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CUSTOMER RELATIONSHIP MANAGEMENT
SECTION 9.1 CUSTOMER RELATIONSHIP MANAGEMENT
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BUSINESS BENEFITS OF CRM
CRM enables an organization to: Provide better customer service Make call centers more efficient Cross sell products more effectively Help sales staff close deals faster Simplify marketing and sales processes Discover new customers Increase customer revenues
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CRM BASICS Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value How recently a customer purchased items (Recency) How frequently a customer purchased items (Frequency) How much a customer spends on each purchase (Monetary Value) Can you use this in a math formula to predict sales? How about on a 2*2 grid like the BCG model?
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CRM BASICS - Model F R E Q U N C Y HIGH LOW DAYS AGO R E C E N C Y
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The AIDA Model Attention – Percent that know you are advertising.
Interest – Percent that want to know more. Desire – Percent that want the product. Action – Percent that will buy the product. # of Customer contacts *A*D*I*A = # of Sales
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The Evolution of CRM CRM reporting technology – help organizations identify their customers across other applications CRM analysis technologies – help organization segment their customers into categories such as best and worst customers CRM predicting technologies – help organizations make predictions regarding customer behavior such as which customers are at risk of leaving Reporting Help organizations identify their customers across applications Analyzing Help organizations segment their customers into categories such as best and worst customers Predicting Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
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The Evolution of CRM Three phases in the evolution of CRM include reporting, analyzing, and predicting Reporting Help organizations identify their customers across applications Analyzing Help organizations segment their customers into categories such as best and worst customers Predicting Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
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The Evolution of CRM
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Operational and Analytical CRM
Operational CRM – supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers
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Operational and Analytical CRM
Basically one database stores all customer information. Multiple applications access this database.
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Using IT to Drive Operational CRM
Operational CRM technologies for sales, marketing, and customer service departments
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Marketing and Operational CRM
Three marketing operational CRM technologies: List generator – compiles customer information from a variety of sources and segment the information for different marketing campaigns Campaign management system – guides users through marketing campaigns Cross-selling and up-selling Cross-selling – selling additional products or services Up-selling – increasing the value of the sale McDonald’s Example
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Sales and Operational CRM
The sales department was the first to begin developing CRM systems with sales force automation – a system that automatically tracks all of the steps in the sales process Walk your students through the sales process displayed in the above figure
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Sales and Operational CRM
Sales and operational CRM technologies Sales management CRM system – automates each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts Contact management CRM system – maintains customer contact information and identifies prospective customers for future sales Opportunity management CRM system – targets sales opportunities by finding new customers or companies for future sales
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Customer Service and Operational CRM
Three customer service operational CRM technologies: Contact center (call center) Web-based self-service system Click-to-talk Call scripting system Contact center (call center) – where CSRs answer customer inquiries and respond to problems through different touchpoints Web-based self-service system – allow customers to use the Web to find answers to their questions or solutions to their problems Click-to-talk –customers click on a button and talk with a CSR via the Internet Call scripting system – access organizational databases that track similar issues or questions and automatically generate the details to the CSR who can then relay them to the customer Documedics is a health care consulting company that provides reimbursement information about pharmaceutical products to patients and health care professionals. The company currently supports inquiries for 12 pharmaceutical companies and receives over 30,000 customer calls per month. Originally, the company had a data file for each patient and for each pharmaceutical company. This inefficient process resulted in the potential for a single patient to have up to 12 different information files if the patient was a client of all 12 pharmaceutical companies. To answer customer questions, a CSR had to download each customer file causing tremendous inefficiencies and confusion.
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Customer Service and Operational CRM
A contact center is part of the customer service department and falls into the category of operational CRM A contact center (call center) is where CSRs answer customer inquiries and respond to problems through different touchpoints A contact center is one of the best assets a customer-driven organization can have because maintaining a high level of customer support is critical to obtaining and retaining customers Automatic call distribution, IVR, and predictive dialing are only three of many different systems available to help an organization automate its contact centers
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USING IT TO DRIVE ANALYTICAL CRM
Personalization – when a Web site knows enough about a persons likes and dislikes that it can fashion offers that are more likely to appeal to that person Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior These systems quickly aggregate, analyze, and disseminate customer information throughout an organization
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CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH
CRM Business Drivers
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CUSTOMER RELATIONSHIP MANAGEMENT’S SUCCESS FACTORS
CRM success factors include: Clearly communicate the CRM strategy Define information needs and flows Build an integrated view of the customer Implement in iterations Scalability for organizational growth Clearly communicate the CRM strategy – ensuring that all departments and employees understand exactly what CRM means and how it will add value to the organization is critical to the success of the implementation Define information needs and flows – the organization must understand all of the different ways that information flows into and out of the organization to implement a successful CRM system. If the organization misses one of the information flows, such as a customer service Web site, then none of that information from that Web site will be integrated into the CRM system and the company will not have a complete view of its customers Build an integrated view of the customer – the CRM system must support the organization's strategies and goals Implement in iterations – avoid the big-bang approach and implement in small, manageable, pieces Scalability for organizational growth – ensure the system can support the organization's future growth CLASSROOM EXERCISE CRM Correlations Break your students into groups and have them compare and analyze the SCM industry success factors and the CRM industry success factors to determine any correlations Ans: Many of the success factors are the same. The sooner your students learn and understand these success factors, such as implementing in iterations or small pieces, the sooner they can apply them to any big system installation and help ensure IT system success
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CURRENT TRENDS: SRM, PRM, AND ERM
Current trends include: Supplier relationship management (SRM) – focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection Partner relationship management (PRM) – focuses on keeping vendors satisfied by managing alliance partner and reseller relationship that provide customers with the optimal sales channel Employee relationship management (ERM) – provides employees with a subset of CRM applications available through a Web browser Supplier relationship management (SRM) focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection. SRM applications help companies analyze vendors based on a number of key variables including strategy, business goals, prices, and markets. The company can then determine the best supplier to collaborate with and can work on developing strong supplier relationships with that supplier. The partners can then work together to streamline processes, outsource services, and provide products that they could not provide individually. Partner relationship management (PRM) focuses on keeping vendors satisfied by managing alliance partner and reseller relationships that provide customers with the optimal sales channel. PRM’s business strategy is to select and manage partners to optimize their long-term value to an organization. In effect, it means picking the right partners, working with them to help them be successful in dealing with mutual customers, and ensuring that partners and the ultimate end customers are satisfied and successful. Employee relationship management (ERM) provides employees with a subset of CRM applications available through a Web browser. Many ERM applications assist the employee in dealing with customers by providing detailed information on company products, services, and customer orders. ERM applications typically offer expense tracking, project management tracking, performance appraisals, training, benefits, and company news.
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FUTURE CRM TRENDS CRM future trends include:
CRM applications will change from employee-only tools to tools used by suppliers, partners, and even customers CRM will continue to be a major strategic focus for companies CRM applications will continue to adapt wireless capabilities supporting mobile sales and mobile customers CRM suites will incorporate PRM and SRM modules
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