Customer Relationship Management CRM

1
Customer Relationship Management (CRM)

• In 1876 the English novelist, George Eliot, wrote
  that, Of a truth, knowledge is power. Now, over
  a century later, that observation still holds
  true. Knowledge gives us, as individuals, the
  power to grow, to better ourselves, and to
  succeed in our endeavours.
• In the business world also, knowledge is power.
  As with individuals, knowledge is what enables
  businesses to grow and to succeed. Contained
  within every business is a wealth of knowledge
  about its policies and practices, and about the
  industry that it serves. A business uses this
  knowledge to sell and support the products and
  services that it offers.

2
What is CRM?

• CRM has been defined in a variety of different
  ways
• A way to identify, acquire, and retain customers
• A way of automating the front office functions of
  sales, marketing, and customer service
• For some vendors, whatever their current product
  may be, that is CRM!

3
CRM Perspectives

• This diversity of definitions is a result of
  differences in perspectives
• The first is based on a business perspective of
  increasing competition that is driving companies
  to focus on their customers.
• The second is based on the relatively new
  phenomenon of the integration of previously
  separate applications such as Sales Force
  Automation and Customer Service Support into
  Enterprise Applications.
• The third is a result of software vendors
  re-positioning their information technology
  products and services under the CRM umbrella, to
  take advantage of the fast growth of the CRM
  market.

4
CRM Definition

• CRM is a technology-enabled business strategy
  whereby companies leverage increased customer
  knowledge to build profitable relationships,
  based on optimising value delivered to and
  realized from their customers.

5
Business Priorities

• In the May 2000 issue of CIO Canada, it was
  reported that a study by Andersen Consulting
  showed that business leaders' top priorities
  were
• attracting new customers (cited by 86 per cent of
  respondents)
• enhancing productivity (84 per cent)
• reducing costs (81 per cent)
• improving customer service (77 per cent)
• securing access to new markets (60 per cent)

6
CRM is about creatingvalue for customers.

• CRM itself is a not a technology, even though
  technology is required to enable CRM.
• Technology makes it possible to integrate the
  large volumes of customer information that are
  required for CRM, and to efficiently transform
  this information into useful knowledge.
• Technology also enables a company to interact
  with its customers in ways that provide value to
  the customer, as well as make it easier for the
  customer to do business with them.
• However, leveraging this customer knowledge to
  make better business decisions and to be
  responsive to customers, remains the
  responsibility of individual managers and workers
  at all levels within the company.

7
Fundamental Concepts

• CRM is based on a number of concepts about
  today's marketplace
• Changing Customer Expectations
• The Nature of the Customer Relationship and
• The Difference between Loyalty and Captivity

8
Changing Customer Expectations

• Following a CRM strategy is about evolving a
  business along a number of dimensions
• From being focused on making and selling products
  to sensing customer needs and responding with
  targeted product and service offerings. This
  should be reflected in "Knowing your customer"
  and "Increasing value-add" components of the
  strategy.
• From mass marketing (e.g. TV) to marketing to
  segments of one (e.g. through personalized Web
  portals). This should be reflected in a "Customer
  interaction" component of the strategy.
• From business-centric interactions designed for
  the business's efficiency and convenience to
  customer-centric interactions designed for the
  customer's efficiency and convenience. This is
  another aspect of "Customer interaction".

9
Outcome Increased Customer Knowledge

• A key dimension of customer knowledge is
  profitability, since the underlying premise is
  that the ultimate objective is increased profits.
  
• In addition to customer profitability, other
  knowledge that is needed relates to providing
  increased value to the targeted segments of
  profitable and potentially profitable customers
• what kinds of relationship will add value, e.g.
  loyalty programs
• what is the value perception of the customer
  segments and how can the value be enhanced by
  marketing, e.g. Coke and Nike
• what products and services, and what mode of
  delivery, have value, e.g. stock market alerts
  via a Web-enabled cell phone
• what were customers' responses to marketing and
  sales campaigns?