Customer Relationship Management CRM

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CHAPTER 11

• Customer Relationship Management (CRM)

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Harley-Davidson begins the Harley Owners Group to
encourage customer involvement
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Learning Outcomes

• Compare operational and analytical CRM
• Identify the primary forces driving the explosive
  growth of CRM
• Define the relationship between decision making
  and analytical CRM
• Summarize the best practices for implementing a
  successful CRM system

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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 CRMs explosive growth
• Using CRM to enhance decision making
• CRM success factors

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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

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Brother International experienced skyrocketing
growth in its sales of multifunction printers
A tremendous increase in customer service calls
When Brother failed to answer the phone fast
enough, product returns started to increase
After Brother deployed SAPs CRM solution, the
1.8 million calls in 2003, dropped to 1.57
million
The CRM system has also reduced call duration by
an average of one minute
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CRM Business Drivers
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Forecasts for CRM Spending (in billions)
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Using Analytical CRM toEnhancing 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

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Operational CRM and analytical CRM
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CRM Success Factors

• Clearly communicate the CRM strategy
• Define information needs and flows
• Build an integrated view of the customer
• Implement in iterations
• Scalability for organizational growth

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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 companys 70 retail
  stores as well as by telephone, mail order, and
  on the Internet
• REIs CRM system benefits
• Minimizes maintenance costs
• Scales easily as company grows
• Provides sophisticated data warehouse for
  business intelligence
• Provides high availability

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Case Questions

• Summarize why it is important for REI to use CRM
  strategies to consolidate its customer
  information
• Determine two pieces of customer information that
  REI could extrapolate from its CRM system that
  would help it manage its business more
  effectively
• Explain how REI could use personalization to give
  its customers a more satisfying shopping
  experience