CRM

Customer relationship management (CRM)

Term applied to processes implemented by a company to handle its contact with its customers CRM is a software-based approach to handling customer relationships

Store information on current and prospective customers

Customer requirements

Control over buying process

Information, comparison, selection, easy to find

Best possible price

Delivery (free), quality

All payment options

Secure

Communication designed to suit needs

Computerized, complex, caring

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Applications

All forms of trading

Direct Traditional Retail E-commerce Wholesale Combination

Applications

New convergence

Telephony & telemarketing Internet Mobile, SMS Digital TV Cable & satellite

Customer requirements

Control over buying process

Information, comparison, selection, easy to find

Best possible price

Delivery (free), quality

All payment options

Secure

Communication designed to suit needs

Computerized, complex, caring

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Applications

All forms of trading

Direct Traditional Retail E-commerce Wholesale Combination

Applications

New convergence

Telephony & telemarketing Internet Mobile, SMS Digital TV Cable & satellite

CRM

Customer relationship management (CRM)

From the outside, customers interacting with a company perceive the business as a single entity, despite often interacting with a variety of employees in different roles and departments CRM is a combination of policies, processes, and strategies implemented by a company that unify its customer interaction and provides a mechanism for tracking customer information

Applications

Information in the system can be accessed and entered by employees in different departments)

Sales Marketing Customer service Training Professional development Performance management Human resource development
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Applications

Details on any customer contacts can also be stored in the system

The rationale behind this approach is to improve services provided directly to customers To use the information in the system for targeted marketing and sales purposes

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Related aspects

Many inter-related aspects

Front office operation Back office operations Business relationships Analysis

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Aspect 1 Front office

Direct interaction with customers

Face to face meetings Phone calls E-mail Online services etc

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Aspect 2 Back office

Operations that ultimately affect the activities of the front office

Billing Maintenance Planning Marketing Advertising Finance Manufacturing

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Aspect 3 - Business relationships

Interaction with other companies and partners

Suppliers/vendors Retail outlets/distributors Industry networks (lobbying groups, trade assn)

This external network supports front and back office activities

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Aspect 4 - Analysis

Key CRM data can be analyzed in order to plan

Target-marketing campaigns Conceive business strategies Judge the success of CRM activities (e.g., market share, number and types of customers, revenue, profitability)

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Aspects

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Flip side - Implementation

CRM initiatives often fail

Implementation was limited to software installation Inadequate motivations for employees to learn, provide input, and take full advantage of the information systems

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CRM as Business Strategy

Business strategy perspective

Three key phases

1. Customer Acquisition 2. Customer Retention 3. Customer Extension

Three contextual factors

4. Marketing Orientation

5. Value Creation
6. Innovative IT.

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CRM as business strategy

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1. Customer Acquisition

Attracting our customer

For the first purchase We have acquired our customer

Growth

Market orientation, innovative IT & value creation Aim is to increase the number of customers that purchase from us for the FIRST TIME

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2. Customer Retention

Re-purchase

Our customer returns and buys for a second time This is most likely to be the purchase of a similar product or service, or the next level of product or service.

Growth

Market orientation, innovative IT & value creation Aim is to increase the number of customers that purchase from us REGULARLY

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3. Customer Extension

Additional, supplementary purchases

Our customers are regularly purchasing We introduce products and services to our loyal customers different from original purchase

Once purchased, our goal is to retain them as customers for

the extended products or services

Growth

Market orientation, innovative IT & value creation Aim is to increase the number of customers that purchase ADDITIONAL products
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CRM as business strategy

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4. Marketing orientation

Focused upon the three levels of needs of customers

Actual, tangible product Core product and its benefit Also the augmented product such as a warranty and customer service

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Brand

Core Benefit
Basic Product Expected Product Augmented product Potential Product
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5. Value creation

Generation of shareholder value

Based upon the satisfaction of customer needs (as with marketing orientation)

Delivery of a sustainable competitive advantage

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IPL

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IPL

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IPL

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6. Innovative IT

Updated IT

Efficient, speedy and focus upon customer needs Whilst IT and/or software are not the entire story for CRM, it is vital to its success

CRM software collects data on consumers and their transactions

Organizations will track individuals, and try to market products and services to them based upon similar buyer behavior seen in other individuals

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Amazon.com

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Three key elements

1. Validation
2. Discovery 3. Action

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Elements of CRM

Three key elements

1. Validation
2. Discovery 3. Action

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1. Validation

Correct data

Ensuring that the data you have on your customers is not only correct

Also, in a suitable state for targeting communications programs

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2. Discovery

Use of data mining techniques

To find relationships that you did not know existed Sometimes conventional analysis is impaired by your own natural assumptions and prejudices Discovery techniques help to solve these issues by starting from ground zero They simply search for relationships in the database against a set of objectives

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3. Action

Right communication

Your customers and prospects need to have the right messages communicated to them

Quality Inter-Action drives quality Trans-Action

This is done with a Campaign Management tool that can automatically select the right targets and the right messages via the right channels

The responses are then fed back into the Validation process for evaluation and refinement

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Essentials

CRM is corporate strategy composed of applications, technology and products that fulfill three essential requirements

1. Organization perspective 2. Customer perspective 3. Front office staff perspective

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1. Organization perspective

360 view of each customer

For consistent and unified contact with that customer whenever anyone anywhere in the enterprise deals with that customer This knowledge increases the opportunities for sales and the effectiveness of customer service

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2. Customer perspective

Customers to have a consistent view

To enable your customers to have a consistent view of your enterprise, regardless of the way the customer contacts you This improves customer satisfaction and customer retention

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3. Front office staff perspective

Staff performance

To enable front office staff to perform sales, service and marketing tasks more efficiently as a team Increasing expertise and reducing costs

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CRM Processes and Systems

Processes & Systems

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Processes & Systems

Important

Business starts with the acquisition of customers However, any successful CRM initiative is highly dependent on a solid understanding of customers

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1. Understand & differentiate

Understand

Demographics, purchase patterns & channels Segmentation to identify logical unique groups Primary research to capture needs and attitudes Customer valuation to understand profitability

Differentiate

Based on the value customers

to deliver

are expected

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2. Develop & Customize

Develop

Products, services, channels and media can be customized based on the needs of quantitative customer segments

Customize

Based on the potential value customer segment

delivered by

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3. Interact & Deliver

Interact

Not just through marketing, sales and media Distribution, shipping, customer service & online

Deliver

Delivering value is a cornerstone Factors including quality, ease of use, responsiveness excellence convenience, speed, and service

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4. Acquire & Retain

Acquire

Learning about customers makes it easy to identify those producing the greatest value

Retain

Maintain interaction; Deliver on value

Customers change as they life stages

Modify the service
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move through differing

Pizza example - Perspective

Subconscious Expectations
Pizza with specified toppings Take 10 minutes Come in a packed box Remain warm till you reach home Charges standard and acceptable price Pizza will taste reasonably good

You will come back is all the above are met

Pizza example
If you go regularly
Rapport with employees You forgive if they mess up with one or two expectations

Degree of confidence determines tolerance

If using first time, and even one expectation is not met You will never go again

Pizza example
Exceeded expectations
Deliver on all expectations Give you a garlic bread FREE !

You will tell everyone about it