Analytical CRM implementation and customer segmentation at Graybar

Management Information System

Graybar's problem and its effect on the business performance

Graybar is one of the largest distributor of communications, networking and high-quality electrical products within the United States, as well as one of the largest employee-owned firms across the country. The company is listed in the Fortune 500 list, but despite these points of strengths, it encountered issues in the efficient management of its customer base.

The issues with customer management became more and more important at the firm, especially since the customers of the modern day era expect higher quality services at lower prices. In other words, it became a competitive necessity to better manage the customer base.

"Despite many years of success, Graybar could do better. For instance, it was not following best practices for analyzing and understanding its customers. These practices were becoming essential for wholesale distributors as well as for retail companies" (case).

Graybar understood the need to better manage the customer base in order to understand it at a deeper level and become able to serve its needs in a means that generates more corporate profitability. This effort became an imperative since the quality and efficiency of the operations was decreased and the growth potential was also threatened.

2. Analytical CRM at Graybar

Having understood the need for better quality management, the company set out to collect extensive data on its customers. It employed the feedback from their field agents and divided the customers into four categories, as follows:

Core customers, who are the customers which make regular, high volume purchases from the company and are the most profitable segment

3. Further benefits of SAP Customer Value Intelligence

The sales representatives at Graybar spent large amounts of time on the process of data collection which would sit at the basis of a the new customer management approach. Still, the company encountered difficulties in efficiently processing the high volume of data so as to draw conclusive business recommendations.

In this order of ideas, the company solicited assistance from technical and developing specialists at SAP and used the SAP Business Objects Dashboards in order to create the SAP Customer Value Intelligence. This new software "provides recommendations on improving customer value. It uses real-time customer revenue, margins and behavior to stratify customers into each of the four categories described earlier" (case).

For the future, the SAP Customer Value Intelligence Platform could be used to further personalize the customer experience by better understanding the customers and delivering customized services. In other words, the application could become even more useful by being able to understand, anticipate and serve customer needs even before these different customer segments become aware of their specific needs (Cawood and Bailey, 2006).

References:

Cawood, S., Bailey, R.V. (2006), "Destination profit: creating people-profit opportunities in your organization," Davies-Black Publishing

"Interactive session: Organizations / Graybar goes for customer analytics" Case studies in chapter 9: Achieving operational excellence and customer intimacy: Enterprise applications.