Customer Relationship Management

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Customer Relationship Management

• Brandon Morrell
• Frank Scott
• Robert Young

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What is Customer Relationship Management?

• CRM - refers to the methodologies and tools that
  help businesses manage customer relationships in
  an organized way. When used to describe software,
  rather than business processes, CRM applications
  are those that focus on relationships, rather
  than transactions.

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Characteristics of excellent CRM

• designed to reduce costs and increase
  profitability by solidifying customer loyalty
• reliability
• responsiveness
• accessibility
• safety
• courtesy
• consideration
• communication
• recognizing the customer
• competence

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Objectives of CRM

• It is designed to optimize profitability,
  revenue, retention, and customer satisfaction.
• 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

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Development of CRM

• Operational CRM
• Customer database
• Linking database with other applications
• Analytic CRM
• Data mining
• Develop data analysis and modeling techniques
• Discover patterns and relationships
• Tactical CRM
• Use existing data warehouses

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Cost

• Per Seat Costs
• High Complexity
• 15,000 - 50,000
• Moderate Complexity
• 10,000 30,000
• High Complexity
• 10,000 - 15,000

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Legal

• Gramm Leach Bliley Act
• Prohibts organizations from using certain
  customer information without first notifying
  customers of the intentions.
• Health Information Portability and Accountability
  Act
• Prohibts organizations from using certain
  customer information without first notifying
  customers of the intentions.

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The Role of IT in CRM

• Powerful Tools
• Databases
• Data warehouses
• Data mining
• The CRM system allows a company to maintain all
  customer records in one centralized location

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Technical functionality

• Scalability - the ability to be used on a large
  scale, and to be reliably expanded to what ever
  scale is necessary.
• Multiple communication channels - the ability to
  interface with users via many different devices
  (phone, WAP, internet, etc)
• Workflow - the ability to trigger a process in
  the back office system, e. g. Email Response, ...
  
• Assignment - the ability to assign requests
  (Service Requests, Sales Opportunities) to a
  person or group.
• Database - the centralized storage (in a data
  warehouse) of all information relevant to
  customer interaction
• Customer privacy considerations - e.g. data
  encryption and the destruction of records to
  ensure that they are not stolen or abused

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Example - Connor Information Technology, Inc.

• netMarketing
• netSales
• netCustomerService
• netCommunicationModes
• netBusiness

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Improving Customer Service

• Provide product information, product use
  information, and technical assistance on web
  sites that are accessible 24 hours a day, 7 days
  a week
• Help to identify potential problems quickly,
  before they occur
• Provide a user-friendly mechanism for registering
  customer complaints (complaints that are not
  registered with the company cannot be resolved,
  and are a major source of customer
  dissatisfaction)
• Provide a fast mechanism for handling problems
  and complaints (complaints that are resolved
  quickly can increase customer satisfaction)
• Provide a fast mechanism for correcting service
  deficiencies (correct the problem before other
  customers experience the same dissatisfaction)
• Identify how each individual customer defines
  quality, and then design a service strategy for
  each customer based on these individual
  requirements and expectations

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Improving Customer Service Cont.

• Use internet cookies to track customer interests
  and personalize product offerings accordingly
• Use the internet to engage in collaborative
  customization or real-time customization
• Provide a fast mechanism for managing and
  scheduling followup sales calls to assess
  post-purchase cognitive dissonance, repurchase
  probabilities, repurchase times, and repurchase
  frequencies
• Provide a fast mechanism for managing and
  scheduling maintenance, repair, and on-going
  support (improve efficiency and effectiveness)
• Provide a mechanism to track all points of
  contact between a customer and the company, and
  do it in an integrated way so that all sources
  and types of contact are included, and all users
  of the system see the same view of the customer
  (reduces confusion)
• The CRM can be integrated into other
  cross-functional systems and thereby provide
  accounting and production information to
  customers when they want it.

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Improving customer relationships

• CRM technology can track customer interests,
  needs, and buying habits as they progress through
  their life cycles, and tailor the marketing
  effort accordingly. This way customers get
  exactly what they want as they change.
• The technology can track customer product use as
  the product progresses through its life cycle,
  and tailor the service strategy accordingly. This
  way customers get what they need as the product
  ages.
• In industrial markets, the technology can be used
  to micro-segment the buying centre and help
  coordinate the conflicting and changing purchase
  criteria of its members
• When any of the technology driven improvements in
  customer service (mentioned above) contribute to
  long-term customer satisfaction, they can ensure
  repeat purchases, improve customer relationships,
  increase customer loyalty, decrease customer
  turnover, decrease marketing costs (associated
  with customer acquisition and customer
  training), increase sales revenue, and thereby
  increase profit margins.

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Implementation Issues

• Often not properly integrated.
• What technology options should be adopted?
• what vendors and partners do they need to choose?

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CRM in Industry

• Sears, Roebuck Company
• Baush Lomb
• Compass Bank

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What is eCRM?

• A means to conduct communications with customers
• Interactive, personalized and relevant
• Across both electronic and traditional channels
• Uses complete view of customer to make decisions
  about messaging, offers, and channel delivery

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What is eCRM? (contd)

• Synchronizes communications across otherwise
  disjointed customer-facing systems
• Focuses on understanding how the economics of
  customer relationships impact the business
• Recognition that a comprehensive understanding of
  customer activities, personalization, relevance,
  permission, timeliness, and metrics are all a
  means to an end
• Remembering your most important asset is your
  customer

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eCRM Diagram
http//www.ittoolbox.com/peer/ecrmwhitepaper.pdfs
earch'evolving20to20eCRM
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eCRM Drivers

• The emergence of new, dynamic customer
  interaction channels such as the Web.
• The speed and unparalleled cost effectiveness of
  the Internet.
• Deregulation, forcing utilities and other
  companies to derive acquisition and retention
  strategies.
• The corporate realization that consumers will no
  longer tolerate mass mailings or spam
  emessaging.

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Why employ eCRM?

• Optimize interactive relationships between
  customers and companies.
• Enable your business to extend its personalized
  messaging to the Web and email.
• Coordinate marketing initiatives across all
  customer channels.
• Leverage customer information for more effective
  eMarketing and eBusiness.
• Focus your business on improving customer
  relationships and earning a greater share of each
  customers business.

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Six Es in eCRM

• Electronic channels
• Enterprise
• Empowerment
• Economics
• Evaluation
• External information

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Why eCRM instead of CRM?

• CRM remains channel centric, not customer centric
• Customer centric metrics do not exist in
  traditional CRM
• Isolated customer-facing systems in CRM systems

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Sources

• http//www.twocrows.com
• http//ittoolbox.com/peer/AP_website.htm
• www.cio.com/summaries/enterprise/crm/
• http//www.ittoolbox.com/peer/ecrmwhitepaper.pdfs
  earch'evolving20to20eCRM
• http//www.peoplesoft.com/media/en/pdf/success/bau
  csh_ss_0602.pdf
• http//www.siebel.com/downloads/case_studies/compa
  ssbank.pdf
• http//www.crm-daily.com/perl/story/17259.html
• http//banking.senate.gov/conf/
• http//banking.senate.gov/conf/
• http//www.siebel.com/downloads/case_studies/compa
  ssbank.pdf
• http//www.peoplesoft.com/media/en/pdf/success/bau
  csh_ss_0602.pdf

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The CRM Dating Game