McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. BUSINESS DRIVEN TECHNOLOGY Chapter Eleven: Building a Customer-Centric Organization.

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1 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. BUSINESS DRIVEN TECHNOLOGY Chapter Eleven: Building a Customer-Centric Organization – Customer Relationship Management

2 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-2 LEARNING OUTCOMES 11.1Compare operational and analytical customer relationship management 11.2 Identify the primary forces driving the explosive growth of customer relationship management 11.3 Define the relationship between decision making and analytical customer relationship management 11.4 Summarize the best practices for implementing a successful customer relationship management system

3 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-3 CHAPTER ELEVEN OVERVIEW CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantages in the future This chapter discusses – The reasons for CRM’s explosive growth – Using CRM to enhance decision making – CRM success factors

4 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-4 CHAPTER ELEVEN OVERVIEW 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

5 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-5 CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH CRM Business Drivers

6 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-6 CUSTOMER RELATIONSHIP MANAGEMENT’S EXPLOSIVE GROWTH Forecasts for CRM Spending (in billions)

7 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-7 USING ANALYTICAL CRM TO ENHANCE DECISIONS 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

8 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-8 USING ANALYTICAL CRM TO ENHANCE DECISIONS Operational CRM and analytical CRM

9 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-9 CUSTOMER RELATIONSHIP MANAGEMENT SUCCESS FACTORS CRM Success factors include: 1.Clearly communicate the CRM strategy 2.Define information needs and flows 3.Build an integrated view of the customer 4.Implement in iterations 5.Scalability for organizational growth

10 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-10 OPENING CASE STUDY QUESTIONS Revving Up Sales at Harley-Davidson 1.Assess the impact on Harley-Davidson’s business if it decided to sell accessories directly to its online customers, be sure to include a brief discussion of the ethics involved in this decision 2.Evaluate the HOG CRM strategy and recommend an additional benefit Harley-Davidson could provide to its HOG members to increase customer satisfaction

11 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-11 CHAPTER ELEVEN CASE Gearing Up at REI REI deserves recognition as an industry leader for its “best practice” multichannel CRM strategy, which allows customers to seamlessly purchase products at the company’s 70 retail stores as well as by telephone, mail order, and on the Internet REI’s CRM system benefits: – Minimizes maintenance costs – Scales easily as company grows – Provides sophisticated data warehouse for business intelligence – Provides high availability

12 McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 11-12 CHAPTER ELEVEN CASE QUESTIONS 1.Summarize why it is important for REI to use CRM strategies to consolidate its customer information 2.Determine two pieces of customer information that REI could extrapolate from its CRM system that would help it manage its business more effectively 3.Explain how REI could use personalization to give its customers a more satisfying shopping experience