Customer Relationship Management

Rather than use CRM to transform entire businesses, companies using CRM successfully have directed their investments toward solving clearly defined problems within their customer relationship base

CRM today result in highly focused projects that are relatively narrow in their scope and modest in their goals. There is also an understanding that highly accurate and timely data are not required everywhere

 Achieving success with CRM is more difficult than expected and it is not just a matter of marketing and IT.

Introduction
The philosophy of Customer Relationship Management: CRM is about Keeping the old-time spirit of customer connection even when you can not shake every hand .

Introduction
The philosophy of CRM is: It is a comprehensive approach for creating, maintaining and expanding customer relationships. CRM is a way of thinking about and dealing with customer relationships

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The focus is on: What will the customers buy, when, why and for how much? What creates value for them? What does create a structural bond? What service can we provide that does create a premium? What about market segmentation?

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What CRM systems do! The primary task of a CRM system consists in supporting or performing the activities involved in customer contact processes The secondary task is related to providing customer and management information

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The concept of CRM is: Customer relationship management (CRM) is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes.

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The concept of CRM is: CRM applications can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy, and culture

CRM should the end of the road

CRM is a great concept BUT you might wonder if it is worth the effort relative to your customer base and expenses involved?
It is the ultimate phase AFTER a solid market research and a strategic planning process!

Introduction
Is the issue we analyse strategic? Where could we make more money? Do we need perfect data? What is the next step?

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Is it strategic? A large and comprehensive CRM program involves complicated business and technology issues and requires investments of time and money. Before spending money, key marketing questions need to be addressed What are your key marketing questions?

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Is it strategic? An example: A well trained and proactive sales force is a strategic necessity; this requires the right information!

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Where could we make more money? It is possible to use CRM to manage the entire relationship cycle: that is usually a bad idea! Large systems usually do not pay back. The focus of CRM should be the weak points that undermine performance

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Where can we make more money? Focusing on weak points can not only be an effective way to build a successful CRM program but can also put it back on track in case you started one.

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Do we need perfect data? Perfect real time information comes at a very high cost The requirements for real time and good data are quite different Example: Outstandings on a current account (real time) versus portfolio management data (good data)

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What is the next step? Narrowly focused CRM system often reveal additional opportunities for business improvements. All the small improvements taken together, can amount to a broad CRM application that extends across the bank. The key is to make sure the step by step approach fits into a defined strategic plan

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What is the next step? In most cases, the opportunities for development lie in the activities adjacent to the customer relationship cycle. Ultimately, CRM can be the glue that binds together all activities related to a customer.

Introduction
Customer relationship cycle.
Development

Targeting

Sales

Retention

Experience

Introduction
Business before technology We should look at what CRM should do, not so much on what it can do CRM depends more on strategy than on the amount spent on technology Strategy is about the way you allocate your resources to create a competitive advantage and superior performance

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Implementing CRM before creating a customer strategy = like building a house without an architectural plan Effective CRM is based on segmentation analysis Customer strategy is designed to achieve some specific marketing goals Technology is not a marketing strategy

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Introducing CRM before changing your organisation into a customer focused organisation = like painting without sanding CRM will succeed only AFTER the organisation and its processes job descriptions, performance measures, compensation systems, training programs, and so on- have been structure to provide superior customer value

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Assume that more technology is better = is like building without foundation To start, see what lower-tech alternatives offer; there may be no need for more in the very near future In the future as sequence of individual software solutions may lead to each step reinforcing the next step

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Define the right customers you want to establish a relationship with = a two way street Just because managers can contact customers, does not mean they should by all means and for whatever reason.

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How do consumers define us in terms of competition?

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How do consumers define us in terms of competition? Cost Time Quality Opportunity Information Knowledge Choice Culture

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Why might you consider CRM?

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Why might you consider CRM? 1. Gather customer information quickly 2. Identify the most valuable customers 3. Obtain loyalty by providing customized products 4. Possibly reduce cost of serving these customers 5. Making it easier to acquire similar customers 6. Retention of existing profitable customers 7. Getting the maximum out of existing customers 8. It can function as an early warning system

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Why might you consider CRM?
Medium term Financial Increased perspective turnover Customer Satisfaction Individual perspective satisfaction Communication One way Attuned
Organisation Data

Current situation Turnover

Long term
Value Commitment

Multichannels Knowledge Integrated image

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The ultimate goal of CRM : The goal is to encourage the customer to make its future purchases from you and reduce the share of purchases being made from the competition DUE TO THE FACT customer knowledge has been accumulated and therefore it will be more difficult for the competition to offer a similar package

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CRM is only a part of the sales performance! How would you assess your overall sales performance? Please rate the questions hereafter as follows Not effective Extremely effective 1 2 3 4 5 6 7 8 9 10
(Source HBR 08/06)

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Salespeoples capabilities Finding customers identifying sales opportunities Winning customers converting opportunities into business Keeping customers cementing customer relationships - CRM Not effective 1 2 3 4 5 Extremely effective 6 7 8 9 10

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Sales Managers' skills Planning for growing business Coaching giving clear direction, expectations and feedback Motivating recognition and rewards

Not effective 1 2 3 4 5

Extremely effective 6 7 8 9 10

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Support systems Recruiting and hiring capabilities Performance management systems Opportunities management systems Strategic account management systems CRM systems Training and development systems Not effective 1 2 3 4 5 Extremely effective 6 7 8 9 10

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Sales organisation climate Clarity of goals and expectations Staff dedication to achieve challenging goals Staff initiative Acknowledgment of good work

Not effective 1 2 3 4 5

Extremely effective 6 7 8 9 10

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The total score for your sales organisation is:..

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Average for high-performing organisations Average for low-performing organisations 123 109

We shall put the spot on CRM, but it is only a part of a bigger picture
( US based companies)

1_Elements of CRM

1_Elements of CRM
The four cornerstones of the elements of CRM are: 1. Customer knowledge 2. Relationship strategy 3. Communication 4. The individual value proposition

1_Elements of CRM
1. Customer knowledge
Segmentation Awareness, Attitude Usage Concept Customer satisfaction Customer loyalty Brand Image Brand equity Pricing Advertising

1_Elements of CRM
2. Relationship strategy
A long lasting customer supplier relationship The key is not only the stimulation of a transaction

Success is not measured by market share

1_Elements of CRM
3. Communication
The issue is to carry on a dialogue with individual customers

Shifts should be possible between distribution channels

1_Elements of CRM
4. The individual value proposition
The product, service and price are adapted to the individual circumstances

The organisation has to build up the capacity to supply customisation in one form or another

1_Elements of CRM
Systems
If a relationship must be maintained with a large group of customers, a portion of which represents a low value to the supplier, the use of IT becomes inevitable. Integration is therefore a must between frontmid-back office