Customer Relationship Management Chapter 11 pages 147-155 Business Plug-In B9 pages 348-362 Managing with an organization with the goal of increasing customer loyalty and retention and an organization's profitability Customer Relationship Management (CRM) • CRM is a business philosophy based on the premise that those organizations of individual customers are best positioned to achieve a sustainable competitive advantage. – A customer first approach that revolves around – Shift from product focus to customer focus • Product: sell one product to as many customers as possible • Customer: sell one customer as many products as possible CRM Philosophy • What are companies trying to do through CRM? – – – – – – – Provide 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 • For many companies, approximately of their overall IT budget is devoted to CRM. • Is the customer always right? Feedback THE UGLY SIDE OF CRM: WHY CRM MATTERS MORE NOW THAN EVER BEFORE THE UGLY SIDE OF CRM: WHY CRM MATTERS MORE NOW THAN EVER BEFORE Using CRM, companies are interested in finding out: • W • W the best customers? are the most profitable? • Companies are using CRM technologies to figure out: –H a customer purchased items (recency) –H a customer purchases items (frequency) –H a customer spends on each purchase (monetary value) Phases of CRM • What are we trying to do with CRM? –K who are? –A to understand what the customer is doing. –F customers just like our existing customers • T Using Technology in CRM (examples) in order to for each customer. • I and behavior • Segment customers ( ) • User-generated content can be incorporated into new product ideas (YouTube, Twitter, Lego) • C at point of contact (phone, web, in-person) • Make info who interact with customers. • D to uncover patterns of behavior that the company can capitalize. • Personalization of web site (site changes to reflect viewer preferences and interests) Types of CRM • Operational CRM – supports traditional transactional processing for front-office service, sales, billing, etc.) or systems that (marketing, customer • Analytical CRM – supports back-office operations and and includes all systems that finance, human resources, data warehouses) (accounting, OPERATIONAL CRM 1. List generator – customer from a variety of sources and then that information by for different marketing campaigns 2. Cross-selling and up-selling – Cross-selling – selling – Up-selling – or services of the sale 3. Sales force automation software is used to automatically tracks all of the steps in the sales process – Sales reps had too much info to maintain and track – Needed to get info out of sales rep heads and into a system that could be used by all. OPERATIONAL CRM 4. Sales reps can so that one reps lead can become a sale by the organization (even if it means someone else makes the sale) 5. Contact management systems can be used to and all with that customer 6. After acquiring a customer, you need to keep the customer through excellent customer service – If you want to ensure customer loyalty and satisfaction, you must • A Provide to problems OPERATIONAL CRM (Customer Service) 1. Provide to questions ( ) 2. Make sure customers don’t have to explain their problems AGAIN ( , avoid customer frustration) 3. E to detect when someone is distressed and upset (determine baseline during first few seconds of contact and then looks for deviations) 4. Web-based find their own answers. – allows customers to Federal Express, UPS and other sites with shipment tracking 5. Click-to-talk buttons on a web site 6. Call scripting systems automatically generate the next item or question. – Good way to be Types of CRM • Operational CRM supports front-office systems that • Analytical CRM doesn’t directly deal with customers. It is used to support and by identifying patterns to help the organization Analytical CRM • Analytical CRM relies heavily on technologies and to glean insights into customer behavior • These systems quickly aggregate, analyze, and disseminate customer information throughout an organization • Personalization – when a website knows enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person • Determine the – Who should we invest in? – Who should we service at an average level? – Who should we not invest in at all? – Since we can’t focus on all of our customers, who should be focus on ? Where can we get the biggest bang for the buck? Information Technology and Customer Relationship Management • Advances in information technology are making it possible to who are buying your products. If an organization understands the characteristics of its customers, it is then in a better position to meet customer needs, and therefore generate even more business. – How are we going to use all of this customer data that we have collected? • Information Technology is simply a used to the customer. that can be – How can customer interactions be made easier? – If you understand customer characteristics, you are then positioned to better serve customers (mine what you have to gain a clearer understanding). • Result: increase customer loyalty and probably increase revenues