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CRM - Case - Study - Caterpillar ABB

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Rohan Narula
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77 views3 pages

CRM - Case - Study - Caterpillar ABB

Uploaded by

Rohan Narula
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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CRM Case Study Analysis: ABB and Caterpillar

A. Problem Analysis

(i) Identified Problems


- Customer Relationship Disconnect: Misaligned communication and lack of responsiveness
to Caterpillar's needs.
- Siloed Operations: ABB's BUs prioritize their individual agendas, leading to fragmented
solutions.
- Missed Opportunities: ABB's rigid processes prevent adaptation to Caterpillar’s evolving
requirements.

(ii) Stakeholders
Primary Stakeholders:
- ABB GAM Team: Risk losing credibility if Caterpillar disengages.
- Caterpillar’s Purchasing/Engineering Teams: Depend on ABB for reliable, cost-effective
solutions.

Secondary Stakeholders:
- ABB BUs: Risk losing a major client.
- End-Users: Impacted by ABB's product quality and aftersales service.

B. Alternatives (Cost vs. Benefits)


1. Realign BUs with GAM Objectives:
- Costs: Training, realignment expenses.
- Benefits: Consistent messaging and solutions for Caterpillar.

2. Dedicated Key Account Team:


- Costs: Specialized resource allocation.
- Benefits: Tailored solutions, faster problem resolution.

3. Co-Development Agreements:
- Costs: Upfront R&D investments.
- Benefits: Long-term loyalty and strategic alignment with Caterpillar’s needs.

C. Optimal Solution Using CRM Formulae & Principles

1. Customer Lifetime Value (CLV)


Formula:
CLV = (ARPU × Gross Margin × Retention Rate) / (1 + Discount Rate - Retention Rate)

Application:
- Calculate Caterpillar's CLV to justify efforts in governance meetings and customization.
- Prioritize long-term collaboration to maximize the lifetime value.

2. Customer Acquisition Cost (CAC) vs. Retention Cost


- Retention is 5x cheaper than acquisition.
Formula:
ROI = (Retention Revenue - Retention Costs) / Retention Costs

Application:
- Caterpillar is a critical account worth retaining; focus resources on retention.

3. Net Promoter Score (NPS)


Formula:
NPS = % Promoters - % Detractors

Application:
- Use surveys to gauge Caterpillar’s satisfaction at regular governance meetings.
- Improve pain points identified from detractor feedback (e.g., turbocharger availability).

4. Churn Rate Reduction


Formula:
Churn Rate = Customers Lost During Period / Total Customers at Start of Period

Application:
- Identify Caterpillar's dissatisfaction triggers (delivery delays, pricing inflexibility).
- Address them through collaborative projects (e.g., redesign silencer rings).

5. Customer Segmentation and Personalization


Principle:
- Treat Caterpillar as a high-value strategic customer.
- Offer premium services (e.g., exclusive governance meetings, tailored pricing models).

6. Lead Scoring
Formula:
Lead Score = (Demographics Weight) + (Engagement Weight) + (Buying Intent Weight)

Application:
- Develop Caterpillar-specific scoring for opportunities like China expansion or new
products (traction motors).

7. Customer Engagement Score (CES)


Formula:
CES = Sum of Customer Interactions / Interaction Frequency Over Time
Application:
- Use governance meetings, joint projects, and day-to-day communication to boost CES.

8. First Response Time (FRT) and Resolution Time (RT)


Metrics:
- FRT: Time taken to acknowledge Caterpillar’s issues.
- RT: Time to fully resolve issues like turbocharger design flaws.

Goal:
- Minimize FRT and RT to improve satisfaction.

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