Customer Relationship Management

1
Customer Relationship Management
(CRM) Introduction
2
Contents

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

3
A definition of marketing

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

The process of planning and executing the
conception, pricing, promotion, and distribution
of ideas, goods, and services to create exchanges
that satisfy individual and organization goals.
American Marketing Association
4
How to define Customers?

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

CONSUMER
BUSINESS TO BUSINESS
CHANNEL DISTRIBUTOR FRANCHISEE
INTERNAL CUSTOMER
5

• It costs 6x more to sell to a new customer than
  to sell to an existing
• One dissatisfied customer will tell 8-10 others
  on his experience
• By increasing the customer retention rate by 5,
  profits could increase by by 85
• There is 50 chance of making a sale to an
  existing customer while only a 15 chance of
  selling to a new customer
• 70 of customers will do business with the
  company again if their complaint is successfully
  resolved
• 90 of companies (in 2000) didnt have the
  necessary sales and service integration to
  support e-commerce

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

6
Customer Loyalty

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

Customer Loyalty is a deeply held commitment to
rebuy or repatronize a preferred product or
service consistently in the future, despite
situational influences and marketing efforts
having the potential to cause switching behavior.
Source Satisfaction A Behavioral Perspective
On The Consumer Richard L. Oliver Mc Graw-Hill
Editions
7
CRM Definition

• An integrated sales, marketing service
  strategy
• An approach which effectively manages customer
  relationships
• 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
• IT definition
• Methodologies, software and usually internet
  capabilities that help an organisation manage
  customer relationships in an organised manner

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

8

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

• Customer Relationship Management is an
  enterprise approach to understanding and
  influencing customer behavior through meaningful
  communications in order to improve customer
  acquisition, customer retention, customer loyalty
  and customer profitability

Source Accelerating Customer Relationships,
Ronald S. Swift Prentice Hall - 2001
9
CRM Functions
The concept of CRM in theory is simple Listen
to your customers and act on what they are saying
to create a mutually beneficial relationship.
Companies with current implementations of
CRM technology can usually hear their
customers however, because they are only
focusing on the operational and collaborative
component of CRM, they cannot really understand
them. They must also consider analytical
CRM to optimize their customer
relationships.

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

10

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

11
Operational CRM
designed to get the right mix of the companys
products and services in front of each customer
at the right time
MARKETING AUTOMATION

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

SALES FORCE AUTOMATION
Collaborative tools that enable all parties to
the transaction to interact with one another
Serving existing customer base through problem
resolution systems, workflow automation and field
service dispatch systems
CUSTOMER SERVICE AND SELF-SERVICE
Capabilities that can be directly invoked by the
customer on the internet via PC and wireless
devices
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Analytical CRM
A process of assembling disparate data from all
over the company transforming it to a consistent
state for business decision making and empowering
users by providing them with access to this
information from multiple applications

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

DATA WAREHOUSE
The process of extracting and presenting new
Knowledge, previously unpredictable, selected
from databases for actionable decisions. The
process of analyzing detailed data, to extract
and present actionable, implicit and novel
information to solve a business problem
DATA MINING
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CRM - Stages

• Customer Acquisition
• Promotion of products build a
  relationship first date
• Customer Extension
• An established relationship
  cross-selling up-selling
• Customer Retention
• Adapt to customer requirements requires
  a complex
• understanding of customer needs.
• Can an organisation pursue all 3
  objectives ?
• extremely difficult

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

14
CRM Business Process with a Customer Focus

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

• Need to have consistent dependable and convenient
  interactions with customers in every interaction
• Need to efficiently create new delivery channels
• Need to capture analyse large amounts of
  customer data
• Overall attempt to produce a unique/different
  business experience for the customer.
• CRM is all about changing processes and therefore
  change management
• What is the companys experience in change? Does
  it have a successful track record?

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CRM Technology
CRM and e-CRM

• e-CRM extending CRM through the Web
• e-CRM is the customer-facing internet portion
• of CRM
• e-CRM is a real designation, but it is not a
• revolutionary new system or set of processes.
• e-CRM is CRM online
• CRM is a strategy, the web is a channel
• CRM is inherently a multi-channel strategy.

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

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Traditional CRM
eCRM
eCRM

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

E-Mail Blasts Web Registration Online
Reply Instant Messaging Online Customer
Service Web Demos Video Conference Online
Prospect Database
Telemarketing Direct Mail B.R.C. Responses Trade
Shows Inbound Calls Press releases Meetings Produc
t Demos Referrals
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CRM Challenges

• Integrating customer content
• All interactions and knowledge about customers
  must be synthesised and stored in a way that
  anyone in the organization with a need to know
  can access that information in real-time and in a
  way that supports that current problem.
  Currently most organizations cannot do this or
  are even close to this

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

• Contact management
• The channels that customers use to contact an
  organization are increasing Web, call centre,
  fax, email, voice message etc. These
  technologies must be integrated so that staff can
  access the details regardless of channel.
• Consistent business rules need to be applied
  across all channels of contact

• End-to end business processes
• Business processes must be integrated and
  consistent eg. sales and service. The service
  staff must have access to sales details and
  commitments and apply consistent rules of dealing
  with the customers. This requires much more
  integration between processes than is current.

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CRM Difficulties

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

• CRM requires major integration of systems which
• few companies have
• CRM requires turning round existing systems to
• store, record and retrieve on a
  customer-centric basis
• CRM requires people to stop thinking about
• departmental boundaries and to start thinking
  about
• how as a team the company can help the customer

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CRM Architecture

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

20

• Step 1 Determining current abilities
• - Do we have a call/contact center?
• - What are the capacities of the call/contact
  center?
• - Are customers questions being answered?
• - Why do we have customer complaints? How can
• they be minimized?
• - What additional infrastructure do we need?
• - What are current costs?

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

21

• Step 2 Building capabilities
• - What technologies are in the call/contact
• centers and is more technology needed
• - Calls are routed based on incoming call
• information (e.g. incoming call phone number)
• - Employees are empowered to make and keep
• promises to customer

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

22

• Step 3 Information utilization
• - Customer information and contact history is
• tracked in a knowledge base and used in future
• contacts
• - Customer information can be linked to contact
• history from all channels
• - Customer patterns (e.g. seasonal patterns) are
• discovered and used for marketing purposes

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

23
Step 4 Determination of what we do - Shift
from data collection and analysis to strategy -
Enterprise goals revolve around customer
relationships - Customers receive support based
on their value to the company - All corporate
divisions share the same information on the
customer and focus on customers relationship
with the company

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

24

• Step 5 CRM becomes a core competency
• - Maintaining customer relationships is a core
• competency of the business, ensuring a greater
• retention rate
• - The focus centers around redefining markets to
• position the company as the best of breed in
  the
• industry

• Customer focus issues
• CRM Definitions
• CRM Functions
• CRM Stages
• CRM Business Process Technology
• CRM challenges Difficulties
• Building a CRM Solution

25
The End