recently implemented the
Controls executive contact program, in which the
main goal is to provide the member CU
CEO with peer-to-peer contact and help
reduce attrition of member CUs. Reports
will be communicated to the board of
directors, audit committee and executive
management to share ideas, and
concerns, and hold personnel accountable
for contacting member CUs.
• In (Insert Year), the company implemented
a program where (Company) performs a
profit and loss (P&L) analysis on member
CU’s consumer credit card account
portfolio. The goals of this program are to
assist member CUs with expanding their
consumer credit card account portfolio
(line of business analysis) and to retain
member CUs. Currently, (Company) does
not charge member CUs for this service.
11
Customer Relationship Management
Observations
• Various individuals and departments such as
the account executives, member service
representatives, (Insert Year) and (Insert Year)
interact with the member CU. However, the
roles and responsibilities of the departments
that interact with the member CU were not
clearly defined. Account executives, as the
relationship manager with the member CU,
should be aware of all sales and other
activities related to the member CU.
• (Company) has advisory groups that address
multiple areas of the company (risk, IT,
marketing and product development). Internal
audit obtained feedback from various
(Company) personnel that expressed a
concern with the lack of rotation of members
within these advisory groups, and that
member CUs may participate in more than
one group.
Considerations for Improvement
• (Company) could formalize the roles and
responsibilities of the account executives,
member service representatives, (Insert
Name) and (Insert Name) personnel to
improve the coordination of information and
communication (i.e., sales efforts) between
these four groups.
• (Company) could consider rotating the
member CUs that participate in the various
advisory groups to obtain newer, “fresher”
ideas from a diverse section of its members.
• Going forward, the company could analyze
member CUs to determine which member
CUs are a good fit (e.g., members with
average/below average survey scores or high-
margin customers) for the P&L analysis
program.
• Developing standard communication
templates for use by (Company) personnel
will help ensure that (Company)’s message is
delivered in a consistent manner and in
accordance with its communication brand.
CURRENT-STATE ASSESSMENT
Supporting Details (3/6)
Customer Relationship Management Customer Relationship Management
Element Considerations for Improvement
Activities Observations
Processes & • The current process that (Company) follows to
Controls analyze the member CU’s profit and loss
information is not automated. Additionally,
when the P&L analysis program began,
(Company) did not ensure that the program
tied to specific customer relationship
strategies and did not identify target specific
member CUs prior to accepting the
recommendations of the account executives.
• When communicating with member CUs,
standard communication templates (e.g.,
confirmation letters, acknowledgement emails,
etc.) are not used. This impacts the
professionalism of communications with
member CUs.

12
CURRENT-STATE ASSESSMENT
Supporting Details (4/6)
Customer Relationship Management
Element
Activities
People • (Company) has account executives and
member service representatives assigned
to specific member CUs. These personnel
attend formal training upon hire or transfer
from another department but can also
attend various training courses throughout
the year.
• There has not been significant turnover in
the regional service centers, but some
personnel may have moved to different
departments within (Company).
Customer Relationship Management
Considerations for Improvement
Observations
• While various training is available to • (Company) could improve its scheduling of
personnel (e.g., AEs, MSRs), the training may training on new products and refresher
not be available at the right time or level of training on existing products so that it is more
detail. For example, the (Insert Year) debit timely for those that are responsible for
platform training occurred in early (Insert communicating the various features and/or
Year), but MSRs interviewed during this benefits of the product to member CUs.
review did not have member CUs on the
(Insert Year) debit platform until (Insert Year).
• While account executives receive training on
customer relationship management, it would
be beneficial for the AEs to receive additional
or refresher training on (Company)’s products
and services.

Management • (Company) utilizes some best-practice
Reports metrics to measure personnel
performance, including the percentage of
first-time contact resolution, percentage of
issues escalated (to FDR) and length of
time from issue presentation to resolution.
• (Company) utilizes reports to show the
total number of visits to a member CU
within a certain time frame.
• While (Company) utilizes a monthly report
that identifies all “code-red” member CUs, in
most cases the member CUs on the list are
members that are deconverting (e.g., selling
their portfolio). This report may no longer
serve its purpose of warning (Company)
personnel to handle the member CU with “kid
gloves”.
• (Company) could redefine the purpose of the
reports used to ensure that member CU
relationship issues are appropriately
addressed and/or resolved. For example, a
“Code Yellow” report may be more appropriate
for resolving member CU issues and assist in
prevention of deconversion.

13
CURRENT-STATE ASSESSMENT
Supporting Details (5/6)
Customer Relationship Management
Element
Activities
Management • For the recently implemented executive
Reports contact program, (Company) intends to
utilize reports to show the total number of
contacts made and contacts by participant
as a means of holding the various
(Company) executives accountable for
making their required contacts.
Methodologies • N/A
14
Customer Relationship Management
Observations
• (Company)’s regional service centers utilize
call center statistics, but some of these may
not be effective when determining an
employee’s performance and member CU
satisfaction. One example is total emails
received and sent by an employee. This does
not distinguish between business and
personal emails, so this metric may be
ineffective. Company management realizes
that while there are some effective
performance metrics in place, they could
continually improve or create additional
performance metrics.
• (Company) does not seem to have a defined
model or methodology to support decisions for
customer relationship management. However,
they occasionally perform comparisons of
products or services their competitors provide.
Considerations for Improvement
• (Company) might consider reevaluating the
purpose of certain performance metrics to
determine which metrics have the most
impact and will allow improved and informed
decision-making. Refer to Appendix B for
example performance metrics and other
best-practice considerations.
• (Company) could determine, document and
execute a customer relationship management
methodology. The established company
strategies support this, but do not complete
the customer loyalty infrastructure. Example
methodologies include customer lifetime value
and six sigma. Refer to Appendix C for
more information on example
methodologies.
CURRENT-STATE ASSESSMENT
Supporting Details (6/6)
Customer Relationship Management
Element
Activities
Systems and Data • (Company) utilizes internal and external
developed applications to retain
contractual documents with the member
CU, as well as tracking overall member
satisfaction. Company uses Siebel
(external) as its salesforce automation
application and ServiceConnect (internal)
for tracking member CU service-related
issues or concerns.
15
Customer Relationship Management
Observations
• At this point, the Siebel and (Insert Name)
applications do not interface. Relationship
management capabilities and data mining
opportunities could be improved with a central
repository for tracking customer information.
• Competitive information is not retained in one
central location. AEs and other (Company)
personnel obtain pricing or other competitor
information, but it was often placed on the
AE’s computer, rather than a network drive.
Considerations for Improvement
• (Company) could consider interfacing Siebel
and ServiceConnect to provide more
knowledge sharing between the personnel
that utilize these applications on a daily basis.
Data mining opportunities could be improved
with a central repository for tracking customer
information.
• (Company) could create a network folder
specifically for competitor information and
request AEs place their data in this specific
folder.
SUMMARY OF STRATEGIC PLANS (1/3)

Strategy Responsible Party Completion Date

Strategies and Policies
• Management believes that it is at the managed/optimized level on the capability maturity model N/A N/A
for this element.
Processes and Controls
• (Company) will prepare a scope of work document Between planning perspectives, inc. and (Insert Name) (Insert Date)
(Company) that clearly defines the roles and responsibilities of the development, execution and
analysis of surveys.
• The executive director of (Insert Department) will issue communications to groups within his (Insert Name) (Insert Date)
areas of responsibility such as the AEs and member service representatives to reinforce the
roles and responsibilities of these groups. In addition, the executive director of (Insert
Department) will work with other members of the company executive team to develop a top-
down approach for communicating the roles and responsibilities of the various groups that
“touch the customer”, such as the AEs and member service representatives to all members of
the organization.

• The executive director of (Insert Department) will present to the company CEO a (Insert Name) (Insert Date)
recommendation to appoint a person to be responsible for the management and oversight of
the advisory groups. This person’s responsibilities will include reviewing the advisory groups’
charters, holding members accountable for attending meetings and ensuring the proper rotation
of the advisory groups’ members.

• Company management will define the roles and responsibilities and establish the goals and (Insert Name) (Insert Date)
objectives for the P&L analysis program for FY (Insert Year).
• (Company) is moving to a Citrix environment for the regional service centers, so the directors of
the regional service centers will explore with IT and marketing the possibility of utilizing
standard email communication templates.

16
SUMMARY OF STRATEGIC PLANS (2/3)

Strategy Responsible Party Completion Date

People
• The directors of the regional service centers will work with (Company)’s training department to (Insert Names) (Insert Date)
develop a schedule for new product training and refresher training on existing products for their
employees to ensure the product information is received in a timely manner. This could include
bringing experts in the subject matter into (Company) or sending (Company) personnel to
external training (i.e., seminars, conferences, etc.).

Management Reports
• Company management will redefine and clarify the purpose of the code red report utilized from (Insert Names) (Insert Date)
Siebel and attach the definitions as a legend in the report.
• Company management feels that there are metrics currently utilized that determine the N/A N/A
effectiveness of their personnel in meeting their member CU needs. However, management
indicated they would continually re-evaluate the reporting available to determine if additional
metrics should be used.

Methodologies
• In the short term, company management will explore the possibility, potentially with external (Insert Name) (Insert Date)
assistance, of either adopting or developing a customer relationship management methodology.

• As a long-term solution, company management will implement a customer relationship (Insert Name) (Insert Date)
management methodology and embed it into its day-to-day processes.

17
SUMMARY OF STRATEGIC PLANS (3/3)

Strategy Responsible Party Completion Date

Management Reports
• In the interim, company management will accept the risk of having two separate applications, (Insert Names) (Insert Date)
Siebel and ServiceConnect, due to the expense of developing an interface between them. As a
long-term solution, the executive director of (Insert Department) will work with members of the
IT area to either enhance the CRM functionality of ServiceConnect or develop/adopt another
CRM system that interfaces with other systems to eliminate duplication of information (e.g.,
marketing, salesforce automation, service/support, etc.).

• Company management has already begun the process of collecting and storing competitor (Insert Names) (Insert Date)
information in one central location for appropriate (Company) personnel to use.

18
FUTURE-STATE ASSESSMENT
Background

In addition to the current-state assessment of Information utilized to create the customer

the customer relationship management
process on Page 6, a future-state assessment
was performed that provides an outlook of the
most likely effect if (Company) implements the
strategic plans defined in this report.
loyalty capability maturity model for the future-
state assessment was gathered through
discussions with (Insert Name), executive
director member development.

19
CUSTOMER LOYALTY CAPABILITY MATURITY MODEL (1/2)
Future State Assessment
Realization
of Value
Strategy & Policies
Proposition
• (Company) frequently updates
strategies to ensure alignment.
• (Company)’s market segmentation,
sales, service and retention
Optimized
strategies are aligned to
organizational loyalty strategies.
• (Company) has aligned formal
policies with company strategies.
• (Company) has an aggressive, risk-
Process Maturity
taking philosophy.
Managed
• (Company) develops and tests
preferred customer group plans.
• (Company) has some defined goals
and policies.
• (Company) has defined preferred
customer groups.
• (Company) has developed but not
Defined
tested, marketing, sales, service
and retention plans.
Risk of
Failure
20
Business Processes People & Organization
• (Company) focuses on • (Company) has an
the continuous environment that fosters
improvement of continuous
processes and controls. improvement.
• (Company) performs • (Company) ties
continuous compensation to loyalty.
benchmarking and best • (Company) has
practice usage. extensive cross-training.
• (Company) has a
strong, experienced
team.
• (Company) updates • (Company) has formal
relationship process training programs for
maps & procedures sales and support staff.
regularly.
• (Company) has
experienced people who
• (Company) has perform with few errors.
• (Company) clearly
preferred customer
processes and controls defines, measures and
in place. evaluates authority and
accountability.
• (Company) has • (Company) sales and
standard sales, service service procedures are
and retention processes well-defined.
with a clear role • (Company) has training
definition and budget. that supports job needs.
• (Company) performs • (Company) has
manual monitoring of
generally experienced
performance and costs.
personnel.
• (Company) has
performance measures
in place.
Managed Reports Methodology Systems & Data
• (Company) has fully • (Company) fully • (Company) has
developed and integrates sophisticated completely integrated
integrated metrics. models into all decisions systems, which are
• (Company) has fully across organization. continuously improved.
automated reporting. • (Company) has well- • (Company) has an
• (Company) performs documented trend automated monitoring
consistent follow-up and analysis results. system and knowledge
continuous action management application
planning. in place.
• (Company) has well- • (Company) has • (Company) has
developed metrics. sophisticated models generally well-integrated
• (Company) has available for decision- and interfacing systems
making (e.g., lead and (e.g., ERP, CRM,
generally automated
reporting with some flag indicators, customer Financials, etc.).
exception reporting. lifetime value,
• (Company) performs acquisition costs,
settlement costs, loyalty
concerted follow-up,
measurements, etc.).
typically resulting in
action plans.
• (Company) has • (Company) has well- • (Company) has well-
developed many developed models developed systems that
metrics. available for decision- interface with other
• (Company) reviews making (e.g., weighted systems to eliminate the
reports but follow-up is criteria, balanced duplication of
inconsistent. scorecard, segmented information (e.g.,
data based on customer marketing, salesforce
profile, etc.). automation, CRM,
service/support, etc.).
CUSTOMER LOYALTY CAPABILITY MATURITY MODEL (2/2)
Future State Assessment
Realization
of Value
Strategy & Policies
Proposition
• (Company) has informal goals and
some defined policies.
• (Company) has a general sense
that some customers are more
profitable than others.
• (Company) has performed an
initial attempt to segment
Repeatable
customers.
Process Maturity
• (Company) does not have
strategies or objectives in place.
• (Company) has ad-hoc marketing,
sales and implementation
activities.
Initial/Ad hoc
Risk of
Failure
21
Business Processes People & Organization Managed Reports Methodology Systems & Data
• (Company) has some • (Company) has defined • (Company) does not • (Company) • (Company) has some
standard documented basic skill have formal metrics. inconsistently uses systems and
procedures, but they requirements. • (Company) has some models to support databases available,
are used inconsistently. • (Company) has some formal reporting, but it decision making (e.g., but they tend to be
• (Company) has some training available. is inconsistently used. comparison to user developed.
awareness of • (Company) has some • (Company) relies on competitor • (Company) relies on
marketing, sales and products/services). outsourced solutions.
competent people. sales numbers or
service effectiveness. revenue as a way to • (Company) relies on
• (Company) has a
measure effectiveness. the latest trends for
general sense that
decision-making (e.g.,
authorization levels are
TQM, Six Sigma, etc.).
necessary.
• (Company) does not • (Company) handles • (Company) does not • (Company) does not • (Company) does not
have formally customer relationship have formal reporting, use models to support have formal systems or
documented management part time only ad-hoc reporting. decision-making. databases.
procedures or by untrained staff. • (Company) services • (Company) uses staff • (Company) has “brain
processes. • (Company) has not members based on experience as trusts” which house all
• (Company) customer defined authority and “noise” factors, instead decision-making pertinent customer
retention is a part-time, accountability and has of catering to preferred guidelines for information (e.g.,
unplanned activity. combined functions. customer groups. extending contracts, pricing, etc.).
relationships.
APPENDIX A: CUSTOMER LOYALTY MODEL

Companies understand that attracting and retaining the

right customers while creating and growing mutually
beneficial, loyal relationships with those customers are
critical components to success.

The best-practice model defined four basic processes Customer Loyalty Model
associated with management of customer loyalty:
Customer Loyalty Strategy
• Creating a relationship – acquiring new customers or
introducing new products to existing preferred
customers
• Building a relationship – producing and delivering
products and services as required during the initial Prospects Ex-
phase of the relationship customers
• Retaining a relationship – providing superior levels of
service and support, exceeding the customer’s needs
or expectations
• Extending a relationship – collaborating with the Customers
preferred customer in order to develop and offer new
products and services that will mutually benefit both
entities

In summary, an organization creates a strong relationship

with a customer, builds that relationship through Customer Relationship Cycle
appropriate additional product and service offerings,
retains the relationship through superior levels of service
and then extends that relationship through new and
mutually beneficial products, pricing and service Source: Protiviti Global Best Practices
offerings.

22
APPENDIX B: BEST-PRACTICE CONSIDERATIONS (1/2)

Best-Practice Considerations (Based on Customer Loyalty Model)

Create Customer Relationships
• Uncover hidden opportunities to satisfy customers. Measure the number of hours spent in direct observation of customers and in one-on-one meetings.

• Create clear and memorable brand positions with provocative marketing communications. Measure the percentage of customers who can accurately describe the brand
image.
• Insist on profitability from sales and distribution methods. Measure the ales of new products and services (those launched in the last three years) as a percentage of total
sales.
• Formulate, disseminate and make use of a customer relationship management policy. Refer to Appendix D for an example policy.
Build/Retain Customer Relationships
• Develop and implement customer retention plans/methodologies with an emphasis on the retention of existing profitable customers.
• Provide timely, accurate, dependable resolutions to customer issues:
− Percentage of first-time contact resolution
− Percentage of escalated issues
− Percentage of issues per customer (member CU)
− Length of time from issue presentation to resolution
− Statistics relating to speed of response (call queue, chat, web, mail, fax receipt to answer rates)
− Service survey feedback
− Length of customer advocate time spent with customers
− Percentage of customer advocate time spent in training

• Place an emphasis on the way complaints are managed. Analyze and learn from complaints.
• Do whatever possible to create and develop an organizational culture that is “blame-free”, within which difficulties affecting customers are confronted positively and within
which people take individual responsibility for resolving issues.

23
APPENDIX B: BEST-PRACTICE CONSIDERATIONS (2/2)

Best-Practice Considerations (Based on Customer Loyalty Model)

Build/Retain Customer Relationships
• Deliberately target existing customers who do not respond to surveys with a second round of contact. These may be the customers whose views and opinions most need
to be heard.
• Contact customers to see how they feel about the way their complaint was managed and whether or not they are satisfied with the resolution of their complaint.

Extend Customer Relationships

• Create and reward a culture of innovation:

− Measure the number of times a company conducts idea-gathering sessions with preferred customers, resellers, suppliers and employees.
− Measure the estimated cycle time for product or process improvements from idea submission to implementation.
− Measure the number of process or product improvement ideas submitted and implemented in the past year.
− Measure the percentage of improvement ideas that are implemented annually
− Measure the cost savings or revenue enhancements gained by improvement ideas.
− Measure the estimated amount of cost or time spent in the organization on improvement initiatives.

24
APPENDIX C: SAMPLE METHODOLOGIES/CONCEPTS TO ADOPT
(1/2)
Customer Lifetime
Value
Customer lifetime value (CLV) is the current value of the likely future
income stream generated by an individual purchaser. Customer lifetime
value seeks to maximize profit by analyzing customer behavior and
business cycles to identify and target customers with the greatest potential
net value overtime .
Why does this concept matter?
There are several reasons that companies perform this calculation:
• Long-term survival through recessionary times is ensured.
• How much to pay to acquire a customer is known.
• How much time/effort to put into retaining a customer is known.
• Increasing the lifetime consumption of products and services is focused
on.
Source: www.businessknowhow.com
25
Balanced
Scorecard
As a value indicator, the balanced scorecard method links business
strategy with financial performance. The traditional metric of financial
performance is balanced by three more fluid activities: customer
relationships, operational excellence and the organization's ability to learn
and improve. Since the balanced scorecard requires that every action
answer to stated corporate goals, implementing it within a project
management system will foster alignment with business strategies and
eliminate projects of little strategic value. DuPont and other scorecard
users have learned four lessons for success: Prepare the organization
ahead of time for the change, devise the right metrics, get buy-in at all
levels and follow through to completion.
Three keys for a successful implementation of the balanced scorecard:
• Tie Scorecard Objectives to Individual Compensation: This provides
an incentive for employees to take the scorecard seriously and think
about their actions in strategic terms.
• Follow Through: You need to periodically review and revise the
scorecard to keep it relevant as strategy changes.
• Find the Right Tools: Many companies that implement the scorecard
either buy or build an application to track the different metrics needed to
analyze the organization's progress toward its goals in real-time. The
Balanced scorecard collaborative has certified about a dozen vendors'
applications, including CorVu, Hyperion, Oracle, PeopleSoft, SAP and
SAS.
Source: www.iSixSigma.com
APPENDIX C: SAMPLE METHODOLOGIES/CONCEPTS TO ADOPT
(2/2)
Six Sigma
• The Six Sigma DMAIC (define, measure, analyze, improve and control) methodology can be thought of as a road map for problem solving and
product/process improvement. Most companies begin implementing Six Sigma using the DMAIC methodology, and later add the DFSS (Design for Six
Sigma, also known as DMADV or IDDOV) methodologies when the organizational culture and experience level permits.
• The DMAIC methodology should be used when a product or process is in existence but is not meeting customer specifications or is not performing
adequately. For DMAIC milestone reviews, there are certain deliverables, checkpoints, questions and concerns that the Six Sigma Black Belt and
improvement team should be aware of prior to a tollgate/milestone review.

Define improvement activity goals. At the top level, the goals will be organization’s strategic objectives such as higher
return on investment or market share. At the operational level, a goal might be to increase the throughput of a
D production department. At the project level, goals might be to reduce the defect level and increase the yield of a
process or machine. Apply data-mining methods to identify potential improvement opportunities.

Measure the existing system. Establish valid and reliable metrics to help monitor progress toward the goal(s) defined
M in the previous step. Begin by determining the current baseline. Use exploratory and descriptive data analysis to help
you understand the data.

Analyze the system to identify ways to eliminate the gap between the current performance of the system or process
A and the desired goal. Apply statistical tools to guide the analysis.
Improve the system. Be creative in finding new ways to do things safer, better, cheaper or faster. Use project
I management and other planning and management tools to implement the new approach. Use statistical methods to
validate the improvement.

Control the new system. Institutionalize the improved system by modifying compensation and incentive systems,
C policies, procedures, MRP, budgets, operating instructions and other management systems. You may wish to utilize
systems such as ISO 9000 to ensure that documentation is correct.

Source: www.iSixSigma.com
APPENDIX D: SAMPLE CRM POLICY
Customer Follow-up Policy

Prepared By:

Approved By:

Revision Date:

Effective Date:

Purpose/Policy:

The purpose is to outline the follow-up action to be used by customer service representatives. Customer service will verify that the customer’s
product/service are set up properly and resolve any problems the customer may be experiencing with either setup or use of the product/service to assure
customer satisfaction.

Procedures:

The customer service department will be responsible for calling customers five to 10 business days after their product/service is set up. The customer
service representative should follow the call script provided but should feel free to speak in their own conversational style by substituting words or
phrases as necessary. The length of the call should be determined by the customer and the representative should respond accordingly. If the product or
service is not working properly or the customer is dissatisfied, the representative should take the necessary action to resolve. Upon completion of the call,
the representative should complete the post-sale satisfaction report. If the representative encounters any unusual requests or comments by the customer,
the report may be copied to any interested parties (e.g., sales, information technology, operations, etc.). The customer service representative should file
the satisfaction report in the customer's file.

Source: Protiviti

27