Customer Relationship Management

Customer relationship management: An overview

 

CRM stands for customer relationship management. It is a process or methodology used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about


customers, sales, marketing effectiveness, responsiveness and market trends.

CRM helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers.

8/3/2011

Shweta Agrawal

Contd.


CRM is the development and maintenance of mutually beneficial long-term relationships with strategically significant customers (Buttle, 2000) CRM is an it enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the voice of the customer in order to deliver long-term superior customer value, at a profit to well identified existing and potential customers. (Plakoyiannaki and tzokas, 2001)

8/3/2011

Shweta Agrawal

Contd.


In simple terms, customer relationship management is defined as finding, getting, and retaining customers. CRM is also defined as tracking customer behavior in order to develop marketing and relationship-building relationshipprograms that bond consumers to a brand often by development of software systems to provide one-on-one one-oncontact between the marketing business and their customer. CRM is the core of any customer-focused business customerstrategy and includes the people, processes, and technology associated with sales, marketing, and service. CRM has also been reported to stand for additional things like:  Customer relationship marketing, and continuous retention marketing, just to name a few.
8/3/2011 Shweta Agrawal 4

Evolution of CRM


CRM has evolved since its earliest incarnation, originally driven by an inside-out focus, through insidethree phases of evolution:
  

Technology, Integration and Process.

Recently there has been a major leap forward to a fourth phase: customer-driven CRM an outsidecustomeroutsidein approach that has intriguing financial promise.

8/3/2011

Shweta Agrawal

Technology


In its earliest incarnation, CRM meant applying automation to existing sales, marketing, support and channel processes as organizations attempted to improve communications, planning, opportunity and campaign management, forecasting, problem solving, and to share best practices. However, automating poorly performing activities or processes rarely improves the quality of the outcome. So, for the most part, the quality of the return on investment (ROI) was meager if measurable at all. The promise of the technology was there, but few organizations were realizing the pinnacle of performance. The metric of success was increased efficiency in sales, marketing, support and channel processes.

8/3/2011

Shweta Agrawal

Integration


By developing cross-functional integration, supported crossby data warehousing and shared roles and responsibilities, organizations began to create a customized view of the customer. Support issues, web hits, sales calls and marketing inquiries started building a deeper understanding of each customer and allowed aggressive organizations to adapt their tactics to fit individual needs. Integration focused around two primary components: - Make it easier to do business with the seller - Predictive modeling

8/3/2011

Shweta Agrawal

Process


By rethinking the quality and effectiveness of customercustomer-related processes, many organizations began to eliminate unnecessary activities, improve outdated processes, and redesign activities that had failed to deliver the desired outcomes. Then, by re-creating the process through an reunderstanding of the capabilities of the technology, the outcomes were more predictable and the promises for a meaningful ROI more substantial and realistic. The metrics for success became the improved effectiveness in serving the customer.
8/3/2011 Shweta Agrawal 8

The fourth phase: customer driven CRM



Today, revenue performance has become the central theme for CRM as organizations seek to achieve and maintain expected financial results The main concerns are:  Which of my customers have the potential for a highhighprofit, sustainable relationship?  What defines profitable and unprofitable customer segments?  What must change to realize that optimal potential?  Where's my opportunity for growth?  Where's my risk for loss?  Am i making the right decisions related to balancing acquisition, cross-selling and up-selling and for the crossupright customer groups?
8/3/2011 Shweta Agrawal 9

Determinants of CRM


Understanding customer needs and problems Meeting their commitments Providing superior after sales support Making sure that the customer is always told the truth (must be honest) Have a passionate interest in establishing and retaining a long-term relationship (e.g., Have long-term perspective).
8/3/2011 Shweta Agrawal 10

Goals of CRM
      

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
8/3/2011 Shweta Agrawal 11

Stages in the development of customer relationship



The pre-relationship stage:  The event that triggers a buyer to seek a new business partner. The early stage:  Experience is accumulated between the buyer and seller although a great degree of uncertainty and distance exists. The development stage:  Increased levels of transactions lead to a higher degree of commitment and the distance is reduced to a social exchange. The long-term stage:  Characterised by the companies mutual importance to each other. The final stage:  The interaction between the companies becomes 8/3/2011 Shweta Agrawal 12 institutionalized.

A RELATIONSHIP LIFE CYCLE MODEL

HIGH COOPERATION LOW COMPETITION

PREDEVELOPMENT RELATIONSHIP STAGE STAGE

MATURITY STAGE

DECLINE STAGE

LOW COOPERATION HIGH COMPETITION

TIME
8/3/2011 Shweta Agrawal (WILKINSON AND YOUNG, 1997) 13

Functions of CRM
Direct functions:  These are the basic requirements of a company that are necessary to survive in the competitive marketplace. This includes:
  

Profit volume; and safeguard

Indirect functions:  These are the actions necessary to convince the customer to participate in various marketing activities. This includes:
Innovation:  market;  scout: and  access. 8/3/2011


Shweta Agrawal

14

Functions of Customer Relationship Management

Value Creation Process
Technology delivery process R&D Technology integration Efficiency, effectiveness learning Value-based Strategies Pricing Communication

Management Decision Process Customer sensitivity Diversity Information Differentiated offering

Product delivery process Concept to launch Manufacturing process Customer delivery process Supply chain Distribution Infomediation (distribution of information) Shweta Agrawal

8/3/2011

15 (Sharma et. al., 2001)

Role of sales people in CRM



The sales people act as relationship builders and relationship promoters by:  Identifying potential customers and their needs  Approaching key decision makers in the buying firm  Negotiating and advancing dialogue and mutual trust  Coordinating the cooperation between the customers and their company  Encouraging the inter-organisational learning process  Contributing to constructive resolution of existing conflicts; and  Leading the customer relationship development team
8/3/2011 Shweta Agrawal 16

ROLE OF IT IN CRM
THERE ARE THREE GENERAL TYPES OF ECRM PACKAGES:


MARKETING AUTOMATION SYSTEMS (MAS)

  

CUSTOMER DATABASE CREATION ANALYSIS OF CUSTOMER ATTRIBUTES AUTOMATE SEVERAL MARKETING FUNCTIONS INTENDED TO AUTOMATE MANY FUNCTIONS PERFORMED BY SALESPEOPLE IF COMPLETELY SUCCESSFUL, IT WILL ELIMINATE THE PERSONAL TOUCH

SALES FORCE AUTOMATION (SFA)



CUSTOMER SERVICE AUTOMATION SYSTEMS



AUGMENTS CALL CENTER PERSONNEL  SOME CAN RESPOND TO E-MAILS ON THEIR OWN E TIES-IN TO EXISTING COMPANY SOFTWARE, INCLUDING TIES8/3/2011 OTHER ECRM PACKAGES Agrawal Shweta 17

MAJOR MODULES OF E-CRM ESOME OF THE MAJOR MODULES OF E-CRM ARE : E SALES FORCE AUTOMATION  SALES FORECASTING  PRODUCT DESCRIPTION  MARKETING AUTOMATION  EVENTS MANAGEMENT  LOYALTY MANAGEMENT  CUSTOMER ORDER MANAGEMENT  QUOTES & ORDER LIFECYCLE MANAGEMENT  PRODUCT AND CATALOG MANAGEMENT  PARTNER RELATIONSHIP MANAGEMENT  MOBILE SERVICE  FIELD SERVICE  CALL CENTER 8/3/2011 Shweta Agrawal

18

Sales force automation



Sales force automation solution provides a broad range of fully integrated applications that address the selling requirements requirements both online and offlineof organizations offline With this, the sales organizations can grow revenue more quickly, predictably, and profitably by helping sales professionals focus on the right deal at the right time. In addition, Siebel's sales force automation solution provides integrated sales opportunity analytics and embedded support for sales best practices, enabling sales organizations to consistently achieve superior performance All the activities can be broadly put into the following two categories:  Contact management: this stores, tracks and manages contacts, leads of an enterprise.  Lead management: this enables an organization to manage, track and forecast sales leads. It also helps understand and improve conversion rates
8/3/2011 Shweta Agrawal 19

Sales forecasting


Sales forecasting is a necessary sales tool for today's managers and executives who are driven to increase revenues and decrease costs. This delivers comprehensive forecast visibility, real-time realopportunity management, improved sales and marketing decision-making, and lower administrative decisionand inventory handling costs. Through this organizations are better positioned to monitor the health of their business in real time and to propro-actively address trends, shortfalls, and opportunities for increased revenues.

8/3/2011

Shweta Agrawal

20

Sales Analytics


To grow revenues more quickly, predictably, and profitably, sales organizations need to empower the entire sales team with rich customer insight, the power to measure sales performance in real-time, and the realmeans to take immediate corrective action if necessary. PrePre-built reports including dashboards on lead generation, sales effectiveness, pipeline management, customers, and industry competitors, this drives more intelligent actions and interactions, dramatically improving responsiveness, effectiveness, and competitive advantage

8/3/2011

Shweta Agrawal

21

Marketing automation


This enables organizations to increase the value of each customer relationship by allowing them to interact with customers in a manner that reflects a deep understanding of their unique needs and preferences. This integrated application provides a complete closedclosedloop solution that enables organizations to
 

better understand their customers; flawlessly execute personalized campaigns synchronized across all channels; and optimize strategies through continuous testing, measurement, and feedback.

8/3/2011

Shweta Agrawal

22

Events management


This enables organizations to increase their return on investment for event-based marketing programs while eventensuring high-quality events that support and build brand highequity. It provides organizations with a complete solution for flawlessly planning and executing a wide range of events such as seminars, product demonstrations, trade shows, conferences, and sporting events. Marketing and sales professionals are assisted to easily and efficiently manage the entire events marketing process, including event planning and budgeting; partnership, vendor, and venue management; registration; onsite management; and post-event results analysis. postIt can also offer an out-of-the-box and fully configurable out-of-theevents web site that supports online registration and payment, allowing organizations to significantly reduce event 8/3/2011 Shweta Agrawal 23 support costs

Loyalty management


This enables companies to quickly and easily modify their loyalty programs. The solution enables business users to create loyalty campaigns and delivers a full range of analytics, marketing, and service capabilities that help organizations maximize the effectiveness of their customer interactions. In addition, this also provides a 360- degree view of the 360customer, which provides clear visibility of member behavior across all channels and customer touch points. As a result, organizations can better understand each customers lifetime value and tailor service levels and promotions accordingly.

8/3/2011

Shweta Agrawal

24

Customer order management

Customer order management applications provide a unified view of customer, quote, order, contract, and pricing information, enabling organizations to create more profitable orders and build stronger customer relationships.  This allows companies to create, validate, and manage customer quotes and orders across multiple enterprise systems  Product and catalog management enables companies to publish dynamic product catalogs containing customizable sales bundles, configure complex products, and analyze product information from all customer channels  Pricing and contract management enables companies to plan, deploy, execute, and analyze contract and pricing policies across all lines of business 8/3/2011 Shweta Agrawal 25


Quotes & order life cycle management



Quote & order lifecycle management business processes allow companies to create, validate and manage quotes and orders across the entire order lifecycle. These business processes supports  complex pricing and product configuration,  quote approval,  availability checking,  and credit and payment verification to ensure orders are complete, valid and accurate before they are delivered to the customer.

8/3/2011

Shweta Agrawal

26

Product & catalog management



Product and catalog management allows companies to develop, manage, and deliver dynamic product catalogs across all customer channels. These processes include
     

support for defining and classifying products, creating sales bundles and configuration rules, delegated user administration, visibility rules, content staging, approvals, and publication.

Using these processes, companies can maximize revenue through upup-sell and cross-sell offers while ensuring product compatibility crossand purchase eligibility.
8/3/2011 Shweta Agrawal 27

Partnership relationship management



Partner relationship management (PRM) provides companies with an enterprise-wide platform for managing enterpriserelationships with partners and resellers. Companies can  plan and execute collaborative sales,  marketing, and service programs;  enhance forecasting accuracy and pipeline visibility;  reduce partner management costs;  and improve their ability to orchestrate channel operations on a global basis. Moreover, it also provides support for industry-specific industrybest practices, leading to greater partner program effectiveness and increased end customer and partner satisfaction.
8/3/2011 Shweta Agrawal 28

Mobile service
 

Mobile service enable real-time and remote access to critical realcustomer information. Field technicians can conduct activities efficiently and productively with access to complete customer, site, and asset histories as needed, access to the corporate knowledge base, reporting tools for time, expenses, and parts, and access to activity details for follow-on work. followMobile service broadens a company's communications options by making accurate, up to date information available anytime, anywhere. It provides support for a wide variety of mobile platformsplatformsincluding wireless phones and pagers, handhelds and laptop computers. Mobile service professionals can be more productive by delivering service more efficiently and effectively, by increasing revenues through cross-selling and up-selling crossupproducts, and by improving customer satisfaction by being 8/3/2011 Shweta Agrawal 29 more responsive while on-site. on-

Field service


Field service enables service organizations to dramatically improve



 

the productivity and effectiveness of their field service professionals, increase revenue, and enhance customer satisfaction.

The application supports closed-loop problem closedresolution with

wireless messaging,  call handling,  schedule optimization,  shipping, receiving, depot repair,  parts logistics,  and inventory managementAgrawal invoicing functionality. 8/3/2011 Shweta and


30

Call center


Call centers focus more time and attention on

 

knowing their customers and cultivating relationships to



improve customer satisfaction, reduce churn, and maximize revenue and profitability.

Each agent must now handle a wider range of tasks across multiple channels of communication, including telephone, email, fax, page, chat, wireless messaging, voice over IP (VOIP), and web collaboration. This significantly reduce operational costs by enabling agents to handle blended service, support, and sales interactions seamlessly across all of these channels. In effect, agents become complete customer contact managers that support a range of products and services and provide solutions that consistently meet all customer 8/3/2011 Shweta Agrawal 31 needs.